Black Tusk Minerals Inc. - FORM 10-K

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EX-32.2 - CERTIFICATION OF CFO PURSUANT TO SECTION 906 - Black Tusk Minerals Inc.	v233665_ex32-2.htm
EX-31.2 - CERTIFICATION OF CFO PURSUANT TO SECTION 302 - Black Tusk Minerals Inc.	v233665_ex31-2.htm
EX-32.1 - CERTIFICATION OF CEO PURSUANT TO SECTION 906 - Black Tusk Minerals Inc.	v233665_ex32-1.htm
EX-31.1 - CERTIFICATION OF CEO PURSUANT TO SECTION 302 - Black Tusk Minerals Inc.	v233665_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended May 31, 2011

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

For the transition period from to

Commission file number: 000-52372

BLACK TUSK MINERALS INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada		20-3366333
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7425 Arbutus Street
Vancouver, British Columbia, Canada		V6P 5T2
(Address of principal executive offices)		(Zip Code)

(778) 999-2575

(Registrant’s Telephone Number, including Area Code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common Stock, $0.001 par value

(Title of Class)

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 Section 15(d)

of the Act. Yes ¨ No x

Indicate by checkmark 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 checkmark whether the registrant has submitted electronically and had 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 such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405) 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 the Form 10-K. ¨

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer ¨	Accelerated Filer ¨
Non-Accelerated Filer ¨	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 ¨ No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or 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:

$495,945 as of November 30, 2010, based on a last sale price on the OTCBB of $0.74.

The number of shares of the Registrant’s Common Stock outstanding as of August 26, 2011 was 6,970,176

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I		2

ITEM 1.	BUSINESS	2

ITEM 1A.	RISK FACTORS.	6

ITEM 1B.	UNRESOLVED STAFF COMMENTS.	14

ITEM 2.	PROPERTIES.	14

ITEM 3.	LEGAL PROCEEDINGS.	18

ITEM 4.	[REMOVED AND RESERVED.]	18

PART II		19

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	19

ITEM 6.	SELECTED FINANCIAL DATA.	22

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	22

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MATERIAL RISK.	27

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	28

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	29

ITEM 9A.	CONTROLS AND PROCEDURES.	29

ITEM 9B.	OTHER INFORMATION.	30

PART III		30

ITEM 10.	DIRECTORS, EXECUTIVE OFFICES AND CORPORATE GOVERNANCE.	30

ITEM 11.	EXECUTIVE COMPENSATION.	33

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	36

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	38

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.	39

PART IV		40

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.	40

SIGNATURES		42

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K and the exhibits attached hereto contain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. We use words like “expects,” “believes,” “intends,” “anticipates,” “plans,” “targets,” “projects” or “estimates” in this annual report. When used, these words and other, similar words and phrases or statements that an event, action or result “will,” “may,” “could,” or “should” result, occur, be taken or be achieved, identify “forward-looking” statements. Such forward-looking statements are subject to certain risks and uncertainties, both known and unknown, and assumptions, including, without limitation, risks related to:

•

our failure to obtain additional financing;

•

our inability to continue as a going concern;

•

the unique difficulties and uncertainties inherent in the mineral exploration business;

•

the inherent dangers involved in mineral exploration;

•

our officer’s inability or unwillingness to devote a sufficient amount of time to our business operations;

•

environmental, health and safety laws in Peru;

•

governmental regulations and processing licenses in Peru;

•

uncertainty as to the termination and renewal of our Peruvian mining concessions;

•

our drilling and exploration program and Banking Feasibility Study;

•

our development projects in Peru;

•

Peruvian economic and political conditions;

•

the Peruvian legal system;

•

native land claims in Peru;

•

natural hazards in Peru; and

•

our common stock.

The preceding bullets outline some of the risks and uncertainties that may affect our forward-looking statements. For a full description of risks and uncertainties, see the sections elsewhere in this Form 10-K entitled “Risk Factors”, “Description of the Business” and “Management's Discussion and Analysis”. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.

Our management has included projections and estimates in this annual report, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the Securities and Exchange Commission or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law.

We qualify all the forward-looking statements contained in this annual report by the foregoing cautionary statements.

PART I

Item 1.

Business

As used in this annual report, and unless otherwise indicated, the terms “we,” “us,” “our,” “Black Tusk” and the “Company” refer to Black Tusk Minerals Inc. All dollar amounts in this annual report are expressed in U.S. dollars unless otherwise indicated.

We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings.

Business Development

Our corporate contact information is 7425 Arbutus Street, Vancouver, British Columbia, Canada V6P 5T2, (778) 999-2575. We were incorporated on August 8, 2005 in the State of Nevada with the intention of acquiring mineral exploration projects. Effective September 21, 2007, the Company incorporated a wholly-owned subsidiary, Black Tusk Minerals Peru SAC (“Black Tusk Peru”), in Peru.

Business of Issuer

We are an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.915 “Development Stage Entities”. Our principal business is the acquisition and exploration of mineral resources. We have not presently determined whether our properties contain mineral reserves that are economically recoverable.

On August 24, 2006, we entered into a sale and acquisition agreement whereby we acquired a 100% interest in one unpatented mineral claim, representing 440.8066 hectares, or 17.63 mineral units, known as the GOLDEN BEAR Claim. The GOLDEN BEAR Claim is located on the east shore of Harrison Lake in the New Westminster Mining District, British Columbia, Canada. On December 31, 2007, the Company allowed the GOLDEN BEAR claim to lapse.

On August 13, 2007, we entered into a term sheet with Leonard Raymond De Melt, an individual, and Marlene Ore Lamilla, an individual, detailing the principal terms of our proposed acquisition of certain mining concessions and pediments located in the District of Huanza, Province of Huarochiri, Department of Lima (the “Peru Properties”) owned by Marlene Ore Lamilla.

On December 5, 2007, we entered into a master purchase agreement with Black Tusk Peru, a Peru corporation and our newly-formed subsidiary, Leonard Raymond De Melt, and Marlene Ore Lamilla (“Master Purchase Agreement”), pursuant to which we agreed to issue an aggregate of 400,000 split-adjusted common shares, par value $0.001 per share, of the Company to Ms. Lamilla and her designees in consideration for the transfer by Ms. Lamilla to Black Tusk Peru of the Peru Properties. As additional consideration for the transfer of the Peru Properties, Black Tusk Peru agreed to grant to Marlene Ore Lamilla (or her designee) a 1% royalty on the net smelter returns upon commercial production on the Peru Properties (the “NSR Royalty”).

Concurrently with the execution of the Master Purchase Agreement, Marlene Ore Lamilla and Black Tusk Peru entered into a mining concessions and claims transfer agreement, dated as of December 5, 2007 (the “Peru Transfer Agreement”), to govern the transfer and registration of the Peru Properties under Peruvian law.

On April 24, 2008 (the “Closing Date”), we consummated the transactions contemplated by the Master Purchase Agreement and the Peru Transfer Agreement. Our consummation of the Master Purchase Agreement and the Peru Transfer Agreement was contingent upon, among other things, the formalization of the Peru Transfer Agreement into a public deed before a Peruvian notary public, recordation of the Peru Transfer Agreement with the appropriate Peruvian governmental entity and registration of the Peru Properties in the name of “Black Tusk Minerals Peru SAC” with the appropriate Peruvian registries. All of the Peru Properties have been registered with the appropriate Peruvian registries.

On August 31, 2009, a Canadian National Instrument 43-101 (“NI 43-101”) compliant technical report relating to the Peru Properties entitled “Geological Evaluation of the Huanza Property” dated August 28, 2009 (the “2009 Technical Report”) was published and filed on SEDAR at www.sedar.com. The report was prepared and authored by Glen MacDonald P.Geo., a “qualified person” as defined in NI 43-101, at the request of Robert Krause, a mineral geologist for the Company. The 2009 Technical Report is based on information collected by Mr. MacDonald during a site visit to the Peru Properties performed in August 2009, with additional information provided by the Company. Other information was obtained from sources within the public domain.

On October 11, 2010, the Company completed a 1 for 50 reverse stock split, whereby 50 pre-split shares were exchanged for one post split share of common stock of the Company, $0.001 par value per share. As a result of the share split, the issued and outstanding shares of the Company was reduced from 200,000,000 to 4,000,000.

On December 7, 2010, the Peru Transfer Agreement was amended to eliminate the NSR Royalty whereby the NSR Royalty reverted to Black Tusk Peru and was terminated. The amendment to the Peru Transfer Agreement is registered with the appropriate Peruvian authority.

On February 8, 2011, Kurt Bordian was appointed to the Board of Directors of the Company.

On February 8, 2011, the Company closed a private placement of units. Under the terms of the private placement, the Company issued 5,559,713 units at a price of $0.05 per unit. Magellan Management Company (“Magellan”), a company solely owned and controlled by Gavin Roy, President and a director of the Company, acquired 5,163,313 units in consideration of the cancellation of debt (the “Magellan Placement”). Each unit consists of one share of common stock of the Company and one full purchase warrant, which may be converted to one share of common stock in the Company at an exercise price of $0.05 until February 8, 2016. Portions of this placement, 2,703,509 and 266,667 (2,970,176 in the aggregate) units, were rescinded on March 30, 2011 and April 14, 2011, respectively.

On February 8, 2011, the Company and Magellan entered into a Section 16 Disgorgement and Settlement Agreement (the “Disgorgement Agreement”). As part of a private placement that occurred on February 8, 2011, the Company issued 5,163,313 units to Magellan in the Magellan Placement, in order to pay off the $261,302 of debt owed to the Magellan (“Magellan Debt”) as a result of cash advances made by the Magellan to the Company. As a result of this issuance of units, Magellan was subject to disgorgement under Section 16(b) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) due to sales of shares made by Magellan on August 13 and August 23, 2010. Magellan was required to disgorge $2,866 in profits. Under the terms of the Disgorgement Agreement, Magellan disgorged $2,866 by forgiving that amount of the Magellan Debt.

The Company determined that it may have improperly effected a share consolidation and that the Company may not have sufficient authorized capital to satisfy the Company’s business objectives and obligations. On March 30, 2011 and April 14, 2011, the Company entered into rescission and conditional purchase agreements with Magellan (the “Rescission and Conditional Purchase Agreements”) whereby Magellan and the Company agreed to rescind a portion of the Magellan Placement by rescinding and cancelling 2,703,509 and 266,667 (2,970,176 in the aggregate) shares of common stock and 2,703,509 and 266,667 (2,970,176 in the aggregate) share purchase warrants (collectively, the “Rescinded Units”) in consideration for the Company’s acknowledgement of the debt obligation in the amount of $135,176 owed to Magellan in connection with the rescission of a portion of the Magellan Placement. The Company and Magellan also agreed that the Company would use commercially reasonable efforts to amend the Articles of Incorporation to increase the authorized capital of the Company, including obtaining shareholder approval for the amendment by a majority of the shareholders of the Company and a majority of the disinterested shareholders of the Company (shareholders excluding Magellan and Gavin Roy), and upon the increase in the authorized shares of common stock of the Company, the Company will permit Magellan to purchase the Rescinded Units under the Rescission and Conditional Purchase Agreement under the same terms as the Magellan Placement.

James Bordian was appointed by the board of directors of the Company as the Chief Financial Officer of the Company effective March 30, 2011.

On April 4, 2011, the Company filed the technical report entitled “Geological Evaluation of the Huanza Property” dated February 2011 (the “Huanza Technical Report”) with the securities regulatory authorities in Canada, pursuant to Canadian securities laws. The Huanza Technical Report was prepared in accordance with NI 43-101 by Glen MacDonald, P.Geo., who is a Qualified Person as defined by NI 43-101. The Huanza Technical Report was prepared by Mr. MacDonald at the request of Robert Krause, a Company geologist. The Huanza Technical Report is based on information collected by Mr. MacDonald during a site visit to the Company’s properties in the Huanza District of Peru in August 2009, with additional information collected through publicly available sources and provided by the Company. The 2009 Technical Report and the Huanza Technical Report form the basis for much of the information in this Annual Report on Form 10-K regarding the Peru Properties. Readers are encouraged to review the technical reports for more information regarding the Peru Properties.

On April 29, 2011 shareholders of the Company passed by written consent amendments to the Bylaws of the Company and an amendment to the Certificate of Incorporation of the Company to increase the authorized share capital of the Company from 4,000,000 to 100,000,000. The amendment to the Certificate of Incorporation was effective June 9, 2011. Additional information can be found in the definitive 14C filed with the SEC on May 3, 2011 and on the 8-K filed with the SEC on June 13, 2011.

Robert Krause and Mark White joined the board of directors of the Company and the Company filed a Certificate of Amendment with the Nevada Secretary of State to increase the authorized share capital of the Company from 4,000,000 shares of common stock to 100,000,000 shares of common stock, effective on June 9, 2011.

On June 13, 2011, in accordance with the Rescission and Conditional Purchase Agreements, the Company issued to Magellan, 2,970,176 units consisting of 2,970,176 shares of common stock of the Company and 2,970,176 common share purchase warrants of the Company which may be converted into shares of common stock of the Company, par value $0.001, at a conversion price of $0.05 per warrant share, until February 8, 2016.

Business Strategy

Our business strategy to date has been focused on acquiring and developing advanced stage and past producing properties throughout the Americas. To that end, in 2008, we acquired the Peruvian Properties. Our objective is to increase value of our shares through the exploration, development and extraction of mineral deposits, beginning with our Peruvian Properties. The development and extraction may be performed by us or may be performed by potential partners or independent contractors.

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.

Seasonality

The climate in the project area is typical of the Peruvian Andes with both wet and dry seasons. The wet season is from December to March, during which limited periods of electrical storm activity can develop with hail, rain and occasionally snow above 5,000 meters. Individual rainfall events can be severe, with over an inch falling in an hour. Dense fog is common during the rainy season and temperatures rarely reach above 15°C. The dry season is from April to November, during which the coldest temperatures can fall below 0°C and highest temperatures may exceed 25°C. Rainfall is very rare in the dry season.

Government Regulations

Peruvian Environmental, Health and Safety Laws

Our exploration and mining activities are subject to a number of Peruvian laws and regulations, including environmental laws and regulations, as well as certain industry technical standards, permits, licenses and authorizations. Additional matters subject to regulation include, but are not limited to, concession fees and penalties, transportation, production, water use and discharge, power use and generation, use and storage of explosives, controlled chemical supplies, surface rights, community and stakeholders’ participation and involvement, plant and facilities’ construction approval, housing and other facilities for workers, reclamation, taxation, labor standards, mine safety and occupational health.

Environmental regulations and sustainable development standards in Peru have become increasingly stringent over the last decade, which may require us to dedicate a substantial amount of time and money to compliance and remediation activities. We expect additional laws and regulations will be enacted over time with respect to environmental, social and sustainable development matters. Recently, Peruvian environmental laws have been enacted imposing closure and remediation obligations on the mining industry.

The development of more stringent environmental protection programs in Peru and in relevant trade agreements could impose constraints and additional costs on our operations and require us to make significant capital expenditures in the future. Future legislative, regulatory or trade developments may have an adverse effect on our business, properties, results of operations, financial condition or prospects.

Peruvian Licensing and Regulation

Governmental approvals, licenses and permits are, as a practical matter, subject to the discretion of the applicable governments or governmental offices in Peru. We must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and the interpretation of the laws and regulations implemented by the permitting authority.

