UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K/A-2

(Mark One)

 X .  

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

For the fiscal year ended March 31, 2011

     .  

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

Commission File Number: 000-53167

Millstream Ventures, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:  801.277.7888

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

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

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 or 15(d) of the Act.      .  

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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 is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of the last business day of the registrant’s most recently completed second fiscal quarter was $111,820.

The number of shares outstanding of the registrant’s common stock on June 7, 2011, was 44,104,325.

DOCUMENTS INCORPORATED BY REFERENCE

None

EXPLANATORY NOTE

We have revised information in the following items of this annual report:

Item–Business. We have revised the disclosure within the Overview section under the heading “Business of GRI” to provide additional information about the differences between U.S. and Canadian standards governing reserve estimates and under the heading “Government Regulation” to provide additional information as to the anticipated receipt of the necessary governmental approvals and the effect if such approvals are delayed.

This Amendment No. 2 continues to speak as of the date of the original Form 10-K for the year ended March 31, 2011, as amended on August 2, 2011, and the Company has not updated or amended the disclosures contained in the amended items to reflect events that have occurred since the filing of the original Form 10-K, or modified or updated those disclosures in any way other than as set forth in the first amendment or as described in the preceding paragraphs.  Accordingly, this Amendment No. 2 should be read in conjunction with the Company’s filings made with the Commission subsequent to the filing of the original Form 10-K on June 9, 2011, as amended August 2, 2011.

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Table of Contents

Page

PART I

4

ITEM 1.  Business

4

SIGNATURES

11

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Forward-Looking Statements

The statements contained in this annual report on Form 10-K that are not historical facts represent management’s beliefs and assumptions based on currently available information and constitute “forward-looking statements.” All statements, other than statements of historical or present facts, including the information concerning our future operations, business strategies, need for financing, competitive position, potential growth opportunities, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “will,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, changes in the general economic downturn; a further downturn in the securities markets; and/or uncertainties associated with our ability to obtain operating capital. Should our underlying assumptions prove incorrect or the consequences of the aforementioned risks worsen, actual results could differ materially from those expected. We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to Millstream Ventures, Inc., a Nevada corporation, and its wholly owned subsidiary, Green River Resources Corp., an Alberta, Canada, company, and its wholly owned subsidiary, Green River Resources, Inc., a Utah corporation.

PART I

ITEM 1.  Business

Overview and Development of the Company

We were originally incorporated in the State of Utah on April 7, 1983, as Carbon Technologies, Inc. for the purpose of engaging in the carbon fiber technology business. Subsequently, we became inactive and changed our corporate domicile to the State of Nevada by merging into a Nevada corporation formed for that purpose. The Nevada corporation was incorporated on May 26, 2005.

In February 2008 control of the Company was changed from William McCrory to Denny W. Nestripke.  At the time, Mr. McCrory was our sole officer and director and was a controlling shareholder.  In connection with the change of control, we issued 20,000,000 shares of our common stock to Mr. Nestripke for $20,000, Mr. McCrory resigned as an officer and director, and Mr. Nestripke was appointed as the sole officer and director of the Company.  Following the change of control, Mr. Nestripke owned approximately 95% of the outstanding common shares.

On April 10, 2008, we amended and restated our articles of incorporation.  We increased our authorized common shares from 45,000,000 to 200,000,000 and increased our authorized preferred shares from 5,000,000 to 10,000,000.

In October 2008 a subsequent change of control occurred.  Mr. Nestripke resigned and appointed Steven L. White as the sole officer and director of the Company.  In November 2009, Mr. Nestripke sold all 20,000,000 of his shares in the Company to Mr. White.  As a result, Mr. White owned approximately 95% of the outstanding common shares at the close of the transaction.  Subsequently, on February 1, 2010, Mr. Nestripke was reappointed to the Board of Directors.

During the year ended March 31, 2011, we conducted no material business operations.

In April 2011 we sold 13,504,000 restricted shares of our common stock to LIFE Power & Fuels, Inc. for gross proceeds of $13,504.  These shares represented approximately 39% of our outstanding common stock at the time.  We also appointed Edward P. Mooney and Daniel F. Carlson, affiliates of LIFE, as directors.

