10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2012

or

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

Commission file number 000-26669

CAN-CAL RESOURCES LTD.

(Exact name of registrant as specified in its charter)

Nevada		86-0865852
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8205 Aqua Spray Ave.
Las Vegas, Nevada	89128
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (702) 243-1849

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

Securities registered pursuant to Section 12(g) of the Exchange Act:	Common Stock, $0.001 par value
	Preferred Stock, $0.001 par value, 5% cumulative

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

¨Yes x No

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

¨Yes x No

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

¨Yes x No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨Yes x No

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.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

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

Yes ¨ No x

The aggregate market value of voting stock held by non-affiliates of the registrant was approximately $1,362,566 as of June 30, 2012 (computed by reference to the last sale price of a share of the registrant’s Common Stock on that date as reported by OTC Bulletin Board). The voting stock held by non-affiliates on that date consisted of 34,064,150 shares of common stock.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 42,027,060 shares of common stock, $0.001 par value, outstanding on April 15, 2013.

Documents Incorporated by Reference

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.

CAN-CAL RESOURCES LTD.

FORM 10-K

TABLE OF CONTENTS

		Page
PART I		2
	Item 1. Business (and Information for Item 2 on Properties)	2
	Item 1A. Risk Factors	3
	Item 1B. Unresolved Staff Comments	8
	Item 2. Properties	8
	Item 3. Legal Proceedings	20
	Item 4. Mine Safety Disclosures	20
PART II		20
	Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
	Item 6. Selected Financial Data	21
	Item 7. Management’s Discussion and Analysis	21
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk	26
	Item 8. Financial Statements and Supplementary Data	27
	Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure	28
	Item 9A Controls and Procedures	28
	Item 9B. Other Information	29
Part III		30
	Item 10. Directors, Executive Officers and Corporate Governance	30
	Item 11. Executive Compensation	32
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
	Item 13. Certain Relationships and Related Transactions, and Director Independence	34
	Item 14. Principal Accountant Fees and Services	35
Part IV		36
	15. Exhibits, Financial Statement Schedules	36

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures we make in this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

· the unavailability of funds for capital expenditures;

· inability to efficiently manage our operations;

· inability to achieve future operating results;

· inability to raise additional financing for working capital;

· the inability of management to effectively implement our strategies and business plans;

· our ability to recruit and hire key employees;

· our ability to diversify our operations;

· actions and initiatives taken by both current and potential competitors;

· deterioration in general or regional economic, market and political conditions;

· the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;

· adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

· changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate; and

· the other risks and uncertainties detailed in this report.

In this form 10-K references to “Can-Cal”, “the Company”, “we,” “us,” “our” and similar terms refer to Can-Cal Resources Ltd.

AVAILABLE INFORMATION

Can-Cal files annual, quarterly, current and special reports and other information with the SEC. You can read these SEC filings and reports over the Internet at the SEC’s website at www.sec.gov or on our website at www.can-cal.com. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt to of a written request to us at Can-Cal Resources Ltd., 8205 Aqua Spray Ave., Las Vegas, Nevada 89128.

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PART I

Item 1. Business (and Information for Item 2 on Properties).

Business Development

Can-Cal Resources Ltd. (“Can-Cal” or the “Company” ) is a Nevada corporation incorporated on March 22, 1995 under the name of British Pubs USA, Inc. as a wholly owned subsidiary of 305856 B.C., Ltd. d/b/a N.W. Electric Carriage Company (“NWE”), a British Columbia, Canada company (“NWE”). On April 12, 1995, NWE exchanged shares of British Pubs USA, Inc. for shares of NWE held by its existing shareholders, on a share for share basis. NWE changed its name to Can-Cal Resources Ltd. on July 2, 1996.

In January 1999, the Company sold its wholly-owned Canadian subsidiary, Scotmar Industries, Inc., which was engaged in the business of buying and salvaging damaged trucks from insurance companies for resale of guaranteed truck part components. The subsidiary was sold for a profit and the proceeds used to acquire and explore mineral properties, as the Company determined that the subsidiary would lose money in the vehicle salvage business unless more capital was obtained at that time specifically for that business.

Business of Issuer

The Company is an exploration company. Since 1996, we have examined various mineral properties prospective for precious metals and minerals and acquired those deemed promising. We own, lease or have mining interest in four mineral properties in the southwestern United States (California and Arizona, as follows: Wikieup, Arizona; Cerbat, Arizona; Owl Canyon, California; and Pisgah, California).

Prior to 2003, we performed more than 1,000 “in-house” assays on mineral samples from our properties in the United States. An assay is a test performed on a sample of minerals to determine the quantity of one or more elements contained in the sample. The in-house work was conducted with our equipment by persons under Can-Cal contract who are experienced in performing assays, but who were not independent of us. We also sent samples of materials from which we obtained the most promising results to outside independent assayers to confirm in-house results.

In 2003, the Company incorporated a wholly owned subsidiary in Mexico, Sierra Madre Resources S.A. de C.V. (“SMR”), to be an operating entity for mining-related acquisitions and activities in Mexico. In February 2004, SMR acquired a 100% interest in a gold-silver mineral concession, in Durango State, Mexico. In July 2004, SMR applied to the Mexican Government for a gold-silver concession, also in Durango State, Mexico. These were exploration stage properties, referred to in previous Company reports as “Arco Project” and “Arco 2 Project”. In November 2004, SMR applied to Mexico’s Director of Mines for three grass roots, gold-silver exploration concessions located in the State of Chihuahua, Mexico. These applications were subsequently cancelled in February 2005 due to incomplete application filings. SMR may reapply for one or more of these concessions in the future, but has currently ceased operations in Mexico.

The Company’s current focus has changed from Mexico to the United States with present emphasis on the Pisgah Mountain material and Wikieup material.

All the United States properties are considered “grass roots” because they are not known to contain reserves of precious metals or other minerals (a reserve is that portion of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination). None of these properties is in production.

In 2005, we sold $11,500 of volcanic cinder materials arising from the Pisgah, California property to industrial users. As of June 1, 2005, we discontinued sales of volcanic cinder materials.

Can-Cal is currently an exploration stage company. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, in the event that we are successful in locating commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims.

To the extent that financing is available, we intend to explore, develop, and, if producible and warranted, bring into production precious metals properties for either on our own account or in conjunction with joint venture partners (in those instances where we acquire less than a 100% interest in a property). However, either due to a combination of a lack of available financing, the number of properties which merit development, and/or the scope of the exploration and development work of a particular property being beyond the Company’s financial and administrative capabilities, the Company may contract out one or more of its properties to other mining companies.

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Executive offices are located at 8205 Aqua Spray Ave, Las Vegas, Nevada 89128 (tel. 702.243.1849; fax 702.243.1869).

Item 1A. Risk Factors.

In the course of conducting our business operations, we are exposed to a variety of risks that are inherent to our industry specifically, and to early stage companies and for investments in securities, generally. The following discusses some of the key inherent risk factors that could affect our business and operations, as well as other risk factors which are particularly relevant to us in the current period of significant economic and market disruption. Other factors besides those discussed below or elsewhere in this report also could adversely affect our business and operations, and these risk factors should not be considered a complete list of potential risks that may affect us.

Risk Factors Related to Our Business

Losses to Date and General Risks Faced by the Company.

We are an exploration stage company engaged in the acquisition and exploration of precious metals mineral properties. To date, we have no producing properties. As a result, we have had minimal sources of operating revenue and we have historically operated and continue to operate at a loss. For the year ended December 31, 2012, the Company recorded a net loss of $682,012 and had an accumulated deficit of $10,362,791 at that date. Our ultimate success will depend on our ability to generate profits from our properties.

We lack material operating cash flow and rely on external funding sources, which might become unavailable. If we are unable to continue to obtain needed capital from outside sources, we will be forced to reduce, curtail or cease our operations. Furthermore the, planned exploration and development of the mineral properties in which we hold interests depends upon our ability to obtain financing through:

- Bank or other debt financing,

- Equity financing, or

- Other means.

As a mineral exploration company, our ability to commence production and generate profits is dependent on our ability to discover viable and economic mineral reserves. Our ability to discover such reserves are subject to numerous factors, many of which are beyond our control and are not predictable.

All of the mineral properties in which we have an interest or right are in the exploration stages only and are without reserves of gold or other precious metals minerals. We cannot assure that current or proposed exploration or development programs on properties in which we have an interest will result in the discovery of gold or other mineral reserves or will result in a profitable commercial mining operation.

Exploration for gold is speculative in nature, involves many risks and is frequently unsuccessful. Any gold exploration program entails risks relating to:

-	The uncertainty of the location of economic ore bodies,
-	Development of appropriate metallurgical processes,
-	Receipt of necessary governmental approvals, and
	Construction of mining and processing facilities at any site chosen for mining.

The commercial viability of a mineral deposit is dependent on a number of factors including:

- The price of gold,

- Exchange rates,

- The particular attributes of the deposit, such as its size, grade and proximity to infrastructure, financing costs, taxation, royalties, land tenure, land use, water use, power use, and foreign government regulations restricting importing and exporting gold and environmental protection requirements.

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The audit report on the financial statements at December 31, 2012 has a “going concern” qualification, which means we may not be able to continue operations unless we obtain additional funding and are successful with our strategic plan.

We have experienced losses since inception. The extended period over which losses have been experienced is principally attributable to the fact that we have spent substantial sums of money has been spent on exploring grass roots mineral properties to determine if precious metals might be present in economic quantities. In order to fund future activities the Company must identify and verify the presence of precious metals in economic quantities, which is currently ongoing “In House” in addition to independent third party testing. If economic results are identified, the Company then would either seek to raise capital itself to put the Pisgah property and the Wikieup into production, sell the properties to another company, or place the properties into a joint venture with another company.

Attaining these objectives will require capital, which the Company will have to obtain principally by selling stock or other equity in the Company, and, or through debt financing, however, we have currently have no definitive arrangements in place to raise the necessary capital to continue operations for any extended period of time, and have generally relied upon relatively small, and intermittent infusions to sustain operations.

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

Our current operating funds are less than necessary to fund basic operations or to complete all intended objectives and therefore we will need to obtain additional financing in order to continue our business. We currently do not generate any operating income.

We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor acceptance of our business model and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.

The most likely source of future funds presently available to us is through the sale of equity capital in one or more negotiated private sale transactions. Any sale of share capital will result in dilution to existing shareholders.

As an exploration company, we are subject to the risks of the minerals business.

The exploration for minerals is highly speculative and involves risks different from and in some instances greater than risks encountered by companies in other industries. Without extensive technical and economic feasibility studies, which Can-Cal is not currently undertaking, no one can reasonably predict if any property can be mined at a profit. Even with promising reserve reports and feasibility studies, profits cannot be assured. Furthermore, most exploration programs do not result in the discovery of mineralization that leads to commercially viable mining activities and most exploration programs never recover the funds invested in them.

The British Columbia Securities Commission has required us to obtain a report by an independent consultant qualified under the standards of the BCSC.

The British Columbia Securities Commission (“BCSC”) previously required the Company to obtain a report by an independent consultant qualified under the standards of the BCSC. Under British Columbia securities laws, all disclosure of scientific or technical information, including disclosure of a mineral resource or mineral reserve must be based on information prepared by or under the supervision of an independent third party who is “qualified” under the terms of that law. The Company was therefore required under order to supply such verification by a “qualified” third party consultant, and its stock was prohibited from trading in British Columbia until the BCSC accepted such verification. The BCSC also requested documentation regarding all subscribers to the Company stock who were at such time residing in British Columbia. The Company subsequently retained a “qualified” third party consultant who prepared and filed the necessary reports with the BCSC. If the BCSC continues with additional investigatory proceedings, it will require the Company to expend additional funds on legal and accounting fees, which will have a negative impact on our resources available for exploration and general operating activities.

We have not systematically drilled and sampled any of our properties to confirm the presence of any concentrations of precious metals, and drilling and sampling results to date have been inconclusive.

There is substantial risk that such testing on the United States properties would show limited concentrations of precious metals, and such testing may show a lack of precious metals in the properties. Any positive test results will only confirm the presence of precious metals in the samples, and it cannot be assumed that precious metals-bearing materials exist outside of the samples tested.

Policy changes.

Changes in regulatory or political policy could adversely affect our exploration and future production activities. Any changes in government policy, in the United States or other countries where properties are or may be held, could result in changes to laws affecting ownership of assets, land tenure, mining policies, taxation, environmental regulations, and labor relations.

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Environmental costs.

Compliance with environmental regulations could adversely affect our exploration and future production activities. There can be no assurance that future changes to environmental legislation and related regulations will not adversely affect our operations.

Future reserve estimates.

All of the mineral properties in which we have an interest or right are in the exploration stages only and are without reserves of gold or other minerals. Even if and when we can prove such reserves, reserve estimates may not be accurate. There is inherent uncertainty attributable to any calculation of reserves or resources. Until reserves or resources are actually mined and processed, the quantity of reserves or resources must be considered as estimates only. In addition, the quantity of reserves or resources may vary depending on metal prices. Any material change in the quantity of reserves, resource grade or stripping ratio may affect the economic viability of our properties. In addition, there can be no assurance that mineral recoveries in small-scale laboratory tests will be duplicated in large tests under on-site conditions or during production.

The possibility of a global financial crisis may significantly impact our business and financial condition for the foreseeable future.

The credit crisis and related turmoil in the global financial system may adversely impact our business and our financial condition, and we may face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets may be restricted at a time when we would like, or need, to raise financing, which could have a material negative impact on our flexibility to react to changing economic and business conditions. The economic situation could have a material negative impact on our lenders or customers, causing them to fail to meet their obligations to us. We will need additional capital and financing to fund our fiscal 2013 operating forecast. There is no assurance that additional capital or financing will be available to us on terms that are acceptable to us or at all.

Risks Related to Our Securities

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

· Deliver to the customer, and obtain a written receipt for, a disclosure document;

· Disclose certain price information about the stock;

· Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

· Send monthly statements to customers with market and price information about the penny stock; and

· In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

The market price of our Common Stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations.

The market price of our Common Stock is likely to continue to be highly volatile and could be subject to wide fluctuations in response to a number of factors, some of which are beyond our control, including but not limited to:

· dilution caused by our issuance of additional shares of Common Stock and other forms of equity securities;

· announcements of new acquisitions, expansions or other business initiatives by us or our potential competitors;

· our ability to take advantage of new acquisitions, expansions or other business initiatives;

· quarterly variations in our revenues and operating expenses;

· changes in the valuation of similarly situated companies, both in our industry and in other industries;

· challenges associated with timely SEC filings;

· illiquidity and lack of marketability by being an OTC quoted stock;

· changes in analysts’ estimates affecting our company, our competitors and/or our industry;

· changes in the accounting methods used in or otherwise affecting our industry;

· additions and departures of key personnel;

· announcements of technological innovations or new products;

· fluctuations in interest rates and the availability of capital in the capital markets; and

· significant sales of our Common Stock, including sales by selling shareholders following the registration of shares under a prospectus.

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These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our Common Stock and our results of operations and financial condition.

FINRA sales practice requirements 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, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The 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.

Shareholders will experience dilution upon the exercise of options and issuance of common stock under our incentive plans.

As of December 31, 2012, we had no options outstanding under our 2003 Non-Qualified Option Plan. Our 2003 Non-Qualified Option Plan permits us to issue up to 1,500,000 shares of our common stock either upon exercise of stock options granted under such plan or through restricted stock awards under such plan. If the holders of outstanding options exercise those options or our full board of directors determines to grant additional stock awards under our incentive plan, shareholders may experience dilution in the net tangible book value of our common stock. In addition, 15,280,394 shares of our common stock may be issued upon the exercise of warrants held by certain of our stockholders. If the stockholders exercise their warrants, shareholders may experience dilution in the net tangible book value of our common stock. Further, the sale or availability for sale of the underlying shares in the marketplace as a result of the exercise of existing options, the grant of additional options, and the exercise of the warrants could depress our stock price.

We do not expect to pay dividends in the foreseeable future.

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings, if any, in the development and growth of our business. In addition, debt arrangements we may enter into in the future may preclude us from paying dividends. Therefore, investors will not receive any funds unless they sell their common stock, and shareholders may be unable to sell their shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in our common stock.

We may issue additional stock without shareholder consent.

Our board of directors has authority, without action or vote of the shareholders, to issue all or part of our authorized but unissued shares. Additional shares or securities convertible or exercisable into shares are likely to be issued in connection with future financing, acquisitions, employee stock plans, or otherwise. Any such issuance will dilute the percentage ownership of existing shareholders. We are also currently authorized to issue up to 10,000,000 shares of preferred stock. The board of directors can issue preferred stock in one or more series and fix the terms of such stock without shareholder approval. Preferred stock may include the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion and redemption rights and sinking fund provisions. The issuance of preferred stock could adversely affect the rights of the holders of common stock and reduce the value of the common stock. In addition, specific rights granted to holders of preferred stock could discourage, delay or prevent a transaction involving a change in control of our company, even if doing so would benefit our shareholders. Such issuance could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

There is currently a limited trading market for our common stock and we cannot ensure that one will ever develop or be sustained.

To date there has not been a significant liquid trading market for our common stock. We cannot predict how liquid the market for our common stock might become. We currently do not satisfy the initial listing standards for any major securities exchange. Currently our common stock is traded on the OTCQB. Should we fail to remain traded on the OTCQB or not be able to be traded on the OTCQB, the trading price of our common stock could suffer, the trading market for our common stock may be less liquid and our common stock price may be subject to increased volatility. Furthermore, for companies whose securities are quoted on the OTCQB, it may be more difficult (i) to obtain accurate quotations, (ii) to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies and (iii) to obtain needed capital.

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Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, or upon the expiration of any statutory holding period under Rule 144, or issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could hinder our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

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

We have a limited number of personnel that are required to perform various roles and duties as well as be responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

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Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

GENERAL

We own or have interests in four United States properties. They are:

· Pisgah, San Bernadino County, California

· Owl Canyon, California

· Cerbat, Arizona

· Wikieup, Arizona

A summary of important features about each of these properties is set forth in Exhibit 99.1 to our Form 10-KSB/A filed on March 11, 2009, and investors should take care to review this summary.

On September 26, 2006, the Company signed a letter of intent with E.R.S. Ltd., an Israeli owned Cyprus corporation with offices located in Tel Aviv. The letter of intent was to expand testing by E.R.S. on material from Can-Cal’s Pisgah property. The Company and E.R.S. did not enter into a definitive agreement in 2007.

In May and June 2006, Can-Cal acquired an additional 66 20-acre lode claims for the filing cost of $1,200. This increased the Company’s property holding to 1,900 acres or 2.97 square miles of 95 lode claims.

In April, June, July and September 2006, the Company conducted further surface sampling and rock wall sampling on its Wikieup, Arizona property. These samples were shipped to ALS Chemex, an internationally recognized assayer for fire assays (process of testing the original head ore material at high temperatures to determine the recoverability of precious metals) and I.C.P. tests. The preliminary assay results were encouraging and the Company will continue with further surface sampling from various areas of the approximate six square miles of claimed land.

On August 28, 2006, Can-Cal acquired an additional 1,800 acres from the Rose Trust in exchange for 1,000,000 restricted shares of its common stock. This increased the Company’s property holding on its Wikieup, Arizona property to 3,700 acres or approximately six square miles of 185 lode claims. The area is accessed by gravel road just off highway 93 approximately eight miles from the town of Wikieup, Arizona.

Adits (A type of entranche to underground mine shafts), tunnels and open pit locations following what may be a trend (direction that an ore body may follow) or vein structure (faults and cracks caused by shifts in the earth that had filled in with silica fluids and other magma volcanics which solidified leaving minerals behind) over a large region have been found on the property. The legacy of previous mining activity including; abandoned equipment, stone built homes, a cement water reservoir and numerous tailings piles, or piles of dirt left over from previous mining operations, can be seen from various locations.

The geology of the Wikieup area claims is comprised of Precambrian ganoids and gneiss. Outcrop is extensive on the property and rock units include diorite, gabbro and granitic dikes. The Company is continuing the surface sampling program and has hired an independent geologist, working together with students from the University of Nevada Las Vegas (UNLV) for continued exploration.

In the United States, one property is owned (patented mining claims on a volcanic cinders property at Pisgah, California), one is leased with an option to purchase (the Cerbat property in Mohave County, Arizona), and two properties are groups of unpatented mining claims located on federal public land and managed by the United States Bureau of Land Management (the “BLM”): the Owl Canyon property (23 miles northeast of Baker, California); and the Wikieup property (in Mohave County, Arizona).

In the United States, unpatented claims are “located” or “staked” by individuals or companies on federal public land. Each placer claim covers 160 acres and each lode claim covers 20 acres. The Company is obligated to pay a maintenance fee of $140 per claim per year to the BLM and file an Affidavit of Assessment Work with the County showing labor and improvements of at least $100 for each claim yearly.

If the statutes and regulations for the location and maintenance of a mining claim in the United States are complied with, the locator obtains a valid possessory right, or claim, to the contained minerals. Failure to pay such fees or make the required filings may render the mining claim void or voidable. We believe we have valid claims, but, because mining claims are self-initiated and self-maintained, it is impossible to ascertain their validity solely from public real estate records. If the government challenges the validity of an unpatented mining claim, we would have the burden of proving the present economic feasibility of mining minerals located on the claims.

8

The evaluation and acquisition of precious metals, mining properties and mineral properties is competitive; as there are numerous companies involved in the mining and minerals business.

Exploration for and production of minerals is highly speculative and involves greater risks than exist in many other industries. Many exploration programs do not result in the discovery of mineralization and any mineralization discovered may not be of a sufficient quantity or quality to be profitably mined. Also, because of the uncertainties in determining metallurgical amenability of any minerals discovered, the mere discovery of mineralization may not warrant the mining of the minerals on the basis of available technology.

The Company’s decision as to whether any of the mineral properties it now holds, or which it may acquire in the future, contain commercially mineable deposits, and whether such properties should be brought into production, will depend upon the results of the exploration programs and independent feasibility analysis and the recommendation of engineers and geologists. The decision will involve the consideration and evaluation of a number of significant factors, including, but not limited to: 1. The ability to obtain all required permits; 2. Costs of bringing the property into production, including exploration and development or preparation of feasibility studies and construction of production facilities; 3. Availability and costs of financing; 4. Ongoing costs of production; 5. Market prices for the metals to be produced; and 6. The existence of reserves or mineralization with economic grades of metals or minerals. No assurance can be given that any of the properties the Company owns, leases or acquires contain (or will contain) commercially mineable mineral deposits, and no assurance can be given that the Company will ever generate a positive cash flow from production operations on such properties.

The Company has processed and tested mineralized materials and produced very small amounts of precious metals on a testing basis. These have come primarily from testing material from the Pisgah Mountain, Wikieup, Cerbat and the Owl Canyon properties.

The Company is not currently dependent upon one or a few major customers.

Exploration and mining operations in the United States are subject to statutory and agency requirements which address various issues, including: (i) environmental permitting and ongoing compliance, including plans of operations which are supervised by the Bureau of Land Management (“BLM”), the Environmental Protection Agency (“EPA”) and state and county regulatory authorities and agencies (e.g., state departments of environmental quality) for water and air quality, hazardous waste, etc.; (ii) mine safety and OSHA generally; and (iii) wildlife (Department of Interior for migratory fowl, if attractive standing water is involved in operations). See (b)(11) below. The Company has been added by San Bernardino County as a party to the Approved Mining/ Reclamation Plan and related permits, which have been issued for the Pisgah property. See Item 2, Description of Properties - Pisgah, California - Pisgah Property Mining Lease.

Because any exploration (and future mining) operations of the Company would be subject to the permitting requirements of one or more agencies, the commencement of any such operations could be delayed, pending agency approval (or a determination that approval is not required because of size, etc.), or the project might even be abandoned due to prohibitive costs.

The Company has historically expended a significant amount of funds on consulting, geochemical analytical testing, metallurgical processing and extracting, and precious metal assaying of material, however, the Company does not consider those activities as research and development activities. All those expenses are borne by the Company.

Federal, state and local provisions regulating the discharge of material into the environment, or otherwise relating to the protection of the environment, such as the Clean Air Act, Clean Water Act, the Resource Conservation and Recovery Act, and the Comprehensive Environmental Response Liability Act (“Superfund”) affect mineral operations. For exploration and mining operations, applicable environmental regulation includes a permitting process for mining operations, an abandoned mine reclamation program and a permitting program for industrial development. Other non-environmental regulations can impact exploration and mining operations and indirectly affect compliance with environmental regulations. For example, a state highway department may have to approve a new access road to make a project accessible at lower costs, but the new road itself may raise environmental issues. Compliance with these laws, and any regulations adopted there under, can make the development of mining claims prohibitively expensive, thereby frustrating the sale or lease of properties, or curtailing profits or royalties which might have been received there from. In 1997, the S & S Joint Venture spent approximately $32,000 to clean up areas of the Owl Canyon properties as requested by the BLM. The Company cannot anticipate what the further costs and/or effects of compliance with any environmental laws might be. The BLM approved the S&S Joint Venture trenching program at Owl Canyon without a requirement for bonding. The BLM approved the reclamation of this trenching program in 2000. BLM demanded further clean-up of the mill site and surrounding area, and the Joint Venture complied with their request in 2000.