New laws and regulations, amendments to existing laws and regulations, or more stringent enforcement of existing laws and regulations, could have a material adverse impact on our results of operations, financial condition and prospects. Exploration, mining and processing activities are dependent upon the grant of appropriate licenses, concessions, leases, permits, approvals, certificates and regulatory consents which may be withdrawn or made subject to limitations. There can also be no assurance that they will be granted or renewed or, if so, on what terms.

Certain licenses contain a range of past, current and future obligations, including minimum expenditure requirements. In some cases there could be adverse consequences of breach of these obligations, ranging from penalties to, in extreme cases, suspension or termination of the licenses or related contracts.

The level of any royalties or taxes payable to the Peruvian government or any other governmental authority in respect of the production of precious or base metals or minerals may be varied at any time as a result of changing legislation.

Peruvian Mining Concessions

Under the laws of Peru, mineral resources belong to the state and government concessions are required to explore for or exploit mineral reserves. In Peru, our mineral rights derive from concessions from the Peruvian Ministry of Energy and Mines for exploration, exploitation, extraction, transportation and/or production operations. Mining concessions in Peru may be terminated if the requirements of the concessionaire are not satisfied.

According to the General Mining Law of Peru, “Validity Fees” are payable annually at a cost of US$ 3.00 per hectare and must be paid by the 30th of June. Should payment of Validity Fees not be made for two consecutive years, mining pediments or concessions will be cancelled. After pediments or concessions are held by a party for 6 years annual fees change according to the following framework:

“Holders of mining concessions are obliged to achieve a minimum production equivalent to US$100.00 per hectare per year, within six years following the year in which the respective mining concession title is granted. If this minimum production is not reached, as of the first semester of the 7th year after the concession title has been granted, the holder of the concession should pay a US$ 6.00 penalty per hectare per year. If such minimum production is not obtained until the end of the 11th year after obtaining the concession title, the penalty to be paid as of the 12th year increases to US$ 20.00 per hectare per year.”

Following the same principle established in connection with the validity fee, evidence of compliance with the requested minimum production or investment or, in its defect, payment of the corresponding penalty can only be missed for one year. Non-compliance with any of these possibilities for two consecutive years, results in the cancellation of the mining concession.

Peruvian Native Land Claims

We are unaware of any outstanding native land claims on the Peru Properties. However, it is possible that a native land claim could be made in the future. Should we encounter a situation where a native person or group claims an interest in our claims, we may be able 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. Notwithstanding the foregoing, we currently have a ten year term agreement with the Peasant Community of Huanza, which is the registered titleholder of the land in which our Peru Properties are located, for the use of their land to conduct mining exploration activities. This agreement has been recorded with the public registry in order to ensure enforceability against the State and third parties with regards to all of the Peru Properties, except for the properties designated “Altococha Mine 14,” “Altococha Mine 15,” “Altococha Mine 16,” “Black Tusk 1,” “Black Tusk 2,” “Black Tusk 3” and “Black Tusk 4.” We hope to record the agreement with the public registry with regards to these properties as soon as possible.

Employees

Gavin Roy and James Bordian are the Company’s sole employees. We hire independent contractors to assist with general administrative matters from time-to-time.

Item 1A.

Risk Factors.

Much of the information included in this annual report includes or is based upon estimates, projections or other forward-looking statements. Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. Prospective investors should consider carefully the risk factors set out below.

Risks Relating to the Company

If we do not obtain additional financing, our business will fail.

As of May 31, 2011, we had no cash and a working capital deficit in the amount of $319,337. We currently do not have any operations and we have no revenue from operations. Our business plan calls for expenses in connection with the technical review and exploration of the Peru Properties. Our current operating funds will not be sufficient to carry out our planned exploration program on the Peru Properties. In addition, we will require additional financing to provide funds for anticipated operating overhead, professional fees and regulatory filing fees. We will need to obtain additional financing to complete our planned programs and to sustain our business operations. If our exploration programs are successful in discovering ore of commercial tonnage and grade, we will require additional funds in order to place the Peru Properties into commercial production, if warranted. The Company’s plans for the next twelve months are to focus on the exploration of the Peru Properties and to fund our working capital deficit. We estimate that cash requirements of approximately $900,000 or more will be required for exploration, administration, and working capital costs for the fiscal year ending May 31, 2012. However, we do not have any commitments to fund these costs. Therefore, we need to raise an additional $900,000 or more in the next twelve months. We believe that such funds, if raised, will be sufficient to meet our liquidity requirements through May 31, 2012. We are exploring joint ventures, options and other arrangements, which will fund exploration and development of our properties. We have not entered into any such arrangements and such arrangements may not be available on acceptable terms, if at all. Failure to raise needed financing or enter into arrangements to fund exploration, development and maintenance of our properties could result in our having to discontinue our mining exploration and development business.

Since May, 31, 2010, we obtained proceeds in the amount of: (1) $16,500 through a private placement of units consisting of shares of common stock and share purchase warrants, 330,000 units were issued at $0.05 per unit; (2) $43,500 through a private placement of 7% convertible debentures; and (3) proceeds in the amount of $20,000 through a private placement of our common shares by issuing 266,667 shares of common stock at $0.075 per share. The private placements funded immediate cash requirements but did not resolve our working capital deficiencies.

We may be unable to continue as a going concern.

As discussed by the auditors in Note 1 to our financial statements contained elsewhere in this annual report, we have not generated any revenue or profitable operations since inception and will need to obtain equity financing and profitable operations to continue as a going concern. Also, we have a working capital deficit. These factors raise substantial doubt about our ability to continue as a going concern. We are in the process of seeking sufficient financing to implement our business strategy. Because we will need additional financing to fund our extensive exploration activities there is substantial doubt about our ability to continue as a going concern.

We have incurred a net loss since of $3,003,384 for the period from August 8, 2005 (date of inception) to May 31, 2011. We estimate that we will be required to raise at least $900,000 during the fiscal year ending May 31, 2012 to satisfy our planned technical review and exploration activities for the Peru Properties and general working capital requirements for general administrative and other expenses. However, we do not have any commitments to fund these costs. We are exploring joint ventures, options and other arrangements, which will fund exploration and development of our properties. We have not entered into any such arrangements and such arrangements may not be available on acceptable terms, if at all. Therefore, we have to raise an additional $900,000 in the next twelve months or enter into an arrangement to fund exploration and development of our properties. These factors raise substantial doubt that we will be able to continue as a going concern.

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

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.

Increased costs could affect our financial condition.

We anticipate that costs at our projects that we may explore or develop, will frequently be subject to variation from one year to the next due to a number of factors, such as changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as fuel, rubber and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in costs at any significant location could have a significant effect on our profitability.

A shortage of equipment and supplies could adversely affect our ability to operate our business.

We are dependent on various supplies and equipment to carry out our mine and development operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost of production.

Recent market events and conditions

Since 2007, the U.S. credit markets have experienced serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, sub-prime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These conditions continued and worsened in 2008, causing a loss of confidence in the broader U.S. and global credit and financial markets and resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions that still exist in 2011. Notwithstanding various actions by the U.S. and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to further deteriorate and stock markets to decline substantially. In addition, general economic indicators have deteriorated, including declining consumer sentiment, increased unemployment and declining economic growth and uncertainty about corporate earnings and the loss of the United States’ AAA credit rating by the Standard and Poor’s.

These unprecedented disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies. These disruptions could, among other things, make it more difficult for us to obtain, or increase its cost of obtaining, capital and financing for its operations. The Company’s access to additional capital may not be available on terms acceptable to it or at all.

General economic conditions

The recent unprecedented events in global financial markets have had a profound impact on the global economy. Many industries, including the gold and base metal mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates, and tax rates may adversely affect our growth and profitability. Specifically:

The global credit/liquidity crisis could impact the cost and availability of financing and our overall liquidity;

the volatility of ore prices may impact our future revenues, profits and cash flow;

volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and

the devaluation and volatility of global stock markets impacts the valuation of our equity securities, which may impact our ability to raise funds through the issuance of equity.

These factors could have a material adverse effect on our financial condition and results of operations.

Because our President and Secretary has only agreed to provide services on a part-time basis, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.

Gavin Roy, our President and Secretary currently devotes approximately thirty hours per week to our business affairs. If the demands of our business require it, Mr. Roy is prepared to adjust his timetable to devote more time to our business. However, Mr. Roy may not be able to devote more time to our affairs when needed. It is possible that the demands of his other interests will increase, with the result that he would no longer be able to devote sufficient time to the management of our business. Competing demands on his time may lead to a divergence between his interests and the interests of other shareholders.

Risks Associated with Doing Business in Peru

Environmental, health and safety laws and other regulations may increase our costs of doing business, restrict our operations or result in operational delays.

The development of more stringent environmental protection programs in Peru and in relevant trade agreements could impose constraints and additional costs on our operations and require us to make significant capital expenditures in the future. We cannot assure you that future legislative, regulatory or trade developments will not have an adverse effect on our business, properties, results of operations, financial condition or prospects.

Governmental regulations and processing licenses.

Governmental approvals, licenses and permits are, as a practical matter, subject to the discretion of the applicable governments or governmental offices. We must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and the interpretation of the laws and regulations implemented by the permitting authority.

There is uncertainty as to the termination and renewal of our mining concessions.

In order to maintain our mining concessions in good standing in Peru, we are obligated to pay annual fees and to reach minimum production levels after the first six years after the concession title has been granted. If said minimum production is not reached, the holder of the concession would have to pay a US$6.00 penalty per hectare per year. It is possible to avoid payment of the penalty if evidence is provided to the mining authorities that an amount equivalent to not less than ten times the applicable penalty has been invested. Therefore, if it is proven that an investment of US$60.00 per hectare per year has been made in the concession, there will be no obligation to pay the penalty (US$20.00 per hectare as of the twelfth year).

Any termination or unfavorable modification of the terms of one or more of our concessions, or failure to obtain renewals of such concessions subject to renewal or extensions, could have a material adverse effect on our financial condition and prospects.

Drilling and Exploration Program and Banking Feasibility Study (BFS).

As with any significant undertaking or effort, the completion of a drilling and exploration program and BFS involves various uncertainties, including availability of materials and labor, labor relations issues, inclement weather, unforeseen engineering, environmental or geological issues, and unanticipated difficulties in obtaining any of the requisite licenses or permits, any of which could give rise to delays or cost overruns or cause the results of the drilling and exploration program and BFS to be less than expected levels. In addition, during perforation and construction of the development tunnels, the contractors could encounter unexpected sub-surface conditions or other difficulties, which could delay or even prevent us from generating or receiving revenues.

Development projects.

The development of new mining operations, which generally result from identifying potentially economically recoverable volumes of minerals or metals, have no operating history upon which to base estimates of future cash operating costs. For such development projects, estimates of proven and probable reserves and cash operating costs are, to a large extent, based upon the interpretation of geological data obtained from drill holes and other sampling techniques and feasibility studies which derive estimates of cash operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, expected recovery rates, comparable facility and equipment operating costs, anticipated climatic conditions and other factors. As a result, it is possible that actual cash operating costs and economic returns may differ from those estimated.

Peruvian economic and political conditions may have an adverse impact on our business.

As of the date of this report, our operations are conducted solely in Peru. Accordingly, our business, financial condition or results of operations could be affected by changes in economic or other policies of the Peruvian government or other political, regulatory or economic developments in Peru. During the past several decades, Peru has had a history of political instability that has included military coups and a succession of regimes with differing policies and programs. Past governments have frequently intervened in the nation’s economy and social structure. Among other actions, past governments have imposed controls on prices, exchange rates and local and foreign investment as well as limitations on imports, have restricted the ability of companies to dismiss employees, have expropriated private sector assets (including mining companies) and have prohibited the remittance of profits to foreign investors.

There is a risk of terrorism in Peru relating to Sendero Luminoso and the Movimiento Revolucionario Tupac Amaru, which were particularly active in the 1980s and early 1990s. We cannot guarantee that acts by these or other terrorist organizations will not adversely affect our operations in the future.

Because, as of the date of this report, we operate solely in Peru, we cannot provide any assurance that political developments in Peru will not have a material adverse effect on market conditions, prices of our securities, our ability to obtain financing, and our results of operations and financial condition.

Legal system in Peru.

Peru may have a less developed legal system than more established economies which could result in risks such as (i) effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation, or in an ownership dispute, being more difficult to obtain; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v) relative inexperience of the judiciary and courts in such matters. Peruvian business people, government officials and agencies and the judicial system’s commitment to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to the licenses and agreements for business.

There can be no assurance that joint ventures, licenses, license applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness and enforcement of such arrangements in Peru cannot be guaranteed.

Native land claims might affect our title to the Peru Properties and our business plan may fail.

Natural hazards may have an adverse impact on our business.

Fires, earthquakes, floods, volcanic eruptions or other similar catastrophic events could cause personal injury, loss of life, damage or destruction to the project or suspension of operations. Although we may maintain insurance to protect ourselves against certain risks, the proceeds of such insurance may not be adequate to cover reduced revenues, increased expenses or other liabilities arising from the occurrence of any of the events described above. Moreover, there can be no assurance that insurance coverage will be available in the future at commercially reasonable rates or that the amounts for which we will be insured will cover all losses.

Risks Relating to Our Common Stock

Our common stock has a limited trading history and has experienced price volatility.

Our common stock trades on the OTC Bulletin Board. The volume of trading in our common stock varies greatly and may often be light, resulting in what is known as a "thinly-traded" stock. Until a larger secondary market for our common stock develops, the price of our common stock may fluctuate substantially. The price of our common stock may also be impacted by any of the following, some of which may have little or no relation to our company or industry:

•

the breadth of our stockholder base and extent to which securities professionals follow our common stock;

•

investor perception of our Company and the mining industry, including industry trends;

•

domestic and international economic and capital market conditions, including fluctuations in commodity prices;

•

responses to quarter-to-quarter variations in our results of operations;

•

announcements of significant acquisitions, strategic alliances, joint ventures or capital commitments by us or our competitors;

•

additions or departures of key personnel;

•

sales or purchases of our common stock by large stockholders or our insiders;

•

accounting pronouncements or changes in accounting rules that affect our financial reporting; and

•

changes in legal and regulatory compliance unrelated to our performance.

In addition, the stock market in general and the market for mineral exploration companies in particular have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating results or asset values of those companies. These broad market and industry factors may seriously impact the market price and trading volume of our common shares regardless of our actual operating performance.

We anticipate that we will raise additional capital through equity financing, which may cause substantial dilution to our existing shareholders.

We may require additional equity financing to be raised in the future. We may issue securities on less than favorable terms to raise sufficient capital to fund our business plan. Any transaction involving the issuance of equity securities or securities convertible into common shares would result in dilution, possibly substantial, to present and prospective holders of common shares.

We have not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future.

We do not anticipate paying cash dividends on our common stock in the foreseeable future. Payment of future cash dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that our board of directors considers relevant. Accordingly, investors may only see a return on their investment if the value of our securities appreciates.

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to explore and develop new properties and continue our exploration and development of our current property interests. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.

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

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA 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, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA 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.

Item 1B.

Unresolved Staff Comments.

Not Applicable.

Item 2.

Properties.

Corporate Headquarters, Vancouver, British Columbia

Our corporate headquarters are located at 7425 Arbutus Street, Vancouver, British Columbia, Canada V6P 5T2. Our current premises are adequate for our existing operations.