In April 2011 we completed a non-public offering of 3,510,126 restricted shares of our common stock for gross proceeds of $100,004.  The stock certificates and the proceeds from the offering were held in escrow pending closing of the transaction with Green River Resources Corp. (“GRC”), an Alberta Canada corporation, discussed below.  In the event the transaction with GRC had not been completed, the funds would have been returned to the investors and the shares would have been canceled.  At the closing of the transaction with GRC we released the stock certificates to the investors and the funds were released to us to satisfy our outstanding liabilities at closing (including $78,053 to repay outstanding promissory notes, $17,500 for legal fees, and $1,414 for transfer agent fees) and to retire 17,608,203 of our outstanding shares of common stock at closing, which shares were held by Mr. White.

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In May 2011 we initiated a non-public offering of 10% Convertible Promissory Notes (the “Notes”) and warrants for maximum gross proceeds of $1,750,000.  The face amounts of the Notes are convertible into our common stock at the rate of $0.25 per share, for a maximum of 7,020,021 shares.  The Notes are convertible at any time prior to repayment and are subject to mandatory conversion at any time the Company completes an equity or debt financing of at least $10,000,000.  The Notes bear interest at the rate of 10% per annum.  Principal and interest on the Notes is due and payable on or before April 30, 2014, and the Notes are subject to prepayment by the Company upon 30 days’ prior notice.  Each lender will also receive at no additional cost a warrant (the “Warrants”) to purchase 200,572 shares of Common Stock at $0.25 per share for each $50,000 loaned to us in the offering.  The Warrants are exercisable in whole or in part at any time through April 30, 2014.  The Warrants are detachable from the Notes and can be transferred in whole or in part, subject to compliance with applicable state and federal laws.  The Notes and the Warrants have not been registered under the Securities Act and are restricted securities as defined therein.  As of the closing date of the Stock Exchange Agreement discussed below, we had raised $770,000 in this offering.

In April 2011 principals of our company commenced negations with William C. Gibbs as a principal of the Green River entities in order to provide access to funding for the planned operations of the entities.  On May 5, 2011, we entered into a Stock Exchange Agreement dated April 29, 2011, as amended on June 3, 2011, with GRC, and the shareholders of GRC (the “Sellers”).  GRC is the sole owner of Green River Resources, Inc., a Utah corporation (“GRI”).  Pursuant to the terms of the agreement we agreed to issue 23,544,201 shares of our common stock to the Sellers in exchange for all of the outstanding equity securities of GRC.  In addition, we agreed to reserve for issuance 10,984,392 shares of our common stock for issuance upon exercise of outstanding warrants of GRC assumed by us at closing and 1,071,407 shares for issuance upon conversion of an outstanding promissory note of GRC also assumed by us at closing.  Closing of the agreement was held on June 3, 2011.  At the closing we issued 23,544,201 shares of common stock to the Sellers in exchange for all of the outstanding shares of GRC.  We also acquired and cancelled 17,608,203 shares of common stock for $17,436 paid to the shareholder.  Mr. White and Mr. Nestripke resigned as officers and directors and William C. Gibbs and Mark F. Lindsey were appointed to replace them.  We also appointed Gayle McKeachnie and Barry Larson to become directors effective 10 days following notification to our shareholders under Rule 14f-1 of the Exchange Act.  We also granted options to purchase 6,175,000 shares of common stock at $0.20 per share to persons designated by GRC and issued warrants to purchase 488,480 shares of common stock at the price of our next offering to persons designated by GRC.  Of these options granted, 3,950,000 were granted to Mr. Gibbs, 1,750,000 were granted to Mr. Gereluk, who became our Chief Operating Officer, 100,000 were granted to Mr. Larsen, 150,000 were granted to Mr. Lindsey, and 75,000 were granted to Mr. McKeachnie.  The options expire seven years from the date of grant and the warrants expire two years from the date of issuance.  In connection with the closing, Mr. White did not assume any role or relationship with Green River Resources Corp. or Green River Resources, Inc.