9

The Company presently has one full-time employee and relies on outside subcontractors, consultants and agents, to perform various administrative, legal and technical functions, as required.

PISGAH, CALIFORNIA PROPERTY

GENERAL TESTING. In 1997 we acquired fee title to a “volcanic cinders” property at Pisgah, San Bernardino County, California, for $567,000. The cinders material resulted from a geologically recent volcanic eruption.

The property is privately owned and is comprised of approximately 120 acres located 10 miles southwest of Ludlow, California, with a very large hill of volcanic cinders, accessible by paved road from Interstate 40. An independent survey service hired by the Company reported that there are approximately 13,500,000 tons of volcanic cinders above the surface. Approximately 3,500,000 tons of the cinders have been screened and stockpiled, the result of prior operations by Burlington Northern Railroad Co. It processed the cinders from the hill for railroad track ballast, taking all cinders above about one inch diameter and leaving the rest on the ground surface within one-quarter mile of the hill. The remaining material in the hill and the material left over from Burlington’s operations can easily be removed by front end loaders and loaded into dump trucks for hauling. The Cinder and Cinder #2 patented mining claims contain morphologically young alkali basalt and hawaiite lava flows and cinder (rock types created by volcanic activity). The cinder and spatter cone is about 100 meters high and has a basal diameter (circumference area at the base of the volcanic material) of about 500 meters, and was formed by the splattering of lava into a cone shape during volcanic activity. The volcanic cone and crater consists of unsorted basalis tephra (volcanic material), ranging from finest ash, through scoriascious cinders and blocks, or slag like structures born from igneous rock, to dense and broken bombs up to two meters in dimension.

The Company owns equipment which was acquired with the property, and is located on the property: a ball mill used for crushing cinders, truck loading pads, two buildings, large storage tanks, conveyors to load trucks, material silos and screening equipment.

The Pisgah property consists of patented claims we own; no fees have to be paid to the BLM or work performed on the claims to retain title to the property.

From the year 2000 through 2002, the Company ran numerous tests on the volcanic cinders property to determine if the material contains precious metals. Although the program indicated precious metals might exist in material taken from the Pisgah property, overall the program results were inconclusive.

Pisgah Property - Mining Lease

To generate working capital, as of May 1, 1998, we signed a Mining Lease Agreement for the Pisgah property with Twin Mountain Rock Venture, a California general partnership (“Twin Mountain,”). The Agreement is for an initial term of 10 years, with an option to renew for an additional ten-year term. Twin Mountain has the right to take 600,000 tons of volcanic cinders during the initial term, and 600,000 more tons during the additional term, for processing and sale as decorative rock. The material would be removed from the original cinder deposit, not the stockpiled material. Twin Mountain has not removed any material to date.

The agreement provides that Twin Mountain will pay minimum annual rental payments of $22,500 for the initial term and $27,500 per year for the additional term. Twin Mountain is also obligated to pay us a monthly production royalty for all material removed from the premises: The greater of 5% of gross sales f.o.b. Pisgah, or $0.80 per ton for material used for block material; plus 10% of gross sales f.o.b. Pisgah for all other material. Twin Mountain will be credited against these payments for minimum royalty payments previously made.

Twin Mountain is current in payments, which are pledged to service company debt. Twin Mountain has not yet removed any material from the property and has not indicated when it would do so. Twin Mountain does not have the right to remove or extract any precious metals from the property; it does have the right to remove cinder material, which could contain precious metals (and Twin Mountain would have title to the removed cinder material), but it cannot process the materials for precious metals either on or off site.

Mining and reclamation permits, and an air quality permit have been issued by the California regulatory agencies in the names of both Twin Mountain and the Company. We posted a cash bond in the amount of $1,379 (1% of the total bond amount) and Twin Mountain has posted the remainder of the $137,886 bond. If Twin Mountain defaults, we would be responsible for reclamation of the property, but reclamation costs incurred in that event would be paid in whole or part by the bond posted by us and Twin Mountain. Reclamation costs are not presently determinable.

10

In addition to our historic exploration activities, we are currently under taking alternative revenue producing opportunities at our Pisgah property. On January 23, 2012 we entered into a mineral lease agreement with a partner who will purchase up to 100,000 tons of resources derived from the property to produce commercial products for resale. The agreement is for an initial period of ten (10) years, with an additional five (5) year extension at the option of the lessee. We will receive fees for the removal of minerals at diminishing prices in $0.50 increments between $12 per ton and $10 per ton for each 20,000 tons of material removed.

Pisgah Property - Debt Transactions

We owed a second private lender (First Colony Merchant) a total of $852,767 including accrued interest, on three notes payable secured by a deed of trust and assignment of rents (payments under the Twin Mountain lease) on the Pisgah property, which were cancelled during 2011 in accordance with the statute of limitations. The resulting gain on extinguishment of debt of $852,767 was recognized within the statement of operations during the year ended December 31, 2011. For additional consideration for part of the amounts loaned, the Company granted the lender a five-year option to purchase 300,000 restricted shares of common stock, at the lower of $0.65 per share or 50% of the lowest trading price during the month before exercise, payable in cash. The option was exercised in 2000 at $0.52 per share. In addition, in fiscal year 2000, as further consideration, we issued 45,000 restricted shares of common stock to a corporate affiliate of the lender as a loan placement fee.

Location and Access

Pisgah Project - General Location Map

The Pisgah Project is located in San Bernardino County, 72 kilometers (45 miles) east of the city of Barstow, California, and 307 kilometers (192 miles) south-southeast of Las Vegas, Nevada, United States. Barstow lies near the southwest border of California, east of the junction of Interstate 15, Interstate 40 and U.S. Route 66. The Project is centered at Latitude 34o 44’ 47” North, Longitude 116o 22’ 29” West (See Figures 1, 2 and 3), or UTM (metric) co-ordinates 55700 E/384500 N in Zone 11, datum point NAD 27. It lies within the NW ¼ of Section 32, Township 8 North, Range 6 East from San Bernardino Meridian and has an area of 48.4 hectares (120.2 acres). Access to the Pisgah Project is by the paved 2-lane paved road. From the junction of Interstate 15 and Interstate 40 just east of Barstow, California travel east along Interstate 40 for 52 kilometers (32.5 miles). Take the Hector Rd. Exit and turn right onto Hector Rd. From here turn left onto Historic Route 66 for 7.4 kilometers (4.6 miles), and then turn right (south) onto the Pisgah Crater road. Follow this road for 3.2 kilometers (2.0 miles) to the Pisgah Crater workings.

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Pisgah Project

Regional Location Map

 

12

Pisgah Project

Township Location Map

13

Pisgah Project

Topography Map

 

14

OWL CANYON - S & S JOINT VENTURE

In 1996, the Company entered into a Joint Venture Agreement with the Schwarz family covering approximately 425 acres of unpatented placer and lode mining claims in the Silurian Hills of California, known as Owl Canyon (the “S&S Joint Venture”). The S & S Joint Venture has since reduced its holdings to 160 acres of lode claims and a five-acre mill site claim. These claims are prospective for precious metals and some base metals. The property is located approximately 23 miles northeast of Baker, California, accessible by 23 miles of paved and dirt road. The Company and the Schwarz family each have a 50% interest in the venture which is operated by a management committee, comprised of G. Michael Hogan, a director of the company, and Ms. Robin Schwarz.

Holding costs are approximately $160 per year for county and BLM filing fees for each of the eight lode claims, in accordance with filings under provisions of the “Small Miner Waiver”. Work must be performed on the property each year to keep title to the claims.

Pursuant to the Joint Venture Agreement, we are funding the venture’s operations. Any income from the venture will first be paid to the Company to repay funds advanced to the venture or spent on its account, with any additional income divided 50% to the Company and 50% to the Schwarz family.

As the acquisition price of its 50% interest in the S & S Joint Venture, in 1996 the Company issued 500,000 restricted shares of common stock to the Schwarz family.

Prior to 2003, the Company conducted extensive preliminary testing and assaying on the Owl Canyon property. Results indicate precious metals are present in material located on the Owl Canyon property, and further exploration is warranted. Upon conclusion of the trenching program conducted by Geochemist, Bruce Ballantyne, the assay results confirmed that the “Papa Hill” section of Owl Canyon should be a designated drill target in the future.

Geology of Owl Canyon

Mineralization on the property migrates along north/south oriented faulting and at the contact point between metamorphic and dolomite rocks. Metalliferous deposits, or deposits filled with fine metal particles, along these fractures are prevalent near the central area of Owl Canyon. Along the southern side of the property, fault contact areas exhibit localized zone alteration from migrating hydrothermal fluids, or areas altered from hot lava and hydrothermal fluids due to volcanic activity, producing a mineralized vein ranging in width from approximately 18 to 36 inches.

We have performed external and in-house fire assays on material from the Owl Canyon property, sending both trench and rock samples to independent laboratories. Approximately 15 tons of material was removed to a depth of 3 to 4 feet to expose a continuation of one of the veins. An independent laboratory analyzed samples from this material.

A detailed structural and geologic mapping survey has been completed on the property, indicating some zones in certain areas are suitable exploration targets. Currently, work on this property has been suspended. This property is without known reserves and future work would be exploratory in nature. There was no significant activity on this property in 2011.

Location

Owl Canyon Project - Township Location Map

The Silurian Hills are located in the Silurian Hills 15-minute quadrangle. The property is located in the northeastern corner of the 7.5 minute series topographic map entitled North of Bank Quadrangle California - San Bernardino County in Section 9, Township 16N, Range 9E. It is centered along the topographic feature known as Owl Canyon. The area lies within the California Desert Conservation Area administered by the Bureau of Land Management. This agency identified the Silurian Hills as having high mineral potential for silver (1980) which led the County of San Bernardino to zone the area for mining and mineral exploration.

Access

From Interstate 15 at Baker, California, access is via California State Highway 127 for a distance of nine miles north of the service center town of Baker. At the Powerline Road junction turn right and travel on a USGS class 3 road generally under the Power Transmission Line for a further 9 miles. At this point turn to the left and head north to the Silurian Hills until metal gates are reached after 5 miles of slow, track-road, travel. This is the eastern boundary of the Owl Canyon Mineral Property.

15

Topography

Relief at the Owl Canyon Mineral Property area ranges from 650 meters to about 775 meters (elevation 2,000 to 3,000 feet above sea level). Locally, topographic relief is on the order of 1,000 feet in less than one half a mile along the Owl Canyon topographic feature.

CERBAT PROPERTY

On March 12, 1998, we signed a Lease and Purchase Option Agreement covering six patented mining claims in the Cerbat Mountains, Hualapai Mining District, and Mohave County, Arizona. The patented claims cover approximately 120 acres. We paid $10,000 as the initial lease payment and are obligated to pay $1,500 per quarter as minimum advance royalties. The Company has the option to purchase the property for $250,000, less payments already made. In the event of production before purchase, we will pay the lessor a production royalty of 5% of the gross returns received from the sale or other disposition of metals produced. Except for limited testing and evaluation work performed in mid- 2002, no work has been performed on this property since 1999. Access is north 15 miles from Kingman, Arizona on Highway 93, east from the historical market to Mill Ranch, then left three miles to a locked gate.

The country rock is pre-Cambrian granite, gneiss and schist complex. It is intruded by dikes of minette, granite porphyry, diabase, rhyolite, basalt and other rocks, some of which are associated with workable veins and are too greatly serieitized (altered small particles within the material) for determination. The complex is also flanked on the west by masses of the tertiary volcanic rocks, principally rhyolite. The mineralized body contains principally gold, silver and lead. They occur in fissure veins, which generally have a north-easterly trend and a steep north-easterly or south-westerly dip. Those situated north of Cerbat wash are chiefly gold bearing while those to the south principally contain silver and lead. The gangue (material that is considered to have base metals that are not precious or worth recovering for market value) is mainly quartz and the values usually favor the hanging wall. The Company has been informed by the owner that the property contains several mine shafts of up to several hundred feet in depth and tailings piles containing thousands of tons of tailings. The property has not produced since the late 1800’s.

The buildings on the property are practically valueless, owing to being in disuse for so many years.

We conducted (in late June and July 2002) a limited number of preliminary tests and assays on material taken from mine dumps (material left on the property from mining by others many years ago). It was anticipated that this material could be economically processed. However, the dump material tonnage will not support a small-scale operation without being supplemented with additional underground ore. We are considering selling or farming out the property, as there have been expressions of interest in the property from time to time. We have had no significant activity on Cerbat as of the date of this annual report.

Location and Access

The Cerbat Group of claims is located in the Hualapai Mining District about 15 miles north from Kingman which is the nearest railroad and supply point. The state highway from Kingman to Boulder Dam and Las Vegas passes within 4 miles of the property and a good County road connects the highway with the mining site. The County road passes through the Rolling Wave and Red Dog claims making transportation available to the lower workings. An old road connects the New Discovery shaft with the Cerbat workings near the crest of the hill. This group of claims is favorably situated for trucking and transportation purposes.

WIKIEUP PROPERTY

The Wikieup property consists of 2,400 acres or approximately 3.8 square miles of 120 lode claims. The lode claims are accessed via gravel road approximately eight miles just off Highway 93 at the town of Wikieup, Arizona.

Holding costs are approximately $155 per year for county and BLM filing fees, and work must be performed on the property each year to keep title to the claims.

The geology of the area is comprised of Precambrian ganoids and gneiss. Outcrop is extensive on the property and rock units include diorite, gabbro and granitic dikes. The Company has kept the claims in good standing by submission of the required rental fees. During the past nine months, the Company has conducted surface sampling of the rock units on the property for “In House” and independent third party companies’ analytical evaluation and assay tests. We are currently holding the property for further exploration. At the present time the property is without known reserves.

During 2011, we began the process of conducting a comprehensive research and development program to ascertain the potential for any rare earth elements on the Wikieup property with the assistance of an independent geologist working together with students from the University of Nevada Las Vegas’ geology department (UNLV). The study is expected to be completed during 2013.

16

Location and Access

Wikieup Project - General Location Map

The Wikieup Project is located in southern Mohave County, 88 kilometers (55 miles) south of the city of Kingman, Arizona, and 253 kilometers (158 miles) southeast of Las Vegas, Nevada, United States. Wikieup lies on Interstate 93. It occurs at Latitude 34o 44’ 47” North, Longitude 116o 22’ 29” West, the site of Wikieup, and west from there for approximately 19 kilometres (12 miles; Figures 1, 2 and 3). The Project is located 37 kilometers (23 miles) northwest of the mining camp of Bagdad, Arizona and 25 kilometers (16 miles) northwest of the mining camp of Bagdad, Arizona. Access to the Wikieup Project is by the paved 2-lane Interstate 93 from the village of Wikieup. A few claims straddle the highway at Wikieup, but the main body of mining claims is accessed by heading west from the junction of Interstate 93 at Wikieup onto Chicken Springs Road and following various secondary and tertiary gravel and sand roads. Many of the tertiary roads require a 4-wheeldrive vehicle for access.

17

Wikieup Project

Regional Location Map

Wikieup Project

District Location Map

 

18

Wikieup Project

Geology Map

19

Item 3. Legal Proceedings.

The Company is not currently a party to, or otherwise involved in any legal proceedings.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

Item 4. Mine Safety Disclosures.

The Company does not currently operate any mines related to its claims. As a result, mine safety disclosures are not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

(a) Market Information

Our Common Stock trades sporadically on the over-the-counter bulletin board market (OTC:QB) under the symbol CCRE. Our common stock has traded infrequently on the OTC:QB, which limits our ability to locate accurate high and low bid prices for each quarter within the last two fiscal years. Therefore, the following table lists the quotations for the high and low bid prices as reported by a Quarterly Trade and Quote Summary Report of the OTC Bulletin Board for the calendar years 2012 and 2011. The quotations from the OTC Bulletin Board reflect inter-dealer prices without retail mark-up, markdown, or commissions and may not represent actual transactions.

	2012		2011
	High	Low	High	Low
1st Quarter	$0.10	$0.03	$0.07	$0.02
2nd Quarter	$0.10	$0.04	$0.10	$0.04
3rd Quarter	$0.05	$0.04	$0.10	$0.02
4th Quarter	$0.10	$0.03	$0.05	$0.02

(b) Holders of Common Stock

As of March 31, 2013, there were approximately 596 holders of record of our Common Stock and 42,027,060 shares outstanding.

(c) Dividends

In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.

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(d) Securities Authorized for Issuance under Equity Compensation Plans

STOCK OPTION PLANS

THE CAN-CAL 2003 QUALIFIED INCENTIVE STOCK OPTION PLAN: The 2003 Qualified Incentive Stock Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan, which will be used to compensate senior executives and mid-level employees in the future. An option on 500,000 shares had been granted to Mr. Ciali under this plan. These options expired unexercised in 2006. An option on 300,000 shares had been granted to Anthony F. Ciali when he was appointed an officer of the company in March 2003. These options expired unexercised in 2006.

An option on 500,000 shares has been granted to Mr. Ronald Sloan with an exercise price of $0.20 in June 2006 under this plan. These options expired unexercised in 2011. An option on 125,000 shares has been granted to Mr. James Dacyszyn with an exercise price of $0.20 in June 2006 under this plan. This option was exercisable upon issuance and expired in June 2008. An option on 125,000 shares has been granted to Mr. John Brian Wolfe with an exercise price of $0.20 in June 2006 under this plan. This option was exercisable upon issuance and expired in June 2008.

THE CAN-CAL 2003 NON-QUALIFIED STOCK OPTION PLAN FOR SENIOR EXECUTIVES, OUTSIDE DIRECTORS, AND CONSULTANTS: The 2003 Non-Qualified Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan. An option on 300,000 shares had been granted to Anthony F. Ciali, a former officer of the Company, when he was appointed an officer of the company in March 2003. These options expired unexercised in 2006. An option on 100,000 shares had been granted to Luis Vega when he signed a consulting agreement with the company in April 2003. Mr. Vega’s options expired unexercised in 2006.

The total number of options issued and outstanding at any time, under both the Qualified and Non-Qualified Stock Option Plans will not exceed 10% of the company’s issued and outstanding common stock, calculated on a pro forma basis.

WARRANTS

For the fiscal years ended December 31, 2012 and 2011, we issued a total of 3,078,314 and 5,824,584 warrants, respectively, to purchase shares of registered or unregistered common stock. We also modified a total of 6,377,496 warrants during each of the fiscal years ended December 31, 2012 and 2011. We had a total of 15,280,394 warrants outstanding at December 31, 2012.

Recent Sales of Unregistered Securities

The following sales of equity securities by the Company occurred during the three month period ended December 31, 2012:

None.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the year ended December 31, 2012.

Item 6. Selected Financial Data.

Not applicable.

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Item 7. Management’s Discussion and Analysis.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of the business, financial condition and results of operation of the Company should be read in conjunction with the financial statements of the Company for the years ended December 31, 2012 and 2011 and the notes to those statements that are included elsewhere in this Annual Report on Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the section titled “Risk Factors.”

Overview

Can-Cal Resources Ltd. is a publicly traded exploration stage company engaged in seeking the acquisition and exploration of metals mineral properties. As part of its growth strategy, the Company will focus its future activities in the USA, with an emphasis on the Pisgah Mountain, California property and the Wikieup, Arizona property.

At December 31, 2012, we had cash on hand of approximately $1,300 available to sustain operations. Accordingly, we are uncertain as to whether the Company may continue as a going concern. While we intend to seek additional investment capital, or possible funding or joint venture arrangements with other mining companies, to finance operations we have no assurance that such investment capital or additional funding and joint venture arrangements will be available to the Company.

We expect in the near term to continue to rely on outside financing activities to finance our operations. We used investment proceeds realized during 2012 and 2011 for (i) completion of work-up of two potential extraction processes to determine which process we will employ to potentially prove up any precious metals, platinum groups elements and/or other base metals on the Pisgah, California property and the Wikieup, Arizona property, if any; (ii) the development of a drill program to potentially prove up any tonnages and precious metals and/or other base metals on the Wikieup, Arizona property, if any; (iii) the continued development a comprehensive research and development program to ascertain the potential for any rare earth elements on the Owl Canyon, California property; (iv) strategic working capital reserve and (v) to finance our operations.

In addition to our historic exploration activities, we are currently under taking alternative revenue producing opportunities at our Pisgah property. On January 23, 2012 we entered into a mineral lease agreement with a partner who will purchase up to 100,000 tons of resources derived from the property to produce commercial products for resale. The agreement is for an initial period of ten (10) years, with an additional five (5) year extension at the option of the lessee. We expect to receive fees for the removal of minerals at diminishing prices in $0.50 increments between $12 per ton and $10 per ton for each 20,000 tons of material removed. As of the date of this report, we have not yet sold any minerals under this agreement.

With reference to the Wikieup Property, Can-Cal has commissioned a Geologist to perform a three-phased project to evaluate the property and its surrounding areas. The use of Satellite Imaging Interpretation software will provide regional, geological mapping. The next phase is to take surface samplings from various areas and have the samples analyzed. The results will determine the potential for any commercially viable mineral deposits as well as prospective drilling locations.

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Results of Operations for the Years Ended December 31, 2012 and 2011:

	Year Ended
	December 31,						Increase /
	2012			2011			(Decrease)
Expenses:
Exploration costs	$	51,837		$	46,499		$	5,338
General and administrative		291,571			311,743			(20,172	)
Depreciation		6,162			8,230			(2,068	)
Officer salary		120,000			120,000			–
Total operating expenses		469,570			486,472			(16,902	)
Net operating loss		(469,570	)		(486,472	)		(16,902	)
Other income (expense):
Other income		3,100			12,400			(9,300	)
Interest expense		(243,042	)		(118,490	)		124,552
Rental revenue		27,500			39,000			(11,500	)
Loss on disposal of fixed assets		–			(23,673	)		(23,673	)
Gain on extinguishment of debts		–			1,152,039			(1,152,039	)
Total other income (expense)		(212,442	)		1,061,276			(1,273,718	)
Net income (loss)	$	(682,012	)	$	574,804		$	(1,256,816	)

Revenues:

We are an exploration stage company and had no revenue to recognize in the years ended December 31, 2012 and 2011. As such, there were no comparative revenues or cost of revenues.

Exploration Costs:

For the year ended December 31, 2012, exploration costs were $51,837 compared to $46,499 for the year ended December 31, 2011, an increase of $5,338, or 11%. The increase in exploration costs for the year ended December 31, 2012 compared to the year ended December 31, 2011 is due to increased exploration activities at our Owl Canyon and Wikieup locations.

General and Administrative:

General and administrative expenses were $291,571 for the year ended December 31, 2012 compared to $311,743 for the year ended December 31, 2011, a decrease of $20,172 or approximately 6%. The decrease in general and administrative expense for the year ended December 31, 2012 compared to the year ended December 31, 2011 was due to decreased professional fees provided during 2012 as we made improvements in our reporting procedures that enabled us to become more cost effective.

Depreciation:

For the year ended December 31, 2012, depreciation expense was $6,162 compared to $8,230 for the year ended December 31, 2011, a decrease of $2,068, or 25%. The decrease in depreciation expense for the year ended December 31, 2012 compared to the year ended December 31, 2011 is due to diminishing depreciation expense as assets have become fully depreciated and have not been replaced.

Officer Salary:

For the year ended December 31, 2012, officer salary expense was $120,000 compared to $120,000 for the year ended December 31, 2011. Officer salary expense for the year ended December 31, 2012 compared to the year ended December 31, 2011 remained constant as our CEO’s compensation is fixed at $10,000 per month. All salaries payable in 2012 and 2011 were accrued, but not paid, and remain an outstanding obligation of the Company.

23

Net Operating Loss:

Net operating loss for the year ended December 31, 2012 was $469,570, or ($0.01) per share, compared to a net operating loss of $486,472 for the year ended December 31, 2011, or ($0.01) per share, a decrease of $16,902 or 3%. Net operating loss decreased primarily due to decreased professional fees provided during 2012 as we made improvements in our reporting procedures that enabled us to become more cost effective.

Other Income:

Other income was $3,100 for the year ended December 31, 2012 compared to $12,400 for the year ended December 31, 2011, a decrease of $9,300, or 75%. Other income decreased due to the diminished collection of restitution proceeds received in settlement of misappropriated funds by our former bookkeeper as the balance due was collected in full during the year.

Interest Expense:

Interest expense was $243,042 for the year ended December 31, 2012 compared to $118,490 for the year ended December 31, 2011, an increase of $124,552, or 105%, which increased primarily to the extinguishment of debts during the fourth quarter of 2011 and differences in the expenses related to the fair value of warrants extended. Interest expense included $238,419 and $57,626 related to the additional fair value of warrants extended based on estimated valuations using a Black-Scholes valuation model during the years ended December 31, 2012 and 2011, respectively.

Rental Revenue:

Rental revenue was $27,500 for the year ended December 31, 2012 compared to $39,000 for the year ended December 31, 2011, a decrease of $11,500, or 29%. The decrease in rental revenue for the year ended December 31, 2012 compared to the year ended December 31, 2011 is due to revenues received from special leasing projects in 2011 that were not realized in 2012. Such revenues include, but are not limited to, sub-leasing land for video shoots and television commercials.