Real Estate Investments

We do not currently maintain any investments in real estate, real estate mortgages or securities of persons primarily engaged in real estate activities, nor do we expect to do so in the foreseeable future.

Peru Properties

On April 4, 2011, the Company filed the NI 43-101 compliant Huanza Technical Report with the securities regulatory authorities in Canada, pursuant to Canadian securities laws. The Huanza Technical Report was prepared in accordance with Canadian National Instrument. Readers are encouraged to review the Technical Report in its entirety on SEDAR (www.sedar.com) or EDGAR (www.sec.gov) for more information regarding the Peru Properties.

Acquisition, Location and Description

On December 5, 2007, we entered into the Master Purchase Agreement with Black Tusk Peru, a Peru corporation and a newly-formed subsidiary of the Company, Leonard Raymond De Melt, and Marlene Ore Lamilla, pursuant to which we agreed to issue an aggregate of 400,000 split-adjusted common shares, par value $0.001 per share, of the Company to Ms. Lamilla and her designees in consideration for the transfer by Ms. Lamilla to Black Tusk Peru of the Peru Properties. As additional consideration for the transfer of the Peru Properties, Black Tusk Peru agreed to grant to Marlene Ore Lamilla (or her designee) a 1% royalty on the net smelter returns upon commercial production on the Peru Properties.

Concurrently with the execution of the Master Purchase Agreement, Marlene Ore Lamilla and Black Tusk Peru entered into the Peru Transfer Agreement, to govern the transfer and registration of the Peru Properties under Peruvian law.

On the Closing Date, we consummated the transactions contemplated by the Master Purchase Agreement and the Peru Transfer Agreement. Our consummation of the Master Purchase Agreement and the Peru Transfer Agreement was contingent upon, among other things, the formalization of the Peru Transfer Agreement into a public deed before a Peruvian notary public, recordation of the Peru Transfer Agreement with the appropriate Peruvian governmental entity and registration of the Peru Properties in the name of “Black Tusk Minerals Peru SAC” with the appropriate Peruvian registries. As of the Closing Date, all of the Peru Properties have been registered with the appropriate Peruvian registries.

The Peru Properties cover an area of 8066.51 hectares in the Republic of Peru and consist of 19 registered claims. The corner coordinates for the claims boundaries are registered with the Instituto Geológico Minero y Metalúrgico (INGAMMET) Avenida Las Artes Sur 220, San Borja, Lima. The Peru Properties are located approximately 120 kilometers northeast of the capital, Lima, in the long hydrothermal alteration trend known as the Central Polymetallic Belt. This area is situated in the rugged Western Andean range at an average elevation of 4,200 meters, an area with a long history of successful production.

The Peru Properties consist of the following mining claims and pediments located in the District of Huanza, Province of Huarochiri, Department of Lima, Peru:

N°	CONCESSION	CODE	INGEMMET	PUBLIC REGISTRY
01	ALTACOCHA MINE	0101292-07	Resolution N° 3423 INGEMMET/PCD/PM	12125438
02	ALTOCOCHA MINE 1	0101324-07	Resolution N°002242-2007-INACC/J	12089171
03	ALTOCOCHA MINE 2	0101325-07	Resolution N° 002666-2007-INGEMMET/PCD/PM	12134767
04	ALTOCOCHA MINE 3	0101326-07	Resolution N°000071-2007-INGEMMET/PCD/PM	12089882
05	ALTOCOCHA MINE 4	0101327-07	Resolution N° 002099-2007-INACC/J	12089359
06	ALTOCOCHA MINE 5	0101328-07	Resolution N° 000310-2007-INGEMMET/PCD/PM	12189875
07	ALTOCOCHA MINE 7	0101598-07	Resolution N° 002425-2007-INACC/J	12089522
08	ALTOCOCHA MINE 8	0101597-07	Resolution N° 002458-2007-INACC/J	12089420
09	ALTOCOCHA MINE 9	0101664-07	Resolution N° 002100-2007-INACC/J	12089424
10	ALTOCOCHA MINE 10	0101665-07	Resolution N° 002579-2007-INGEMMET/PCD/PM	12135392
11	ALTOCOCHA MINE 11	0101666-07	Resolution N° 000402-2007-INGEMMET/PCD/PM	12089535
12	ALTOCOCHA MINE 12	0101667-07	Resolution N° 001448-2007-INGEMMET/PCD/PM	12089549
13	ALTOCOCHA MINE 14	0104158-07	Resolution N° 004169-2008-INGEMMET/PCD/PM	12359543
14	ALTOCOCHA MINE 15	0106330-07	Resolution N° 001890-2008-INGEMMET/PCD/PM	12359721
15	ALTOCOCHA MINE 16	0106329-07	Resolution N° 001705-2008-INGEMMET/PCD/PM	12359751
16	BLACK TUSK 1	0102020-09	Resolution N°4919-2009- INGEMMET/PCD/PM	12477466
17	BLACK TUSK 2	0102019-09	Resolution N°0209-2010- INGEMMET/PCD/PM	12477470
18	BLACK TUSK 3	0102018-09	Resolution N° 0367-2010-INGEMMET/PCD/PM	12477475
19	BLACK TUSK 4	0102021-09	Resolution N° 0045-2010-INGEMMET/PCD/PM	12477483

Access, Climate, Local Resources, Infrastructure and Physiography

Access to the project area from Lima is via the Carterra Central highway to the towns of Chosica 70 (kilometers) or San Mateo (100 kilometers) then continuing via unpaved road, a further 50 kilometers from Chosica or San Mateo, traversing mountainous terrain. Driving time from Lima is approximately 5 hours. The elevation of the mine gate is about 4,100 meters above sea level

The Peru Properties are located in an area of high altitude between 4,000 and 4,800 meters above sea level. The mountain slopes are steep to occasionally vertical where local topography is defined by fault planes. Valley floors and gently dipping terrain below 4,500 meters is covered with short grasses and small bushes near drainages and the upper terrain is covered with barren rock. Subsistence farming is variably developed in the valleys and alpacas, llamas and goats are herded at higher elevations.

The town of San Mateo, with approximately 4,500 inhabitants, is the only population center in the immediate vicinity of the Property and is located along the Central Highway approximately two hours from Lima.

The western cordillera has a long history of mining and exploration, experienced Peruvian labor can be found in many towns including Chosica and San Mateo, the more local mountain village of Huanza (10 kilometers) is also likely to have a ready work force. The Village of Hunaza is supplied with hydroelectricity and is the closest electrical supply to the project area. Electricity pylons, that once carried electricity to the Finlandia mine and mill, stand within the project concessions, power cables however have been removed. Water flows year-round in mountain streams.

The unpaved roads between the Carterra Central Highway and project area cross an operating freight rail road between Lima and La Oroya. The nearest airport to the Peru Properties is Jorge Chavez International Airport in Lima (120 kilometers). A few derelict buildings stand within the concession boundaries, ownership of these buildings is not known.

As an international mining centre Peru (and Lima in-particular) has a good supply of world-class mining and exploration related services including; drilling companies, Toronto Stock Exchange accredited assay laboratories, surveying companies, specialist tool and equipment suppliers.

Operational History

Gold mining in the Lima region of Peru dates back to the early colonial days, when the Spaniards are reported to have mined the polymetallic veins located in the Huanza area.

More recent exploration and mining in the Huanza area started in the mid 1950s. Commercial production from the Nueva Condor mine, which the Altochocha properties surround, commenced in 1956. Based on information published prior to the completion of the Company’s Technical Report, it is reported that from 1956 to 1991, Compania Minera Huampar S.A., produced about 25,000 ounces of gold and about 15 million ounces of silver. 2.5 million tons averaging 1.6 g/t Au, 5.4 oz/ton Ag, 3.8% Pb and 5.0% Zn was reported to have been milled.

The mine, however, was shut down in 1991 due to a terrorist event which destroyed a major power plant, hence stopping part of the power supply to the city of Lima and also to the Nueva Condor mine.

Peruvian General Mining Law

According to the General Mining Law of Peru, Validity Fees are payable annually at a cost of US$ 3.00 per hectare and must be paid by the 30th of June. Should payment of Validity Fees not be made for two consecutive years, mining pediments or concessions will be cancelled. After pediments or concessions are held by a party for 6 years annual fees change according to the following framework:

No permits are required for exploration work although an affidavit must be signed. An Environmental Impact Assessment (EIA) must be completed prior to any drilling.

Present Condition

The total cost for the acquisition of the Peru Properties was $1,330,000. During the year ended May 31, 2011, the Company incurred $23,197 of mineral property costs related to the Peru Properties. The Company has made no improvements on the Peru Properties and they contain no physical plant, equipment, or other structures. The Company has neither improved the present condition of, nor undertaken any work on, the Peru Properties aside from road construction.

The Company’s anticipates using diesel generators as the exclusive power source for the Peru Properties.

As of May 31, 2011, the Company does not know of any environmental issues specific to the Peru Properties. The Company intends to undertake an extensive environmental due diligence program on the entire site.

Geological Setting and Deposit Types

As of May 31, 2011 we have performed very limited exploration and sampling of the Peru Properties. The Technical Report does not contain a mineral resources or mineral reserves estimate for the Peru Properties.

Recommended Program

The Technical Report recommends the following:

Satellite Imagery	$	25,000
Airborne geophysical survey (500 km @ $200/km)	$	100,000
Ground follow-up (geology, soil geochemistry, rock sampling)	$	100,000

A drilling decision will be made following a review of results of this initial exploration work.

Capital Expenditures

As of May 31, 2011 the Company is in the exploration phase of its planned operations for the Peru Properties. Consequently, we do not anticipate making any capital expenditures for the fiscal year ending May 31, 2012. The only expenses we anticipate accruing prior to May 31, 2012 are those relating to operations, exploration, and technical review. The Company is exploring joint ventures, option arrangements, earn-ins or other arrangements which will fund maintenance, explorations and development of our properties, although none have been negotiated.

Item 3.

Legal Proceedings.

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

Item 4.

[Removed and Reserved.]

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is quoted on the Over The Counter Bulletin Board (“OTCBB”), which is sponsored by the Financial Industry Regulatory Authority (“FINRA”). The OTCBB is a network of security dealers who buy and sell stock. The dealers are connected by a computer network, which provides information on current “bids” and “asks” as well as volume information. The OTCBB is not considered a “national exchange.” Our symbol is “BKTK.”

Our common stock began trading on the OTCBB on February 1, 2008. Accordingly, there is only a very limited trading history for our common stock. Further, the market for shares in our common stock is limited because only a small number of our outstanding shares are available for trading in the public market.

The high and low bid quotations of our common stock on the OTCBB as reported by the OTC Markets were as follows:

FINRA OTC Bulletin Board(1)(2)
Quarter Ended	High ($)		Low ($)
May 31, 2011		0.26		0.07

February 28, 2011		1.00		0.1

November 30, 2010		0.75		0.15

August 31, 2010		0.725		0.175

May 31, 2010	$	10.5	$	0.56

February 28, 2010	$	9.5	$	2.75

November 30, 2009	$	5.50	$	2.50

August 31, 2009	$	13.75	$	4.00

(1)

Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.

(2)

The pricing gives effect to the 50-1 reverse stock split that was effective on October 8, 2010.

Holders

Our common shares are issued in registered form. Colonial Stock Transfer Company, Inc., 66 Exchange Place, Suite 100, Salt Lake City, Utah 84111 (801) 355-5740 (phone), (801) 355-6505 (fax) is the registrar and transfer agent for our common shares. On August 26, 2011, the shareholders' list of our common shares showed 6,970,176 shares outstanding and 61 shareholders of record.

Dividend Policy

We have not paid any cash dividends on our common stock and we have no intention of paying any dividends on our shares of common stock in the near future. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.

Securities Authorized for Issuance Under Equity Compensation Plans

On August 24, 2009, the Company’s Board of Directors adopted the Black Tusk Minerals Inc. 2009 Nonqualified Stock Option Plan (the “2009 Plan”). The 2009 Plan was approved by the Company’s shareholders became effective on November 16, 2009.

Pursuant to the 2009 Plan, stock options may be granted to any person who is performing or who has been engaged to perform services of special importance to management of the Company in the operation, development and growth of the Company. The maximum number of shares with respect to which stock options may be granted under the 2009 Plan may not exceed 100,000 split adjusted shares. All stock options granted under the 2009 Plan shall be nonqualified stock options and shall be evidenced by agreements, which shall be subject to the applicable provisions of the 2009 Plan. The foregoing description of the 2009 Plan is qualified in its entirety by reference to the 2009 Plan, a copy of which is filed as Exhibit 10.1 to Company’s Current Report on Form 8-K filed with the SEC on August 29, 2009.

The Committee (as defined in the 2009 Plan) and the Company’s Board of Directors authorized and approved the grant of stock options on the dates and exercise prices as follows, which were the closing prices of the Company’s common shares on the OTC Bulletin Board on the trading day immediately prior to the date of grant.

On August 25, 2009, granted 80,000 split-adjusted stock options at an exercise price of $5.00 per share;

On September 1, 2009, granted 4,000 split-adjusted stock options at an exercise price of $5.50 per share;

On September 7, 2009, granted 4,000 split-adjusted stock options at an exercise price of $5.00 per share; and

On January 4, 2010, granted 12,000 split-adjusted stock options at an exercise price of $5.00 per share.

On March 17, 2011, the Company’s Board of Directors adopted the Black Tusk Minerals Inc. 2011 Nonqualified Stock Option Plan (the “2011 Plan”). The 2011 Plan was ratified by the shareholders by written consent on April 29, 2011.

Pursuant to the 2011 Plan, stock options may be granted to any person who is performing or who has been engaged to perform services of special importance to management of the Company in the operation, development and growth of the Company. The maximum number of shares with respect to which stock options may be granted under the 2011 Plan may not exceed 650,000. All stock options granted under the 2011 Plan shall be nonqualified stock options and shall be evidenced by agreements, which shall be subject to the applicable provisions of the 2011 Plan. The foregoing description of the 2011 Plan is qualified in its entirety by reference to the 2011 Plan, a copy of which was filed as Exhibit 99.1 to a Current Report on Form 8-K filed with the SEC on March 23, 2011.

The Company’s Board of Directors authorized, approved and ratified the grants of stock options on August 11, 2011 and the grants and exercise prices as follows, which were the closing prices of the Company’s common shares on the OTC Bulletin Board on the trading day immediately prior to the date of grant.

On March 18, 2011, granted 550,000 stock options at an exercise price of $0.12 per share; and

On April 6, 2011, granted 100,000 stock options at an exercise price of $0.12 per share

For more information regarding the grants of stock option see “Item 11. Executive Compensation – Outstanding Equity Awards at Fiscal Year End.”

The following summary information is presented in aggregate for the 2009 Plan and the 2011 Plan as of May 31, 2011.

Number of Securities to

be Issued Upon Exercise

of Outstanding Options

Weighted Average

Exercise Price of

Outstanding Options,

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation

Plans (Excluding

Securities Reflected in

Column (a)

Plan Category

(a)

(b)

(c)

Equity Compensation

Plans Approved By

Security Holders(1)

750,000(2)

$0.53

40,000

Equity Compensation

Plans Not Approved By

Security Holders

Not Applicable

(1)

The 2009 Plan was approved by the Company’s shareholders became effective on November 16, 2009; the 2011 Plan was approved by the consenting stockholders on April 29, 2011.