GRI is an exploration stage company which is a wholly owned subsidiary of GRC, which in turn is a wholly owned subsidiary of our company and will be engaged in the clean extraction of bitumen from oil sands prevalent in the Mountain West region of North America using GRI’s proprietary technology.

Business of GRI

Overview

GRI is a Utah corporation formed in 2005 for the purpose of commercializing a process for the clean extraction of bitumen, and, if successful, mining, extracting and selling recoverable bitumen from tar sand deposits located in Utah.

In May of 2005, GRI secured a hydrocarbon extraction process that separates oil and other hydrocarbons from sand, shale, dirt and other substances, without leaving behind toxins or other contaminants. GRI acquired the right to use this process through an Operating Agreement with Bleeding Rock, LLC (“Bleeding Rock”), a Utah limited liability company. The geographic area covered by the Operating Agreement between GRI and Bleeding Rock is limited to the area known as the Sunnyside Tar Sand Deposit in central Utah, approximately 20 miles southeast of Price, Utah.  Under the agreement, as amended, GRI is responsible for the design, engineering, construction and operation of a facility for the extraction of hydrocarbons from tar sand, oil sand and oil shale located on the mineral leases held by GRI, using technology licensed to Bleeding Rock by Natural Resource Recovery, Inc. Under the terms of the license, Bleeding Rock has a perpetual and exclusive right to develop and use their hydrocarbon extraction technology within the state of Utah and the western portion of Colorado known as the Piceance Basin. The License is in good standing and full force and effect. Bleeding Rock is not required to pay any royalties or other payments under the license. The Licensor received an equity interest in Bleeding Rock in exchange for the license of the technology.

The activities of the parties pursuant to the Operating Agreement are to be coordinated by an operating committee to be comprised of two persons from each of Bleeding Rock and GRI. The operating committee reviews and approves the engineering and construction designs and plans, schedules and expenditures, and the development of the extraction system.

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In addition to the rights to develop the process technology, GRI also acquired by assignment from Bleeding Rock certain hydrocarbon and mineral leases. The leases cover approximately 1,760 acres within the Sunnyside Tar Sand deposit. The site is accessible by county road and is serviced at the plant and mine site by an existing power grid. It is approximately 7 miles from an existing power plant and rail head. The leases extend to December 31, 2013, or so long thereafter as production consists of at least 500 barrels per day.

In accordance with the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X, these leases contain no proven reserves of oil or gas.  However, GRI has obtained an independent Resource Audit and Classification report from a major international geology and mining consulting firm describing the quantity and quality of the bitumen resource estimated to be located on our leases as of May 29, 2009. The Resource Audit and Classification was completed in accordance with the provisions of the National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101).   Such evaluation of our estimates of resources under NI 51-101 was carried out in accordance with the standards set out in the Canadian Oil and Gas Evaluation (COGE) Handbook, prepared jointly by the Society of Petroleum Evaluation Engineers and the Canadian Institute of Mining, Metallurgy & Petroleum. Those standards require that the evaluator plan and perform an evaluation to obtain reasonable assurance as to whether the reserves are free of material misstatement.  An evaluation must also include an assessment as to whether the reserves data are in accordance with the principles and definitions presented in the COGE Handbook.  The estimate provided in this report is classified as contingent resources according to the guidelines set forth in NI 51-101 and COGE.  The project resource calculation is contingent upon completion of additional exploration drilling, processing and extraction analysis, detailed economic analysis, evolution of legal mining rights, and environmental evaluations.  There is no certainty that the project will be commercially viable to produce any portion of the resource.  As a result of the differences between the U.S. rules and Canadian standards governing disclosure of reserve or resource estimates, differing estimates of reserves or resources available under our leases are reported, and may in the future be reported, between our website and our periodic reports filed with the SEC.