Loss on disposal of fixed assets:

Loss on disposal of fixed assets was $-0- for the year ended December 31, 2012 compared to $23,673 for the year ended December 31, 2011. The loss on disposal of fixed assets in 2011 consisted of the disposal of an ARC Furnace with a historical cost basis of $32,386 and accumulated depreciation of $8,713, resulting in a loss on disposal of $23,673.

Gain on extinguishment of debts:

Gain on extinguishment of debts was $-0- for the year ended December 31, 2012 compared to $1,152,039 for the year ended December 31, 2011. The gain on extinguishment of debts in 2011 consisted of a total of $852,767 of principal and accrued interest that was written off during 2011 in accordance with the statute of limitations, along with another $17,268 of accrued interest on a debt that was previously paid in full. We also recognized a gain of $282,004 due to the forgiveness of accrued salaries previously earned by our former CEO, Ron Sloan.

Net Income (Loss):

The net income (loss) for the year ended December 31, 2012 was $(682,012) compared to net income of $574,804 for the year ended December 31, 2011, resulting in a decreased net income (loss) of $1,256,816, or 219%. Net income (loss) decreased primarily due to a gain of $1,152,039 on the extinguishment of debts in 2011 that were not realized during the comparative period in 2012, and the additional expense related to the fair value of warrants extended based on estimated valuations using a Black-Scholes valuation model during the years ended December 31, 2012 compared to 2011.

24

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes total assets, accumulated deficit, stockholders’ equity (deficit) and working capital at December 31, 2012 compared to December 31, 2011.

	December 31,
	2012			2011
Total Assets	$	38,312		$	65,928
Accumulated (Deficit)	$	(10,362,791	)	$	(9,680,779	)
Stockholders’ Equity (Deficit)	$	(610,260	)	$	(391,705	)
Working Capital (Deficit)	$	(611,286	)	$	(398,288	)

At December 31, 2012, we had total assets of $38,312, consisting principally of cash, prepaid expenses and property and equipment. We have implemented financial controls in the business to ensure each expense is warranted and needed. Our cash on hand at December 31, 2012 was $1,316.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements of any kind.

Contractual Obligations

We have certain fixed contractual obligations and commitments. The table below summarizes our contractual obligations as of December 31, 2012 and for the future periods identified. The exploration of our properties, changes in our business needs and other factors may result in our incurring significant future obligations which would impact our cash and liquidity position and requirements. We cannot provide certainty regarding the timing and amounts of payments.

Payments Due By Period
Contractual Cash Obligations	Total	Less than One Year	1-3 Years	3-5 Years	After 5 Years
Repayment of debt(1)	$32,368	$32,368	$-0-	$-0-	$-0-
Total Contractual Cash Obligations	$32,368	$32,368	$-0-	$-0-	$-0-

⁽¹⁾ Includes total principal amounts of $31,291 and interest of $1,077.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, allowance for sales returns and doubtful accounts, inventory valuation, business combination purchase price allocations, our review for impairment of long-lived assets, intangible assets and goodwill, income taxes and stock-based compensation expense. Actual results may differ from these judgments and estimates, and they may be adjusted as more information becomes available. Any adjustment may be significant.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably may have been used, or if changes in the estimate that are reasonably likely to occur may materially impact the financial statements. We refer readers to Note 1 to our audited financial statements for the year ended December 31, 2012 filed with this Annual Report.

Recent Accounting Pronouncements

See Note 1 contained in the “Notes to the Financial Statements” for a discussion of new and recently adopted accounting pronouncements.

25

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

26

Item 8. Financial Statements and Supplementary Data.

Index to Financial Statements

Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2012 and 2011	F-2
Statements of Operations for the years ended December 31, 2012 and 2011, and the period from March 22, 1995 (inception) to December 31, 2012	F-3
Statement of Stockholders' (Deficit) for the period from March 22, 1995 (inception) to December 31, 2012	F-4
Statements of Cash Flows for the years ended December 31, 2012 and 2011, and the period from March 22, 1995 (inception) to December 31, 2012	F-7
Notes to Financial Statements	F-8

27

Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures.

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Chief Executive Officer has concluded that the Company’s disclosure controls and procedures were not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below in Management’s Annual Report on Internal Control over Financial Reporting, which we view as an integral part of our disclosure controls and procedures.

Changes in Internal Control

We have also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls as of December 31, 2012.

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act.

The management of the Company assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on this assessment, management determined that, during the year ended December 31, 2012, our internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules, as more fully described below. This was due to deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls and that may be considered to be material weaknesses.

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Management identified the following material weaknesses in internal control over financial reporting:

1. The Company has limited segregation of duties, which is not consistent with good internal control procedures.

2. The Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future. This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal controls.

Management believes that the material weaknesses set forth in items 1 and 2 above did not have an effect on the Company’s financial results.

The Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so.

Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

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 temporary rules of the Securities and Exchange Commission that permit the company to provide only the management’s report in this annual report.

Item 9B. Other Information.

On February 27, 2013, following the Company’s fiscal year ended December 31, 2012, Mr. William J. Hogan resigned from the Board of Directors. Wlliam Hogan’s resignation from the Board did not occur in connection with any disagreement on any matter relating to the Company’s operations, policies or practices, nor regarding the general direction of the Company.

On August 12, 2012, Dr. Michael Giuffre was appointed to the Company’s Board of Directors. Dr. Giuffre MD, MBA is currently “Clinical Professor” of Cardiac Sciences and Pediatrics in the Faculty of Medicine at the University of Calgary and a recipient of the “Distinguished Fellow of the American Academy of Cardiology.” Dr Giuffre is also the current President of the Alberta Medical Association. He currently sits on the board of FoodChek Systems, a private Life Sciences company in Calgary, Canada owned by another former member of the Company’s Board of Directors, William Hogan; DiaMedica, a biotechnology company currently traded on the TSX; and UNICEF Canada. Dr. Giuffre is a past Board member of MedMira, a public biotechnology company in rapid HIV and hepatitis diagnostics, and is a past consultant for Redsky Inc. that was sold to Research In Motion (“RIM”). Dr. Giuffre subsequently resigned on March 1, 2013.

On April 17, 2012 the Company appointed Ron Schinnour to the Board of Directors. Mr. Schinnour has held countless executive, leadership and management roles in the agricultural industry, both domestically and globally. This has included positions with Monsanto, United Agri Products and Agrium (Cominco). He recently moved back to Calgary and joined the UFA, holding the position of Executive VP of Agri Business. Mr. Schinnour’s expertise in Strategic Planning, Financial Management, International Business and M&A Leadership has been instrumental for the business success and growth of his current and previous companies. Mr. Schinnour holds an MBA from Washington University with special recognition for Excellence in Team Process, Strategic Planning and Finance. He also holds a CMA Designation from the University of Calgary/Society of Management Accountants. Mr. Schinnour currently serves on the Board of Directors of FoodChek Systems Inc., a private Life Sciences company in Calgary, Canada owned by another former member of the Company’s Board of Directors, William Hogan, and Universal Co-op Ltd. (Minneapolis). He has previously served as the Chairman and Director for RAPID & AEC, and on the Board of Directors for the Latin America Agricultural Development Bank, AgroBio & the Agricultural Future of America. He has been President, Treasurer and Director of numerous corporate entities at Monsanto and UAP.

29

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Officers and directors of the Company are listed below. Directors are elected to hold offices until the next annual meeting of shareholders and until their successors are elected or appointed and qualified. Officers are appointed by the board of directors until a successor is elected and qualified or until resignation, removal or death.

Name	Age	Position and Tenure
G. Michael Hogan	74	President and Chief Executive Officer since November 17, 2009, and a Director.
William J. Hogan	63	Secretary and Chairman of the Board of Directors from July 31, 2009 until his resignation on February 27, 2013.
Thompson MacDonald	66	Director from June 4, 2009 to November 13, 2009, reappointed on January 31, 2012. Mr. MacDonald was appointed Chairman of the Board of Directors upon Mr. Hogan’s resignation on February 27, 2013.
Dr. Michael Giuffre	57	Director from August 12, 2012 until his resignation on March 1, 2013.
Ron Schinnour	56	Director since April 17, 2012.

G. MICHAEL HOGAN. Mr. G. Michael Hogan spent the majority of his career in various senior management positions at Texaco Canada Ltd and Imperial Oil Ltd. He began his career as an Industrial/Lubrication Engineer for Texaco Canada. Shortly thereafter, he was promoted to District Supervisor making him the youngest supervisor in the company. After graduating with a degree in Mechanical Engineering from the University of Toronto, Ontario and an MBA in Finance from the University of Western Ontario in 1971, he returned to Texaco as the Assistant Manager in Strategic Planning at the corporate office of Texaco Canada. After several promotions, he was appointed Manager of Budgets and Long Range Strategic Planning, where he managed the team that computerized the budget and planning process. Prior to the merger with Imperial Oil, he served on the Corporate M&A team for two years. After the merger with Imperial Oil, he served as the Manager of Retail Pricing.

Mr. Hogan joined Equion Securities in 1991, as a Financial Advisor (FA) serving high net worth individual investors. After joining Equion, the company merged with Loring Ward and the combined company changed its name to Assante Corp. Assante then grew by purchasing fifteen (15) Independent Financial Advisory firms. Subsequently, Assante was purchased by CI Financial, during the second half of 2003, for approximately $900 million.

Mr. Hogan sold his prosperous FA practice in 2004, and went into semi-retirement and ultimately into full retirement in 2007. Mr. G. Michael Hogan has a degree in Mechanical Engineering from the University of Toronto, Ontario and an MBA in Finance from the University of Western Ontario.

WILLIAM J. HOGAN. Mr. Hogan specializes in business development and has a track record of adding shareholder value to his endeavors in both the public and private sectors, with over 33 years of experience in the areas of development, operations, fund raising and strategic planning for startup and growth level companies. Mr. Hogan currently holds the position of Vice Chairman, Founder of Vacci-Test Corporation, a Calgary, Alberta developing food safety pathogen testing company. Mr. Hogan resigned from the Board of Directors on February 27, 2013, following the Company’s fiscal year ended December 31, 2012.

DR. MICHAEL GIUFFRE. Dr. Giuffre MD, MBA is currently “Clinical Professor” of Cardiac Sciences and Pediatrics in the Faculty of Medicine at the University of Calgary and a recipient of the “Distinguished Fellow of the American Academy of Cardiology.” Dr Giuffre is also the current President of the Alberta Medical Association. He currently sits on the board of FoodChek Systems, a private Life Sciences company in Calgary, Canada owned by another former member of the Company’s Board of Directors, William Hogan; DiaMedica, a biotechnology company currently traded on the TSX; and UNICEF Canada. Dr. Giuffre is a past Board member of MedMira, a public biotechnology company in rapid HIV and hepatitis diagnostics, and is a past consultant for Redsky Inc. that was sold to Research In Motion (“RIM”).

RON SCHINNOUR. Mr. Schinnour has held countless executive, leadership and management roles in the agricultural industry, both domestically and globally. This has included positions with Monsanto, United Agri Products and Agrium (Cominco). He recently moved back to Calgary and joined the UFA, holding the position of Executive VP of Agri Business. Mr. Schinnour’s expertise in Strategic Planning, Financial Management, International Business and M&A Leadership has been instrumental for the business success and growth of his current and previous companies. Mr. Schinnour holds an MBA from Washington University with special recognition for Excellence in Team Process, Strategic Planning and Finance. He also holds a CMA Designation from the University of Calgary/Society of Management Accountants. Mr. Schinnour currently serves on the Board of Directors of FoodChek Systems Inc., a private Life Sciences company in Calgary, Canada owned by another former member of the Company’s Board of Directors, William Hogan, and Universal Co-op Ltd. (Minneapolis). He has previously served as the Chairman and Director for RAPID & AEC, and on the Board of Directors for the Latin America Agricultural Development Bank, AgroBio & the Agricultural Future of America. He has been President, Treasurer and Director of numerous corporate entities at Monsanto and UAP.

30

DIRECTOR COMPENSATION

During the fiscal year ended December 31, 2012, we had five directors. Our chairman of the board of directors, William J. Hogan, received annual compensation in the amount of $60,000 to be paid in a combination of cash and restricted shares of the Company’s common stock, as funds are available. The board can approve to award the compensation in a combination of cash or common stock as agreed upon to be computed utilizing the trading price of the Company’s common stock as quoted on the Over the Counter Bulletin Board (OTCBB) on the last trading day of each month. In the past, the Company has not compensated outside (non-employee) directors for service but has reimbursed them for travel costs to attend Board meetings. In the future, the Board of Directors may issue non-qualified options to non-executive directors. The terms of such options to be granted have not yet been established.

Our other director, Mr. G. Michael Hogan, who also serves as CEO and President, receives compensation for his services as CEO and President in the amount of $120,000 annually. The board can approve to award the compensation in a combination of cash or common stock as agreed upon to be computed utilizing the trading price of the Company’s common stock as quoted on the Over the Counter Bulletin Board (OTCBB) on the last trading day of each month.

William J. Hogan’s and G. Michael Hogan’s salaries for 2012 and 2011 were accrued, but not paid.

Compensation has not yet been determined for our other three Directors.

(b) Identification of Certain Significant Employees and Consultants

None.

(c) Family Relationships.

Not applicable.

(d) Involvement in Certain Legal Proceedings.

During the past five years, no director, person nominated to become a director, or executive officer of the Company:

(1) has filed or had filed against him, a petition under the federal bankruptcy law or any state insolvency law, nor has any court appointed a receiver, fiscal agent or similar officer by or against any business of which such person was a general partner, or any corporation or business association of which he was an executive officer within two years before the time of such filing;

(2) was convicted in a criminal proceeding or is the named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring or suspending him from, or otherwise limiting his involvement in, any type of business, securities or banking activities, or

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

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based upon a review of Forms 3 and 4 furnished to the company pursuant to Rule 16a-3(a) and written representations referred to in Item 405(b) (2)(i) of Regulation S-K, no directors, officers, beneficial owners of more than 10% of the company’s common stock, or any other person subject to Section 16 of the Exchange Act failed for the period from January 1, 2012 through December 31, 2012 to file on a timely basis the reports required by Section 16(a) of the Exchange Act.

CODE OF ETHICS

The Company has adopted a Code of Ethics. A copy of the Code of Ethics will be provided to any person, without charge, upon written request addressed to G. Michael Hogan, President/Chief Executive Officer, 8205 Aqua Spray Avenue, Las Vegas, Nevada 89128.

31

Item 11. Executive Compensation.

The following table sets forth summary compensation information for the years ended December 31, 2012, 2011 and 2010 for our chief executive officers and directors.

Summary Compensation Table
				Option	All Other
Name and	Fiscal	Salary	Bonus	Awards	Compensation	Total
Principal Position	Year	($)	($)	($)	($)	($)
G Michael Hogan	2012	$120,000(1)	$-0-	$-0-	$-0-	$120,000
President, CEO, Director	2011	$120,000(1)	$-0-	$-0-	$-0-	$120,000
	2010	$120,000(1)	$-0-	$-0-	$-0-	$120,000
William J. Hogan	2012	$60,000(1)	$-0-	$-0-	$-0-	$  60,000
Secretary, Former Chairman	2011	$60,000(1)	$-0-	$-0-	$-0-	$  60,000
	2010	$60,000(1)	$-0-	$-0-	$-0-	$  60,000
Thompson MacDonald(2)	2012	$-0-	$-0-	$-0-	$-0-	$-0-
Current Chairman, Former Director
Dr. Michael Giuffre(2)	2012	$-0-	$-0-	$-0-	$-0-	$-0-
Former Director
Ron Schinnour(2)	2012	$-0-	$-0-	$-0-	$-0-	$-0-
Director
Officers as a Group	2012	$180,000	$-0-	$-0-	$-0-	$180,000
	2011	$180,000	$-0-	$-0-	$-0-	$180,000
	2010	$180,000	$-0-	$-0-	$-0-	$180,000

₍₁₎ Accrued, but not paid.

₍₂₎ Compensation has not yet been determined.

Grants of Plan-Based Awards in Fiscal 2012

We did not grant any plan-based awards to our named executive officer during the fiscal year ended December 31, 2012.

Outstanding Equity Awards at 2012 Fiscal Year-End

There were no unexercised stock options, stock that has not vested, and equity incentive plan awards held by our executive officers at December 31, 2012.

Option Exercises for 2012

There were no options issued or exercised by our executive officers during fiscal 2012.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table presents information, to the best of Can-Cal’s knowledge, about the ownership of Can-Cal’s common stock on March 31, 2013 relating to those persons known to beneficially own more than 5% of Can-Cal’s capital stock and by Can-Cal’s directors and executive officers. The percentage of beneficial ownership for the following table is based on 42,027,060 shares of common stock outstanding as of March 31, 2013.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the shareholder has sole or shared voting or investment power. It also includes shares of common stock that the shareholder has a right to acquire within 60 days after March 31, 2013 pursuant to options, warrants, conversion privileges or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of Can-Cal’s common stock.

		Percent of
		Outstanding Shares of
Name and Address of Beneficial Owner, Officer or Director(1)(3)	Number of Shares	Common Stock(2)
Officers and Directors:
G. Michael Hogan, Chief Executive Officer, President and Director	4,943,779(4)	11.1%
William J. Hogan, Former Chairman	2,266,968(5)	5.2%
Thompson MacDonald, Chairman	2,135,070(6)	4.9%
Dr. Michael Giuffre, Former Director, resigned March 1, 2013	833,332(7)	2.0%
Ron Schinnour, Director	833,300(8)	2.0%
All Current Directors and Executive as a Group (5 persons)	11,012,449	23.2%
5% Holders:
Randy Obniawka	2,812,000(9)	6.5%

₍₁₎ As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security).

₍₂₎ Figures are rounded to the nearest tenth of a percent.

₍₃₎ The address of each person is care of Can-Cal: 8205 Aqua Spray Avenue, Las Vegas, Nevada 89128.

₍₄₎ Includes warrants to purchase an additional 2,439,920 shares.

₍₅₎ Includes warrants to purchase an additional 1,321,312 shares.

₍₆₎ Includes warrants to purchase an additional 1,284,491 shares.

₍₇₎ Includes warrants to purchase an additional 416,666 shares.

₍₈₎ Includes warrants to purchase an additional 416,650 shares.

₍₉₎ Includes warrants to purchase an additional 1,000,000 shares.

33

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2012 regarding outstanding options granted under the plan, warrants issued to consultants and options reserved for future grant under the plan.

	Number of shares to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column
Plan Category	(a)		(b)		(a)(c)
2003 Qualified ISOP (1,500,000 shares)		–	$	–		1,500,000
Equity compensation plans not approved by stockholders		15,280,394		0.14		–
Total		15,280,394	$	0.14		1,500,000

Total shares underlying unexercised options cannot exceed 10% of the Company’s total issued and outstanding shares of common stock, calculated on a pro forma basis.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

On November 30, 2012, the Company sold a promissory note to FutureWorth Capital Corp., a consulting firm owned by our former Chairman of the Board of Directors. The note is unsecured, bears interest at 10% and matures on November 29, 2013. In connection with the promissory note, the Company granted warrants to purchase 20,000 shares of the Company’s common stock at an exercise price of $0.10. The warrants expire on November 29, 2014.

On September 30, 2012, the Company extended 348,320 previously granted and extended common stock warrants issued to the Company’s former CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $13,022 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended 2,439,920 previously granted and extended common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $91,215 and was recognized as interest during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 1,301,312 previously granted and extended common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $48,649 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 2,287,944 previously granted and extended common stock warrants issued amongst a total of five former investors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $85,533 and was recognized as interest expense during the year ended December 31, 2012.

34

Item 14. Principal Accountant Fees and Services.

(5)(i) The Board of Directors has not established an audit committee. However, the Board of Directors, as a group, carries out the responsibilities, which an audit committee would have. In this respect the Board of Directors has the responsibility of reviewing our financial statements, exercising general oversight of the integrity and reliability of our accounting and financial reporting practices, and monitoring the effectiveness of our internal control systems. The Board of Directors also recommends selection of the auditing firm and exercises general oversight of the activities of our independent auditors, principal financial and accounting officers and employees and related matters.

The Board of Directors delegates to management of Mr. G. Michael Hogan and the Board of Directors, the terms of engagement, before we engage independent auditor for audit and non-audit services, except as to engagements for services outside the scope of the original terms, in which instances the services have been provided pursuant to pre-approval policies and procedures, established by management. These pre-approval policies and procedures are detailed as to the category of service and the Board of Directors is kept informed of each service provided.

(7) L.L. Bradford & Company was retained as our auditing firm by the Board of Directors for the fiscal years ended December 31, 2012 and 2011. L.L. Bradford & Company billed us as follows for the years ended December 31, 2012 and 2011, respectively:

	For the Fiscal Years
	Ended December 31,
	2012		2011
Audit Fees(a)	$	24,442	$	25,000
Audit-Related Fees(b)		–		–
Tax Fees(c)		–		–
All Other Fees(d)		–		–
Total fees paid or accrued to our principal accountants	$	24,442	$	25,000

(a)	Includes fees for audit of the annual financial statements and review of quarterly financial information filed with the Securities and Exchange Commission.
(b)	For assurance and related services that were reasonably related to the performance of the audit or review of the financial statements, which are not included in the Audit Fees category. The Company had no Audit-Related Fees for the periods ended December 31, 2012, and 2011, respectively.
(c)	For tax compliance, tax advice, and tax planning services, relating to any and all federal and state tax returns as necessary for the periods ended December 31, 2012 and 2011, respectively.
(d)	For services in respect of any and all other reports as required by the SEC and other governing agencies.

35

PART IV

Item 15. Exhibits, Financial Statement Schedules.

The following information required under this item is filed as part of this report:

(a) 1. Financial Statements

	Page
Management’s Report on Internal Control Over Financial Reporting	34
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Stockholders’ (Deficit)	F-4
Statements of Cash Flows	F-7
Notes to Financial Statements	F-8

(b) 2. Financial Statement Schedules

None.

(c) 3. Exhibit Index

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
10.1	Form of Mineral Lease Agreement	X
10.2	Form of Promissory Note with FutureWorth Capital	X
10.3	Form of Subscription Agreement for Promissory Note with FutureWorth Capital	X
10.4	Form of Warrant Certificate with FutureWorth Capital	X
24.1	Power of Attorney (including on signature page)	X
31.1	Certification of G. Michael Hogan pursuant to Section 302 of the Sarbanes-Oxley Act	X
32.1	Certification of G. Michael Hogan pursuant to Section 906 of the Sarbanes-Oxley Act	X
99.1	Summary of Significant Details Regarding Pigsah, Wikeiup, Cerbat and the Owl Canyon Properties		10-KSB/A	12/31/07	99.1	03/11/09
99.2	Press Release stated February 19, 2010		8-K		99.7	02/25/10
99.3	Press Release stated January 4, 2011		8-K		99.8	01/04/11
99.4	Press Release stated February 23, 2011		8-K		99.9	03/03/11
99.5	Press Release stated January 31, 2012		8-K		99.10	01/31/12
99.6	Press Release stated April 18, 2012		8-K		99.11	04/18/12
99.7	Press Release stated October 24, 2012		8-K		99.12	10/25/12
101.INS	XBRL Instance Document	X
101.SCH	XBRL Schema Document	X
101.CAL	XBRL Calculation Linkbase Document	X
101.DEF	XBRL Definition Linkbase Document	X
101.LAB	XBRL Labels Linkbase Document	X
101.PRE	XBRL Presentation Linkbase Document	X

36

SIGNATURES

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

CAN-CAL RESOURCES LTD.

By: /s/ G. Michael Hogan

G. Michael Hogan, President and Chief Executive Officer

Date: April 16, 2013

POWER OF ATTORNEY

Each of the undersigned members of the Board of Directors of Can-Cal Resources Ltd., whose signature appears below hereby constitutes and appoints G. Michael Hogan, such person’s true and lawful attorney-in-fact and agent with full power of substitution and resubstitution for such person and in such name, place and stead, in any and all capacities, to sign the Form 10-K for the year ended December 31, 2012 (the “Annual Report”) of Can-Cal Resources Ltd. and any or all amendments to such Annual Report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, and Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons in the capacities indicated on the dates indicated.

Name	Title	Date
/s/ G. Michael Hogan	Director & Chief Executive Officer (Principal	April 16, 2013
G. Michael Hogan	Executive Officer & Principal Accounting Officer)
/s/ Thompson MacDonald	Chairman of the Board of Directors	April 16, 2013
Thompson MacDonald
/s/ Ron Schinnour	Director	April 16, 2013
Ron Schinnour

37

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Can-Cal Resources Ltd.