(2)

20,000 split adjusted stock options at an exercise price of $5.00 per share (split-adjusted) were cancelled effective as of the resignation of Michael McIsaac from his positions as director, secretary and treasurer; 20,000 split adjusted stock options at an exercise price of $5.00 per share (split-adjusted) were cancelled effective June 1, 2010.

Recent Sales of Unregistered Securities

During the year ended May 31, 2011, we have offered and sold the following securities in unregistered transactions pursuant to exemptions under the United States Securities Act of 1933, as amended (the “Securities Act”).

On February 8, 2011, the Company closed a private placement of units. Under the terms of the private placement, the Company issued 5,559,713 units at a price of $0.05 per unit. Magellan acquired 5,163,313 units in consideration of the cancellation of debt. Each unit consists of one share of common stock of the Company and one full purchase warrant, which may be converted to one share of common stock in the Company at an exercise price of $0.05 until February 8, 2016, a portion of this placement, 2,703,509 and 266,667 (2,970,176 in the aggregate) units, were rescinded on March 30, 2011 and April 14, 2011 (See below for additional details regarding this private placement and the subsequent Rescission and Conditional Purchase Agreement).

On February 8, 2011, the Company issued 7% convertible debentures in the total amount of $33,500. The debentures are due and payable on March 1, 2016, with interest accruing on the unpaid principal amount, compounded annually. The debentures are convertible at the option of the holder into units. Each unit consists of one share of common stock of the Company, par value of $0.001, and one share purchase warrant, at a conversion price of $0.05 per unit. Each warrant is exercisable to acquire one share of common stock of the Company at an exercise price of $0.05 per share until February 8, 2016.

On February 10, 2011, the Company issued 7% convertible debentures in the total amount of $10,000. The debentures are due and payable on March 1, 2016, with interest accruing on the unpaid principal amount, compounded annually. The debentures are convertible at the option of the holder into units. Each unit consists of one share of common stock of the Company, par value of $0.001, and one share purchase warrant, at a conversion price of $0.05 per unit. Each warrant is exercisable to acquire one share of common stock of the Company at an exercise price of $0.05 per share until February 10, 2016.

On March 9, 2011, the Company closed a private placement of common shares. Under the terms of the private placement, the Company issued 200,000 common shares at a price of $0.075 per unit and raised $15,000.

On March 14, 2011, the Company closed a private placement of common shares. Under the terms of the private placement, the Company issued 66,667 common shares at a price of $0.075 per unit and raised $5,000.

On March 31, 2011, the Company issued 200,000 split-adjusted shares of common stock upon the conversion of the notes in the principal amount of $10,000.

The units, shares and convertible debentures were offered by the Company in a non-brokered private placement to non-U.S. persons outside of the United States in off-shore transactions. The units, convertible debentures, shares, warrants and underlying shares of the private placement were not registered under the Securities Act of 1933, or the laws of any state, and are “restricted securities” (as defined in Rule 144(a)(3) of the Securities Act). The securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The shares, warrants and underlying securities were placed pursuant to exclusions from registration requirements by Rule 903 of Regulation S of the Securities Act, such exclusions being available based on information obtained from the investors to the private placement.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

During the period covered by this annual report, neither us nor any of our affiliates repurchased common shares of the Company registered under section 12 of the Exchange Act, except as listed in this annual report on 10-K.

On February 8, 2011, the Company and Magellan entered into the Disgorgement Agreement. Magellan is wholly owned and controlled by Gavin Roy, the President and a director of the Company. As part of a private placement that occurred on February 8, 2011, the Company issued 5,163,313 units to Magellan in the Magellan Placement, in order to pay off the Magellan Debt as a result of cash advances made by the Magellan to the Company. As a result of this issuance of units, Magellan was subject to disgorgement under Section 16(b) of the Exchange Act, due to sales of shares made by Magellan on August 13 and August 23, 2010. Magellan was required to disgorge $2,866 in profits. Under the terms of the Disgorgement Agreement, Magellan disgorged $2,866 by forgiving that amount of the Magellan Debt.

The Company determined that it may have improperly effected a share consolidation and that the Company may not have sufficient authorized capital to satisfy the Company’s business objectives and obligations. On March 30, 2011 and April 14, 2011, the Company and Magellan entered the Rescission and Conditional Purchase Agreements whereby Magellan and the Company agreed to rescind a portion of the Magellan Placement by rescinding and cancelling the Rescinded Units in consideration for the Company’s acknowledgement of the debt obligation in the amount of $135,176 owed to Magellan in connection with the rescission of a portion of the Magellan Placement. The Company and Magellan also agreed that the Company would use commercially reasonable efforts to amend the Articles of Incorporation to increase the authorized capital of the Company, including obtaining shareholder approval for the amendment by a majority of the shareholders of the Company and a majority of the disinterested shareholders of the Company (shareholders excluding Magellan and Gavin Roy), and upon the increase in the authorized shares of common stock of the Company, the Company will permit Magellan to purchase the Rescinded Units under the Rescission and Conditional Purchase Agreement under the same terms as the Magellan Placement.

Item 6.

Selected Financial Data.

Not Applicable.

Item 7.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this annual report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this annual report. See “Cautionary Note Regarding Forward-Looking Statements” above.

Plan of Operation

Peru Properties

The Company’s plans for the next twelve months are to focus on the exploration of the Peru Properties and estimates that cash requirements of approximately $900,000 will be required for exploration and administration costs and to fund working capital. We do not have any commitments to fund these costs. Therefore, we need to raise an additional $900,000 in debt or equity financing in the next twelve months. We believe that such funds, if raised, will be sufficient to meet our liquidity requirements through May 31, 2012. However, we do not have any commitments to fund such costs during the next twelve months. Since May, 31, 2010, we obtained proceeds in the amount of: (1) $16,500 through a private placement of units consisting of shares of common stock and share purchase warrants, 330,000 units were issued at $0.05 per unit; (2) $43,500 through a private placement of 7% convertible debentures; and (3) proceeds in the amount of $20,000 through a private placement of our common shares by issuing 266,667 shares of common stock at $0.075 per share.

We anticipate that we will incur the following expenses over the next 12 months as of May 31, 2012:

(1)

$350,000 for operating expenses, including general, legal, accounting and administrative expenses associated with our reporting obligations under the Securities Exchange Act of 1934, and general working capital expenditures;

(2)

$550,000 for expenses related to the technical review and exploration of the Peru Properties, including, but not limited to, satellite imagery, the airborne geophysical survey, and geology, soil geochemistry, and rock sampling.

Failure to raise needed financing could result in our having to discontinue our mining exploration and development business.

On August 31, 2009, a NI 43-101 compliant Technical Report relating to the Peru Properties entitled “Geological Evaluation of the Huanza Property” dated August 28, 2009 was published and filed on SEDAR at www.sedar.com. Readers are encouraged to review the Technical Report in its entirety for more information regarding the Peru Properties and the recommended program for exploration and development of the Peru Properties..

Limited Operating History; Need for Additional Capital

In Note 1 to the Company’s audited consolidated financial statements as of May 31, 2011, included elsewhere in this Form 10-K, the Company included an explanatory paragraph stating that, because the Company had a working capital deficiency of $319,337 as of May 31, 2011, and had incurred accumulated losses of $3,003,384 for the period from August 8, 2005 (inception) to May 31, 2011, there was substantial doubt about its ability to continue as a going concern.

There is limited historical financial information about the Company upon which to base an evaluation of its performance. The Company is a development stage enterprise and has not generated any revenues from operations. The Company cannot guarantee it will be successful in its business operations. The Company’s business is subject to risks inherent in the establishment of a new mineral exploration company, including limited capital resources, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. To become profitable and competitive, the Company will implement its plan of operation as detailed above.

The Company will be required to raise funds to complete the technical review of the Peru Properties, to conduct the recommended exploration program on the Peru Properties and for general working capital purposes. Such financing activities could include issuing debt or equity securities in the Company and could result in a dilution of the Company’s existing share capital. The Company can give no assurance that future financing will be available to it on acceptable terms or at all. If financing is not available on satisfactory terms, the Company may be unable to continue, develop or expand its operations.

Results of Operations

We did not earn any revenues from May 31, 2010 to May 31, 2011. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.

We incurred operating expenses in the amount of $265,279 for the period from May 31, 2010 to May 31, 2011 compared to $820,510 for the period from May 31, 2009 to May 31, 2010. These operating expenses included: (a) professional fees in connection with our corporate organization of $86,982 (2010:$113,862); (b) donated office rent of $3,000 (2010: $3,000); (c) donated management services of $6,000 (2010: $6,000); (d) impairment of mineral property costs of $Nil (2010: $21,958); and (e) general and administrative costs of $145,662 (2010: $633,547).

We incurred a net loss in the amount of $278,079 for the period from May 31, 2010 to May 31, 2011 compared to $841,814 for the period from May 31, 2009 to May 31, 2010. The smaller loss was attributable to less general and administrative fees, professional fees and property impairment costs.

Liquidity and Capital Resources

There is limited financial information about the Company upon which to base an evaluation of our performance. We are an exploration stage company and have not generated any revenues from operations.

As at May 31, 2011, we had cash of $2 (2010: $257), a working capital deficit of $319,337 (2010: $270,436) and an accumulated deficit of $3,003,384 (2010: $2,725,305). The increase in working capital deficit was due to decrease in monies due to related parties from $224,734 as at May 31, 2010 to $151,673 as at May 31, 2011 which is offset by increase in accounts payable by $52,589 since May 31, 2010 and increase in current portion of convertible notes and interest from $Nil (May 31, 2010) to $60,168 at May 31, 2011.

Our continued existence and plans for future growth depend on our ability to obtain the capital necessary to operate by the sale of equity shares. We will need to raise additional capital to fund normal operating costs and exploration efforts. We anticipate that we will need $900,000 or more to fund our capital requirements through May 31, 2012. We do not have any commitments to fund these costs. Therefore, we need to raise an additional $900,000 or more in debt or equity financing in the next twelve months. We believe that such funds, if raised, will be sufficient to meet our liquidity requirements through May 31, 2012. However, we do not have any commitments to fund such costs. If we are not able to generate sufficient revenues and cash flows or obtain additional or alternative funding, we will be unable to continue as a going concern. Our recurring losses and negative cash flow from operations raise substantial doubt about our ability to continue as a going concern. Subsequent to May, 31, 2010, we obtained proceeds in the amount of: (1) $16,500 through a private placement of units consisting of shares of common stock and share purchase warrants, 330,000 units were issued at $0.05 per unit; (2) $43,500 through a private placement of 7% convertible debentures; and (3) proceeds in the amount of $20,000 through a private placement of our common shares by issuing 266,667 shares of common stock at $0.075 per share. These proceeds funded our immediate cash requirements but did not resolve our working capital deficit or our need to raise additional capital.

The Company may enter into joint venture agreements, option arrangements, earn-in arrangements or other arrangements with third parties in order to fund exploration, development and maintenance of its properties or to provide funding to meet the Company’s capital requirements through May 31, 2012.

The Company’s consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. The Company’s working capital deficiency of $319,337 and accumulated losses of $3,003,304 since inception raise substantial doubt regarding the Company’s ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet transactions.

Critical Accounting Policies

Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned Peruvian subsidiary, Black Tusk Minerals Peru SAC. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is May 31.

Use of Estimates

The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to impairment of its mineral properties, valuation of donated capital and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti - dilutive. Shares underlying these securities totalled 4,204,989 as at May 31, 2011 (115,452 - May 31, 2010).

Comprehensive Loss

ASC 220, “Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2011 and 2010, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. The Company’s Peruvian subsidiary uses the US dollar for its transactions and accounts for its operations in US dollars, which does not give rise to comprehensive income or loss.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Mineral Property Costs

The Company has been in the exploration stage since its inception on August 8, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant and Equipment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Long-Lived Assets

In accordance with ASC 360, Property, Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Financial Instruments and Fair Value Measures

The Company’s financial instruments consist principally of cash, accounts payable, amounts due to related parties and convertible notes. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments the fair value of the Company’s cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company’s convertible notes are recorded using the amortized cost basis, with the discount amortized to interest expense over the term of the notes. The fair value of convertible notes is determined using "Level 2" inputs and approximate carrying value. The Company believes that the recorded values of all of the Company’s other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

The Company’s operations are in Canada and Peru, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Income Taxes” as of its inception. Pursuant to ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. The Company’s Peruvian subsidiary uses the US dollar for its transactions and accounts for its operations in US dollars. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830 “Foreign Currency Translation Matters”, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Item 7A.

Quantitative and Qualitative Disclosures About Material Risk.

Not Applicable.

Item 8.

Financial Statements and Supplementary Data.

Black Tusk Minerals Inc.

(An Exploration Stage Company)

May 31, 2011

Index

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets	F-2

Consolidated Statements of Operations	F-3

Consolidated Statements of Cash Flows	F-4

Consolidated Statements of of Stockholders’ Deficit	F-5

Notes to the Consolidated Financial Statements	F-7

Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders of

Black Tusk Minerals Inc. (An Exploration Stage Company)

We have audited the accompanying consolidated balance sheets of Black Tusk Minerals Inc. (An Exploration Stage Company) as of May 31, 2011 and 2010 and the related consolidated statements of operations, cash flows and stockholders’ deficit for the years then ended, and accumulated from August 8, 2005 (Date of Inception) to May 31, 2011. 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.