The practice of preparing production and reserve quantities data under NI 51-101 differs from the U.S. rules. The primary differences between the two reporting requirements include: (i) NI 51-101 requires disclosure of proved and probable reserves and the U.S. rules require disclosure of only proved reserves; (ii) NI 51-101 requires the use of forecast prices in the estimation of reserves and the U.S. rules require the use of 12-month average prices which are held constant; (iii) NI 51-101 requires disclosure of reserves on a gross (before royalties) and net (after royalties) basis and the U.S. rules require disclosure on a net (after royalties) basis; (iv) the Canadian standards require disclosure of production on a gross (before royalties) basis and the U.S. rules require disclosure on a net (after royalties) basis; and (v) NI 51-101 requires that reserves and other data be reported on a more granular product type basis than required by the U.S. rules.

Project Development

GRI has established an extensive resource position, a working knowledge of the process technology and an initial list of environmental and other permits required to build a commercial plant (the “Commercial Facility”).  Additional work to be completed as part of the project development phase includes:

1.

Initial mine planning and engineering for the Sunnyside properties.

2.

Acquisition of additional property in areas of interest in order to block-up properties into logical and economical mining units.

3.

Determination of technical and economic parameters for the commercial scale use of the process, including engineering.

4.

Preparation of environmental impact statements and receipt of federal and state regulatory agency approval for the Commercial Facility.

5.

Completion of environmental and permitting work for the Commercial Facility.

We believe that with the net proceeds available from our $1,750,000 private placement of 10% convertible promissory notes, of which $770,000 was available at the closing of the GRI acquisition, together with the remaining net proceeds of $880,000 to be raised, we will be in a position to initiate items 1 through 5 above.

Contemporaneously with the pursuit of the permitting of the project, we will also finalize engineering and equipment for the 3,000 barrel per day plant. We have retained a leading engineering firm in the North American oil sands extraction industry, AMEC BDR, and they have completed an engineering and feasibility study with respect to a commercial plant that will produce up to 3,000 barrels of oil per day. Based on this report, we believe that additional financing of approximately $35 million will be required to procure and install the necessary equipment to begin operations of a plant that we believe will produce approximately 3,000 barrels per day of bitumen.

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Technology

GRI performed lab and pilot plant tests on tar sands from the Utah Green River Formation to prove the viability of the technology and to understand several key elements in the process.  GRI hired an independent engineering firm. AMEC BDR, to witness the pilot plant tests and to manage the lab work and review the results. The results of these tests are summarized as follows:

·

The bitumen was completely separated from the sand, leaving the sand “oil” free.

·

No sand particles or other contaminates were found in the separated Bitumen.

·

The Sand product contained no solvent residue. Because the sand produced is free of solvents it presents no environmental liability and can be returned to the mine site or sold.

·

Solvent losses to the bitumen product were also insignificant. Consequently, because the solvent is recycled with minimal loss in a closed loop system, make-up solvent costs are minimal.

·

The compositional characteristics of the Bitumen were not altered by the process; therefore, the Bitumen will be suitable for upgrading and refining to saleable products by conventional refining technology.

·

The composition and properties of the solvent recovered by the process were not altered by the process; therefore, the solvent can be recycled through the process without further conditioning or processing.

Based on the results of those tests, the engineering firm evaluated the feasibility and costs of scaling the process into a plant that will initially process up to 3,000 barrels per day, with follow on scale up facilities of up to 50,000 barrels per day.  GRI is in the process of finalizing the engineering and design of the proposed plant, but requires additional financing for completion.

The GRI process starts with the mixing of tar sand ore with a proprietary solvent. The solvent immediately separates the hydrocarbons contained in the ore from the inorganic insoluble material such as sand, rock and clay.

The liquid hydrocarbon/solvent mix is then separated from the clean sand by gravity. The sand is heated to evaporate the solvent and the resulting solvent vapors are condensed and reused. The clean sand can be returned to the mine site as reclamation material or sold for industrial purposes.

The liquid hydrocarbon/solvent mix is subject to a simple, refluxed, low pressure, medium temperature distillation process to separate the solvent from the recovered hydrocarbon. The solvent distilled from the recovered hydrocarbon is condensed and reused. The extracted bitumen is transported to a refinery.

As a result, tailing ponds and other environmental hazards are eliminated from the process, with the attendant reduction in costs and effects on the environment.

In connection with the engineering and development of the technology, we have incurred costs of approximately $100,000 over the past two years.