We have audited the accompanying balance sheets of Can-Cal Resources Ltd. as of December 31, 2012 and 2011, and the related statements of operations, stockholders' deficit and cash flows for each of the years in the two-year period ended December 31, 2012, and the period from inception (March 22, 1995) to December 31, 2012. Can-Cal Resources Ltd.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Can-Cal Resources Ltd. as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2012, and the period from inception (March 22, 1995) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statement, the Company suffered net losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ L. L. Bradford & Company, LLC

Las Vegas, Nevada

April 16, 2013

F-1

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

BALANCE SHEETS

	December 31,			December 31,
	2012			2011
ASSETS
Current assets:
Cash	$	1,316		$	37,846
Prepaid expenses		35,970			21,499
Total current assets		37,286			59,345
Property and equipment, net of accumulated depreciation of $33,133 and $26,971, respectively		1,026			6,583
Total assets	$	38,312		$	65,928
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable	$	44,988		$	25,936
Accounts payable, related parties		180,506			120,632
Accrued expenses		5,211			4,967
Accrued expenses, related parties		377,857			243,869
Unearned rental revenues		9,167			9,167
Notes payable, related parties, net of $448 and $-0- of unamortized common stock warrants at December 31, 2012 and 2011, respectively		30,843			53,062
Total current liabilities		648,572			457,633
Total liabilities		648,572			457,633
Commitments and contingencies (See Note 8)
Stockholders' (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding		–			–
Common stock, $0.001 par value, 100,000,000 shares authorized, 42,027,060 and 38,901,246 shares issued and outstanding as of December 31, 2012 and 2011, respectively		42,027			38,901
Subscriptions payable, -0-, and 50,000 shares at December 31, 2012 and 2011, respectively		–			1,500
Additional paid-in capital		9,710,504			9,248,673
(Deficit) accumulated during exploration stage		(10,362,791	)		(9,680,779	)
Total stockholders' (deficit)		(610,260	)		(391,705	)
Total liabilities and stockholders' (deficit)	$	38,312		$	65,928

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

F-2

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF OPERATIONS

							March 22, 1995
	For the Years Ended						(inception) to
	December 31,						December 31,
	2012			2011			2012
Material sales	$	–		$	–		$	245,500
Cost of sales		–			–			263,400
Gross loss		–			–			(17,900	)
Operating expenses:
Exploration costs		51,837			46,499			647,686
General and administrative		291,571			311,743			7,305,542
Depreciation		6,162			8,230			264,946
Officer salary		120,000			120,000			1,201,176
Impairment of operating assets		–			–			443,772
Total operating expenses		469,570			486,472			9,863,122
Net operating loss		(469,570	)		(486,472	)		(9,881,022	)
Other income (expense):
Other income		3,100			12,400			69,798
Interest income		–			–			52,945
Interest expense		(243,042	)		(118,490	)		(1,708,487	)
Rental revenue		27,500			39,000			422,408
Gain (loss) on disposal of fixed assets		–			(23,673	)		3,128
Gain on extinguishment of debts		–			1,152,039			1,152,039
Total other income (expense)		(212,442	)		1,061,276			(8,169	)
Loss before provision for income taxes		(682,012	)		574,804			(9,889,191	)
Provision for income taxes		–			–			–
Net income (loss) from continuing operations		(682,012	)		574,804			(9,889,191	)
Income from discontinued operations:
Income from discontinued operations		–			–			116,400
Loss on disposal of operations (net of taxes)		–			–			(590,000	)
Net income (loss)	$	(682,012	)	$	574,804		$	(10,362,791	)
Weighted average number of common shares outstanding - basic and fully diluted		40,941,949			36,285,342
Net (loss) per share - basic and fully diluted	$	(0.02	)	$	0.02

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

F-3

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(Deficit)

Foreign

Accumulated

Total

Common stock

Rescission

Unamortized

Currency

Additional

during

Stockholders’

Number of

Subscriptions

Subscriptions

Liability

Equity

Translation

Paid-in

Exploration

Equity

Shares

Amount

Receivable

Payable

Receivable

Grants

Adjustment

Capital

Stage

(Deficit)

Balance, March 22, 1995

–

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

–

Common shares issued for services

–

–

–

–

–

–

–

–

–

–

Net loss

(1,000

)

(1,000

)

Balance, December 31, 1995

–

–

–

–

–

–

–

–

(1,000

)

(1,000

)

Common shares issued for services

3,441,217

3,400

–

–

–

–

–

625,000

–

628,400

Prior period adjustment, investment in joint venture

–

–

–

–

–

–

–

–

497,900

497,900

Net loss

(497,000

)

(497,000

)

Balance, December 31, 1996

3,441,217

3,400

–

–

–

–

–

625,000

(100

)

628,300

Common shares issued for services

3,006,435

3,000

–

–

–

–

–

1,051,400

–

1,054,400

Net loss

(1,044,700

)

(1,044,700

)

Balance, December 31, 1997

6,447,652

6,400

–

–

–

–

–

1,676,400

(1,044,800

)

638,000

Common shares issued for cash

557,509

600

–

–

–

–

–

211,200

–

211,800

Foreign currency translation adjustment

–

–

–

–

–

–

8,500

–

–

8,500

Net loss

(353,000

)

(353,000

)

Balance, December 31, 1998

7,005,161

7,000

–

–

–

–

8,500

1,887,600

(1,397,800

)

505,300

Common shares issued for cash

1,248,621

1,200

–

–

–

–

–

572,600

–

573,800

Foreign currency translation adjustment

–

–

–

–

–

–

(11,800

)

–

–

(11,800

)

Realized foreign currency translation loss

–

–

–

–

–

–

3,300

–

–

3,300

Prior period Adjustment

–

–

–

–

–

–

–

–

15,000

15,000

Elimination of subsidiary upon disposal

–

–

–

–

–

–

–

–

116,400

116,400

Net loss

(1,038,500

)

(1,038,500

)

Balance, December 31, 1999

8,253,782

8,200

–

–

–

–

–

2,460,200

(2,304,900

)

163,500

Common shares issued for cash

1,119,009

1,200

–

–

–

–

–

948,400

–

949,600

Net loss

(962,500

)

(962,500

)

Balance, December 31, 2000

9,372,791

9,400

–

–

–

–

–

3,408,600

(3,267,400

)

150,600

Common shares issued for cash

785,947

800

–

–

–

–

–

81,500

–

82,300

Net loss

(704,500

)

(704,500

)

Balance, December 31, 2001

10,158,738

10,200

–

–

–

–

–

3,490,100

(3,971,900

)

(471,600

)

Common shares issued for cash

1,093,280

1,100

–

–

–

–

–

269,900

–

271,000

Common shares issued for services

92,292

100

–

–

–

–

–

23,800

–

23,900

Options granted for services

–

–

–

–

–

–

–

7,100

–

7,100

Common shares issued for repayment of note payable, related party in the amount of $119,800, including accrued interest of $71,800

309,677

300

–

–

–

–

–

119,500

–

119,800

Warrants granted for loan fees on convertible notes payable, related party

–

–

(16,700

)

–

(16,700

)

(16,700

)

–

16,700

–

(33,400

)

Common shares issued for loan fees on convertible notes payable, related party

30,000

–

(13,500

)

–

(13,500

)

(13,500

)

–

13,500

–

(27,000

)

Deemed interest on beneficial conversion feature of notes payable, related party

–

–

–

–

–

–

–

20,500

–

20,500

Amortization of loan fees

–

–

8,200

–

8,200

8,200

–

–

–

24,600

Net loss

(709,300

)

(709,300

)

Balance, December 31, 2002

11,683,987

11,700

(22,000

)

–

(22,000

)

(22,000

)

–

3,961,100

(4,681,200

)

(774,400

)

Common shares issued for cash

823,410

800

–

–

–

–

–

163,900

–

164,700

Common shares issued for services

381,260

400

–

–

–

–

–

63,800

–

64,200

Options granted for services

–

–

–

–

–

–

–

61,300

–

61,300

Common shares issued for repayment of note payable, related party common shares issued for repayment of note payable, related party in the amount of $78,300, including accrued interest of $43,300

364,305

400

–

–

–

–

–

77,900

–

78,300

Deemed interest on beneficial conversion feature of notes payable, related party

–

–

–

–

–

–

–

38,300

–

38,300

Amortization of loan fees

–

–

15,000

–

15,000

15,000

–

–

–

45,000

Net loss

(711,100

)

(711,100

)

F-4

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(continued)

(Deficit)

Foreign

Accumulated

Total

Common stock

Rescission

Unamortized

Currency

Additional

during

Stockholders’

Number of

Subscriptions

Subscriptions

Liability

Equity

Translation

Paid-in

Exploration

Equity

Shares

Amount

Receivable

Payable

Receivable

Grants

Adjustment

Capital

Stage

(Deficit)

Balance, December 31, 2003

13,252,962

13,300

(7,000

)

–

(7,000

)

(7,000

)

–

4,366,300

(5,392,300

)

(1,033,700

)

Common shares issued for cash

1,564,311

1,600

–

–

–

–

–

306,400

–

308,000

Common shares issued for exercise of warrants

701,275

700

–

–

–

–

–

124,900

–

125,600

Common shares issued for services

390,224

400

–

–

–

–

–

73,800

–

74,200

Warrants granted for services

–

–

–

–

–

–

–

12,200

–

12,200

Interest expense for warrants granted

–

–

–

–

–

–

–

280,200

–

280,200

Common shares issued in satisfaction of accounts payable and accrued liabilities in the amount of $229,400

917,747

900

–

–

–

–

–

228,500

–

229,400

Common shares issued for repayment of note payable in the amount of $99,700, including accrued interest of $14,700

702,760

700

–

–

–

–

–

99,000

–

99,700

Common shares issued for repayment of note payable, related party in the amount of $82,700

330,747

300

–

–

–

–

–

82,400

–

82,700

Deemed interest on beneficial conversion feature of notes payable, related party

–

–

–

–

–

–

–

17,600

–

17,600

Amortization of loan fees

–

–

7,000

–

7,000

7,000

–

–

–

21,000

Net loss

(1,030,500

)

(1,030,500

)

Balance, December 31, 2004

17,860,026

17,900

–

–

–

–

–

5,591,300

(6,422,800

)

(813,600

)

Common shares issued for cash

762,500

800

–

–

–

–

–

152,700

–

153,500

Common shares issued for exercise of warrants

349,545

300

–

–

–

–

–

69,500

–

69,800

Net loss

(421,800

)

(421,800

)

Balance, December 31, 2005

18,972,071

19,000

–

–

–

–

–

5,813,500

(6,844,600

)

(1,012,100

)

Common shares issued for cash

2,448,213

2,400

–

–

–

–

–

642,100

–

644,500

Common warrants exercised for cash

174,000

200

–

–

–

–

–

43,300

–

43,500

Common shares issued for services

19,500

–

–

–

–

–

–

5,000

–

5,000

Common shares issued in satisfaction of accounts payable and accrued liabilities

385,714

400

–

–

–

–

–

80,600

–

81,000

Common shares issued in satisfaction of notes payable-related parties

56,821

100

–

–

–

–

–

11,800

–

11,900

Common shares issued in satisfaction of convertible debenture, (including accrued interest of $1,895)

206,767

200

–

–

–

–

–

41,700

–

41,900

Common shares issued for asset acquisition

1,000,000

1,000

–

–

–

–

–

399,000

–

400,000

Option granted to officers and directors

–

–

–

–

–

–

–

123,500

–

123,500

Warrants granted for services

–

–

–

–

–

–

–

2,200

–

2,200

Warrants granted in satisfaction of accounts payable and accrued liabilities

–

–

–

–

–

–

–

65,400

–

65,400

Warrants granted in satisfaction of notes payable-related parties

–

–

–

–

–

–

–

9,600

–

9,600

Warrants granted in satisfaction of convertible debenture

–

–

–

–

–

–

–

40,000

–

40,000

Net loss

(621,000

)

(621,000

)

Balance, December 31, 2006 (Restated)

23,263,086

23,264

–

–

–

–

–

7,277,736

(7,465,600

)

(164,600

)

Common shares issued for cash

492,795

492

–

–

–

–

–

188,698

–

189,190

Common warrants exercised for cash

745,372

745

–

–

–

–

–

185,598

–

186,343

Common shares issued for services

4,000

4

–

–

–

–

–

2,010

–

2,014

Common shares issued in satisfaction of accrued wages of $22,000, related party

50,000

50

–

–

–

–

–

21,950

–

22,000

Debt forgiveness, related party

–

–

–

–

–

–

–

147,419

–

147,419

Net loss

(604,913

)

(604,913

)

Balance, December 31, 2007 (Restated)

24,555,253

24,555

–

–

–

–

–

7,823,411

(8,070,513

)

(222,547

)

Common shares issued for cash

32,500

33

–

–

–

–

–

8,091

–

8,124

Net loss

(1,016,661

)

(1,016,661

)

Balance, December 31, 2008

24,587,753

24,588

–

–

–

–

–

7,831,502

(9,087,174

)

(1,231,084

)

F-5

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(continued)

(Deficit)

Foreign

Accumulated

Total

Common stock

Rescission

Unamortized

Currency

Additional

during

Stockholders’

Number of

Subscriptions

Subscriptions

Liability

Equity

Translation

Paid-in

Exploration

Equity

Shares

Amount

Receivable

Payable

Receivable

Grants

Adjustment

Capital

Stage

(Deficit)

Common shares issued for cash

2,926,600

2,926

(25,000

)

–

–

–

–

362,899

–

340,825

Common shares issued for debt conversion to related parties of $398,593, including accrued interest of $29,093

3,188,741

3,189

–

–

–

–

–

395,404

–

398,593

Warrants granted in connection with debt conversion

–

–

–

–

–

–

–

78,961

–

78,961

Common shares issued for services

122,000

122

–

–

–

–

–

15,338

–

15,460

Common shares cancelled per rescission order

(126,898

)

(127

)

–

–

–

–

–

(55,660

)

–

(55,787

)

Rescission liability receivable

–

–

–

–

(12,125

)

–

–

–

–

(12,125

)

Net loss

(595,554

)

(595,554

)

Balance, December 31, 2009

30,698,196

30,698

(25,000

)

–

(12,125

)

–

–

8,628,444

(9,682,728

)

(1,060,711

)

Common shares issued for cash

40,000

40

25,000

–

–

–

–

4,960

–

30,000

Receipt of payment on rescission liability receivable

–

–

–

–

12,125

–

–

–

–

12,125

Common shares awarded for debt conversion, 2,146,666 shares

–

–

–

128,800

–

–

–

–

–

128,800

Finance costs on inducement of conversion, 2,146,666 warrants

–

–

–

–

–

–

–

74,403

–

74,403

Common shares awarded for commissions, 46,500 shares

–

–

–

2,790

–

–

–

–

–

2,790

Common shares cancelled

(26,993

)

(27

)

–

–

–

–

–

27

–

–

Net loss

(572,855

)

(572,855

)

Balance, December 31, 2010

30,711,203

30,711

–

131,590

–

–

–

8,707,834

(10,255,583

)

(1,385,448

)

Common shares issued for cash

5,824,584

5,825

–

–

–

–

–

343,650

–

349,475

Common shares granted for commissions, 50,000 shares

–

–

–

1,500

–

–

–

–

–

1,500

Common shares issued for debt conversion

2,146,666

2,146

–

(128,800

)

–

–

–

126,654

–

–

Common shares awarded for commissions

218,793

219

–

(2,790

)

–

–

–

12,909

–

10,338

Extension of previously granted warrants, 6,377,496 warrants

–

–

–

–

–

–

–

57,626

–

57,626

Net income

574,804

574,804

Balance, December 31, 2011

38,901,246

38,901

–

1,500

–

–

–

9,248,673

(9,680,779

)

(391,705

)

Common shares issued for cash

3,058,314

3,059

–

–

–

–

–

220,440

–

223,499

Common shares issued for services

50,000

50

–

(1,500

)

–

–

–

1,450

–

–

Common shares granted for commissions, 17,000 shares

17,500

17

–

–

–

–

–

1,033

–

1,050

Extension of previously granted warrants, 6,377,496 warrants

–

–

–

–

–

–

–

238,419

–

238,419

Warrants granted as debt offering costs, 20,000 warrants

–

–

–

–

–

–

–

489

–

489

Net loss

(682,012

)

(682,012

)

Balance, December 31, 2012

42,027,060

$

42,027

$

–

$

–

$

–

$

–

$

–

$

9,710,504

$

(10,362,791

)

$

(610,260

)

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

F-6

CAN-CAL RESOURCES LTD.

(AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CASH FLOWS

							March 22, 1995
	For the Years Ended						(inception) to
	December 31,						December 31,
	2012			2011			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(682,012	)	$	574,804		$	(10,362,791	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		6,162			8,230			264,946
Bad debts		–			–			207,100
(Gain) loss on sale of fixed assets		–			23,673			(3,128	)
Gain on extinguishment of debts		–			(1,152,039	)		(1,152,039	)
Stock based compensation granted for services		1,050			11,838			563,952
Stock based compensation granted for financing and interest		238,460			57,626			972,650
Beneficial conversion feature on convertible debenture		–			–			25,200
Loss on disposal of investment property		–			–			764,300
Undistributed earnings of affiliate		–			–			(174,300	)
Gain on discontinued operations		–			–			(116,400	)
Loss on foreign currency translation		–			–			8,500
Impairment of operating assets		–			–			443,772
Decrease (increase) in assets:
Prepaid expenses		(14,471	)		(3,072	)		84,930
Increase (decrease) in liabilities:
Accounts payable		19,052			(72,859	)		(22,924	)
Accounts payable, related parties		59,874			60,632			180,506
Accrued expenses		244			164,401			543,789
Accrued expenses, related parties		133,988			2,064			659,861
Unearned revenues		–			–			9,167
Net cash used in operating activities		(237,653	)		(324,702	)		(7,102,909	)
CASH FLOWS FROM INVESTING ACTIVITIES					–
Purchase of investment property		–			–			(1,083,600	)
Proceeds from sale of investment property		–			–			319,300
Purchase of property and equipment		(605	)		–			(770,016	)
Proceeds from sale of property and equipment		–			–			26,100
Net cash used in investing activities		(605	)		–			(1,508,216	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible debentures		–			–			128,800
Proceeds from notes payable		–			–			948,400
Principal payments on notes payable		–			–			(689,900	)
Proceeds from notes payable, related parties		57,525			–			965,316
Principal payments on notes payable, related parties		(79,296	)		(4,129	)		(462,475	)
Proceeds from the issuance of common stock		223,499			349,475			7,722,300
Net cash provided by financing activities		201,728			345,346			8,612,441
Net increase in cash		(36,530	)		20,644			1,316
Cash, beginning of period		37,846			17,202			–
Cash, end of period	$	1,316		$	37,846		$	1,316
Supplemental disclosures:
Interest paid	$	–		$	–
Income taxes paid	$	–		$	–

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

F-7

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 1 – Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) is a Nevada corporation incorporated on March 22, 1995.

The Company is an exploration company engaged in the exploration for precious metals, specifically focused on gold exploration projects. We have examined various prospective mineral properties for precious metals and acquired those deemed promising. We currently own, lease or have mining interest in four mineral properties in the southwestern United States (California and Arizona, as follows: Wikieup, Arizona; Cerbat, Arizona; Owl Canyon, California; and Pisgah, California).

Summary of Significant Accounting Policies

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is December 31.

The Company’s functional and reporting currency is the United States dollar (USD). Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, 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 the Canadian dollar (CDN). The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

Exploration Stage Company

The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred net losses of $10,362,791 and used net cash in operations of $7,102,909 for the period from inception (March 22, 1995) through December 31, 2012. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents include money market accounts which have maturities of three months or less. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost plus accrued interest, which approximates market value.

Long-Lived Assets

Fixed assets are recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Machinery and equipment 10 years

Transportation equipment 5 years

Furniture and fixtures 7 years

Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

F-8

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2012 and 2011, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Stock-Based Compensation

The Company has adopted FASB guidance on stock based compensation. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $239,510 and $69,464 for the years ended December 31, 2012 and 2011, respectively, based on the fair value of the common stock at the grant date.

Modification of Warrants

The Company extended a total of 6,417,496 warrants on September 30, 2012, which were originally granted on June 30, 2009 as part of debt financing arrangements. A modification of the terms or conditions of an equity award is treated as an exchange of the original award for a new award. The incremental (additional) cost is computed as any excess of the fair value of the modified award over the fair value of the original award immediately before modification. As a result, a total of $238,419 has been expensed as finance charges during the year ended December 31, 2012.

Income Taxes

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

F-9

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Mineral Claim Payments and Exploration Expenditures

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. We assess the carrying cost for impairment under the FASB ASC topic 360 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 subsequently incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Capitalized Mineral Costs

Mineral rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited; the value of mineral rights have diminished below cost, or the economic feasibility of extraction is limited, a write-down is affected against income in the period that such determination is made. The Company did not record any write downs during the years ended December 31, 2012 and 2011. Non-mining assets are recorded at cost of acquisition. These assets include the assets of the mining operation not included in the previous categories and all the assets of the non-mining operations. Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost of acquisition. Expenditure incurred to evaluate and develop new ore bodies, to define mineralization in existing ore bodies, to establish or expand productive capacity, is capitalized until commercial levels of production are achieved, at which time the costs will be amortized.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

F-10

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

Note 2 – Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company had a net loss of $682,012 for the year ended December 31, 2012, has used net cash in operating activities of $7,102,909 from inception and had a working capital deficit of $611,286 at December 31, 2012. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management has plans to seek additional capital through private placements and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 3 – Related Party

Management Changes

On March 1, 2013, Dr. Michael Giuffre resigned from the Board of Directors.

On February 27, 2013, Mr. William J. Hogan resigned from the Board of Directors.

On August 12, 2012, Dr. Michael Giuffre was appointed to the Company’s Board of Directors. Compensation has not yet been determined.

F-11

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

On April 17, 2012 the Company appointed Ron Schinnour to the Board of Directors. Mr. Schinnour currently serves on the Board of Directors of FoodChek Systems Inc., a Company owned by another former member of the Company’s Board of Directors, William Hogan. Compensation has not yet been determined.

On January 30, 2012, the Company appointed Mr. Thompson MacDonald to the Board of Directors. Compensation has not yet been determined.

Notes Payable, Related Parties

From time to time we have received and repaid loans from Officers and Directors to fund operations. These related debts are fully disclosed in Note 6 below.

Compensation

On July 1, 2010, the Company entered into a twelve month employment agreement, subject to automatic monthly renewals, with the Company’s CEO, G. Michael Hogan. The terms of the agreement include a fixed annual salary of $120,000. The Company may elect to satisfy payment in shares of common stock in lieu of cash at a market value equal to $0.10 above the average closing trading price of the common stock for the preceding five (5) days from the date of such election. No payments have been made in cash or stock to date.

We owed accrued salaries to our CEO of $360,000 and $240,000 at December 31, 2012 and 2011, respectively.

On June 30, 2010, the Company entered into a consulting agreement, with a Board of Director’s consulting firm, Futureworth Capital Corp. The terms of the agreement include annual compensation of $60,000, payable monthly. The Company may elect to satisfy payment in shares of common stock in lieu of cash at a market value equal to $0.10 above the average closing trading price of the common stock for the preceding five (5) days from the date of such election. No payments have been made in cash or stock to date. As of December 31, 2012 we owed Futureworth Capital Corp. $180,000, as included in accounts payable, related parties, for service prior to, and during the service period under the consulting agreement. The consulting agreement was terminated on February 27, 2013 with Mr. William Hogan’s resignation from the Board of Directors.

Share Based Compensation

On September 30, 2012, the Company extended 2,439,920 previously granted and extended common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $91,215 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 1,301,312 previously granted and extended common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $48,649 and was recognized as interest expense during the year ended December 31, 2012.

On April 4, 2012, the Company sold 416,667 shares of its common stock and an equal number of warrants pursuant to unit offerings to a member of the Company’s Board of Directors in exchange for proceeds of $25,000. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 30, 2011, the Company extended 2,439,920 previously granted common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $22,047 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 1,301,312 previously granted common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $11,758 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

F-12

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 4 – Prepaid Expenses

Prepaid expenses consisted of the following as of December 31, 2012 and December 31, 2011, respectively:

	December 31,		December 31,
	2012		2011
Prepaid portion of UNLV research project as disclosed below	$	18,530	$	–
Annual Bureau of Land Management fees		14,581		16,492
Securities and Exchange Commission filing fees (XBRL)		–		1,750
Rental fees		–		2,400
Health and auto insurance premiums		–		857
Directors and officers insurance		2,859		–
	$	35,970	$	21,499

On April 23, 2012 and May 10, 2012, the Company paid $30,000 and $5,000, respectively to the University of Nevada Las Vegas (UNLV) as part of a research project on our Wikieup property to be conducted from May 1, 2012 through September 30, 2013. These fees were paid pursuant to a donation to the UNLV’s Economic Geology Research Program Fund, and will be amortized over the duration of the project on a straight line basis. The project will use both field and laboratory analyses to investigate the surface geology of the property in order to address the following questions:

1. Is there geologic evidence consistent with the presence of a porphyry copper system within the area of Can-Cal's claim block?

2. Is there evidence to support the hypothesis that the property represents the root zone of a porphyry system that has been decapitated and transported into the valley to the east?