We conducted our audits in accordance with 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes 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 internal control over financial reporting. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Black Tusk Minerals Inc. (An Exploration Stage Company) as of May 31, 2011 and 2010, and the results of its operations, cash flows and stockholders’ deficit for the years then ended and accumulated from August 8, 2005 (Date of Inception) to May 31, 2011, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has working capital deficiency and accumulated losses from operations since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ “Manning Elliott LLP”

CHARTERED ACCOUNTANTS

Vancouver, Canada

August 29, 2011

F-1

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Consolidated Balance Sheets

(Expressed in US dollars)

	May 31, 2011 $			May 31, 2010 $


ASSETS

Current Assets

Cash		2			257
Prepaid expenses		964			140

Total Current Assets		966			397

Equipment (Note 2(e))		2,310			–

Total Assets		3,276			397


LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable		85,872			33,283
Accrued liabilities		22,590			12,816
Due to related parties (Note 3)		151,673			224,734
Convertible notes and interest, current (Note 5)		60,168			–

Total Current Liabilities		320,303			270,833

Convertible Notes and Interest (Note 5)		34,313			52,169

Total Liabilities		354,616			323,002


Contingencies (Note 1)
Subsequent Events (Note 11)

Stockholders’ Deficit

Common Stock, 100,000,000 shares authorized, $0.001 par value 4,000,000 shares issued and outstanding (2010 – 1,015,785) (Note 6)		4,000			944

Additional Paid-in Capital		2,596,294			2,359,006

Donated Capital (Note 3)		51,750			42,750

Deficit Accumulated During the Exploration Stage		(3,003,384	)		(2,725,305	)

Total Stockholders’ Deficit		(351,340	)		(322,605	)

Total Liabilities and Stockholders’ Deficit		3,276			397

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

F-2

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Consolidated Statements of Operations

(Expressed in US dollars)

	Accumulated From August 8, 2005 (Date of Inception)			For the Year Ended			For the Year Ended
	to May 31,			May 31,			May 31,
	2011 $			2011 $			2010 $

Revenue		–			–			–

Expenses

Amortization		538			538			–
Donated rent (Note 3)		17,250			3,000			3,000
Donated services (Note 3)		34,500			6,000			6,000
General and administrative (Note 7)		950,999			145,662			633,547
Impairment of mineral property costs (Note 4)		1,452,208			–			21,958
Mineral property costs (Note 4)		69,340			23,197			42,143
Professional fees		416,903			86,982			113,862

Total Operating Expenses		2,941,738			265,379			820,510

Loss From Operations		(2,941,738	)		(265,379	)		(820,510	)

Other Expenses

Interest on convertible notes (Note 5)		(35,886	)		(12,700	)		(20,426	)
Gain on settlement of debt		–			–			–
Loss on conversion of accounts payable to convertible note (Note 5)		(25,760	)		–			(878	)

Total Other Expenses		(61,646	)		(12,700	)		(21,304	)

Net Loss		(3,003,384	)		(278,079	)		(841,814	)

Net Loss Per Share – Basic and Diluted					(0.15	)		(0.88	)

Weighted Average Shares Outstanding					1,833,000			941,000

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

F-3

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US dollars)

	Accumulated From August 8, 2005 (Date of Inception) to May 31, 2011 $			For the Year Ended May 31, 2011 $			For the Year Ended May 31, 2010 $

Operating Activities

Net loss		(3,003,384	)		(278,079	)		(841,814	)

Adjustments to reconcile net loss to cash:

Amortization		538			538			–
Impairment of mineral property		1,452,208			–			21,958
Loss on conversion of accounts payable to convertible note		25,760			–			878
Donated services and rent		51,750			9,000			9,000
Common stock issued for services		4,000			–			–
Accretion of convertible debt		32,045			8,859			20,426
Stock – based compensation		635,903			78,000			557,903

Changes in operating assets and liabilities:
Prepaid expenses		(964	)		(824	)		(59	)
Accounts payable and accrued liabilities		170,703			71,384			11,160
Due to related parties		145,775			35,243			104,097

Net Cash Used in Operating Activities		(485,666	)		(75,879	)		(116,451	)

Investing Activities

Purchase of equipment		(1,495	)		(1,495	)		–
Mineral property acquisition costs		(112,208	)		–			(21,958	)

Net Cash Used in Investing Activities		(113,703	)		(1,495	)		(21,958	)

Financing Activities

Bank indebtedness		–			–			(149	)
Proceeds from issuance of common stock		431,937			36,500			5,000
Proceeds from loans		93,613			43,500			45,113
Repayment of loans		(25,381	)		(2,881	)		(22,500	)
Share issuance costs		(12,000	)		–			–
Advance from related party		111,202			–			111,202

Net Cash Provided by Financing Activities		599,371			77,119			138,666

Increase (Decrease) In Cash		2			(255	)		257

Cash - Beginning of Period		–			257			–

Cash - End of Period		2			2			257

Supplemental Disclosures

Interest paid		5,317			3,958			1,159
Income tax paid		–			–			–

Non-cash Investing and Financing Activities

Common shares issued upon the conversion of convertible notes		37,613			10,000			27,613
Common shares issued for mineral property		1,330,000			–			–
Settlement of accounts payable for convertible notes		64,381			–			2,881
Common shares issued for settlement of accounts payable		3,254			3,254			–
Common shares issued for settlement of due to related party		112,978			112,978			–
Issuance of convertible notes for mineral property costs		34,113			–			34,113

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

F-4

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Consolidated Statement of Stockholders’ Deficit

For the Period from August 8, 2005 (Date of Inception) to May 31, 2011

(Expressed in US dollars)

																		Deficit
																		Accumulated
							Additional			Stock			Common					During the
							Paid-in			Subscriptions			Stock			Donated		Exploration
	Shares #			Amount $			Capital $			Receivable $			Subscribed $			Capital $		Stage $			Total $

Balance – August 8, 2005 (Date of Inception)		–			–			–			–			–			–		–			–

August 8, 2005 – common shares issued for cash at $0.0125 per share		380,000			380			4,370			–			–			–		–			4,750

March 24, 2006 – common shares issued for cash at $0.125 per share		292,000			292			36,208			–			–			–		–			36,500

May 31, 2006 – common shares issued for cash at $3.038 per share		2,880			3			8,997			(250	)		–			–		–			8,750

Donated rent and services		–			–			–			–			–			6,750		–			6,750

Net loss for the period		–			–			–			–			–			–		(24,639	)		(24,639	)

Balance – May 31, 2006		674,880			675			49,575			(250	)		–			6,750		(24,639	)		32,111

August 31, 2006 – common shares issued for services at $0.125 per share		32,000			32			3,968			–			–			–		–			4,000

Donated rent and services		–			–			–			–			–			9,000		–			9,000

Net loss for the year		–			–			–			–			–			–		(47,215	)		(47,215	)

Balance – May 31, 2007		706,880			707			53,543			(250	)		–			15,750		(71,854	)		(2,104	)

September 1, 2007 - common shares issued for cash at $3.750 per share		25,123			25			94,186			–			–			–		–			94,211

Share issuance costs		–			–			(3,000	)		–			–			–		–			(3,000	)

February 8, 2008 - common shares issued for cash at $3.750 per share		4,260			4			15,971			–			–			–		–			15,975

April 24, 2008 – common shares issued for mineral property at a fair value of $3.325 per share		400,000			400			1,329,600			–			–			–		–			1,330,000

April 24, 2008 – common shares returned for cancellation (Note 3)		(240,000	)		(240	)		(2,760	)		–			–			–		–			(3,000	)

Subscriptions received		–			–			–			250			–			–		–			250

Common stock subscribed		–			–			–			–			125,750			–		–			125,750

Donated rent and services		–			–			–			–			–			9,000		–			9,000

Net loss for the year		–			–			–			–			–			–		(1,670,861	)		(1,670,861	)

Balance – May 31, 2008		896,263			896			1,487,540			–			125,750			24,750		(1,742,715	)		(103,779	)

June 17, 2008 - common shares issued for cash at $0.110 per share		20,480			21			127,979			–			(125,750	)		–		–			2,250

September 8, 2008 – common shares issued for cash at $5.00 per share		20,000			20			99,980			–			–			–		–			100,000

Share issuance costs		–			–			(9,000	)		–			–			–		–			(9,000	)

January 23, 2009 – intrinsic value of beneficial conversion feature on convertible debt (Note 6)		–			–			24,600			–			–			–		–			24,600

January 23, 2009 – fair value of warrants issued		–			–			24,882			–			–			–		–			24,882

Common stock subscribed		–			–			–			–			2,000			–		–			2,000

Donated rent and services		–			–			–			–			–			9,000		–			9,000

Net loss for the year		–			–			–			–			–			–		(140,776	)		(140,776	)

Balance – May 31, 2009		936,743			937			1,755,981			–			2,000			33,750		(1,883,491	)		(90,823	)

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

F-5

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Consolidated Statement of Stockholders’ Deficit

For the Period from August 8, 2005 (Date of Inception) to May 31, 2011

(Expressed in US dollars)

Deficit

Accumulated

Additional

Stock

Common

During the

Paid-in

Subscriptions

Stock

Donated

Exploration

Amount

Capital

Receivable

Subscribed

Capital

Stage

Total

Balance – May 31, 2009

936,743

937

1,755,981

–

2,000

33,750

(1,883,491

)

(90,823

)

June 26, 2009 – fair value of warrants issued

–

11,338

–

11,338

July 14, 2009 – loss on conversion of accounts payable to convertible note

–

878

–

878

August 25, 2009 – fair value of options issued

–

457,184

–

457,184

September 1, 2009 – fair value of options issued

–

21,851

–

21,851

September 7, 2009 – fair value of options issued

–

18,868

–

18,868

September 11, 2009 – common shares issued for conversion of note

3,200

13,699

–

13,702

September 11, 2009 – common shares issued for cash at $3.571 per share

1,400

6,999

–

(2,000

)

–

5,000

December 31, 2009 – common shares issued for conversion of note

2,442

12,208

–

12,211

January 4, 2010 – fair value of options issued

–

60,000

–

60,000

Donated rent and services

–

9,000

–

9,000

Treasury shares issued but not paid

72,000

–

Net loss for the year

–

(841,814

)

(841,814

)

Balance – May 31, 2010

1,015,785

944

2,359,006

–

42,750

(2,725,305

)

(322,605

)

September 2, 2010 – Cancellation of treasury shares

(72,000

)

–

October 11, 2010 – Adjustment to number of shares outstanding after stock split

–

February 8, 2011 – Shares issued to settle debt

2,259,537

2,259

110,719

–

112,978

–

February 8, 2011 – Common shares issued for cash at $0.05 per share

330,000

330

16,170

–

16,500

–

March 7, 2011 – common shares issued for cash at $0.075 per share

200,000

200

14,800

–

15,000

–

March 11, 2011 – common shares issued for cash at $0.075 per share

66,667

4,933

–

5,000

–

March 30, 2011 – common shares issued for conversion of note

100,000

100

4,900

–

5,000

–

March 31, 2011 – common shares issued for conversion of note

100,000

100

4,900

–

5,000

March 18, 2011 – fair value of options issued

–

66,000

–

66,000

April 14, 2011 – fair value of options issued

–

12,000

–

12,000

Donated rent and services

–

9,000

–

9,000

–

Gain on debt settlement

–

2,866

–

2,866

–

Net loss for the year

–

(278,079

)

(278,079

)

Balance – May 31, 2011

4,000,000

4,000

2,596,294

–

51,750

(3,003,384

)

(351,340

)

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

F-6

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

1.	Nature of Business and Continuance of Operations

Black Tusk Minerals Inc. (the “Company”) was incorporated in the State of Nevada on August 8, 2005. Effective September 21, 2007, the Company incorporated a wholly-owned Peruvian subsidiary, Black Tusk Minerals Peru SAC. The Company is an Exploration Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company’s principal business is the acquisition and exploration of mineral properties. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its management and shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at May 31, 2011, the Company has a working capital deficiency of $319,337 and has accumulated losses of $3,003,384 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company’s plans for the next twelve months are to focus on the exploration of its mineral properties in Peru and estimates that cash requirements of approximately $575,000 will be required, $225,000 for research and studies and $350,000 for exploration and administration costs and to fund working capital. There can be no assurance that the Company will be able to raise sufficient funds to pay the expected expenses for the next twelve months.

2.	Summary of Significant Accounting Policies

Basis of Presentation

On October 11, 2010, the Company effected a 50:1 reverse stock-split of its issued and outstanding common stock. The issued and outstanding share capital decreased from 47,189,262 shares of common stock to 943,785 shares of common stock. All per share amounts, number and exercise price of stock options, warrants and conversion price of convertible debt have been retroactively restated to reflect the reverse stock-split.

Use of Estimates

The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to impairment of its mineral properties, valuation of donated capital, stock-based compensation, valuation of financial instruments and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2011 and 2010, the Company has no items that represent other comprehensive loss and therefore, has not included a schedule of other comprehensive loss in the financial statements. The Company’s Peruvian subsidiary uses the US dollar for its transactions and accounts for its operations in US dollars, which does not give rise to other comprehensive income or loss.

F-7

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

2.	Summary of Significant Accounting Policies (continued)

Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential split-adjusted shares if their effect is anti-dilutive. Split-adjusted shares underlying these securities totalled 4,204,989 as at May 31, 2011 (2010 – 115,452).

Equipment

Equipment is comprised of computer equipment and is recorded at cost and amortized using the straight line method over the estimated useful life of 3 years.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Mineral Property Costs

The Company has been in the exploration stage since its inception on August 8, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Long-Lived Assets

In accordance with ASC 360, Property, Plant, and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Financial Instruments and Fair Value Measures

The Company’s financial instruments consist principally of cash, accounts payable, amounts due to related parties and convertible notes and interest. The Company believes that the recorded values of all of the Company’s financial instruments approximate their current fair values because of their nature, respective relatively short maturity dates or durations, and current market interest rates for similar financial instruments.

The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

F-8

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

2.	Summary of Significant Accounting Policies (continued)

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar ("US dollars"). The Company’s Peruvian subsidiary uses the US dollar for its transactions and accounts for its operations in US dollars. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Based Compensation, and ASC 505-50, Equity Based Payments to Non-Employees using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.	Related Party Transactions and Balances

During the year ended May 31, 2011, the Company recognized $6,000 (2010 - $6,000) for donated services at $500 per month, and $3,000 (2010 - $3,000) for donated rent at $250 per month provided by a former director.

At May 31, 2011, the Company paid $1,625 to a former director of the Company for returning 65,000 split-adjusted shares of common stock to the Company for cancellation. At May 31, 2011, the Company is indebted to a former director of the Company for $nil (May 31, 2010 - $1,625)

At May 31, 2011, the Company paid $1,375 to the former secretary, treasurer and director of the Company for returning 55,000 split-adjusted shares of common stock to the Company for cancellation. At May 31, 2011, the Company is indebted to the former secretary, treasurer and director of the Company for $nil (May 31, 2010 - $1,375).

On February 8, 2011, the Company entered into a disgorgement and settlement agreement with Magellan Management Company, wholly owned and controlled by the President of the Company (Magellan). Pursuant to the agreement, the Company issued 5,163,313 units at $0.05 per unit (“Magellan Placement) to settle $261,032 of debt owed to the Related Company (“Magellan Debt”) as a result of cash advances made by the Magellan to the Company. A portion of the Magellan Placement was rescinded (Refer to Note 3(f) below). Each unit consists of one share of common stock and one warrant to purchase an additional common share of the Company at $0.05. As a result of this issuance of units, the Magellan was subject to matching under section 16(b) of the Securities Exchange Act of 1934, due to sales of shares made by Magellan on August 13 and August 23, 2010. As a result of the matching transaction, Magellan was required to disgorge $2,866 in profits (refer to 3(f) below). The $2,866 was forgiven as part of the Magellan Debt (refer to Note 6(g)).

F-9

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

3.	Related Party Transactions and Balances (continued)

At May 31, 2011, the Company is indebted to a company owned by the president of the Company for $151,673 (May 31, 2010 - $221,734), of which $151,673 (May 31, 2010 - $110,532) represents expenses paid on behalf of the Company and $nil (May 31, 2010 - $111,202) represents net cash advances provided to the Company. Indebtedness of $3,164 is non-interest bearing, unsecured and has no specific repayment terms. The remaining indebtedness amount of $148,509 will be converted into units pursuant to a rescission and conditional purchase agreements entered into by the Company and the related party on March 30, 2011 and April 14, 2011 (Refer to Note 3(f) below for details on the Rescission and Conditional Purchase Agreement).

The Company determined that it may have improperly effected a share consolidation and that the Company may not have sufficient authorized capital to satisfy the Company’s business objectives and obligations. On March 30, 2011 and April 14, 2011, the Company entered into a rescission and conditional purchase agreement with Magellan (the “Rescission and Conditional Purchase Agreements”) whereby Magellan and the Company agreed to rescind a portion of the Magellan Placement by rescinding and cancelling 2,703,509 and 266,667 (2,970,176 in the aggregate) shares of common stock and 2,703,509 and 266,667 (2,970,176 in the aggregate) share purchase warrants (collectively, the “Rescinded Units”) in consideration for the Company’s acknowledgement of the debt obligation in the amount of $135,176 and $13,333 ($148,509 in the aggregate) owed to Magellan in connection with the rescission of a portion of the Magellan Placement. The Company and Magellan also agreed that the Company would use commercially reasonable efforts to amend the Articles of Incorporation to increase the authorized capital of the Company, including obtaining shareholder approval for the amendment by a majority of the shareholders of the Company and a majority of the disinterested shareholders of the Company (shareholders excluding Magellan and Gavin Roy), and upon the increase in the authorized shares of common stock of the Company, the Company would permit Magellan to purchase the Rescinded Units under the Rescission and Conditional Purchase Agreements under the same terms as the Magellan Placement. On June 13, 2011, the Company issued to Magellan, 2,970,176 units with each unit consisting of one common share and one common share purchase warrant with an exercise price of $0.05 per share exercisable until February 8, 2016. Refer to Note 11(b).