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Resource Base and Mine Plan

Of the 24 states in the United States that contain tar sand deposits, approximately 90% of the USGS mapped mineable resource is located in Utah, where in excess of 25 billion barrels of oil are in place.  There are eleven tar sands deposit areas located in Utah.  The seven major areas are Sunnyside, P. R. Spring, Asphalt Ridge, White Rocks, Tar Sand Triangle, Circle Cliffs, and Hill Creek. Three of these seven areas, Tar Sand Triangle, Circle Cliffs, and Hill Creek have substantial constraints to resource development including environmental drawbacks related to their location on Indian Reservations and/or National Parks, significant overburden, lack of rich ore, and high sulfur content. The prime tar sand properties include Sunnyside, P. R. Spring, Asphalt Ridge and White Rocks.

GRI has obtained leases in the Sunnyside area, on private property (not public lands).  GRI currently holds an undivided 60% interest pursuant to two freehold hydrocarbon and mineral lease agreements in Section 2, East Half and North West quarters of Section 3 Township 14 South, Range 14 East, SLM containing approximately 1,120 acres; and an undivided 21.67% interest pursuant to two further freehold hydrocarbon and mineral lease agreement in the North West quarter of Section 3, East half and North West quarter of Section 10, Township 14, Range 14 East, SLM containing approximately 640 acres, pursuant to which GRI has the right to extract bitumen from the land.  The leases are for a primary term ending December 31, 2013, and are extended thereafter for so long as an average of 500 barrels of oil are produced per day, subject to certain acceptable interruptions.

GRI has reviewed previous resource estimates prepared for Chevron and Amoco, as well as USGS estimates of mineable bitumen on our leases.  In addition, GRI retained Marston & Marston, Inc. which provided GRI with a Resource Audit and Classification report which was done in accordance with the provisions of the NI 51-101.  GRI had also requested Marston & Marston to provide an updated resource estimate of proved, probable, and possible reserves on the leases using the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X.  However, we were recently informed by Marston that since its recent acquisition by Golder Associates, it no longer accepts engagements to prepare such reports under U.S. standards and we are in the process of locating another firm to provide the report.

GRI also has access to and has reviewed detailed mining and operational plans prepared for Amoco with respect to the Leases prepared in the mid 1990s.  The Company intends to utilize this previous work in finalizing a mine plan and operations over the next six months.

Overall Market for Oil and Petroleum Products.

According to the U.S. Energy Information Administration (“EIA”), estimates of world crude oil and liquid fuels consumption grew to 86.7 million bbl/d in 2010, surpassing the previous record of 86.3 million bbl/d set in 2007.  EIA expects that world liquid fuels consumption will grow by 1.4 million bbl/d in 2011, followed by 1.6 million bbl/d growth in 2012, resulting in total world consumption of 89.7 million bbl/d in 2012.  Countries outside the Organization for Economic Cooperation and Development (OECD) will make up almost all of the growth in consumption over the next two years, with the largest increases coming from China, Brazil, and the Middle East.  EIA expects that, among the OECD nations, only the United States and Canada will show growth in oil consumption over the next two years, offsetting declines in Europe and Japan.

In addition to the substantial overall increase in demand, fears of a supply disruption are keeping crude prices high in a well-supplied market.  Speculators worry that even a small terrorist-caused disruption to oil supplies could cause major repercussions that wreak havoc with the supply chain.

The result of the overall increase in demand, and terrorist fears, is that analysts believe the price for crude oil will stabilize above the $100 per barrel mark for the next several years and will gradually increase after that, with fluctuations upward based on supply disruption.

Projected Markets for the Company’s Oil.

The primary product to be produced by the Company will be bitumen.  There are numerous refineries within our potential marketing area. Located in the Salt Lake City area, within 130 miles, there are a number of refineries with cumulative total daily capacity of approximately 175,000 barrels per day, according to the U.S. Energy Administration. Additionally, refineries in Colorado, Wyoming and New Mexico have daily combined capacity of approximately 442,000 barrels per day. We have had the separated bitumen analyzed and submitted to various refineries.  