Note 5 – Property and Equipment

Property and Equipment consists of the following:

	December 31,			December 31,
	2012			2011
Machinery and equipment	$	1,000		$	1,000
Transportation equipment		31,787			31,787
Furniture and fixtures		1,372			767
		34,159			33,554
Less accumulated depreciation		(33,133	)		(26,971	)
	$	1,026		$	6,583

Depreciation expense totaled $6,162 and $8,230 for the years ended December 31, 2012 and 2011, respectively.

During 2011, we disposed of an Arc Furnace classified as machinery with a cost basis of $32,386 that had accumulated depreciation of 8,713 and was no longer in service. No proceeds were received from the disposals and a $23,673 loss on disposal of fixed assets was recognized in the statement of operations.

F-13

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 6 – Notes Payable, Related Parties

Notes payable, related parties consisted of the following as of December 31, 2012 and 2011, respectively:

	December 31,		December 31,
	2012		2011
Note payable to the CEO, unsecured, bearing interest at 10%, due on demand.	$	26,291	$	–
Promissory note payable originated on November 30, 2012 with Futureworth Capital Corp., a consulting firm owned by our former Chairman of the Board of Directors, unsecured, bearing interest at 10%, matures on November 29, 2013. In connection with the promissory note, the Company granted warrants to purchase 20,000 shares of the Company’s common stock at an exercise price of $0.10. The warrants expire on November 29, 2014.		5,000		–
Note payable to a member of the Board of Directors, unsecured, due on demand, bearing interest at 8.25%, related party.		–		25,000
Note payable to the CEO, unsecured, non-interest bearing, due on demand, related party.		–		28,062
Total notes payable, related parties		31,291		53,062
Less: unamortized discount on common stock warrants		448		–
Less: current portion		30,843		53,062
Notes payable, related parties, less current portion	$	–	$	–

During the year ended December 31, 2011, in connection with the cancellation of obligations with certain debt holders, the Company recognized a gain of $870,035 representing the entire carrying value of the amounts due on four promissory notes that have been extinguished in accordance with the statute of limitations, consisting of total principal of $360,550 and total accrued interest of $509,485 as of December 31, 2011.

The following presents components of interest expense by instrument type for the years ended December 31, 2012 and 2011, respectively:

	December 31,		December 31,
	2012		2011
Interest on notes payable, related parties	$	1,593	$	2,064
Interest on notes payable		–		39,633
Commissions on finance offerings		1,050		7,720
Fair value of common stock granted as commissions on finance offerings		1,050		10,337
Amortization of warrants granted on notes payable, related parties		41		–
Fair value of warrant extensions		238,419		57,626
Accounts payable related vendor finance charges		889		1,110
	$	243,042	$	118,490

Note 7 – Unearned Rental Revenues

On May 1, 1998, we entered into an agreement with Twin Mountain Rock Venture (“Twin Mountain”) to lease our property located in San Bernardino County, California for a period of ten years. Further, we will make available to Twin Mountain a minimum of 600,000 tons of finished material during the term of the agreement in exchange for a minimum annual royalty payment in the amount of $22,500. The initial agreement expired on April 30, 2008. Twin Mountain elected to utilize the renewal option for an additional ten-year period with an increased minimum annual royalty of $27,500. As of December 31, 2012 and 2011, we had unearned revenue from this agreement totaling $9,167 and $9,167, respectively.

F-14

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 8 – Commitments and Contingencies

Mining claims - The Company has a lease and purchase option agreement covering six patented claims in the Cerbat Mountains, Hualapai Mining District and Mohave County Arizona. The Company pays $1,500 per quarter as minimum advance royalties. The Company has the option to purchase the property for $250,000 plus interest at a rate of 8% compounded annually from and after the date of its exercise of the option to purchase the property. If the Lessee exercises its option to purchase, all funds paid to Lessors shall be credited toward the purchase price as of the date the payments were made.

Mining reclamation costs - Mining and reclamation permits, and an air quality permit have been issued by the California regulatory agencies in the names of both Twin Mountain, our joint venture partner, and the Company. The Company posted a cash bond in the amount of $1,379 (1% of the total bond amount) and Twin Mountain has posted the remainder of the $137,886 bond. If Twin Mountain defaults, we would be responsible for reclamation of the property, but reclamation costs incurred in that event would be paid in whole or part by the bond posted by us and Twin Mountain. Reclamation costs are not presently determinable.

Note 9 – Changes in Securities

2012

On August 1, 2012 the Company issued 17,500 shares of its common stock to satisfy the $1,050 of subscriptions payable realized pursuant to common stock granted on March 20, 2012 as commission on the sale of securities.

On July 31, 2012, the Company sold a total of 1,000,000 shares of its common stock and an equal number of warrants pursuant to unit offerings to an individual investor in exchange for proceeds of $100,000. The warrants are exercisable over two years at an exercise price of $0.15 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 4, 2012, the Company sold 416,667 shares of its common stock and an equal number of warrants pursuant to unit offerings to a member of the Company’s Board of Directors in exchange for proceeds of $25,000. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 4, 2012, the Company sold a total of 874,982 shares of its common stock and an equal number of warrants pursuant to unit offerings amongst three individual investors in exchange for total proceeds of $52,499. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 20, 2012, the Company sold a total of 566,665 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $34,000 received amongst four investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 20, 2012, the Company granted a total of 17,500 shares of its common stock as commissions on the sale of securities. The total fair value of the common stock was $1,050 based on the fair market value of the Company’s common stock on the date of grant. The Company elected not to net these commissions against the proceeds received from the sales and recognized the $1,050 of finance costs as interest expense within the statement of operations. The shares were subsequently issued in April of, 2012.

On March 20, 2012 the Company issued 50,000 shares of its common stock to satisfy the $1,500 of subscriptions payable realized pursuant to common stock granted to an employee for services on December 29, 2011.

On February 15, 2012, the Company sold a total of 200,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $12,000 received amongst two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

F-15

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

2011

On December 29, 2011 the Company granted 50,000 shares of common stock to an employee for services rendered. The fair value of the common stock was $1,500 based on the closing price of the Company’s common stock on the date of grant. The shares were authorized, but unissued and recognized as a subscription payable as of December 31, 2011.

On October 24, 2011, the Company issued a total of 218,793 shares of its common stock as commissions on the sale of securities amongst three different sales persons. The total fair value of the common stock was $12,078 based on the closing price of the Company’s common stock on the date of grant. The Company elected not to net these commissions against the proceeds received from the sales and recognized the $12,078 of finance costs as interest expense within the statement of operations.

On October 18, 2011, the Company sold a total of 200,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $12,000 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On October 14, 2011, the Company sold a total of 150,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $9,000 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On September 26, 2011, the Company sold a total of 700,000 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $42,000 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On July 12, 2011, the Company sold 84,000 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds $5,040. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 29, 2011, the Company sold a total of 1,067,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $64,020 from five investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 22, 2011, the Company sold a total of 595,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $35,700 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 10, 2011, the Company sold a total of 565,250 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $33,915 from six investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On May 31, 2011, the Company sold a total of 255,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $15,300 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 1, 2011, the Company sold a total of 320,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $19,200 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 16, 2011, the Company sold a total of 698,334 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $41,900 from four investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On February 25, 2011, the Company sold 170,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $10,200. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 26, 2011, the Company sold 85,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,100. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

F-16

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

On January 26, 2011, the Company sold 85,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,100. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 5, 2011, the Company issued a total of 2,146,666 shares of its par value common stock to satisfy subscriptions payable outstanding as of December 31, 2010 related to debts converted by a total of nine investors in the amount of $128,800.

On January 4, 2011, the Company sold 680,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $40,800. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 4, 2011, the Company sold 170,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $10,200. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

2010

On December 31, 2010, the Company converted $128,800 of previously issued convertible debentures to a total of nine investors in exchange for a total of 2,146,666 shares, at $0.06 per share, and a total of 2,146,666 warrants exercisable at $0.08 per share over a two year term, that were not issued until January 5, 2011. The shares were presented as a subscription payable of $128,800 at December 31, 2010. A total of $3,598 of accrued interest was forgiven by the note holders, as presented in other income. The total estimated value of the warrants granted as an inducement for conversion using the Black-Scholes Pricing Model, based on a volatility rate of 179% and a call option value of $0.0347, was $74,403, as presented in the income statement as interest expense.

Finders acting in connection with the conversion are entitled to receive aggregate fees of $2,790 and 46,500 shares of common stock. The fair market value of the common stock payable based on the closing stock price at the grant date was $2,790.

On December 31, 2010, the Company cancelled 26,993 previously granted shares to related parties.

On March 17, 2010, the Company received $12,125 in payment on a rescission receivable outstanding at December 31, 2009.

On January 20, 2010, the Company issued 40,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,000. The warrants are exercisable over fifteen months at an exercise price of $0.15 per share.

On January 20, 2010, the Company received $25,000 in payment on a subscription receivable outstanding at December 31, 2009.

2009

During the year ended December 31, 2009, the Company issued 2,926,600 shares of its common stock and an equal number of warrants pursuant to a unit offering whereby each recipient received one share of common stock and one warrant certificate for a unit price of $0.125. The Company recorded proceeds from the offering of $340,825 and a subscription receivable in the amount of $25,000, subsequently paid in January 2010.

During the year ended December 31, 2009, the Company issued a total of 107,000 shares of its restricted common stock to individuals for services rendered to the Company. As of December 31, 2009, the Company recorded an expense of $14,260 representing the fair value of the grant.

On December 31, 2009, the Company authorized the issuance of 9,000 and 6,000 shares of its restricted common stock to a director and officer of the Company, respectively for services performed for the Company. As of December 31, 2009, we recorded an expense of $1,200, representing the fair value of the issuance on the date of grant.

On June 30, 2009, certain note holders elected to convert the principal balance of their notes together with accrued interest into shares of the Company’s common stock at a rate of $0.125 per share. In addition, the Company agreed to issue a warrant to purchase two shares of the Company’s common stock for each share converted. The total principal balance converted was $369,500 and was converted into 2,956,000 common shares. Total accrued interest converted was $29,093 or 232,741 common shares.

F-17

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

2008

During the year ended December 31, 2008, the Company issued 32,500 shares of common stock and warrants to purchase 32,500 shares common stock for cash totaling $8,124. The warrants are fully vested upon grant, expire in two years and have an exercise price of $0.35 per share.

2007

During the twelve months ended December 31, 2007, we sold 1,238,167 restricted common shares to 72 Canadian residents and 4 US residents for a total of $375,534 and issued warrants to purchase 492,795 restricted common shares, exercisable between $0.35 and $0.65 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

On June 29, 2007, the Company also issued 4,000 shares of restricted common stock for services rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $2,000.

On April 30, 2007, the Company also issued 50,000 shares of restricted common stock as part of a settlement agreement with a former officer of the Company for compensation of accrued salaries. The common stock was rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $22,000. In addition to monthly cash payments of $3,500 per month the Company has recorded debt forgiveness of $147,419 in accordance with the terms of the settlement agreement. Due to the related party nature of the transaction the gain has been recorded to additional paid in capital, therefore there has been no impact on the Company’s net loss.

2006

During the twelve months ended December 31, 2006, we sold 2,622,213 restricted common shares to 76 Canadian residents, 8 US residents, 5 Israeli Nationals and 1 Swiss National for a total of $688,000, and issued warrants to purchase 2,348,213 restricted common shares, exercisable between $0.25 to $.45 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 8,500 restricted common shares for a total value of $2,325 and these securities were issued to one U.S. resident in reliance on the exemption provided by Section 4(2) of the 1933 Act.

On August 22, 2006, the Company entered into an agreement to purchase mining claims located in Mohave County, Arizona in exchange for 1,000,000 shares of the Company’s par value common stock. The Company recorded an asset totaling $400,000, the fair value of the underlying shares.

On July 11, 2006, the Company issued 206,767 shares of its par value common stock pursuant to the convertible debenture agreement entered into on January 24, 2006 whereby the Company received a $40,000 convertible at a rate of $0.20 per share bearing interest of 10% per annum. The note holder elected to convert all accrued interest totaling $1,895 into 6,767 shares of the Company’s par value common stock.

On July 3, 2006, the Company issued 2,200 shares of its par value common stock for services received by an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $462, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase 2,200 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $373, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 8,800 shares of its par value common stock for services received from an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $2,200, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 8,800 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $1,812, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

F-18

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

On July 3, 2006, an officer of the Company elected to convert half of his accrued salary in exchange for 385,714 shares of common stock valued at $81,000, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 385,714 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $65,418, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 56,821 shares of its common stock for conversion of a note in the amount of $11,932 from a shareholder of the Company. Additionally, the Company granted a warrant to purchase up to 56,821 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $9,637, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

2005

During the twelve months ended December 31, 2005, we sold 712,500 restricted common shares to 21 Canadian residents for a total of $142,500, and issued warrants to purchase 712,500 restricted common shares, exercisable at $0.25 per share. These securities were issued in private transactions in reliance on the exemption from registration with the SEC provided by Regulation S.

A prior U.S. shareholder exercised other warrants, at exercise prices ranging from $0.22, for proceeds of $11,000, which resulted in the issuance of 50,000 restricted common shares. These securities were issued in private transactions in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 349,545 restricted common shares for a total value of $69,800 valued at fair market value at date of issuance and granted 13,575 warrants (exercisable for two years at $0.25 per share) valued at fair market value at date of issuance. These securities were issued to two Canadian residents, and one Mexican Corporation in reliance on the exemption from registration available under Regulation S, and one U.S. resident, in reliance on the exemption provided by Section 4(2) of the 1933 Act.

2004

During 2004, 2,255,586 restricted common shares were issued to one hundred and seven (107) Canadian residents or companies controlled and owned by Canadian resident investors for $431,425 and 10,000 restricted common shares were issued to one U.S. resident investor for $2,000 (245,000 shares were priced at $0.18 per share, 1,620,131 shares were priced at $0.20 per share, 261,200 shares were priced at $0.25 per share, and 139,255 shares were issued as a 25% premium on the conversion of warrants, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 1,319,308 of these restricted common shares, the investors were also issued warrants to purchase 1,259,308 additional restricted common shares at $0.25 per share and 60,000 additional restricted common shares at $0.20 per share. With respect to 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.25, and with respect to another 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.50 per share. Of these, we also sold 5,000 shares to a director of the Company for proceeds of $1,000 and issued warrants to purchase 5,000 restricted common shares, exercisable at $0.25 per share for a two year period. All warrants will expire two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 702,760 restricted common shares were issued in conversion of $99,657 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.216 for 92,593 shares ($20,000 of the debenture); $0.160 for 31,250 shares ($5,000 of the debenture); $0.144 for 34,722 shares ($5,000 of the debenture); $0.128 for 544,195 shares ($69,657 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion). These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 215,336 restricted common shares were issued in payment of $40,932 of services by Luis Vega, consulting geologist. The price per share was determined by dividing the amount owed by the average closing price of the Company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

F-19

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

During 2004, 15,367 restricted common shares were issued in payment of accounts payable amounting to $3,842. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During 2004, 87,388 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $15,247. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

On December 22, 2004, 2,500 restricted common shares were issued to Karen Barra, a U.S. resident, for services amounting to $500. The price per share was $0.20 based on private placement offering for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

On March 1, 2004, in connection with the conversion of $82,687 in notes payable and $225,595 in accrued officers’ salary payable, we issued 1,233,127 restricted common shares at $0.25 per share and 1,233,127 warrants, with an exercise price of $0.30 and expiring on March 1, 2006, to two officers, two directors, and a former director and his insurance agency. These persons and the insurance agency are accredited investors.

Between February 10 and March 31, 2004, 75,000 restricted common shares were issued to Jeff Whitford, a Canadian resident, for investor relation services, in the amount of $15,000. In addition, Mr. Whitford received 50,000 warrants at an exercise price of $0.20 per share; the warrants will expire between February 2006 and March 2006. The warrants were valued at $12,200 utilizing the Black Scholes model. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

On February 4, 2004, 10,000 restricted common shares were issued to Yvonne St. Pierre, a Canadian resident, for computer-related services, in the amount of $2,500. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

2003

During 2003, 673,410 restricted common shares were issued to nineteen (19) Canadian residents or companies controlled and owned by Canadian resident investors for $134,682 and 150,000 restricted common shares were issued to 12 U.S. resident investors for $30,000 (all shares were priced at $0.20 per share, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 237,410 restricted common shares, the investors were also issued warrants to purchase 474,820 additional restricted common shares and with respect to 473,500 restricted common shares, the investors were also issued warrants to purchase 473,500 additional restricted common shares; all warrants were priced at $0.20 per share and will expire two years from the date of issuance. With respect to 112,500 restricted common shares, the investors were also issued 112,500 warrants to purchase additional restricted common shares, at a price of $0.25 per share for a period of two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 364,305 restricted common shares were issued in conversion of $35,000 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.099 for 50,710 shares ($5,000 of the debenture); $0.112 for 44,643 shares ($5,000 of the debenture); $0.061 for 81,433 shares ($5,000 of the debenture); $0.067 for 75,075 shares ($5,000 of the debenture); and $0.1334 for 112,444 shares ($15,000 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 205,166 restricted common shares in payment of $31,500 of services by Luis Vega, consulting geologist. The price per share was determined by dividing the amount owed by the average closing price of the Company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On March 14, 2003, 24,960 restricted common shares were issued to Catherine Nichols, a Canadian resident, for marketing services amounting to $5,000. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During the period from July 15 to December 31, 2003, 112,326 restricted common shares in payment of $22,250 of investor relations services by Jeffrey Whitford, a Canadian resident who is a consultant to the Company. The price per share was based on the average monthly closing share prices for the period. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

F-20

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

33,600 restricted common shares were issued to pay $4,200 of legal services provided by Stephen E. Rounds, outside company counsel. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On December 30, 2003, 5,208 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $1,250. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

2002

In November 2002, the Company issued 52,292 restricted common shares to four individuals in exchange for various services, valued at approximately $9,900.

During October 2002, the Company issued 35,679 shares of the Company’s common stock for $4,600 in cash related to the Dutchess Private Equities Fund, net of offering costs of $700.

During September 2002, the Company issued 32,281 shares of the Company’s common stock for $5,500 in cash related to the Dutchess Private Equities Fund, net of offering costs of $200, and issued 30,000 shares to Joseph B. LaRocco, attorney for Dutchess Fund and DRH Investment Company, LLC for legal services to such entities.

From July 1, 2002 through December 24, 2002, 609,720 restricted common shares were issued to 20 investors (19 whom are Canadian residents or companies controlled and owned by Canadian residents, and one who is a resident of Great Britain) for $152,400 cash ($0.25 per share, representing prices that ranged from 22% over market to approximately 40% below market prices at the time of issuance). The investors also were issued warrants to purchase a total of 609,720 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

On June 21, 2002, 40,000 restricted common shares were issued to Financial Communications Corp. for public relations services, valued at approximately $14,000.

From March 1, 2002 through June 3, 2002, 369,600 restricted common shares were issued to 48 investors (all Canadian residents or companies controlled and owned by Canadian residents) for $92,400 cash ($0.25 per share, representing discounts ranging from 0% to approximately 50% from market prices at the time of issuance). These investors also were issued warrants to purchase 369,600 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

On February 11, 2002, 10,000 restricted common shares were sold to one investor (a Canadian resident) for $3,500 cash ($0.35 per share, representing a discount of approximately 50% from market price). This investor also was issued warrants to purchase 10,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire February 11, 2004. Complete information about the Company was provided to these investors. These shares and warrants were sold pursuant to the exemption provided by Regulation S of the 1933 Act. No commissions were paid.

On January 31, 2002, we issued 309,677 restricted common shares to a lender (First Colony Merchant) for payment of past due and current interest on debt, $119,800. No commissions were paid.

On January 8, 2002, we sold 36,000 restricted common shares to three investors (one Canadian resident, and two private companies controlled and owned by Canadian residents) for $12,600 cash ($0.35 per share, representing a discount of approximately 50% from market price). These investors also were issued warrants to purchase 36,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire January 8, 2004.

2001

On December 12, 2001 the Board of Directors approved the sale of 40,000 shares of restricted common stock.

On November 2, 2001 the Board of Directors approved the sale of 82,888 shares of restricted common stock.

F-21

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

During October, 2001 the Company signed an Investment Agreement with two funds (Dutchess Private Equities Fund LP and DRH Investment Company LLC) to sell to those funds up to $8,000,000 in common stock of the Company, for a period of three years. In connection with the Investment Agreement, the Company issued 606,059 shares of restricted common stock to Dutchess Fund and its advisor, and to a broker-dealer firm, for services valued at $400,000, to induce those entities to enter into the Investment Agreement and perform services contemplated under such agreement. The Company also issued 37,000 shares of restricted common stock to the attorney for Dutchess Fund.

In September, 2001, the Board of Directors authorized the sale of 20,000 shares of its common stock to an individual.

2000

On November 24, 2000, the Company borrowed $300,000 from a lender. As part of the transaction, the Company issued 45,000 shares of its common stock as a loan placement fee and granted the lender an option to purchase up to 300,000 shares of its common stock. On November 24, 2000, the lender exercised its option in full and purchased 300,000 shares of Can-Cal’s common stock.

In July 2000 the Board of Directors authorized the sale of 74,009 shares of its common stock to eight persons, all of whom reside outside the United States. During the third quarter 46,670 shares were sold and the remaining 27,339 shares were sold during the fourth quarter. All of those shares were issued on December 15, 2000.

On July 3, 2000, the Board of Directors exercised the option to acquire technology related to the extraction and processing of ore and, in accordance with the agreement with the two owners of that technology, issued 200,000 shares of Can-Cal’s common stock to them.

On February 27, 2000, the Board of Directors approved the sale of 500,000 shares of common stock to three of its directors (all of whom reside in Canada), an offshore trust and another person affiliated with the Company.

1999

On November 9, 1999 the board approved the issuance of 10,000 shares of common stock to an investor.

On September 7, 1999 the Board approved the sale of 20,000 shares of common stock to an investor.

On August 24, 1999 the Board approved the sale of 274,000 shares of common stock to various investors.

On July 21, 1999 the Board approved the sale of 357,500 shares of common stock to various investors.

On April 1, 1999 the Board approved the sale of 1,000 shares of restricted common stock in return for equipment.

On March 17, 1999 the Board approved the issuance of 40,000 shares of Can-Cal common stock in return for equipment.

On March 15, 1999 the Board approved the sale of 86,000 shares of Can-Cal common stock to various investors.

On March 10, 1999 the Board approved the sale of 295,500 shares of Can-Cal common stock to various investors.

On March 1, 1999 the Board approved the issuance of 32,121 shares of Can-Cal common stock in return for services rendered.

On February 8, 1999 the Board approved the sale of 70,000 shares of Can-Cal common stock to a Board member.

On February 1, 1999, the Board of Directors approved the Sale of 62,500 shares of Can-Cal common stock to a Board member.

1998

During December, 1998 the Board approved the sale of 263,059 restricted common shares to various investors.

In October, 1998 the Board approved the sale of 172,450 restricted common shares to various investors.

In July, 1998 the Board approved the issuance 122,000 restricted common shares to various investors.

F-22

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

1997

During December, 1997 the Board approved the issuance of 42,000 restricted common shares in return for services rendered.

During November, 1997 the Board approved the sale of 124,683 restricted common shares to various investors.

On October 27, 1997 the Board approved the issuance of 2,181,752 restricted common shares to ARUM, LLC to repay an existing debt of $315,046 and to purchase a property located in San Bernadino County, California, known as the Pisgah property.

On February 13, 1997 the Board approved the acquisition of Scotmar Industries, Inc. 200,000 shares of Can-Cal common stock were issued in return for all of the issued and outstanding stock of the acquired company.

On January 15, 1997 the Company issued 500,000 shares of Can-Cal common stock along with a cash payment of $100,000 in exchange for a 50% interest in S&S Joint Venture. Additionally, the Company agreed to loan the joint venture up to $48,000.

1996

During 1996 the Company issued 3,441,217 shares of Can-Cal common stock to various investors resulting in cash proceeds of $628,400.

Note 10 – Options

Option Plan

Options granted for employee and consulting services - The 2003 Non-Qualified Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan.

Options Granted

There were no options issued during the years ended December 31, 2012 through 2007.

On June 7, 2006, the Company granted options to buy 500,000 shares of the Company’s common stock at an exercise price of $0.20 with a five year term from the date of issuance to the former Directors of the Company.

On June 7, 2006, the Company granted options to buy 250,000 shares of the Company’s common stock at an exercise price of $0.20 with a three year term from the date of issuance to an unrelated consultant.

On May 22, 2006, the Company granted options to buy 250,000 shares of the Company’s common stock at an exercise price of $0.20 with a three year term from the date of issuance to an unrelated consultant.

On October 1, 2003, the Company granted options to buy 500,000 shares of the Company’s common stock at an exercise price of $0.16 with a ten year term from the date of issuance to a former employee of the Company.

Options Exercised

On June 19, 2006, a consultant exercised 100,000 options of 250,000 that were originally granted on May 22, 2006 in exchange for $20,000 of proceeds.

Options Cancelled

On June 6, 2011, options to purchase 500,000 shares of common stock, exercisable at $0.20 per share, held by our former CEO expired.