The above transactions have been recorded at the exchange amounts, being the amounts agreed upon by the related parties.

4.	Mineral Properties

On August 13, 2007, the Company entered into a term sheet with two individuals detailing the principal terms of the Company’s acquisition of 15 mining concessions and pediments covering approximately 8,000 hectares located in the District of Huanza, Province of Huarochiri, Peru. These concessions are subject to a 1% net smelter royalty granted to those individuals. As a result, the Company formed a Peruvian subsidiary to acquire the concessions. On December 5, 2007, the Company entered into a Master Purchase Agreement pursuant to which the Company would issue an aggregate of 400,000 split-adjusted common shares of the Company to the individuals for the transfer of the properties to the Company’s subsidiary. On April 24, 2008, the Company issued the 400,000 split-adjusted common shares at a fair value of $1,330,000. The Company paid $50,000 for the right to use adjacent property for mineral exploration purposes and has spent $41,860 on road building. The total cost of $1,421,860 was recognized as an impairment loss during the year ended May 31, 2008. On December 7, 2010, the Company entered into an Amendment to the Mining Concession Agreement. Pursuant to the amendment, both parties agreed to terminate the 1% NSR royalty.

During the year ended May 31, 2010, the Company acquired additional mining rights in the district of Huanza, Province of Huarochiri, Peru by paying $21,958 and incurred $42,143 of mineral property costs. During the year ended May 31, 2011, the Company incurred additional mineral property costs of $23,197. As it has not been determined whether there are proven or probable reserves on the property, the Company recognized an impairment loss of mineral property acquisition costs for the year ended May 31, 2011 of $nil (2010 - $21,958).

F-10

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

5.	Convertible Notes

On January 23, 2009, the Company entered into two fee arrangement agreements to settle $61,500 of professional fees included in accounts payable. Pursuant to the agreement the Company issued two convertible notes with an aggregate principal amount of $61,500, bearing interest at 4% per annum, and convertible into the Company’s common shares at a conversion price of $5.00 and warrants to purchase 12,000 split-adjusted shares of the Company’s common stock at $5.00 per share until January 23, 2012. The note is due on the earlier of: (a) January 23, 2012, (b) the date the Company closes an Acquisition Transaction (defined as the sale of equity securities or securities convertible into equity securities, any merger, consolidation, statutory share exchange or acquisition transaction, any sale of substantially all of the assets of the Company or any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company, unless following the completion of such transaction, the then existing shareholders of the Company own or control, indirectly or directly at least 50% of the voting power or liquidation rights of the Company or the successor of such merger, consolidation or statutory share exchange) or (c) the date the Company raises financing of $250,000 or more. In accordance with ASC 470-20, Debt – Debt with Conversion and Other Options, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $24,600 as additional paid-in capital and reduced the carrying value of the convertible notes to $36,900. The carrying value of the convertible notes is to be accreted over the term of the convertible notes up to their face value of $61,500. As at May 31, 2011, the carrying values of the convertible debenture and accrued convertible interest payable thereon were $54,385 and $5,782, respectively.

On June 26, 2009, the Company issued four convertible notes in exchange for cash proceeds used to pay concession fees due on the Company’s principal mineral properties in Peru. The notes bear interest at 10% per annum and are convertible into the Company’s common shares at a conversion rate of $5.00 per share. The principal amounts and due dates are as follows: $12,500 due on September 26, 2009 and $37,613 on December 31, 2009. In conjunction with the convertible notes, the Company issued warrants to purchase 10,000 split-adjusted common shares of the Company at a price of $5.00 per share until January 23, 2012. On August 31, 2009, the maturity date of the $12,500 convertible note was amended from August 31, 2009 to September 26, 2009. The notes are due on the earlier of (a) the specified due date, (b) the date the Company closes an Acquisition Transaction (defined as the sale of equity securities or securities convertible into equity securities, any merger, consolidation, statutory share exchange or acquisition transaction or any sale of substantially all of the assets of the Company, any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company, unless following the completion of such transaction, the then existing shareholders of the Company own or control, indirectly or directly at least 50% of the voting power or liquidation rights of the Company or the successor of such merger, consolidation or statutory share exchange) or (c) the date the Company raises financing of $250,000 or more. In accordance with ASC 470-20, the Company determined that there was no intrinsic value or beneficial conversion feature on the convertible notes. As a result, the Company recorded discounts equal to the relative fair value of the detachable warrants of $11,338 as additional paid-in capital and reduced the carrying value of the convertible notes to $38,775. The carrying values of the convertible notes were to be accreted over the term of the convertible notes up to their face value of $50,113.

On September 11, 2009, the Company issued 3,200 split-adjusted shares of common stock upon the conversion of a note in the principal amount of $16,000 and recorded the unamortized discount of $2,298 to additional paid-in capital.

On December 31, 2009, the Company repaid the convertible note in the principal amount of $10,000 due on December 31, 2009. The Company also made interest payment of $515 on this note.

On December 31, 2009, the Company repaid the convertible note in the principal amount of $12,500 due on September 26, 2009. The Company also made interest payment of $644 on this note.

On December 31, 2009, the Company issued 2,442 split-adjusted shares of common stock upon the conversion of a note in the principal amount of $11,613 and accrued interest of $598. As at May 31, 2011, the Company paid the remaining $338 of interest outstanding on this note.

On July 14, 2009, the Company entered into a fee arrangement agreement to settle $2,881 of professional fees included in accounts payable. Pursuant to the agreement the Company issued a convertible note with an aggregate principal amount of $2,881, bearing interest at 4% per annum, and convertible into the Company’s common stock at a conversion price of $5.00 and warrants to purchase 576 split-adjusted shares of the Company’s common stock at $5.00 per share until January 23, 2012. The note is due on the earlier of: (a) January 23, 2012, (b) the Company closing an Acquisition Transaction (defined as the sale of equity securities or securities convertible into equity securities, any merger, consolidation, statutory share exchange or acquisition transaction or any sale of substantially all of the assets of the Company, any similar

F-11

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

5.	Convertible Notes (continued)

transaction involving the issuance, cancellation or restructuring of equity securities of the Company, unless following the completion of such transaction, the then existing shareholders of the Company own or control, indirectly or directly at least 50% of the voting power or liquidation rights of the Company or the successor of such merger, consolidation or statutory share exchange), or (c) the date the Company raises financing of $250,000 or more. In accordance with ASC 470-20, the Company did not recognize intrinsic value as there was no beneficial conversion feature. On February 17, 2011, the Company repaid the remaining principle and interest outstanding on the convertible note of $2,881 and $188 respectively.

During the year ended May 31, 2011, the Company recorded a loss on conversion of accounts payable to convertible note of $nil (2010 - $878) equal to the fair value of the warrants issued pursuant to the fee arrangement agreements.

On February 8, 2011, the Company issued two convertible notes with an aggregate principal amount of $33,500, bearing interest at 7% per annum, and convertible into the Company’s common shares at a conversion price of $0.05 and warrants to purchase 670,000 shares of the Company’s common stock at $0.05 per share until March 1, 2016. The note is due on the earlier of: (a) March 1, 2016, (b) the date the Company closes an Acquisition Transaction (defined as (i) any sale of equity securities or securities convertible into equity securities of the Company; (ii) any merger, consolidation, statutory share exchange or acquisition transaction involving the Company or any material subsidiary of the Company; (iii), any sale of substantially all of the assets of the Company or any material subsidiary of the Company; or (iv) any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company, unless following the completion of such transaction, the then existing shareholders of the Company own or control, indirectly or directly at least 50% of the voting power or liquidation rights of the Company or the successor of such merger, consolidation or statutory share exchange. In the event of a contemplated change of control transaction, the Company shall provide the holder at least fifteen business days prior to the effective date of any change of control transaction, except as may otherwise be prohibited by law) In accordance with ASC 470-20, the Company did not recognize intrinsic value as there was no beneficial conversion feature. As at May 31, 2011, the carrying values of the convertible debenture and accrued convertible interest payable thereon were $33,500 and $720, respectively.

On February 10, 2011, the Company issued two convertible notes with an aggregate principal amount of $10,000, bearing interest at 7% per annum, and convertible into Units at $0.05 per unit, consisting of one share of common stock of the Company and one share purchase warrant exercisable to acquire one share of common stock of the Company at an exercise price of $0.05. The note is due on the earlier of: (a) March 1, 2016, (b) the date the Company closes an Acquisition Transaction (defined as (i) any sale of equity securities or securities convertible into equity securities of the Company; (ii) any merger, consolidation, statutory share exchange or acquisition transaction involving the Company or any material subsidiary of the Company; (iii), any sale of substantially all of the assets of the Company or any material subsidiary of the Company; or (iv) any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company, unless following the completion of such transaction, the then existing shareholders of the Company own or control, indirectly or directly at least 50% of the voting power or liquidation rights of the Company or the successor of such merger, consolidation or statutory share exchange. In the event of a contemplated change of control transaction, the Company shall provide the holder at least fifteen business days prior to the effective date of any change of control transaction, except as may otherwise be prohibited by law). In accordance with ASC 470-20, the Company did not recognize intrinsic value as there was no beneficial conversion feature.

On March 31, 2011, the Company issued 200,000 split-adjusted shares of common stock upon the conversion of the notes in the principal amount of $10,000. At May 31, 2011, $94 of accrued interest remains payable.

6.	Common Stock

On September 11, 2009, the Company issued 1,400 split-adjusted common shares at $5.00 per share for gross proceeds of $7,000, of which $2,000 was included in common stock subscribed at May 31, 2009.

On September 11, 2009, the $16,000 convertible note was converted into 3,200 split-adjusted common shares at a conversion price of $5.00 per share. The balance of the unamortized discount of $2,298 was included in additional paid-in capital. See Note 5 (b).

On December 31, 2009, the $11,613 convertible note and accrued interest of $598 was converted into 2,442 split-adjusted common shares at a conversion price of $5.00 per share. See Note 5 (b).

F-12

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

6.	Common Stock (continued)

On February 16, 2010, the Company effected a 2:1 forward stock-split of its issued and outstanding common stock. The issued and outstanding share capital increased from 25,394,631 shares of common stock to 50,789,262 shares of common stock. All per share amounts, number and exercise price of stock options, warrants and conversion price of convertible debt have been retroactively restated to reflect the forward stock-split.

On May 3, 2010, the Company issued 72,000 split-adjusted shares of common stock in error that were held in treasury. No consideration was received for these shares, and these shares were cancelled on September 2, 2010.

On February 8, 2011, the Company issued 5,163,313 units at $0.05 per unit to a company which is wholly owned and controlled by the President of the Company to settle $261,032 of debt. Each unit consists on one share of common stock and one warrant to purchase an additional share of the Company’s common stock price of $0.05 per share until February 8, 2016. The Company recorded a credit of $2,867 in additional paid in capital, pursuant to the Disgorgement Agreement. Pursuant to the Rescission and Conditional Purchase Agreements dated March 30, 2011 and April 14, 2011, respectively, the Company rescinded the purchase of 2,970,176 units issued to Magellan for a net issuance of 2,193,137 units to settle $109,657 of debt (Refer Note 3(d) and 3(f)).

On February 8, 2011, the Company issued 66,400 units at $0.05 per unit to settle $3,321 of accounts payable. Each unit consists of one share of common stock and one warrant to purchase an additional share of common stock at a price of $0.05 per share until February 8, 2016.

On February 8, 2011, the Company issued 330,000 units at $0.05 per unit for total proceeds of $16,500. Each unit consists of one share of common stock and one warrant to purchase an additional share of common stock at a price of $0.05 per share until February 8, 2016.

On March 9, 2011, the Company issued 200,000 split-adjusted shares of common stock at $0.075 per share for total proceeds of $15,000.

On March 14, 2011, the Company issued 66,667 split-adjusted shares of common stock at $0.075 per share for total proceeds of $5,000.

On March 30, 2011, the Company issued 200,000 split-adjusted units at $0.05 per unit upon the conversion of the two convertible notes as described in Note 5(e).

On June 9, 2011, the Company increased the authorized common stock to 100,000,000 shares (see Note 11).

7)	Stock-Based Compensation

On August 24, 2009, the Company adopted the 2009 Nonqualified Stock Option Plan (the “2009 Plan”). Pursuant to the 2009 Plan, the Company may grant up to a total of 100,000 split-adjusted stock options for the performance of services relating to the operation, development and growth of the Company. At May 31, 2011, the Company had 40,000 shares of common stock available to be issued under the 2009 Plan.

On August 25, 2009, pursuant to the 2009 Plan, the Company granted 80,000 split-adjusted stock options with immediate vesting to directors, officers, employees and consultants to acquire 80,000 split-adjusted common shares at an exercise price of $5.00 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $457,184, as general and administrative expense.

On September 1, 2009, pursuant to the 2009 Plan, the Company granted 4,000 split-adjusted stock options with immediate vesting to consultants to acquire 4,000 split-adjusted common shares at an exercise price of $5.50 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $21,851, as general and administrative expense.

F-13

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

7)	Stock-Based Compensation (continued)

On September 7, 2009, pursuant to the 2009 Plan, the Company granted 4,000 split-adjusted stock options with immediate vesting to consultants to acquire 4,000 split-adjusted common shares at an exercise price of $5.00 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $18,868, as general and administrative expense.

On January 4, 2010, pursuant to the 2009 Plan, the Company granted 12,000 split-adjusted stock options with immediate vesting to consultant to acquire 12,000 split-adjusted common shares at an exercise price of $5.00 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $60,000, as general and administrative expense.

On May 30, 2010, 20,000 split-adjusted stock options were cancelled.

On June 1, 2010, 20,000 split-adjusted stock options were cancelled.

On March 17, 2011, the Company adopted the 2011 Nonqualified Stock Option Plan (the “2011 Plan”). Pursuant to the 2011 Plan, the Company may grant up to a total of 650,000 split-adjusted stock options for the performance of services relating to the operation, development and growth of the Company. At May 31, 2011, the Company had no shares of common stock available to be issued under the 2011 Plan.

On March 18, 2011, pursuant to the 2011 Plan, the Company granted 550,000 split-adjusted stock options with immediate vesting to directors, officers and consultants to acquire 550,000 split-adjusted common shares at an exercise price of $0.12 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $66,000 as general and administrative expense.

On April 6, 2011, pursuant to the 2011 Plan, the Company granted 100,000 split-adjusted stock options with immediate vesting to consultants to acquire 100,000 split-adjusted common shares at an exercise price of $0.12 per share exercisable for 10 years and recorded stock-based compensation for the vested options of $12,000 as general and administrative expense.

The fair value for stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model and the weighted average fair value of stock options granted during the year ended May 31, 2011 was $0.12 per share.