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We currently have received  indications of interest from Silver Eagle Refinery, Woods Cross, Utah, and Milagro Energy Resources, Inc., Green River, Utah. Each refinery has indicated that the bitumen samples tested meet there refining criteria and that, subject to price and capacity, they would purchase the offtake from our facility. In the case of Milagro Energy, we have signed a non-binding letter of intent to supply up to 3,000 barrels per day, subject to our obtaining adequate financing to build and operate our facility and Milagro restarting the refinery. The projected price, in the case of Silver Eagle, is a discount to West Texas Intermediate crude, which is the world benchmark price ("WTI") of 20%. In the case of Milagro Energy, the price is benchmarked to Plains Marketing LP's posted price for Wyoming Asphaltic crude.  Historically, Wyoming Asphaltic crude has traded at a discount of between 20 to 25% of the WTI price.  We anticipate initially that our entire estimated output of 3,000 barrels per day will be delivered to a single refinery.  Based on our prototype trials and initial engineering, we believe that a breakeven cost is approximately $35 per barrel.  As we expand production, we will evaluate supplying product to multiple refineries, based on price and transportation costs.

We also believe that the liquid paving asphalt industry will be a market for our products and is a 30 million ton per year market.  The industry is segmented into commodity asphalt, performance-grade asphalt and asphalt emulsions and maintenance products.  The commodity asphalt segment is by far the largest, comprised of private construction projects (parking lots, driveways, etc.) and much of the minor city and county road projects.  The liquid asphalt used by this segment generally has few quality or performance specifications and is served by refined sand asphalt wholesalers.  The performance-grade asphalt segment is comprised of interstate highways and larger state highways and city/county roads.  The liquid asphalt used in this segment must meet very stringent performance standards and requires the blending of asphalt with other asphalts, additives and modifiers to meet the product specification.  The asphalt emulsions/maintenance segment is also growing as states and other agencies implement pavement maintenance programs to rehabilitate and extend the life of existing roads.  With little or no upgrading, the separated bitumen from tar sands can be sold into these markets.  Market prices for asphalt during the summer months are expected to yield a higher overall price for our products.  We intend to target these markets during summer months when asphalt prices are highest and demand greatest.

Government Regulation

We are in the process of reviewing the regulatory approvals required in connection with our project.  We are committed to environmental responsibility.  We support the principle of sustainable development through adaptive management and we are working with stakeholders in the community, government and industry to protect and sustain air, land and aquatic resources in the region.

The key environmental issues to be managed in the development of our project encompass surface disturbance on the terrestrial ecosystem, effects on traditional land use and historical resources, and effects on wildlife populations and resources.  Because the commercial facility to be constructed will be a closed loop system, the only emissions anticipated will be from power generation.  Otherwise, clean sand and bitumen will be produced.

We are committed to operating our project to achieve compliance with applicable statutes, regulations, codes, regulatory approvals and, to the extent practicable, government guidelines.  Where the applicable laws are not clear or do not address all environmental concerns, management will apply appropriate internal standards and guidelines to address such concerns.  In addition to complying with statutes, regulations, codes and regulatory approvals and exercising due diligence, we will strive to continuously improve the overall environmental performance of the operation and products.

The following is an estimate of the permits and licences required:

1.

Carbon County Business Licence;

2.

Approval from County Planning/Zoning;

3.

A Large Mine Plan permit (greater than 5 acres);

4.

Road encroachment permit for truck traffic entering and exiting highway;

5.

Air-Quality Permit;

6.

UPDES Discharge Permit/Storm water Discharge Permit;

7.

Other studies/clearances required for permits:

a.

Archaeological/Cultural clearance;

b.

Threatened & Endangered Species Check/clearance;

c.

Soil/Vegetation/Hydrologic Studies.

The Large Mine Plan will require a number of studies and/or clearances, and will include processing of the permits described in Items 4 through 7.  The large mine plan will also require engineering and operation plans and posting of a reclamation bond.  We intend to seek the necessary business license from Carbon County and approval of the county planning and zoning prior to obtaining the large mining permit concurrent with the preparation of the large mining plan and anticipate being able to obtain the necessary license and approval from Carbon County prior to receiving the large mining permit.