On June 6, 2011, options to purchase 500,000 shares of common stock, exercisable at $0.16 per share, held by a former employee expired due to his previous resignation.

F-23

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

On June 6, 2009, options to purchase 250,000 shares of common stock, exercisable at $0.20 per share, held by outside consultants expired.

On May 21, 2009, the remaining 150,000 options of the original 250,000 options granted to a consultant on May 22, 2006 expired.

In accordance with ASC 505, “Share-Based Payment”; the Company recognized the fair value of the options in the statement of operations on the date of grant. The following is a summary of information about the stock options outstanding at December 31, 2012.

				Shares Underlying
Shares Underlying Options Outstanding				Options Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Options	Contractual	Exercise	Options	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.16 – $0.20	-0-	-0- years	$0.18	-0-	$0.00

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

	December 31,		December 31,
	2012		2011
Average risk-free interest rates		-%		-%
Average expected life (in years)		-0-		-0-
Volatility		-%		-%

The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During 2012 and 2011, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The following table summarizes the Company’s option activity related to employees and consultants:

		Weighted
	Options	Average
	Outstanding	Exercise Price
Balance, January 1, 2011	1,000,000	$	0.18
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	(1,000,000)		(0.18)
Balance, December 31, 2011	-		-
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	-		-
Balance, December 31, 2012	-	$	-

F-24

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 11 – Warrants

Warrants Granted

On November 30, 2012, the Company granted 20,000 common stock warrants s to a former member of the Company’s Board of Directors with an exercise price of $0.10 per share for its common stock. These stock warrants were granted in connection with a $5,000 loan from the Director. These warrants are exercisable over two years from the date of grant at an exercise price of $0.10 per share.

On September 30, 2012, the Company extended 348,320 previously granted and extended common stock warrants issued to the Company’s former CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $13,022 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended 2,439,920 previously granted and extended common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $91,215 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 1,301,312 previously granted and extended common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $48,649 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 2,287,944 previously granted and extended common stock warrants issued amongst a total of five former investors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $85,533 and was recognized as interest expense during the year ended December 31, 2012.

On July 31, 2012, the Company granted 1,000,000 common stock warrants with an exercise price of $0.15 per share for its common stock. These stock warrants were granted in connection with the sale of 1,000,000 shares of common stock in exchange for proceeds of $100,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.15 per share.

On April 4, 2012, the Company granted a total of 874,982 common stock warrants amongst three individual investors with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 874,982 shares of common stock in exchange for total proceeds of $52,499. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On April 4, 2012, the Company granted 416,667 common stock warrants s to a member of the Company’s Board of Directors with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 874,982 shares of common stock in exchange for total proceeds of $25,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 150,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 150,000 shares of common stock in exchange for proceeds of $9,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 83,333 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 83,333 shares of common stock in exchange for proceeds of $5,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 166,666 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 166,666 shares of common stock in exchange for proceeds of $10,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

F-25

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

On March 20, 2012, the Company granted 166,666 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 166,666 shares of common stock in exchange for proceeds of $10,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On February 15, 2012, the Company granted 100,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 100,000 shares of common stock in exchange for proceeds of $6,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On February 15, 2012, the Company granted 100,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 100,000 shares of common stock in exchange for proceeds of $6,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

During the year ended December 31, 2011, the Company granted a total of 5,824,584 common stock warrants with an exercise price of $0.08 per share for its common stock amongst a total of thirty six investors. These stock warrants were granted in connection with financing activities related to the sale of common stock sold at various dates between January 4, 2011 and October 18, 2011. These warrants were exercisable upon issuance and expire two years from the date of grant, consisting of maturity dates between January 4, 2013 and October 18, 2011.

On June 30, 2011, the Company extended 348,320 previously granted common stock warrants issued to the Company’s former CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $3,147 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended 2,439,920 previously granted common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $22,047 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 1,301,312 previously granted common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $11,758 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 2,287,944 previously granted common stock warrants issued amongst a total of five former investors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $20,674 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On December 31, 2010, the Company granted 2,146,666 common stock warrants with an exercise price of $0.08 per share. These stock warrants were granted in connection with the conversion of $128,800 of previously issued convertible debentures on December 31, 2010 to a total of nine investors in exchange for a total of 2,146,666 shares. These warrants were exercisable upon issuance and expire on December 31, 2012.

On January 22, 2010, the Company granted 40,000 stock warrants with an exercise price of $0.15 per share for its common stock. These stock warrants were granted in connection with financing activities relating to stock sold on January 22, 2010. These warrants were exercisable upon issuance and expired on March 31, 2011.

Warrants Expired

A total of 2,146,666 and -0- warrants expired during the years ended December 31, 2012 and 2011, respectively.

F-26

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

The following is a summary of information about the common stock warrants outstanding at December 31, 2012:

				Shares Underlying
Shares Underlying Warrants Outstanding				Warrants Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Warrants	Contractual	Exercise	Warrants	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.08 – $0.15	15,280,394	1.05 years	$0.14	15,280,394	$0.14

The following is a summary of the common stock warrant activity as of December 31, 2012.

				Weighted
	Warrants			Average
	Outstanding			Exercise Price
Balance, January 1, 2011		9,588,162		$	0.13
Granted		5,824,584			0.08
Cancelled		–			–
Exercised		–			–
Expired		(1,064,000	)		(0.15	)
Balance, December 31, 2011		14,348,746			0.11
Granted		9,455,810			0.13
Cancelled		–			–
Exercised		–			–
Expired		(8,524,162	)		(0.08	)
Balance, December 31, 2012		15,280,394		$	0.14

Note 12 – Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

As of December 31, 2012, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $8,395,720 and $8,076,600 of federal net operating losses at December 31, 2012 and 2011, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2029.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

	December 31,			December 31,
	2012			2011
Deferred tax asset:
Net operating loss carry forwards	$	2,938,500		$	2,826,810
Total deferred tax assets:		2,938,500			2,826,810
Less: Valuation allowance		(2,938,500	)		(2,826,810	)
Net deferred tax assets	$	–		$	–

F-27

CAN-CAL RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2012 and 2011.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	December 31,	December 31,
	2012	2011
Federal and state statutory rate	35%	35%
Change in valuation allowance on deferred tax assets	(35%)	(35%)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Note 13 – Gain from Extinguishment of Debt

During the year ended December 31, 2011, in connection with the settlement of obligations involving our former CEO, Ron Sloan, the Company recognized a gain of $282,004 representing the entire carrying value of the amounts due to Mr. Sloan for unpaid accrued salary earned prior to January 1, 2010 which were forgiven by Mr. Sloan on November 19, 2011.

During the year ended December 31, 2011, in connection with the cancellation of obligations with certain debt holders, the Company recognized a gain of $870,035 representing the entire carrying value of the amounts due on four promissory notes that have been extinguished in accordance with the statute of limitations, consisting of total principal of $360,550 and total accrued interest of $509,485 as of December 31, 2011.

The Company evaluated the classification of this gain and determined that the gain does not meet the criteria for classification as an extraordinary item. As a result, the gain has been included as “Gain on extinguishment of debt” under “Other income (expense)” within income from continuing operations in the accompanying Statement of Operations for the year ended December 31, 2011.

Note 14 – Subsequent Events

On March 1, 2013, Dr. Michael Giuffre resigned from the Board of Directors.

On February 27, 2013, Mr. William J. Hogan resigned from the Board of Directors.

F-28

EX-10.2

Exhibit 10.2

UNSECURED PROMISSORY NOTE

The holder of this security must not trade the security in or from a jurisdiction of Canada unless the conditions in section 13 of Multilateral Instrument 51-105 “Issuers Quoted in the U.S. Over-the-Counter Market” are met.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN LOCAL LAWS AND REGULATIONS, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C)(2) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE CORPORATION MUST FIRST BE PROVIDED TO THE TRANSFER AGENT OF THE CORPORATION.

THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES. IF THE CORPORATION IS A “FOREIGN ISSUER” WITHIN THE MEANING OF REGULATION S AT THE TIME OF TRANSFER, A NEW CERTIFICATE, BEARING NO LEGEND, MAY BE OBTAINED FROM THE TRANSFER AGENT OF THE CORPORATION UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE CORPORATION AND THE TRANSFER AGENT OF THE CORPORATION AND, IF SO REQUIRED BY THE TRANSFER AGENT OF THE CORPORATION, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.

Amount: US$5,000 November 30, 2012

CAN-CAL RESOURCES LTD., a public company incorporated in the State of Nevada, USA (Trading Symbol: NASDAQ OTCBB – “CCRE”) (the “Borrower” or “CAN-CAL”) for value received hereby promises to pay to the order of FutureWorth Capital Corp. (the “Holder”), located at 1712 25 Street SW, Calgary, Alberta, Canada, T3C1J6 on or before November 30, 2013 (the “Maturity Date”), the principal sum of US$5,000.

1. Interest shall accrue on such part of the principal amount as remains from time to time outstanding hereunder at the rate of ten percent (10%) per annum, both after and before the Maturity Date, default and judgment, with interest on overdue interest at the same rate, computed from the date hereof and calculated and payable on the earlier of the Maturity Date and the date on which the principal amount is paid in full.

2. In addition, on (maturity date), the Borrower will grant to the Holder, 20,000 Common Share Purchase Warrants (“Warrants”) for each $5,000 Principal Amount, with each Warrant entitling the Holder to purchase one Common Share of the Corporation at an exercise price of US$0.10 per Common Share until November 30, 2014.

1

3. At any time following the date that is three months from the date of this promissory note, the Borrower has the right to prepay all or a portion of this promissory note without additional bonus or penalty. This promissory note is non-assignable and non-transferable without the prior written consent of the Borrower.

4. The Borrower hereby waives grace, presentment for payment, notice of non-payment, notice of non-payment, notice of protest, notice of intent to accelerate, notice of acceleration, demand, diligence, presentment and time of commencement of suit.

5. Time is of the essence with respect to this unsecured promissory note.

6. Extension of time for payment of all or any part of the amount owing hereunder or otherwise at the time or times or failure of the Holder to enforce any of its rights or remedies hereunder or under any instrument securing this promissory note or any release or surrender of property shall not release the Borrower and shall not constitute a waiver of the right of the Holder to enforce any of such rights or remedies thereafter.

7. This unsecured promissory note shall be construed, interpreted and governed in accordance with the laws of the State of Nevada and United States applicable therein.

Can-Cal Resources Ltd.

Per:

____________________

Authorized Signatory

2

EX-10.3

Exhibit 10.3

SUBSCRIPTION AGREEMENT FOR A PROMISSORY NOTE

TO: CAN-CAL RESOURCES LTD. (the “Corporation”)

The undersigned (hereinafter referred to as the “Subscriber”) hereby irrevocably subscribes for the aggregate principal amount of a 10% unsecured promissory note of the Corporation (“Promissory Note”) set forth below for the aggregate subscription amount set forth below (the “Aggregate Subscription Amount”), upon and subject to the terms and conditions set forth in “Terms and Conditions of Subscription for a Promissory Note of Can-Cal Resources Ltd.” attached hereto (together with this page and the attached exhibits, the “Subscription Agreement”).

____________________ (Name of Subscriber – please print) By: X                     (Authorized Signature) ____________________ (Official Capacity or Title - please print) ____________________ (Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.) ____________________ (Subscriber’s Address including Postal Code) ____________________ ____________________ (Telephone Number) (Email Address)	Aggregate Subscription Amount: US$____________________ (Must be multiples of $5,000)
	If the Subscriber is signing as agent for a principal, unless it is deemed to be purchasing as principal under NI 45-106, complete the following and ensure that the applicable Exhibit(s) are completed on behalf of such principal: ____________________ (Name of Principal) ____________________ (Principal’s Address including Postal Code) ____________________ (Telephone Number) (Email Address)
Register the Promissory Note Exactly as set forth below: ____________________ (Name) ____________________ (Account reference, if applicable) ____________________ (Address) ____________________ (Address)	Deliver the Promissory Note as set forth below: ____________________ (Name) ____________________ (Account reference, if applicable) ____________________ (Contact Name) ____________________ (Address)
TO BE COMPLETED BY SUBSCRIBERS RESIDENT IN BRITISH COLUMBIA: The Subscriber is □ or is not □ a registrant as defined in the Securities Act (British Columbia) (the “Act”). [Please check applicable box] The Subscriber is □ or is not □ an insider of the Corporation as defined in the Act. [Please check applicable box] If the Subscriber is an insider or a registrant, the Subscriber currently owns, directly or indirectly, the following number of securities (including options, warrants and other convertible securities) of the Corporation:_______________________________

ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.

November 30, 2012

CAN-CAL RESOURCES LTD.
 
By: ______________________________ Authorized Signatory   Subscription No:

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TERMS AND CONDITIONS OF SUBSCRIPTION FOR 

A PROMISSORY NOTE OF CAN-CAL RESOURCES LTD.

Terms of the Offering

1. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that this subscription is subject to rejection or allotment by the Corporation in whole or in part at any time prior to closing.

2. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) that the Promissory Note subscribed for by it hereunder forms part of a larger issuance and sale by the Corporation of Promissory Notes for total gross proceeds of up to US$200,000 (the “Offering”). Depending on market conditions, the Corporation reserves the right to increase the gross proceeds under the Offering.

3. The Promissory Note will be evidenced by a certificate substantially in the form as attached hereto in Exhibit 5 (the “Promissory Note Certificate”) and will include the following terms:

(a) the Promissory Notes are unsecured and shall evidence indebtedness of the Corporation to the holder thereof in the principal amount stated on the Promissory Note and such principal amount shall be equal to the Aggregate Subscription Amount stated on the face page hereof (“Principal Amount”);

(b) the Promissory Note will have a term (the “Term”) of one year (the one year anniversary of the Promissory Note being the “Maturity Date”) and on the Maturity Date, the Principal Amount of the Promissory Note then outstanding and all accrued but unpaid Interest (as defined below) shall become immediately due and payable in cash by the Corporation to the holder thereof in full;

(c) the Corporation may, at its sole discretion, at any time following the date that is three months from the Closing Date (as defined below) and before the Maturity Date, without additional bonus, notice or penalty, repay the entire Principal Amount and all accrued but unpaid Interest, calculated to the date of repayment;

(d) the Principal Amount of the Promissory Note will bear interest at the rate of 10% per annum (“Interest”), and Interest payments will be paid in cash to the Subscriber in arrears and on the earlier of the Maturity Date and the date on which the Principal Amount is paid in full;

(e) on the Closing Date (as defined herein), the Corporation will also grant to the Subscriber 20,000 common share purchase warrants (“Warrants”) for each $5,000 of Principal Amount subscriber for hereunder, with each Warrant entitling the holder to purchase one common share of the Corporation (“Underlying Share”) at an exercise price of US$0.10 per Underlying Share until the date that is two years from the Closing Date;

(f) the Promissory Note, the Warrants and the Underlying Shares issuable upon proper exercise of the Warrants are sometimes collectively referred to in this Subscription Agreement as the “Securities”;

(g) the foregoing description of the Promissory Note is a summary only and is subject to the detailed provisions of the Promissory Note Certificate pursuant to which such Promissory Note is issued, which is substantially in the form attached hereto as Exhibit 5, and if there is a discrepancy between the terms of the Promissory Note as stated in this Subscription Agreement and the Promissory Note Certificate, the Promissory Note Certificate shall govern;

(h) the terms and conditions which govern the Warrants will be referred to on the certificates representing the Warrants and will, among other things, include provisions for the appropriate adjustment in the class, number and price of the shares issuable upon exercise of the Warrants upon the occurrence of certain events, including any subdivision, consolidation or reclassification of the Corporation’s common shares, the payment of stock dividends and the amalgamation, arrangement or reorganization of the Corporation. The issue of the Warrants will not restrict or prevent the Corporation from obtaining any other financing, or from issuing additional securities or rights, during the period within which the Warrants may be exercised.

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4. BY EXECUTING THIS SUBSCRIPTION AGREEMENT, THE SUBSCRIBER (ON ITS OWN BEHALF AND, IF APPLICABLE, ON BEHALF OF EACH PERSON ON WHOSE BEHALF THE SUBSCRIBER IS CONTRACTING) ACKNOWLEDGES THAT THE CORPORATION IS A “REPORTING ISSUER” IN BRITISH COLUMBIA AND ALBERTA ONLY BY VIRTUE OF MULTILATERAL INSTRUMENT 51-105 “ISSUERS QUOTED IN THE U.S. OVER-THE-COUNTER MARKETS” (“MI 51-105”). THE SUBSCRIBER WILL NOT BE ABLE TO RESELL THE SECURITIES SUBSCRIBED FOR UNDER THIS SUBSCRIPTION AGREEMENT EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS OF MI 51-105.

Representations, Warranties, Acknowledgements and Covenants by Subscriber

5. The Subscriber (on its own behalf and, if applicable, on behalf of each person on whose behalf the Subscriber is contracting) represents, warrants, acknowledges and covenants, as applicable, to the Corporation and its counsel (and acknowledges that the Corporation and its counsel, are relying thereon) both at the date hereof and at the Closing Time (as herein defined) that:

(a) the Subscriber has been independently advised to consult with the Subscriber’s own legal advisers as to restrictions with respect to trading in the Securities imposed by applicable securities legislation in the jurisdiction in which the Subscriber resides or to which the Subscriber is otherwise subject, confirms that no representation (written or oral) has been made to the Subscriber by or on behalf of the Corporation with respect thereto, acknowledges that the Subscriber is aware of the characteristics of the Securities, the risks relating to an investment therein and of the fact that the Subscriber may not be able to resell the Securities, except in accordance with limited exemptions under applicable securities legislation and regulatory policy until the expiry of the applicable restricted period and compliance with the other requirements of applicable law; and the Subscriber agrees that any certificates representing the Securities will bear a legend indicating that the resale of such Securities is restricted, including the following legend:

“The holder of this security must not trade the security in or from a jurisdiction of Canada unless the conditions in section 13 of Multilateral Instrument 51-105 “Issuers Quoted in the U.S. Over-the-Counter Market” are met”; and

(b) the Subscriber has not received nor been provided with, nor has the Subscriber requested, nor does the Subscriber have any need to receive, any offering memorandum, any prospectus, or any other similar document (other than, if any, an annual report, annual information form, interim report, information circular, take-over bid circular, issuer bid circular, prospectus, or other continuous disclosure document), the content of which, if applicable, is prescribed by securities law and that, in each case, has been filed, if applicable, with applicable securities commissions, such document describing, or purporting to describe, the business and affairs of the Corporation; and

(c) the Subscriber has not become aware of and the purchase of the Promissory Note is not made through or as a result of any general solicitation or any advertisement in printed media of general and regular paid circulation (or other printed public media), radio, television or telecommunications or other form of advertisement (including electronic display such as the Internet) with respect to the distribution of the Promissory Note; and

(d) the Subscriber is, or is deemed to be, purchasing the Promissory Note as principal for the Subscriber’s own account, not for the benefit of any other person, for investment only and not with a view to the resale or distribution of all or any of the Securities, the Subscriber certifies that it is resident in the jurisdiction set out as the “Subscriber's Address” on the face page hereof, and if the Subscriber is acting as agent or trustee for a principal/beneficial purchaser, such principal/beneficial purchaser is purchasing as principal for its own account, not for the benefit of any other person, for investment only and not with a view to resale or distribution, and is resident in the jurisdiction set forth in this Subscription Agreement as the “Principal's Address” of the principal/beneficial purchaser and the Subscriber, or the principal/beneficial purchaser, as the case may be, fully complies with the criteria set forth below:

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(i) the Subscriber is resident in or otherwise subject to applicable securities laws of any jurisdiction of Canada and:

(A) the Subscriber is an “accredited investor”, as such term is defined in National Instrument 45-106 - “Prospectus and Registration Exemptions” (“NI 45-106”), and has concurrently executed and delivered a Representation Letter in the form attached as Exhibit 1 to this Subscription Agreement with Appendix A to Exhibit 1 completed indicating that the Subscriber satisfies one of the categories of “accredited investor” set forth in such definition; or

(B) the Subscriber is one of the following and has so indicated by identifying the applicable subsection:

___	(I)	an employee, executive officer (as defined in NI 45-106), director or consultant of the Corporation or a related entity (as defined in NI 45-106) of the Corporation; or
___	(II)	a permitted assign (as defined in NI 45-106) of a person referred to in (I) above; and

participation in the purchase is “voluntary” as explained in NI 45-106; or

(ii) the Subscriber is resident in or otherwise subject to applicable securities laws of any jurisdiction of Canada, other than Ontario, is one of the following and has so indicated by identifying the applicable subsection and, if a close personal friend or close business associate, has completed, executed and delivered Exhibit 2 to this Subscription Agreement:

___	(A)	a director, executive officer (as defined in NI 45-106) or control person of the Corporation, or of an affiliate (as defined in NI 45-106) of the Corporation; or
___	(B)	a spouse, parent, grandparent, brother, sister, child or grandchild of any person referred to in subclause (A) above; or
___	(C)	a parent, grandparent, brother, sister, child or grandchild of the spouse of any person referred to in subclause (A); or
___	(D)	a close personal friend of any person referred to in subclause (A); or
___	(E)	a close business associate of any person referred to in subclause (A); or
___	(F)	a founder (as defined in NI 45-106) of the Corporation or a spouse, parent, grandparent, brother, sister, child, grandchild, close personal friend or close business associate of a founder of the Corporation; or
___	(G)	a parent, grandparent, brother, sister, child or grandchild of a spouse of a founder (as defined in NI 45-106) of the Corporation; or
___	(H)	a person of which a majority of the voting securities are beneficially owned by, or a majority of the directors are, persons described in subsections (A) through (G) above; or
___	(I)	a trust or estate of which all of the beneficiaries or a majority of the trustees are persons described in subsections (A) through (G) above; and

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if the Subscriber is a close friend or close business associate resident in Saskatchewan and is purchasing under subsections (D), (E), (F), (H) or (I) above, the Subscriber has executed and delivered to the Corporation a Risk Acknowledgement Form in the form attached hereto as Exhibit 3; or

(iii) the Subscriber is resident in or otherwise subject to applicable securities laws of Ontario, is one of the following and has so indicated by identifying the applicable subsection:

___	(A)	a founder (as defined in NI 45-106) of the Corporation; or
___	(B)	an affiliate (as defined in NI 45-106) of a founder (as defined in NI 45-106) of the Corporation; or
___	(C)	a spouse, parent, brother, sister, grandparent, child or grandchild of an executive officer (as defined in NI 45-106), director or founder (as defined in NI 45-106) of the Corporation; or
___	(D)	a person that is a control person of the Corporation, or

(iv) if the Subscriber is a resident of or otherwise subject to applicable securities laws of any jurisdiction referred to in the preceding subsections but not purchasing thereunder, the Subscriber or any beneficial purchaser for whom the Subscriber is acting, is purchasing pursuant to an exemption from the prospectus and registration requirements (particulars of which are enclosed herewith) available to the Subscriber under applicable securities legislation of the jurisdiction of the Subscriber’s residence and the Subscriber shall deliver to the Corporation such further particulars of the exemption(s) and the Subscriber's qualifications thereunder as the Corporation or its counsel may request; or

(v) if the Subscriber is resident in or otherwise subject to applicable securities laws of a jurisdiction other than Canada or the United States, the Subscriber confirms, represents and warrants that:

(A) the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws of the jurisdiction in which the Subscriber is resident (the “International Jurisdiction”) and which would apply to the acquisition of the Promissory Note; and

(B) the Subscriber is purchasing the Promissory Note pursuant to exemptions from the prospectus or registration requirements or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to purchase the Promissory Note under the applicable securities laws of the International Jurisdiction without the need to rely on any exemptions; and

(C) the applicable securities laws of the International Jurisdiction do not require the Corporation to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the Securities; and

(D) the purchase of the Promissory Note by the Subscriber does not trigger:

(I) any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

(II) any continuous disclosure reporting obligation of the Corporation in the International Jurisdiction; and

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(E) if the Subscriber is an “accredited investor”, as such term is defined in NI 45-106, the Subscriber will, if requested by the Corporation, execute and deliver a Representation letter in the form attached as Exhibit 1 to this Subscription Agreement with Appendix A to Exhibit 1 completed; and

the Subscriber will, if requested by the Corporation, deliver to the Corporation a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subsections (B), (C) and (D) above to the satisfaction of the Corporation, acting reasonably; or

(vi) if the Subscriber is resident in or otherwise subject to applicable securities laws of the United States, the Subscriber is an “Accredited Investor” as such term is defined in Rule 506 of Regulation D of the Securities Act of 1933, as amended, (the “1933 Act”) and has concurrently executed and delivered a U.S. Accredited Investor Certificate in the form attached as Exhibit 4 to this Subscription Agreement as well as a Representation Letter in the form attached as Exhibit 1 to this Subscription Agreement with Appendix A to Exhibit 1 completed indicating that the Subscriber satisfies one of the categories of “accredited investor” set forth in such definition; and

(e) the Subscriber acknowledges that:

(i) no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities; and

(ii) there is no government or other insurance covering the Securities; and

(iii) there are risks associated with the purchase of the Securities; and

(iv) there are indefinite restrictions on the Subscriber's ability to resell the Securities and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Securities; and