The weighted average assumptions used were as follows:

	Year Ended May 31, 2011			Year Ended May 31, 2010

Expected dividend yield		0	%		0	%
Risk-free interest rate		3.32	%		3.50	%
Expected volatility		482	%		177	%
Expected option life (in years)		10			10

The following table summarizes the continuity of the Company’s stock options:

	Number of Options			Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (years) $		Aggregate Intrinsic Value $

Outstanding, May 31, 2009		–			–		–		–

Granted		100,000			5.00
Cancelled		(20,000	)		5.00

Outstanding, May 31, 2010		80,000			5.00		9.30		–

Granted		650,000			0.12
Cancelled		(20,000	)		5.00

Outstanding, May 31, 2011		710,000			0.53		9.69		–

Exercisable, May 31, 2011		710,000			0.53		9.69		–

F-14

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

8)	Share Purchase Warrants

A summary of the changes in the Company’s common share purchase warrants is presented below:

	Number of Warrants		Weighted Average Exercise Price


Balance – May 31, 2009		12,000	$	5.00

Issued		10,576	$	5.00

Balance – May 31, 2010		22,576	$	5.00

Issued		2,789,537	$	0.05

Balance – May 31, 2011		2,812,113	$	0.05

9)	Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Valuations are based on quoted prices that are readily and regularly available in an active market and do not entail a significant degree of judgment.

Level 2

Level 2 applies to assets or liabilities for which there are other than Level 1 observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 2 instruments require more management judgment and subjectivity as compared to Level 1 instruments. For instance, determining which instruments are most similar to the instrument being priced requires management to identify a sample of similar securities based on the coupon rates, maturity, issuer, credit rating and instrument type, and subjectively select an individual security or multiple securities that are deemed most similar to the security being priced; and determining whether a market is considered active requires management judgment.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The determination of fair value for Level 3 instruments requires the most management judgment and subjectivity.

Pursuant to ASC 825, cash is based on "Level 1" inputs and convertible notes are valued based on “Level 2” inputs, consisting of model driven valuations. The Company believes that the recorded values of accounts payable, due to related parties and convertible notes and interest approximate their current fair values because of their nature, respective relatively short durations, or current market rates of interest for similar financial instruments.

F-15

Black Tusk Minerals Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011

(Expressed in US dollars)

9)	Fair Value Measurements (continued)

Assets measured at fair value on a recurring basis were presented on the Company’s consolidated balance sheet as of May 31, 2011 as follows:

Fair Value Measurements Using

Quoted Prices in

Significant

Active Markets

Other

Significant

For Identical

Observable

Unobservable

Instruments

Inputs

Balance as of

(Level 1)

(Level 2)

(Level 3)

May 31, 2011

Assets:

Cash

–

Total Assets

–

10)	Income Taxes

The Company is subject to United States federal income taxes at an approximate rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

	May 31, 2011 $			May 31, 2010 $

Net loss before income taxes per financial statements		278,079			841,814

Income tax rate		35	%		35	%

Expected income tax recovery		(97,328	)		(294,635	)

Permanent differences		4,007			4,135

Valuation allowance change		93,321			290,500

Provision for income taxes		–			–

The significant components of deferred income tax assets at May 31, 2011 and 2010 are as follows:

	May 31, 2011 $			May 31, 2010 $

Net operating loss carryforward		1,021,857			928,536

Valuation allowance		(1,021,857	)		(928,536	)

Net deferred income tax asset		–			–

The Company has net operating loss carryforwards of approximately $2,919,600 available to offset taxable income in future years which expire beginning in fiscal 2028. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years.

11)	Subsequent Events

On June 9, 2011, the Company filed amended Articles of Incorporation to increase the number of authorized shares of the Company’s common stock to 100,000,000 shares.

On June 13, 2011, Black Tusk Minerals Inc. (the “Company”) issued to Magellan Management Company (“Magellan”), 2,970,176 units with each unit consisting of one common share and one common share purchase warrant with an exercise price of $0.05 per share exercisable until February 8, 2016. This issuance is in accordance with the rescission and conditional purchase agreements entered into by Magellan and the Company on March 30, 2011, and April 14, 2011. Pursuant to those rescission and conditional purchase agreements 2,703,509 units were rescinded on March 30, 2011 and 266,667 units were rescinded on April 14, 2011. Magellan is wholly owned and controlled by Gavin Roy, the President and a director of the Company.

F-16

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.

Controls and Procedures.

Disclosure Control and Procedure

At the end of the period covered by this report on Form 10-K for the year ended May 31, 2011, an evaluation was carried out under the supervision of and with the participation of the Company's management, including the President, who is the principal executive officer, and Treasurer, who is the principal financial and accounting officer, of the effectiveness of the design and operations of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation the President and the Treasurer have concluded that the Company's disclosure controls and procedures were adequately designed and effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s 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 dispositions of the assets of the company; (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 of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) 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. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management conducted an evaluation of the design and operation of the Company’s internal control over financial reporting as of May 31, 2011 based on the criteria in a framework developed by the Company’s management pursuant to and in compliance with the principles and framework of the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of May 31, 2011 and no material weaknesses were discovered. The error that occurred regarding the total number of authorized share capital of the Company, was a result of rounding procedures used by Colonial Stock Transfer Inc, the Company’s transfer agent, when conducting the 50-1 reverse stock split.

Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company’s registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform Act of 2010 and the Company only provided the management's report in this annual report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f)) that occurred during the Company’s the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

None.

PART III

Item 10.

Directors, executive Offices and Corporate Governance.

Directors and Executive Officers and Significant Employees

All directors of the Company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. The officers of the Company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors, executive officers and significant employees, their ages (as of May 31, 2011), positions held, and date first elected/appointed, are as follows:

Name	Position	Age	Date First Elected/Appointed
Gavin Roy	President, Secretary, and Director	44	August 9, 2007

Kurt Bordian	Director	42	February 8, 2011

James Bordian	Chief Financial Officer and Treasurer	70	March 30, 2011

Robert Krause	Director	53	June 9, 2011

Mark White	Director	49	June 9, 2011

Gavin Roy

Gavin Roy was elected Vice President of the Company on August 9, 2007, resigned as Vice President on April 24, 2008 and was appointed as Director and President effective April 24, 2008. On March 30, 2010, Mr. Roy was appointed Secretary and Treasurer. Mr. Roy resigned as Treasurer on the appointment of James Bordian. Mr. Roy is currently the principal of Magellan Management Company, a venture capital firm in Vancouver, British Columbia. Prior to forming Magellan Management in 2005, Mr. Roy’s principal occupation has been as an investment advisor with Canaccord Capital Corporation, Octagon Capital Corporation and Global Securities Corporation. Mr. Roy has been a registrant in Canada with the British Columbia, Alberta, Saskatchewan and Ontario securities commissions.

Robert Krause

Mr. Krause was elected to the Board, effective June 9, 2011. Mr. Krause brings over 25 years of experience in the mining and exploration sector, having worked on projects in both North and South America. He serves and has served both private and public corporations in various positions such as: Vice President of exploration for Wyn Developments Inc., Vice President of Exploration for Starfield Resources Inc. and Mine Geologist for Skylark Resources Ltd. Robert Krause graduated from the University of British Columbia in 1985 with a Bachelor of Science in geology. Robert Krause has also been a consulting geologist for the Company.

Mark White

Mr. White was elected to the Board, effective June 9, 2011. Mr. White is also the Chairman and founder of MyRapidMD a mobile application developer specializing in healthcare and first response applications. He also serves as the VP of Business Development for Virtual Medical Centre Inc. (“VMC”), one of Australia’s leading online healthcare and medical information portals. Mr. White is leading VMC’s push into the North American market. Previously he was co-founder and President of Pixtera Corp, a developer of handheld electronic reading devices. From 1999 through 2002 he was as an independent business consultant to young public companies and from 1997-1999 was director of investor relations for Turbodyne Technologies, a maker of electronic turbo chargers. Prior to moving in the direction of entrepreneurial ship he was a stock broker in Los Angeles where he still lives. He is conversant in all aspects of strategic planning, capital raising for early stage companies, as well as the day-to-day obligations of managing an operating company. He received his BA from Victoria University, Wellington New Zealand and currently resides in Los Angeles, California.

Kurt Bordian

Mr. Bordian was appointed to the Board effective February 8, 2011. Mr. Bordian is a designated Certified General Accountant, and holds a Bachelor of Commerce (Honours) Degree from the University of Manitoba. He has worked primarily with public companies in the mineral exploration and oil and gas industries over the past 12 years. Mr. Bordian currently serves as a director or officer on a number of resource exploration and development companies, including: Chief Financial Officer of ESO Uranium Corp. (ESO-TSX.V), Chief Financial Officer of Canyon Copper Corp. (CNYC-OTCBB), director of Palo Duro Energy Inc. (PDE-TSX.V), and director of Calypso Uranium Corp. (CLP-TSX-V).

James Bordian

James Bordian was appointed by the board of directors of the Company as the Chief Financial Officer of the Company effective March 30, 2011. James Bordian is a retired Chartered Accountant and Certified Internal Auditor with over 40 years experience. During his career, Mr. Bordian has held senior management positions with US Plywood, Dillingham Corporation, Air Canada, and BC Hydro. Presently he is Vice President of a Vancouver-based private management-consulting firm offering financial accounting services. James Bordian has also held the following past positions: Director and Chairman of Audit and Finance Committee for Royal Aloha Vacation Club; Director and Treasurer of Grand Lakefront Resort Club Canada; and President of Institute of Internal Auditors – Vancouver Chapter. Mr. Bordian has extensive experience in income tax planning, budgeting, financial statement presentations and business evaluations. James Bordian is 70 years old and is the father of Kurt Bordian, a director of the Company.

Significant Employees

Gavin Roy and James Bordian are the Company’s sole employees. We hire independent contractors to assist with general administrative matters from time-to-time.

Family Relationships

James Bordian, the Chief Financial Officer of the Company, is the father of Kurt Bordian who is a Director of the Company.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Conflicts of Interest

To our knowledge, and other than as disclosed in this report, there are no known existing or potential conflicts of interest among us, our promoters, directors and officers, or other members of management, or of any proposed director, officer or other member of management as a result of their outside business interests except that certain of the directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to us and their duties as a director or officer of such other companies.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, requires the Company's officers, directors, and persons who beneficially own more than 10% of the Company's common stock (“10% Stockholders”), to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such officers, directors and 10% Stockholders are also required by Securities and Exchange Commission’s rules to furnish us with copies of all Section 16(a) forms that they file.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended May 31, 2011, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with, except for the following:

NAME AND NATURE OF AFFILIATION	LATE REPORTS	LATE TRANSACTIONS	REPORTS NOT FILED
Gavin Roy – President, Secretary, and Director	6	13	0
James Bordian	1	1	0
Kurt Bordian	4	5	0
Robert Krause*	n/a	n/a	n/a
Mark White*	n/a	n/a	n/a

*The appointment of Robert Krause and Mark White to the Board was effective on June 9, 2011, which was after the fiscal year end.

Code of Ethics

The Company is aware of its corporate governance responsibilities and seeks to operate to the highest ethical standards. However, the Company has not adopted a code of ethics because of its limited size. The Company only has two employees, James Bordian who serves as an officer and Gavin Roy who serves as an officer and director, and therefore has not found it necessary to adopt a code of ethics.

Corporate Governance

As of August 26, 2011, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate the Company's requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the President of the Company at the address on the cover of this annual report.

Audit Committee

We do not have a standing audit committee at the present time. To our knowledge, and other than as disclosed in this report, there are no known existing or potential conflicts of interest among us, our promoters, directors and officers, or other members of management, or of any proposed director, officer or other member of management as a result of their outside business interests except that certain of the directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to us and their duties as a director or officer of such other companies.

We believe that the members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of the Company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors as it currently exists. In addition, we do not have an “audit committee financial expert” as we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any significant revenues from operations to date.

Item 11.

Executive Compensation.

A summary of cash and other compensation paid to our Principal Executive Officer and other executives for the fiscal year ended May 31, 2011 is as follows:

Name and

Principal

Position

(a)

Year

(b)

Salary
($)

(c)

Bonus ($)

(d)

Stock

Awards

($)

(e)

Option

Awards

($)

(f)

Non-Equity

Incentive Plan

Compensation

($)

(g)

Nonqualified

Deferred

Compensation

Earnings ($)

(h)

All Other

Compensation

($)

(i)

Total ($)

(j)

Gavin Roy, President, Secretary, and Director

May 31, 2011

NIL

12,000(1)

NIL

112,657(1)

124,657(1)

(former Vice President and former Treasurer)

May 31, 2010

NIL

260,000(1)

NIL

5,097(1)

265,097(1)

Michael McIsaac, Former

May 31, 2011

NIL

Secretary, Treasurer and Director

May 31, 2010

NIL

NIL(2)

NIL

NIL(2)

Kurt Bordian

Director, and Former

May 31, 2011

NIL

9,000(3)

NIL

9,000(3)

Secretary, Treasurer

May 31, 2010

NIL

James Bordian

May 31, 2011

NIL

6,000(4)

NIL

6,000(4)

Chief Financial Officer

May 31, 2010

NIL

(1)

Magellan Management Company, of which Mr. Roy is a principal, has provided administrative and consulting services to the Company. On March 18, 2011, the Company granted Magellan 100,000 stock options pursuant to the 2011 Plan. On February 8, 2011, the Company granted Magellan 2,193,137 units in order to pay off $109,657 of debt owed to the Magellan as a result the Magellan Debt. As a result of this issuance of units, Magellan was subject to disgorgement under Section 16(b) of the Securities Exchange Act of 1934, due to sales of shares made by Magellan on August 13 and August 23, 2010. Magellan was required to disgorge $2,866 in profits. Under the terms of the Disgorgement Agreement, Magellan disgorged $2,866 by forgiving that amount of the Magellan Debt. In addition, during the fiscal year ended May 31, 2011, the Company paid Magellan, $3,000 for administrative and consulting services. During the fiscal year ended May 31, 2010, the Company paid $5,097 to Magellan for administrative and consulting services and granted Magellan Management Company 40,000 split adjusted stock options on August 25, 2009, and 12,000 split adjusted options on January 4, 2010.

(2)	On August 25, 2009, the Company granted Michael McIsaac 20,000 split adjusted stock options at an exercise price of $5.00, which were subsequently cancelled March 30, 2010 upon his resignation as director, secretary and treasurer.

(3)	On March 18, 2011, Kurt Bordian was granted 75,000 options to purchase shares of common stock of the Company at an exercise price of $0.12 pursuant to the 2011 Plan. Kurt Bordian was not an officer of the Company when he received the options, but he was a director of the Company.

(4)	On March 18, 2011, James Bordian was granted 50,000 options to purchase shares of common stock of the Company at an exercise price of $0.12 pursuant to the 2011 Plan. At the time, James Bordian was not an officer of the Company.

Narrative Disclosure to Summary Compensation Table

For the fiscal year ending May, 31, 2011 we did not pay to our directors or officers any salary or ongoing consulting fees. However, Magellan was paid $3,000 for consulting and administrative services during the fiscal year ending May 31, 2011. Effective June 1, 2011, James Bordian, the Chief Financial Officer of the Company, is being paid $1,500 per quarter. We anticipate that additional compensation may be paid to an officer in the event that we decide to proceed with advanced exploration programs on the Peru Properties. Please reference the executive compensation table and accompanying footnote above for all information concerning executive and director compensation.

Other Compensation Information

The Company does not maintain any long-term compensation plans, and did not maintain such plans at any time during our two most recently completed fiscal years ended May 31, 2011. As such, there were no long-term compensation plan awards or payouts to any of the named executive officers of the Company during our two most recently completed fiscal years ended May 31, 2011 and 2010.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.