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We have contracted with an environmental consulting firm to obtain the required studies and prepare the application to obtain the large mine permit. In addition, we have contracted with a mining consultant to prepare the large mine plan. They currently estimate that the required environmental studies and other necessary items designated in items 4 through 7 above can be completed by the end of September 2011  or early October 2011, and that the permit application could be filed by late October 2011.  Management estimates that it will require between five and six months to process the application with the Utah Division of Oil, Gas and Mining and to receive the large mine permit. Any delays in obtaining the necessary permits would likely delay receipt of additional funding or reduce our ability to raise the necessary $35 million required to procure and install equipment, make necessary improvements to the mining site, open the mine, and begin operations of our plant.  Failure to obtain the large mine permit would result in a failure of the business.

Competition

To our knowledge, there are currently no companies operating a tar sand mining and extraction company in the state of Utah. Several companies have acquired sites with tar sand deposits, including U.S. Oil Sands, but they are not in production and require significant capital to commence operations. Additionally, these companies are using processes that require water, and are unproven in commercial production.

In comparing our process to known tar sands extraction systems, GRI’s proprietary system offers a significantly reduced operating environmental impact. Our process significantly mitigates or eliminates environmental impacts typically associated with tar sand projects including:

o

Volatile Organic Hydrocarbons (VOC’s): The solvent losses resulting from the operation of the system are minor. The system does not release any solvent to the environment. Solvent consumed by the process is recovered and conserved during the processing of the ore. In addition the process does not produce gases to a flare or vent system of any kind.

o

Water consumption/contamination: Our process neither consumes nor produces any water. It is a dry process and therefore no water is taken from or returned to the environment.

o

Energy: The process can be powered by natural gas or electrically. If it were powered by electricity, emissions associated with the energy consumption of the process could be controlled through standard power plant emission control systems. As noted above the deposit under lease to Green River is currently serviced by electrical power lines.

o

Hydrocarbon and water wet tailings stream: Typical tar sands operations produce a waste stream of spent sand that contains a significant amount of residual hydrocarbons and water. The sand product from our process is dry and essentially free of hydrocarbons, either natural or induced through the solvent wetting process. It is directly suitable for use in reclamation efforts or can be sold as a value added product without further processing. Use of the sand in the reclamation process provides for the return of the mined material to the mine site (less the naturally occurring hydrocarbons) with no loss of material.

Our process is efficient, cost effective, “green,” and simple when compared to other technologies currently known or used for the separation of tar sands.  By comparison, the processes utilized in Canada for the extraction of bitumen from tar sand consume significant amounts of water and have a significant environmental impact.

Approximately 3/4 of a barrel of tailings is produced for every barrel of bitumen produced by current technology. Consequently, there are thousands of acres of tailing ponds located at Canadian tar sands operations produced as a direct result of the tar sand extraction process. This is one reason why tar sands are being questioned as a source of energy for the United States.  Our process does not use water, and recaptures all of the solvent used, resulting in only clean sand as a byproduct (which can be used for reclamation or sold commercially).

Syncrude, an established producer of bitumen from oil sands in Canada has a total breakeven price (operating plus non operating costs divided by production) of about $56.00 per barrel. This number has been adjusted by our estimation of their cost of upgrading. This compares favorably with our total breakeven price of about WTI $35 per barrel. In addition, the projected capital cost for our 3,000 barrel per day plant would be about $11,300 per producing barrel per day, compared to a cost of capital for a traditional tar sands project of approximately $120,000 per producing barrel. In other words, the capital cost for our project is less than 10% of the cost of a traditional project in Canada, with operating costs of approximately half of the traditional operating costs.

Employees

As of the closing of the acquisition of GRI, we had two employees, namely our CEO, William C. Gibbs and our COO, Robin Gereluk. We intend to hire a CFO as soon as practicable following closing of our acquisition of GRC.  We also intend to engage consultants and independent contractors as and when required while our business grows to justify additional employees.

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SIGNATURES

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

Millstream Ventures, Inc.

Date: August 23, 2011

By: /s/ William C. Gibbs            

       William C. Gibbs, President

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