(v) the Corporation has advised the Subscriber that the Corporation is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell securities through a person or company registered to sell securities under the Securities Act (Alberta) and other applicable securities laws and, as a consequence of acquiring Promissory Note pursuant to this exemption, certain protections, rights and remedies provided by the Securities Act (Alberta) and other applicable securities laws, including statutory rights of rescission or damages, will not be available to the Subscriber; and

(vi) the certificate(s) representing the Promissory Note, the Warrants and the Underlying Shares, if any, will be endorsed by a legend stating that the Promissory Note, the Warrants and the Underlying Shares, if any, will be subject to restrictions on resale in accordance with applicable securities legislation; and

(f) the Subscriber has not received from the Corporation any financial assistance of any kind, directly or indirectly, in connection with its purchase of the Promissory Note hereunder; and

(g) the Subscriber has not and will not enter into any voting trust or similar agreement that has the effect of directing the manner in which the votes attached to the Promissory Note purchased pursuant to this Subscription Agreement may be voted following the Closing Date (as defined herein); and

(h) the Subscriber is aware that the Securities and the common shares in the share capital of the Corporation (“Common Shares”) have not been and will not be registered under 1933 Act or the securities laws of any state of the United States and that these securities may not be offered or sold, directly or indirectly, in the United States without registration under the 1933 Act or compliance with requirements of an exemption from registration or an exemption from such registration exemption is available and the applicable laws of all applicable states and the Subscriber acknowledges that the Corporation has no present intention of filing a registration statement under the 1933 Act in respect of the Securities or the Common Shares; and

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(i) the Promissory Note have only been offered to the Subscribers in the United States pursuant to the exemption from registration provided by Rule 506 under Regulation D of the 1933 Act, and the individuals making the order to purchase the Promissory Note and executing and delivering this Subscription Agreement on behalf of the Subscriber if in the United States when the order was placed and this Subscription Agreement was executed and delivered have executed and delivered Exhibit 4 hereto; and

(j) the Subscriber undertakes and agrees that it will not offer or sell the Securities in the United States unless such securities are registered under the 1933 Act and the securities laws of all applicable states of the United States or an exemption from such registration requirements is available, and further that the Subscriber will not resell the Securities, except in accordance with the provisions of applicable securities legislation, regulations, rules, policies and orders and stock exchange rules; and

(k) if a corporation, partnership, unincorporated association or other entity, the Subscriber has the legal capacity and competence to enter into and be bound by this Subscription Agreement and to perform all of its obligations hereunder, and if the Subscriber is a body corporate, the Subscriber is duly incorporated or created and validly subsisting under the laws of the jurisdiction of its incorporation, and further certifies that all necessary approvals of directors, shareholders, partners or otherwise have been given and obtained; and

(l) if the Subscriber is an individual, the Subscriber is of the full age of majority in the jurisdiction in which the Subscription Agreement is executed and is legally competent to execute this Subscription Agreement and take all action pursuant hereto; and

(m) this Subscription Agreement has been duly and validly authorized, executed and delivered by and constitutes a legal, valid, binding and enforceable obligation of the Subscriber; and

(n) the Subscriber acknowledges that this Subscription Agreement is not enforceable by the Subscriber until the Subscription Agreement has been accepted by the Corporation; and

(o) in the case of a subscription by the Subscriber for Promissory Note acting as agent for a principal/beneficial purchaser, the Subscriber is duly authorized to execute and deliver this Subscription Agreement and all other necessary documentation in connection with such subscription on behalf of such principal/beneficial purchaser and this Subscription Agreement has been duly authorized, executed and delivered by or on behalf of, and constitutes a legal, valid and binding agreement of, such principal/beneficial purchaser and the Subscriber acknowledges that the Corporation is required by law to disclose to certain regulatory authorities the identity of each principal/beneficial purchaser for whom the Subscriber may be acting; and

(p) the Subscriber, or each principal/beneficial purchaser for whom it is acting, has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment and the Subscriber, or, each principal/beneficial purchaser for whom it is acting, is able to bear the economic risk of loss of its entire investment; and

(q) the Subscriber has relied solely upon this Subscription Agreement and publicly available information relating to the Corporation and, other than as stated herein, not upon any verbal or written representation as to fact or otherwise made by or on behalf of the Corporation and agrees and acknowledges that the Corporation's counsel is acting as counsel to the Corporation and not as counsel to the Subscriber; and;

(r) the Subscriber understands and acknowledges that the Promissory Note are being offered for sale only on a “private placement” basis and that the sale and delivery of the Promissory Note is conditional upon such sale being exempt from the requirements as to the filing of a prospectus or delivery of an offering memorandum or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or delivering an offering memorandum; and

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(s) if required by applicable securities legislation, regulations, rules, policies or orders or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Corporation in filing, such reports, undertakings and other documents with respect to the issue of the Promissory Note as may be required, including, without limitation:

(i) in the case of an “accredited investor”, a representation letter in the form attached as Exhibit 1 with Appendix A to Exhibit 1 fully completed; and

(ii) in the case of a “close personal friend” or “close business associate”, a Close Personal Friend and/or Close Business Associate Questionnaire attached as Exhibit 2;

(iii) for a Subscriber that is a “close personal friend” or “close business associate” resident in Saskatchewan and subscribing pursuant to the exemption contained in subsection 5(d)(ii)(D),(E),(F),(H) or (I), a Risk Acknowledgement Form attached hereto as Exhibit 3; and

(iv) in the case of Subscriber resident or otherwise subject to applicable laws of the United States, a U.S. Accredited Investor Certificate in the form attached as Exhibit 4 as well as a representation letter in the form attached as Exhibit 1 with Appendix A to Exhibit 1 fully completed; and

(t) the Subscriber will not resell the Securities, if any, except in accordance with the provisions of applicable securities legislation and stock exchange rules, if applicable, in the future; and

(u) the entering into of this Subscription Agreement and the transactions contemplated hereby will not result in a violation of any of the terms or provisions of any law applicable to the Subscriber, or if the Subscriber is not a natural person, any of the Subscriber's constating documents, or any agreement to which the Subscriber is a party or by which the Subscriber is bound; and

(v) none of the funds that the Subscriber is using to purchase the Promissory Note represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscriber’s name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLTFA, and to the best of the Subscriber’s knowledge:

(i) the Aggregate Subscription Amount to be provided by the Subscriber:

(A) has not been or will not be derived from or related to any activity that is deemed criminal under the law of Canada, the United States of America, or any other jurisdiction; or

(B) is not being tendered on behalf of a person or entity who has not been identified to the Subscriber; and

(ii) the Subscriber shall promptly notify the Corporation if the Subscriber discovers that any of such representations ceases to be true, and to provide the Corporation with appropriate information in connection therewith; and

(w) none of the funds the Subscriber is using to purchase the Promissory Note are, to the knowledge of the Subscriber, proceeds obtained or derived, directly or indirectly, as a result of illegal activities; and

(x) the Subscriber understands and acknowledges that the Promissory Note are being purchased pursuant to exemptions from the prospectus requirements contained in applicable securities legislation and, as a result:

(i) the Subscriber is restricted from using most of the civil remedies available under applicable securities legislation; and

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(ii) the Subscriber may not receive information that would otherwise be required to be provided to the Subscriber under applicable securities legislation; and

(iii) the Corporation is relieved from certain obligations that would otherwise apply under applicable securities legislation; and

(y) the Subscriber acknowledges that it has been encouraged to and should obtain independent legal, income tax and investment advice with respect to its subscription for the Promissory Note, including, but not limited to, the applicable resale restrictions, and accordingly, has been independently advised as to the meanings of all terms contained herein relevant to the Subscriber for purposes of giving representations, warranties and covenants under this Subscription Agreement; and

(z) the Subscriber is aware that there is no minimum gross proceeds amount under the Offering, the Corporation may close on any amount and the Subscriber may be the only purchaser under the Offering; and

(aa) the Subscriber is aware and has been advised that his subscription funds will not be held in escrow and represent “seed” or “risk” capital for the immediate use of the Corporation; and

(bb) the Subscriber’s offer to subscribe for Promissory Note has not been induced by any representations with regard to the present or future worth of the Securities or the Common Shares; and

(cc) the Subscriber is aware that any Securities issued upon the Corporation's acceptance of this Subscription Agreement will be subject to restrictions on resale imposed by the securities legislation and the Subscriber agrees to be bound by and to comply with such restrictions; and

(dd) the Subscriber acknowledges that the Corporation may complete additional financings in the future in order to develop the proposed business of the Corporation and to fund its ongoing development; that there is no assurance that such financings will be available and, if available, on reasonable terms; any such future financings may have a dilutive effect on current securityholders, including the Subscriber; that if such future financings are not available, the Corporation may be unable to fund its ongoing development and the lack of capital resources may result in the failure of its business venture; and

(ee) the Subscriber acknowledges that the Corporation is a reporting issuer only in British Columbia and Alberta pursuant to MI 51-105 and the Corporation is not representing that the Securities or the Common Shares are or will be listed on the TSX Venture Exchange Inc., The Toronto Stock Exchange and that only a limited market exists for the securities of the Corporation as the Common Shares of the Corporation are currently only quoted on OTC Bulletin Board; and

(ff) upon acceptance by the Corporation of this Subscription Agreement, the Aggregate Subscription Amount is immediately releasable to the Corporation to be used for the ongoing business of the Corporation; and

(gg) the Subscriber is not a “control person” of the Corporation, as that term is defined in the Securities Act (Alberta), will not become a “control person” of the Corporation by purchasing the number of Promissory Note subscribed for under this Subscription Agreement, and does not intend to act jointly or in concert with any other person to form a control group in respect of the Corporation; and

(hh) no authorization, consent, order, approval or notice of any federal, provincial, territorial, municipal or foreign regulatory body or official must be obtained or given, and no waiting period must expire, in order that this Subscription Agreement and the transactions contemplated herein can be consummated by the Subscriber; and

(ii) the Subscriber does not act jointly or in concert with any other person for the purposes of the acquisition of the Promissory Note; and

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(jj) the delivery of this Subscription Agreement, the acceptance hereof by the Corporation and the issuance of the Promissory Note to the Subscriber complies or will comply with all applicable laws of the Subscriber’s jurisdiction of residence and domicile and will not cause the Corporation or any of its officers or directors to become subject to or require any disclosure, prospectus or other reporting requirement; and

(kk) the Subscriber acknowledges that the Subscriber or the Corporation may be required to provide the applicable securities regulatory authorities with a list setting forth the identities of the beneficial purchasers of the Promissory Note and notwithstanding that the Subscriber may be purchasing the Promissory Note as agent for a principal, it will provide, on request, particulars as to the identity of such principal as may be required by the Corporation (in order to comply with the foregoing).

Closing

6. The Subscriber agrees to deliver to the Corporation, not later than 4:30 p.m. (Calgary time) on the day that is two business days before the Closing Date: (a) this duly completed and executed Subscription Agreement; (b) a cheque or bank draft payable to the Corporation for the Aggregate Subscription Amount of the Promissory Note subscribed for under this Subscription Agreement or payment of the same amount in such other manner as is acceptable to the Corporation; (c) if the Subscriber is an “accredited investor”, a fully executed and completed Representation Letter in the form of Exhibit 1 with Appendix A to Exhibit 1 fully completed; (d) if the Subscriber is purchasing as a “close personal friend” or “close business associate”, a Close Personal Friend and/or Close Business Associate Questionnaire attached as Exhibit 2; (e) if the Subscriber is resident in Saskatchewan and subscribing pursuant to the exemption contained in subsection 5(d)(ii)(D),(E),(F),(H) or (I), a Risk Acknowledgement Form attached hereto as Exhibit 3; and (f) if the Subscriber is resident or otherwise subject to applicable laws of the United States, a U.S. Accredited Investor Certificate in the form attached as Exhibit 4 as well as a representation letter in the form attached as Exhibit 1 with Appendix A to Exhibit 1 fully completed.

7. The sale of the Promissory Note pursuant to this Subscription Agreement will be completed at the offices of Davis LLP, the Corporation's counsel, in Calgary, Alberta at 10:00 a.m. or such other times as the Corporation may determine (the “Closing Time”) on February 6, 2013, or such other earlier or later date or dates as the Corporation may determine (each a “Closing Date”). At the Closing Time, the cheque or bank draft payable to the Corporation in payment of the Aggregate Subscription Amount delivered as set forth in section 6 will be tendered to the Corporation against delivery by the Corporation of the certificate representing the Promissory Note.

8. The Corporation shall be entitled to rely on delivery of a facsimile or electronic copy of executed subscriptions, and acceptance by the Corporation of such facsimile or electronic copy of subscriptions shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof. Notwithstanding the foregoing, the Subscriber shall deliver originally executed copies of the documents listed in section 6 hereof to the Corporation within two business days of the Closing Date. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same document.

General

9. The Subscriber agrees that the representations, warranties and covenants of the Subscriber herein will be true and correct both as of the execution of this Subscription Agreement and as of the Closing Time as if made at that time and will survive the completion of the issuance of the Securities. The representations, warranties and covenants of the Subscriber herein are made with the intent that they be relied upon by the Corporation and its counsel in determining the Subscriber’s eligibility to purchase the Securities and the Subscriber hereby agrees to indemnify and hold harmless the Corporation and its respective directors, officers, employees, advisors, affiliates, shareholders, partners and agents from and against any and all loss, liability, claim, damage and expense whatsoever including, but not limited to, any fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, administrative proceeding or investigation commenced or threatened or any claim whatsoever arising out of or based upon any representation or warranty of the Subscriber contained herein or in any document furnished by the Subscriber to the Corporation in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any document furnished by the Subscriber to the Corporation in connection herewith. The Subscriber undertakes to immediately notify the Corporation c/o Davis llp, 1000 Livingston Place, 250 - 2nd Street S.W., Calgary, Alberta T2P 0C1, Attn: Catherine Kay (Fax Number: (403) 296-4474) of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the Closing Time.

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10. The Subscriber, if an individual, acknowledges that this Subscription Agreement and the Exhibits hereto require the Subscriber to provide certain personal information to the Corporation and its counsel. Such information is being collected by the Corporation and its counsel for the purposes of completing the Offering described herein, which includes, without limitation, determining the Subscriber’s eligibility to purchase the Promissory Note under applicable securities legislation, preparing and registering certificates representing the Securities to be issued to the Subscriber and completing filings required by any stock exchange, securities commission or securities regulatory authority or taxation authorities. Certain securities commissions have been granted the authority to indirectly collect this personal information pursuant to securities legislation and this personal information is also being collected for the purpose of administration and enforcement of securities legislation. In Ontario, the Administrative Assistant to the Director of Corporate Finance, Suite 1903, Box 55 20 Queen Street West, Toronto, Ontario M5H 3S8, Telephone (416) 593-8086, Facsimile: (416) 593-8252 is the public official who can answer questions about the indirect collection of personal information. The Subscriber agrees that the Subscriber’s personal information may be disclosed by the Corporation or its counsel to: (a) stock exchanges, securities commissions or securities regulatory authorities; (b) the Corporation’s registrar and transfer agent; (c) taxation authorities; (d) any of the other parties involved in the Offering, including legal counsel. By executing this Subscription Agreement, the Subscriber is deemed to be authorizing and consenting to the foregoing collection (including the indirect collection of personal information), use and disclosure of the Subscriber’s personal information as set forth above. The Subscriber also consents to the filing of copies or originals of any of the Subscriber’s documents described in this Subscription Agreement as may be required to be filed with any stock exchange, securities commission or securities regulatory authority in connection with the transactions contemplated hereby.

11. The Subscriber hereby irrevocably authorizes the Corporation to: (a) act as the Subscriber’s representative at the closing and to execute in the Subscriber’s name and on the Subscriber’s behalf all closing receipts and documents required; (b) complete or correct any errors or omissions in any form or document, including this Subscription Agreement, provided by the Subscriber; (c) receive on the Subscriber’s behalf certificates representing the Securities purchased under this Subscription Agreement; and (d) approve any opinions, certificates or other documents addressed to the Subscriber.

12. The obligations of the parties hereunder are subject to all required regulatory approvals.

13. The Subscriber agrees that upon satisfaction of the closing conditions, the entire Aggregate Subscription Amount shall be immediately released to the Corporation on the Closing Date, and that no part of such proceeds will be held in escrow.

14. The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the sale of the Promissory Note to the Subscriber shall be borne by the Subscriber.

15. The contract arising out of this Subscription Agreement and all documents relating thereto shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta. Time shall be of the essence hereof.

16. This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.

17. The terms and provisions of this Subscription Agreement shall be binding upon and enure to the benefit of the Subscriber and the Corporation and their respective heirs, executors, administrators, successors and assigns; provided that, except for the assignment by a Subscriber who is acting as nominee or agent to the beneficial owner and as otherwise herein provided, this Subscription Agreement shall not be assignable by any party without prior written consent of the other parties.

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18. Except as otherwise provided herein, the parties may waive, modify, change, discharge or terminate this Subscription Agreement only by a written instrument signed by each party against whom the waiver, change, discharge or termination is sought.

19. The invalidity, illegality or unenforceability of any provision of this Subscription Agreement shall not affect the validity, legality or enforceability of any other provision hereof.

20. The Subscriber, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder, agrees that this subscription is made for valuable consideration and may not be withdrawn, cancelled, terminated or revoked by the Subscriber, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder.

21. The covenants, representations and warranties contained herein shall survive the closing of the transactions contemplated hereby.

22. In this Subscription Agreement (including exhibits), references to “$” are to United States dollars.

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EXHIBIT 1

REPRESENTATION LETTER

(FOR ACCREDITED INVESTORS)

TO: CAN-CAL RESOURCES LTD. (the “Corporation”)

In connection with the purchase of Promissory Note of the Corporation as defined in the attached Subscription Agreement by the undersigned subscriber or, if applicable, the principal on whose behalf the undersigned is purchasing as agent (the “Subscriber” for the purposes of this Exhibit 1), the Subscriber hereby represents, warrants, covenants and certifies to the Corporation that:

1. The Subscriber is resident in the jurisdiction as set forth on the face page of this Subscription Agreement or is subject to the securities laws of such jurisdiction;

2. The Subscriber is purchasing the Promissory Note as principal for its own account (unless the Subscriber is an accredited investor pursuant to paragraphs (p) and (q) in Appendix “A” hereto);

3. The Subscriber has read and understands the initialed criterion of an accredited investor as set out in Appendix “A” attached to this Representation Letter;

4. The Subscriber is, and at the time of closing will be, an “accredited investor” within the meaning of National Instrument 45-106 entitled “Prospectus and Registration Exemptions” by virtue of satisfying the initialed criterion as set out in Appendix “A” attached to this Representation Letter;

5. The Subscriber was not created or used solely to purchase or hold securities as an accredited investor as described in paragraph (m) of the attached Appendix “A” of this Exhibit 1; and

6. Upon execution of this Exhibit 1 by the Subscriber, this Exhibit 1 shall be incorporated into and form a part of the Subscription Agreement.

Dated: _________________________, 201___

_______________________________

Print name of Subscriber

By:       _________________________

Signature

___________________________

Print name of Signatory (if different from Subscriber)

____________________________

Title

IMPORTANT: PLEASE INITIAL THE CATEGORY OR CATEGORIES

IN APPENDIX “A” ON THE NEXT PAGE THAT DESCRIBE YOU

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APPENDIX “A” to Exhibit 1

NOTE: THE INVESTOR MUST INITIAL BESIDE THE APPLICABLE PORTION OF THE DEFINITION BELOW.

Accredited Investor - (defined in National Instrument 45-106) means:

__________	(a)	a Canadian financial institution, or a Schedule III bank; or
__________	(b)	the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or
__________	(c)	a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; or
__________	(d)	a person registered under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); or
__________	(e)	an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); or
__________	(f)	the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly-owned entity of the Government of Canada or a jurisdiction of Canada; or
__________	(g)	a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec; or
__________	(h)	any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; or
__________	(i)	a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada; or
__________	(j)	an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; or
	(Note: the value of your personal residence cannot be included in the calculation of financial assets.)
__________	(k)	an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
	(Note: if individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under paragraph (t) below, which must be initialed.)
__________	(l)	an individual who, either alone or with a spouse, has net assets of at least $5,000,000; or
	(Note: for the net asset test (total assets minus total liabilities), the calculation of total assets includes the value of your primary residence and the calculation of total liabilities includes the amount of any liability, such as a mortgage, on your primary residence)
__________	(m)	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; or

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__________ (n) an investment fund that distributes or has distributed its securities only to:

(i) a person that is or was an accredited investor at the time of the distribution, or

(ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 or 2.19 of National Instrument 45-106, or

(iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 of National Instrument 45-106; or

__________ (o) an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Quebéc, the securities regulatory authority, has issued a receipt; or

__________ (p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; or

__________ (q) a person acting on behalf of a fully managed account managed by that person, if that person

(iv) is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and

(v) in Ontario, is purchasing a security that is not a security of an investment fund; or

__________ (r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; or

__________ (s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; or

__________ (t) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors (as defined in National Instrument 45-106); or

(Note: if you are purchasing as an individual accredited investor paragraph (k) above must be initialed rather than paragraph (t).)

__________ (u) an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; or

__________ (v) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Quebéc, the regulator as an accredited investor.

For the purposes hereof:

(a) “Canadian financial institution” means

(i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or

(ii) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada;

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(b) “control person” has the same meaning as in securities legislation and generally means any person that holds or is one of a combination of persons that holds:

(i) a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer, and

(ii) if a person holds more than 20% of the outstanding voting rights attached to all outstanding voting securities of an issuer, the person is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the issuer;

(c) “director” means:

(i) a member of the board of directors of a company or an individual who performs similar functions for a company, and

(ii) with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company;

(d) “eligibility adviser” means:

(i) a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed, and

(ii) in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not

(A) have a professional, business or personal relationship with the issuer, or any of its directors, executive officers, founders, or control persons, and

(B) have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months;

(e) “executive officer” means, for an issuer, an individual who is

(i) a chair, vice-chair or president,

(ii) a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

(iii) performing a policy-making function in respect of the issuer;

(f) “financial assets” means

(i) cash,

(ii) securities, or

(iii) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

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(g) “foreign jurisdiction” means a country other than Canada or a political subdivision of a country other than Canada;

(h) “founder” means, in respect of an issuer, a person who,

(i) acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and

(ii) at the time of the distribution or trade is actively involved in the business of the issuer;

(i) “fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction;

(j) “investment fund” means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an EVCC and a VCC (as such capitalized terms are defined in National Instrument 81-106 - Investment Fund Continuous Disclosure);

(k) “jurisdiction” means a province or territory of Canada except when used in the term foreign jurisdiction;

(l) “local jurisdiction” means the jurisdiction in which the Canadian securities regulatory authority is situate;

(m) “non-redeemable investment fund” means an issuer,

(i) whose primary purpose is to invest money provided by its security holders,

(ii) that does not invest;

(A) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund; or

(B) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund; and

(iii) that is not a mutual fund;

(n) “person” includes

(i) an individual,

(ii) a corporation,

(iii) a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

(iv) an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

(o) “regulator” means, for the local jurisdiction, the Executive Director as defined under securities legislation of the local jurisdiction;

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(p) “related liabilities” means

(i) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

(ii) liabilities that are secured by financial assets.

(q) “Schedule III bank” means an authorized foreign bank named in Schedule III of the Bank Act (Canada);

(r) “spouse” means, an individual who,

(i) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,

(ii) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or

(iii) in Alberta, is an individual referred to in paragraph (i) or (ii) above, or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

(s) “subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

All monetary references are in Canadian Dollars.

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EXHIBIT 2

CLOSE PERSONAL FRIEND AND/OR

CLOSE BUSINESS ASSOCIATE QUESTIONNAIRE

TO: Can-Cal Resources Ltd. (the “Corporation”)

To be completed by Subscribers to whom the “close personal friend” or the “close business associate” aspect of subsections 5(d)(ii)(D), (E), (F), (H) or (I) of the Subscription Agreement applies. For the purposes of this certificate “close personal friend” means that you have directly known such individual well enough and for a sufficient period of time and in a sufficiently close relationship (where such relationship is direct and extends beyond being a relative or member of the same organization, association or religious group or a client, customer or former client or customer or being a close personal friend of a close personal friend of such individual) to be in a position to assess the capabilities and the trustworthiness of such individual. For the purposes of this certificate “close business associate” means that you have had a direct sufficient prior business dealings with such individual (where such relationship is direct and extends beyond being a casual business associate or person introduced or solicited for the purpose of purchasing securities or a client, customer or former client or customer or being a close business associate of a close business associate of such individual) to be in a position to assess the capabilities and trustworthiness of such individual.

Name of director, executive officer, control person or founder:

Length of Relationship:

Details of Relationship:

Prior Business Dealings (if applicable):

The undersigned understands that the Corporation is relying on this information in determining to sell securities to the undersigned in a manner exempt from the prospectus and registration requirements of the applicable securities laws.

The undersigned has executed this Questionnaire as of the __________ day of __________________________, 201__.