Outstanding Equity Awards at Fiscal Year-End

	Option awards									Stock awards
Name	Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)		Option exercise price ($)		Option expiration date	Number of shares or units of stock that have not vested (#)		Market value of shares of units of stock that have not vested ($)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or others rights that have not vested ($)
(a)	(b)		(c)		(d)		(e)		(f)	(g)		(h)		(i)		(j)
Gavin Roy, President,		40,000						5.00	August 25, 2019

Secretary,		12,000		-		-		5.00	January 4, 2020		-		-		-		-
Treasurer and Director (former Vice President)		100,000						0.12	March 18, 2021
James Bordian Chief Financial Officer		50,000		-		-		0.12	March 18, 2021		-		-		-		-

2009 Plan

On August 24, 2009, the Company’s Board of Directors adopted the Plan. The Plan was approved by the Company’s shareholders became effective on November 16, 2009.

Pursuant to the Plan, stock options may be granted to any person who is performing or who has been engaged to perform services of special importance to management of the Company in the operation, development and growth of the Company. The maximum number of shares with respect to which stock options may be granted under the Plan may not exceed 100,000 (split adjusted). All stock options granted under the Plan shall be nonqualified stock options and shall be evidenced by agreements, which shall be subject to the applicable provisions of the Plan. The foregoing description of the Plan is qualified in its entirety by reference to the Plan, a copy of which is filed as Exhibit 10.1 to Company’s Current Report on Form 8-K filed with the SEC on August 29, 2009.

On August 25, 2009, the Committee (as defined in the Plan) and the Company’s Board of Directors authorized and approved the following stock option grants at an exercise price of $5.00 per share (split adjusted), which was the closing price of the Company’s common shares on the OTC Bulletin Board on the trading day immediately prior to the date of grant:

Name	Stock Options			Exercise Price
Magellan Management Company		40,000		$	5.00
Robert Krause		20,000	(1)	$	5.00
Michael McIsaac		20,000	(2)	$	5.00

(1) The Company granted Robert Krause 20,000 split adjusted stock options which were cancelled on June 1, 2010.

(2) The Company granted Michael McIsaac 20,000 split adjusted stock options which were cancelled March 30, 2010, upon his resignation as director, secretary and treasurer.

On January 4, 2010, the Committee (as defined in the Plan) and the Company’s Board of Directors authorized and approved the following stock option grants at an exercise price of $5.00 per share, which was the closing price of the Company’s common shares on the OTC Bulletin Board on the trading day immediately prior to the date of grant:

Name		Stock Options				Exercise Price
Magellan Management Company			12,000			$	5.00

2011 Plan

On March 17, 2011, the Company’s Board of Directors adopted the 2011 Plan. The Plan was ratified by the shareholders by written consent on April 29, 2011.

Pursuant to the 2011 Plan, stock options may be granted to any person who is performing or who has been engaged to perform services of special importance to management of the Company in the operation, development and growth of the Company. The maximum number of shares with respect to which stock options may be granted under the 2011 Plan may not exceed 650,000. All stock options granted under the 2011 Plan shall be nonqualified stock options and shall be evidenced by agreements, which shall be subject to the applicable provisions of the 2011 Plan. The foregoing description of the Plan is qualified in its entirety by reference to the Plan, a copy of which was filed as Exhibit 99.1 to a Current Report on Form 8-K filed with the SEC on March 23, 2011.

The Company’s Board of Directors authorized, approved and ratified the grants of stock options, to officers and directors of the Company, on August 11, 2011 and the grants and exercise prices as follows, which were the closing prices of the Company’s common shares on the OTC Bulletin Board on the trading day immediately prior to the date of grant.

Name of Optionee	Number of Shares		Date of Grant	Exercise Price
James Bordian (i)		50,000	March 18, 2011	$	0.12
Robert G. Krause(ii)		50,000	March 18, 2011	$	0.12
Mark White (ii)		25,000	March 18, 2011	$	0.12
Kurt Bordian		75,000	March 18, 2011	$	0.12
Magellan Management Co.		100,000	March 18, 2011	$	0.12

(i) James Bordian was not an officer of the Company when the stock options were granted.

(ii) Mark White and Robert Krause were not directors of the Company when the stock options were granted.

Retirement, Resignation or Termination Plans

We sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company.

Compensation of Directors

We do not pay to our directors any compensation for serving on our board of directors. Directors can participate in the Company’s stock option plans and other compensation plans.

Employment Contracts and Termination of Employment and Change-In-Control Arrangements

None.

Compensation Committee

The Company does not have a Compensation Committee. The Board as a whole makes decisions related to compensation.

Compensation Committee Report

The Company does not have a Compensation Committee. Each member of the Board has reviewed the Compensation and Discussion and Analysis and recommended it be included in this Annual Report on 10-K.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of shares of our common stock as of August 26, 2011:

each person who is known by us to beneficially own more than 5% of our issued and outstanding shares of common stock;

our named executive officers;

our directors; and

all of our executive officers and directors as a group.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner			Percent of Class*
Directors and Named Executive Officers
Common Stock	Gavin Roy 7425 Arbutus Street Vancouver, BC Canada V6P 5T2		5,417,713	(1)		76.28	%
Common Stock	Kurt Bordian 408-1199 West Pender Street Vancouver, BC V6E 2R1		675,880	(2)		9.04	%
Common Stock	James Bordian 103-6109 Boundary Drive West Surrey, BC V3X 2A4		250,000	(3)		3.56	%
Common Stock	Robert Krause 615-700 West Pender Street Vancouver, BC V6C 1G8		250,587	(4)		3.54	%
Common Stock	Mark White 925 Dickson Street Marina Del Ray, CA 90292		25,000	(5)		**
Directors and Named Executives as a Group			7,219180			86.28	%
5% Shareholders
Common Stock	Magellan Management Company 7425 Arbutus Street Vancouver, BC Canada V6P 5T2		5,417,713	(6)		76.28	%

(1)

Includes 80,000 shares held by Gavin Roy; 132,000 shares issuable to Magellan, a company solely owned and controlled by Gavin Roy, upon exercise of outstanding stock options; 5,205,713 shares of Common Stock held directly by Magellan. In addition, Magellan owns 5,163,313 share purchase warrants which may be exercised at $0.05 until February 8, 2016. Under the terms of the warrants, the warrants may not be exercised if the warrant holder would beneficially own more than 4.99% of the issued and outstanding Common Stock of the Company unless the warrant holder waived the restriction with 61 days written notice.

(2)

Includes 165,880 shares of Common Stock; 165,000 share purchase warrants held by Kurt Bordian which may be converted to shares of Common Stock at exercise price of $0.05 per share and 75,000 shares issuable to Kurt Bordian upon exercise of outstanding stock options. Kurt Bordian also has the right to convert $21,750 in principal under a 7% convertible debentures into units, which would consist of 435,000 shares of Common Stock, par value $0.001 and 435,000 share purchase warrants exercisable at $0.05. Under the terms of the warrants, the warrants may not be exercised if the warrant holder would beneficially own more than 4.99% of the issued and outstanding Common Stock of the Company unless the warrant holder waived the restriction with 61 days written notice.

(3)	Includes 200,000 shares of Common Stock and 50,000 shares issuable to James Bordian upon exercise of outstanding stock options.

(4)

The shares beneficial owned by Robert Krause are held in the name of 695809 BC Ltd, which owns 134,187 shares of Common stock; warrants exercisable to purchase 66,400 shares of Common Stock at an exercise price of $0.05, as part of units purchased on February 8, 2011. Also includes 50,000 shares issuable to Robert Krause upon exercise of outstanding stock options.

(5)	Includes 25,000 shares issuable to Mark White upon exercise of outstanding stock options.

(6)

* Percentages are calculated on a partially diluted basis based on 6,970,176 shares issued and outstanding on August 26, 2011 and shares acquirable by the holder within the next 60 days.

** the percentage of ownership of this director does not exceed 1%.

We have no knowledge of any other arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

We are not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Except for the transactions described below, none of our directors, executive officers or more-than-five-percent shareholders, nor any associate, affiliate, or family member of the foregoing, have any interest, direct or indirect, in any transaction or in any proposed transactions, since the start of the fiscal year ending May 31, 2011, which has materially affected or will materially affect us.

On February 8, 2011, the Company entered into a disgorgement and settlement agreement with Magellan , wholly owned and controlled by Gavin Roy, the President of the Company. Pursuant to the agreement, the Company issued 5,163,313 units at $0.05 per unit (“Magellan Placement) to settle $261,302 of debt owed to the Related Company (“Magellan Debt”) as a result of cash advances made by the Magellan to the Company. A portion of the Magellan Placement was rescinded (Refer to (g) below). Each unit consists of one share of common stock and one warrant to purchase an additional common share of the Company at $0.05. As a result of this issuance of units, the Magellan was subject to matching under section 16(b) of the Exchange Act, due to sales of shares made by Magellan on August 13 and August 23, 2010. As a result of the matching transaction, Magellan was required to disgorge $2,866 in profits (refer to (f) below). The $2,866 was forgiven as part of the Magellan Debt.

At May 31, 2011, the Company is indebted to a company owned by the president of the Company for $151,673 (May 31, 2010 - $221,734), of which $151,673 (May 31, 2010 - $110,532) represents expenses paid on behalf of the Company and $nil (May 31, 2010 - $111,202) represents net cash advances provided to the Company. Indebtedness of $3,164 is non-interest bearing, unsecured and has no specific repayment terms. The remaining indebtedness amount of $148,509 was converted into units subsequent to year end on June 13, 2011, pursuant to the Rescission and Conditional Purchase Agreements.

On February 8, 2011, the Company and Magellan entered the Disgorgement Agreement. Magellan is wholly owned and controlled by Gavin Roy, the President and a director of the Company. As part of a private placement that occurred on February 8, 2011, the Company issued 5,163,313 units to Magellan in the Magellan Placement, in order to pay off the Magellan Debt. As a result of this issuance of units, Magellan was subject to disgorgement under Section 16(b) of the Exchange Act, due to sales of shares made by Magellan on August 13, 2010 and August 23, 2010. Magellan was required to disgorge $2,867 in profits. Under the terms of the Disgorgement Agreement, Magellan disgorged $2,867 by forgiving that amount of the Magellan Debt.

During the fiscal year ending May 31, 2011, Magellan was paid $3,000 for consulting and administrative services.

Other than as set forth above, none of our directors, executive officers or more-than-five-percent shareholders, nor any associate, affiliate, or family member of the foregoing, has entered into any agreement with the Company in which any of them is to receive from the Company or provide to the Company anything of value.

Director Independence

We currently act with four directors: Gavin Roy, Kurt Bordian, Mark White and Robert Krause We have determined that Mark White and Robert Krause are independent directors using the standards for independence set out in the NYSE Amex LLC Company Guide.

Item 14.

Principal Accountant Fees and Services.

Audit Fees

The aggregate fees billed by Manning Elliott, the Company's auditors, for professional services rendered in connection with the audit of the Company's annual consolidated financial statements for fiscal years ended May 31, 2011 and 2010 and reviews of the consolidated financial statements included in the Company's Forms 10-K for fiscal years ended May 31, 2011 and 2010 were $21,250 and $18,850, respectively.

Audit-Related Fees

The aggregate fees billed by the Company's auditors for any additional fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under ‘Audit Fees’ above for fiscal years ended May 31, 2011 and 2010 were $Nil and $2,500, respectively.

Tax Fees

The aggregate fees billed by the Company's auditors for professional services for tax compliance, tax advice, and tax planning for fiscal years ended May 31, 2011 and 2010 were $Nil and $Nil, respectively.

All Other Fees

The aggregate fees billed by the Company's auditors for all other non-audit services rendered to the Company, such as attending meetings and other miscellaneous financial consulting, for fiscal years ended May 31, 2011 and 2010 were $Nil and $Nil, respectively.

PART IV

Item 15.

Exhibits and Financial Statement Schedules.

Financial Statements

The following financial statements have been filed with this Annual Report on Form 10-K and are presented in Item 8, herein.

1. Report of Independent Registered Public Accounting Firm

2. Consolidated Balance Sheets

3. Consolidated Statements of Operations

4. Consolidated Statements of Cash Flows

5. Consolidated Statements of Stockholders Equity (Deficit)

6. Notes to the Consolidated Financial Statements

Exhibits

3.1		Articles of Incorporation (incorporated by reference from our SB-2 filed on September 28, 2006)

3.2		Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on September 11, 2007)

3.3		Bylaws (incorporated by reference from our Current Report on Form 8-K filed on June 13, 2011)

3.4		Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on June 13, 2011)

10.1		Property Acquisition Agreement, dated August 24, 2006, between Black Tusk Minerals Inc. and George E. Nicholson Limited (incorporated by reference from our SB-2 filed on September 28, 2006)

10.2		Term Sheet, dated August 13, 2007, among Black Tusk Minerals Inc., Leonard Raymond De Melt and Marlene Ore Lamilla (incorporated by reference from our Current Report on Form 8-K filed on August 14, 2007)

10.3		Master Purchase Agreement, dated December 5, 2007, among Black Tusk Minerals Inc., Black Tusk Minerals Peru SAC, Leonard Raymond De Melt and Marlene Ore Lamilla (incorporated by reference from our Current Report on Form 8-K filed on December 7, 2007)

10.4		Mining Concessions and Claims Transfer Agreement, dated December 5, 2007, between Black Tusk Minerals Peru SAC and Marlene Ore Lamilla (English Translation) (incorporated by reference from our Current Report on Form 8-K filed on April 28, 2008)

10.5		Fee Arrangement Agreement with Dorsey & Whitney LLP, dated May 29, 2009 (incorporated by reference from our 10-K filed on September 1, 2009)

10.6		Fee Arrangement Agreement with Rodrigo, Elías & Medrano Abogados, dated May 29, 2009 (incorporated by reference from our 10-K filed on September 1, 2009)

10.7		Fee Arrangement Agreement with Forstrom Jackson, Barristers and Solicitors, dated July 14, 20092009 (incorporated by reference from our 10-K filed on September 1, 2009)

10.8		Black Tusk Minerals Inc. 2009 Nonqualified Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on August 29, 2009)

10.9		Black Tusk Minerals Inc. 2011 Nonqualified Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on March 23, 2011)

10.10		Section 16 Disgorgement and Settlement Agreement (incorporated by reference from our Current Report on Form 8-K filed on February 11, 2011)

31.1		Certification of Principal Executive Officer filed pursuant to Rule 13a-14(a) of the Exchange Act

31.2		Certification of Principal Financial Officer filed pursuant to Rule 13a-14(a) of the Exchange Act

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

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

SIGNATURES

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

	BLACK TUSK MINERALS INC.

August 30, 2011	By:	/s/ Gavin Roy
	Gavin Roy, President and Secretary
	(Principal Executive Officer)

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

Signature	Title	Date

/s/ Gavin Roy	President, Secretary, and Director	August 30, 2011
Gavin Roy	(Principal Executive Officer)

/s/ James Bordian	Chief Financial Officer	August 30, 2011
James Bordian	(Principal Financial Officer)

/s/ Robert Krause	Director	August 30, 2011
Robert Krause

/s/ Mark White	Director	August 30, 2011
Mark White

/s/ Kurt Bordian	Director	August 30, 2011
Kurt Bordian

Attached files

Black Tusk Minerals Inc. Reports

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