If a Corporation, Partnership or other Entity:	If an Individual:
Name of Entity	Signature
Signature of Person Signing	Name of Individual
Title of Person

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EXHIBIT 3

RISK ACKNOWLEDGEMENT FORM

Risk Acknowledgement Saskatchewan Close Personal Friends and Close Business Associates I acknowledge that this is a risky investment: ● I am investing entirely at my own risk. ● No securities regulatory authority or regulator has evaluated or endorsed the merits of these securities. ● The person selling me these securities is not registered with a securities regulatory authority or regulator and has no duty to tell me whether this investment is suitable for me. ● I will not be able to sell these securities except in very limited circumstances. I may never be able to sell these securities. ● I could lose all the money I invest. ● I do not have a 2 -day right to cancel my purchase of these securities or the statutory rights of action for misrepresentation I would have if I were purchasing the securities under a prospectus. I do have a 2-day right to cancel my purchase of these securities if I receive an amended offering document I am investing $ [total consideration] in total; this includes any amount I am obliged to pay in future. I am a close personal friend or close business associate of _________________________[state name], who is a ____________________[state title - founder, director, executive officer or control person] of Can-Cal Resources Ltd. I acknowledge that I am purchasing based on my close relationship with _____________________ [state name of founder, director, executive officer or control person] whom I know well enough and for a sufficient period of time to be able to assess her/his capabilities and trustworthiness. I acknowledge that this is a risky investment and that I could lose all the money I invest.     _________________________                    ________________________________ Date                                                                                      Signature of Purchaser                                                                                 ________________________________                                                                                              Print name of Purchaser   Sign 2 copies of this document. Keep one copy for your records.    

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You are buying Exempt Market Securities

They are called exempt market securities because two parts of securities law do not apply to them. If an issuer wants to sell exempt market securities to you:

· the issuer does not have to give you a prospectus (a document that describes the investment in detail and gives you some legal protections), and

· the securities do not have to be sold by an investment dealer registered with a securities regulatory authority or regulator.

There are restrictions on your ability to resell exempt market securities. Exempt market securities are more risky than other securities.

You may not receive any written information about the issuer or its business

If you have any questions about the issuer or its business, ask for written clarification before you purchase the securities. You should consult your own professional advisers before investing in the securities.

You will not receive advice

Unless you consult your own professional advisers, you will not get professional advice about whether the investment is suitable for you.

The securities you are buying are not listed
The securities you are buying are not listed on any stock exchange, and they may never be listed. There may be no market for these securities. You may never be able to sell these securities

For more information on the exempt market, refer to the Saskatchewan Financial Services Commission’s website at http://www.sfsc.gov.sk.ca.

You must sign 2 copies of this form. You and the Corporation must each receive a signed copy.

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EXHIBIT 4

U.S. INVESTOR CERTIFICATE

This is Exhibit 4 to the Subscription Agreement relating to the purchase of Promissory Note of Can-Cal Resources Ltd. (the “Corporation”). Capitalized terms used but not defined in this schedule are intended to have the meanings ascribed thereto, as applicable, in the body of this Subscription Agreement.

The Subscriber understands and agrees that the Securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or applicable state securities laws, and are being offered and sold on behalf of the Corporation to the Subscriber in reliance upon Rule 506 of Regulation D under the 1933 Act. Accordingly, the Securities of the Corporation will be “restricted securities” within the meaning of the Rule 144 under the 1933 Act, and therefore may not be offered or sold by it without registration under United States federal and state securities laws, or (A) to the Corporation, (B) outside the United States in accordance with Rule 904 of Regulation S under the 1933 Act, (C) in a transaction that complies with Rule 144 or Rule 144A under the 1933 Ac, or (D) in a transaction otherwise exempt from registration under the 1933 Act and, in any event, in compliance with any applicable state securities laws of the United States. Capitalized terms used in this Exhibit 4 and defined in the Subscription Agreement to which this Exhibit 4 is attached have the meanings defined in such Subscription Agreement unless otherwise defined in this Exhibit 4.

The undersigned represents, warrants and covenants (which representations, warranties and covenants shall survive the Closing Date) to the Corporation (and acknowledges that the Corporation is relying thereon) that:

(a) It is an “Accredited Investor” as defined in Rule 501(a) under the 1933 Act and is acquiring the Promissory Note for its own account or for the account of one or more Institutional Accredited Investors with respect to which it exercises sole investment discretion, and in each case not with a view to any resale, distribution or other disposition of the Securities, if any, in violation of United States federal or state securities laws; and

(b) it, and if applicable, each person for whose account it is purchasing the Promissory Note represents that it is an “Accredited Investor” as defined in Rule 501(a) and satisfies one or more of the categories of “accredited investor” indicated below (the Subscriber must check the appropriate line(s)):

_____	Category 1.	A bank, as defined in Section 3(a)(2) of the 1933 Act, whether acting in its individual or fiduciary capacity; or
_____	Category 2.	A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in its individual or fiduciary capacity; or
_____	Category 3.	A broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended; or
_____	Category 4.	An insurance company as defined in Section 2(13) of the 1933 Act; or
_____	Category 5.	An investment company registered under the United States Investment Company Act of 1940; or
_____	Category 6.	A business development company as defined in Section 2(a)(48) of the United States Investment Company Act of 1940; or
_____	Category 7.	A small business investment company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958; or
_____	Category 8.	A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with total assets in excess of U.S. $5,000,000; or

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_____	Category 9.	An employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons who are accredited investors; or
_____	Category 10.	A private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940; or
_____	Category 11.	An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of U.S. $5,000,000; or
_____	Category 12.	Any director or executive officer of the Corporation; or
_____	Category 13.	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the date hereof exceeds U.S.$1,000,000, excluding the value (if any) of such person’s primary residence; or
_____	Category 14.	A natural person who had an individual income in excess of U.S.$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of U.S.$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
_____	Category 15.	A trust, with total assets in excess of U.S.$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act; or
_____	Category 16.	Any entity in which all of the equity owners meet the requirements of at least one of the above categories;

(c) it understands that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. state laws and regulations, the certificates representing the Promissory Note, the Warrants and Underlying Shares, if any, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ENCUMBERED ONLY (A) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S PROMULGATED UNDER THE 1933 ACT, (B) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (C) IN A TRANSACTION THAT IS OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND ANY APPLICABLE STATE LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THESE SECURITIES ARE BEING SOLD AT ANY TIME THE COMPANY IS A “FOREIGN ISSUER” AS DEFINED IN RULE 902 UNDER THE 1933 ACT, A NEW CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF WHICH WILL CONSTITUTE “GOOD DELIVERY” MAY BE OBTAINED FROM THE COMPANY’S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN FORM SATISFACTORY TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT TO THE EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT.”

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provided, that if the Promissory Note, Warrants or Underlying Shares are being sold under clause (B) above, at a time when the Corporation is a “foreign issuer” as defined in Rule 902 under the 1933 Act, the legend set forth above may be removed at the time of sale by providing a declaration to the Corporation and its transfer agent in the form attached hereto as Appendix A or as the Corporation may from time to time prescribe, to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S under the 1933 Act; provided further, that if any of the Promissory Note, Warrants or Underlying Shares are being sold pursuant to Rule 144 of the 1933 Act and in compliance with any applicable state securities laws, the legend may be removed by delivery to the Corporation’s transfer agent of an opinion satisfactory to the Corporation to the effect that the legend is no longer required under applicable requirements of the 1933 Act or state securities laws;

(d) it understands and acknowledges that in addition to the legend set forth in Section (c) above, the certificates representing the Warrants may in addition bear a legend in substantially the following form:

“THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON UNLESS THIS WARRANT AND SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.”

(e) it has had the opportunity to ask questions of and receive answers from the Corporation regarding the investment, and has received all the information regarding the Corporation that it has requested;

(f) it consents to the Corporation making a notation on its records or giving instruction to the registrar and transfer agent of the Corporation in order to implement the restrictions on transfer set forth and described herein;

(g) it understands and acknowledges that the Corporation has no obligation or present intention of filing with the United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect of resales of the Promissory Note, Warrants or Underlying Shares in the United States;

(h) the office or other address of the Subscriber at which the Subscriber received and accepted the offer to purchase the Promissory Note is the address listed as the “Address of Subscriber” on the front page of the Subscription Agreement;

(i) it understands and agrees that there may be material tax consequences to the Subscriber of an Arrangement or disposition of the Promissory Note, Warrant or Underlying Shares; the Corporation does not give any opinion or make any representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the undersigned’s Arrangement or disposition of such Promissory Note, Warrants or Underlying Shares; in particular, no determination has been made whether the Corporation will be a “passive foreign investment company” (“PFIC”) within the meaning of Section 1291 of the United States Internal Revenue Code;

(j) it understands and acknowledges that the Corporation is not obligated to remain a “foreign issuer”;

(k) it understands and agrees that the financial statements of the Corporation have been prepared in accordance with Canadian generally accepted accounting principles, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies;

(l) it understands that the Securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of the information in the subscription agreement or the schedules attached thereto. Any representation to the contrary is a criminal offense; and

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(m) it understands that (i) the Corporation was organized under, and is governed by, the laws of the Province of Alberta, (ii) the Corporation’s assets are located outside the United States, and (iii) its directors and officers reside outside the United States.

The Subscriber undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber set forth herein which takes place prior to the Closing Date.

If a Corporation, Partnership or Other Entity:	If an Individual:
Name of Entity	Signature
Type of Entity	Print or Type Name
Signature of Person Signing
Print or Type Name and Title of Person Signing

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Appendix A to

Exhibit 4 – U.S. Accredited Investor Certificate

FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO: Registrar and transfer agent for the Common Shares of Can-Cal Resources Ltd. (the “Issuer”):

The undersigned (A) acknowledges that the sale of [INSERT NUMBER OF SECURITIES BEING SOLD] the securities of the Issuer to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “1933 Act”), and (B) certifies that: (1) the undersigned is not an “affiliate” of the Issuer (as that term is defined in Rule 405 under the 1933 Act); (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (b) the transaction is being executed on or through the facilities of the Toronto Stock Exchange or the TSX Venture Exchange or any other designated offshore securities market as defined in Regulation S under the 1933 Act and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as that term is defined in Rule 144(a)(3) under the 1933 Act); (5) the seller does not intend to replace such securities with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the 1933 Act. Terms used herein have the meanings given to them by Regulation S under the 1933 Act.

Dated ________________________________, 201 .

X____________________
Signature of individual (if Holder is an individual)

X____________________
Authorized signatory (if Holder is not an individual)

____________________
Name of Holder (please print)

____________________
Name of authorized signatory (please print)

____________________
Official capacity of authorized signatory
(please print)

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EXHIBIT 5

FORM OF PROMISSORY NOTE

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EX-10.4

Exhibit 10.4

THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS IN SECTION 13 OF MULTILATERAL INSTRUMENT 51-105 “ISSUERS QUOTED IN THE U.S. OVER-THE-COUNTER MARKET” ARE MET.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN LOCAL LAWS AND REGULATIONS, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C)(2) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE CORPORATION MUST FIRST BE PROVIDED TO THE TRANSFER AGENT OF THE CORPORATION.

THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES. IF THE CORPORATION IS A “FOREIGN ISSUER” WITHIN THE MEANING OF REGULATION S AT THE TIME OF TRANSFER, A NEW CERTIFICATE, BEARING NO LEGEND, MAY BE OBTAINED FROM THE TRANSFER AGENT OF THE CORPORATION UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE CORPORATION AND THE TRANSFER AGENT OF THE CORPORATION AND, IF SO REQUIRED BY THE TRANSFER AGENT OF THE CORPORATION, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.

THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE “1933 SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND THE WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR FOR THE ACCOUNT OR BENEFIT OF A PERSON IN THE UNITED STATES OR A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE 1933 SECURITIES ACT) WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM AND THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT SATISFACTORY TO IT.

2012-2013 WARRANT CERTIFICATE

CAN-CAL RESOURCES LTD.
(Incorporated under the laws of Nevada)

2013 WARRANT
CERTIFICATE NO. 11-12	20,000 WARRANTS entitling the holder to acquire, subject to adjustment, one (1) common share for each Warrant represented hereby.

This is to certify that for value received FutureWorth Capital Corp. (the “Holder”) is the registered holder of 20,000 2013 common share purchase warrants (each a “Warrant”), entitling the Holder to subscribe for and purchase one (1) fully paid and non-assessable common share of Can-Cal Resources Ltd. (the “Corporation”) for every one (1) Warrant held by the Holder, up to and including a total of 20,000 common shares without nominal or par value of the Corporation, upon the terms and conditions as hereinafter set forth.

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Exercise Date

The Warrants to purchase common shares of the Corporation represented by this certificate shall be exercised on or before 4:30 p.m., Calgary, Alberta time, on or before November 30, 2014 (the “Expiry Date”), after which all rights evidenced hereby shall be void and of no further value.

Exercise Price

The exercise price shall be US$0.10 per common share payable in lawful money of Canada during the period commencing on the date of issue and ending on the Expiry Date (the “Exercise Price”).

Exercise of Warrants

The Warrants may be exercised, in whole or in part, at any time on or prior to the Expiry Date by the Holder hereof completing the Warrant Exercise Form attached hereto and made a part hereof and delivering same to the President of the Corporation, in care of the head office of the Corporation, 8205 Aqua Spray Ave., Las Vegas, Nevada, 89128 (the “Head Office”), together with this certificate and the appropriate sum payable to the order of the Corporation, at par in the amount of the aggregate Exercise Price for the common shares of the Corporation subscribed for, which may not exceed the number shown on the face hereof. The Corporation shall notify the Holder of any change of address of the Head Office.

Payment

The common shares subscribed for must be paid in full at the time of subscription, by certified cheque, money order or bank draft in Canadian funds to or to the order of the Corporation.

Share Certificates

Upon compliance with the terms and conditions as aforesaid, the Corporation will cause to be issued to the person or persons in whose name or names the common shares so subscribed for are to be issued the number of fully paid and non-assessable common shares of the Corporation subscribed for and such person or persons shall be deemed upon presentation and payment as aforesaid to be the holder or holders of record of such common shares of the Corporation. Within three (3) business days of compliance of the conditions aforesaid, the Corporation will cause to be mailed or delivered to the holder at the address or addresses specified in the Warrant Exercise Form attached hereto, a certificate or certificates evidencing the number of common shares of the Corporation subscribed for.

Exercise in Whole or in Part

The Warrants may be exercised in whole or in part and, if exercised in part, the Corporation shall issue within three (3) business days of exercise, without charge therefore, another certificate evidencing the remaining rights to purchase common shares of the Corporation, provided that any such right shall terminate on the Expiry Date.

No Rights of Shareholder Until Exercise

This certificate and the Warrants represented hereby do not confer any rights of a shareholder on the Holder (including any right to receive dividends or other distribution to shareholders or to vote at a general meeting of the shareholders of the Corporation), other than in respect of common shares of the Corporation which the Holder shall have exercised his right to purchase hereunder and which the Holder shall have actually taken up and paid for.

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Non-Transferability of Warrants

The Warrants represented by this certificate and all rights granted hereunder are non-transferable.

No Fractional Common Shares

No fractional common shares will be issued upon exercise of the Warrants, nor shall any compensation be made for such fractional common shares, if any. To the extent that the Holder would otherwise be entitled to purchase a fraction of a common share, such right may be exercised in combination with other rights which, in the aggregate, entitle the Holder hereof to purchase a whole number of common shares.

Dilution

The Exercise Price in effect and the number and type of securities purchasable under the Warrants at any date shall be subject to adjustment from time to time in the event and in the manner as follows:

a) If at any time during the period commencing on the date of issue of this Warrant certificate and ending at the Expiry Date (the “Adjustment Period”), the Corporation:

i. fixes a record date for the issues of, or issue, common shares of the Corporation to the holders of all or substantially all of the outstanding common shares of the Corporation by way of a stock dividend;

ii. fixes a record date for the distribution to, or makes a distribution to, the holders of all or substantially all of the common shares of the Corporation payable in common shares of the Corporation or securities exchangeable for or convertible into common shares of the Corporation;

iii. subdivides the outstanding common shares of the Corporation into a greater number of common shares of the Corporation; or

iv. consolidates the outstanding common shares of the Corporation into a lesser number of common shares of the Corporation;

(any of such events in subclauses i, ii, iii and iv above being herein called a “Common Share Reorganization”), the Exercise Price will be adjusted on the earlier of the record date on which holders of common shares of the Corporation are determined for the purposes of the Common Share Reorganization and the effective date of the Common Share Reorganization to the amount determined by multiplying the Exercise Price in effect immediately prior to such record date or effective date, as the case may be, by a fraction:

v. the numerator of which will be the number of common shares of the Corporation outstanding on such record date or effective date before giving effect to such Common Share Reorganization; and

vi. the denominator of which will be the number of common shares of the Corporation which will be outstanding immediately after giving effect to such Common Share Reorganization (including in the case of a distribution of securities exchangeable for or convertible into common shares of the Corporation, the number of common shares of the Corporation that would be outstanding had such securities all been exchanged for or converted into common shares of the Corporation on such date).

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To the extent that any adjustment in the Exercise Price occurs pursuant to this subparagraph (a) as a result of the fixing by the Corporation of a record date for the distribution of securities exchangeable for or convertible into common shares of the Corporation, the Exercise Price will be readjusted immediately after the expiry of any relevant exchange or conversion right to the Exercise Price which would then be in effect based upon the number of common shares of the Corporation actually issued and remaining issuable after such expiry and will be further readjusted in such manner upon the expiry of any further such right.

b) If at any time during the Adjustment Period the Corporation fixes a record date for the issue or distribution of rights, options or warrants to the holders of all or substantially all of the outstanding common shares of the Corporation pursuant to which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue (such period being the “Rights Period”), to subscribe for or purchase common shares of the Corporation or securities exchangeable for or convertible into common shares of the Corporation at a price per share (or in the case of securities exchangeable for or convertible into common shares of the Corporation at an exchange or conversion price per share at the date of issue of such securities) of less than 95% of the price per share equal to the weighted average price at which the common shares of the Corporation have traded on the TSX Venture Exchange or, if the common shares of the Corporation are not then listed on the TSX Venture Exchange, on such other Canadian stock exchange as may be selected by the directors of the Corporation for such purpose or, if the common shares of the Corporation are not then listed on any Canadian stock exchange, in the over-the-counter market, during the period of any twenty consecutive trading days ending not more than five business days before such date; provided that the weighted average price will be determined by dividing the aggregate sale price of all common shares of the Corporation sold on the said exchange or market, as the case may be, during the said twenty consecutive trading days by the total number of common shares of the Corporation so sold; and provided further that if the common shares of the Corporation are not then listed on any Canadian stock exchange or traded in the over-the counter market, then the Current Market Price will be determined by such firm of independent chartered accountants as may be selected by the directors of the Corporation, acting reasonably (“Current Market Price”), of the common shares of the Corporation on such record date (any of such events being herein called a “Rights Offering”), then the Exercise Price will be adjusted effective immediately after the record date for the Rights Offering to the amount determined by multiplying the Exercise Price in effect on such record date by a fraction:

i. the numerator of which will be the aggregate of

A. the number of common shares of the Corporation outstanding on the record date for the Rights Offering; and

B. the quotient determined by dividing

I. either (a) the product of the number of common shares of the Corporation offered during the Rights Period pursuant to the Rights Offering and the price at which such common shares of the Corporation are offered, or, (b) the product of the exchange or conversion price of the securities so offered and the number of common shares of the Corporation for or into which the securities offered pursuant to the Rights Offering may be exchanged or converted, as the case may be, by

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II. the Current Market Price of the common shares of the Corporation as of the record date for the Rights Offering; and

ii. the denominator of which will be the aggregate of the number of common shares of the Corporation outstanding on such record date and the number of common shares of the Corporation offered pursuant to the Rights Offering (including in the case of the issue or distribution of securities exchangeable for or convertible into common shares of the Corporation the number of common shares of the Corporation for or into which such securities may be exchanged or converted).

If by the terms of the rights, options, or warrants referred to in this subparagraph (b), there is more than one purchase, conversion or exchange price per common shares of the Corporation, the aggregate price of the total number of additional common shares of the Corporation offered for subscription or purchase, or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, will be calculated for purposes of the adjustment on the basis of the lowest purchase, conversion or exchange price per common shares of the Corporation, as the case may be. Any common shares of the Corporation owned by or held for the account of the Corporation will be deemed not to be outstanding for the purpose of any such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this subparagraph (b) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants referred to in this subparagraph (b), the Exercise Price will be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would then be in effect based upon the number of common shares of the Corporation actually issued and remaining issuable after such expiry and will be further readjusted in such manner upon the expiry of any further such right.

c) If at any time during the Adjustment Period the Corporation fixes a record date for the issue or distribution to the holders of all or substantially all of the common shares of the Corporation of:

i. shares of the Corporation of any class other than common shares of the Corporation;

ii. rights, options or warrants to acquire common shares of the Corporation or securities exchangeable for or convertible into common shares of the Corporation (other than rights, options or warrants pursuant to which holders of common shares of the Corporation are entitled, during a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase common shares of the Corporation at a price per share (or in the case of securities exchangeable for or convertible into common shares of the Corporation at an exchange or conversion price per share at the date of issue of such securities) of at least 95% of the Current Market Price of the common shares of the Corporation on such record date);

iii. evidences of indebtedness of the Corporation; or

iv. any property or assets of the Corporation;

and if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise Price will be adjusted effective immediately after the record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction:

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A. the numerator of which will be the difference between

I. the product of the number of common shares of the Corporation outstanding on such record date and the Current Market Price of the common shares of the Corporation on such record date, and

II. the fair value, as determined by the directors of the Corporation, to the holders of the common shares of the Corporation of the shares, rights, options, warrants, evidences of indebtedness or property or assets to be issued or distributed in the Special Distribution, and

B. the denominator of which will be the product obtained by multiplying the number of Shares outstanding on such record date by the Current Market Price of the common shares of the Corporation on such record date.

Any common shares of the Corporation owned by or held for the account of the Corporation will be deemed not to be outstanding for the purpose of such calculation. To the extent that any adjustment in the Exercise Price occurs pursuant to this subparagraph (c) as a result of the fixing by the Corporation of a record date for the issue or distribution of rights, options or warrants to acquire common shares of the Corporation or securities exchangeable for or convertible into common shares of the Corporation referred to in this subparagraph (c), the Exercise Price will be readjusted immediately after the expiry of any relevant exercise, exchange or conversion right to the amount which would then be in effect if the fair market value had been determined on the basis of the number of common shares of the Corporation issued and remaining issuable immediately after such expiry, and will be further readjusted in such manner upon the expiry of any further such right.

d) If at any time during the Adjustment Period there occurs:

i. a reclassification or redesignation of the common shares of the Corporation, any change of the common shares of the Corporation into other shares or securities or any other capital reorganization involving the common shares of the Corporation other than a Common Share Reorganization;

ii. a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate which results in a reclassification or redesignation of the common shares of the Corporation or a change or exchange of the common shares of the Corporation into other shares or securities; or

iii. the transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or entity;

iv. (any of such events being herein called a “Capital Reorganization”), after the effective date of the Capital Reorganization:

v. the Holder will be entitled to receive, and shall accept, upon exercise of the Warrants, in lieu of the number of common shares of the Corporation to which the Holder was theretofore entitled upon the exercise of the Warrants, the kind and aggregate number of shares and other securities or property resulting from the Capital Reorganization which the Holder would have been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Holder had been the registered holder of the number of common shares of the Corporation to which the Holder was theretofore entitled to purchase or receive upon the exercise of the Warrants; and

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vi. the Exercise Price shall, on the effective date of the Capital Reorganization, be adjusted by multiplying the Exercise Price in effect immediately prior to such Capital Reorganization by the number of common shares of the Corporation purchasable pursuant to this Warrant certificate immediately prior to the Capital Reorganization, and dividing the product thereof by the number of successor securities determined in subparagraph (d)(iv) above.

If necessary, as a result of any Capital Reorganization, appropriate adjustments will be made in the application of the provisions of this Warrant certificate with respect to the rights and interest thereafter of the Holder to the end that the provisions of this Warrant certificate will thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Warrants.

e) If at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price occurs pursuant to the provisions of subparagraphs (a), (b) or (c) above, then the number of common shares of the Corporation purchasable upon the subsequent exercise of the Warrants will be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of common shares of the Corporation purchasable upon the exercise of the Warrants immediately prior to such adjustment or readjustment by a fraction which will be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise Price.

Rules of Adjustment

The following rules and procedures will be applicable to adjustments made pursuant to the Dilution section above of this Warrant certificate.

a) Subject to the following provisions of this section, any adjustment made pursuant to the Adjustment section above will be made successively whenever an event referred to therein will occur.

b) No adjustment in the Exercise Price will be required unless the adjustment would result in a change of at least one per cent in the Exercise Price then in effect and no adjustment will be made in the number of common shares of the Corporation purchasable or issuable on the exercise of the Warrants unless it would result in a change of at least one one-hundredth of a common shares of the Corporation; provided, however, that any adjustments which except for the provisions of this clause would otherwise have been required to be made will be carried forward and taken into account in any subsequent adjustment.

c) If at any time during the Adjustment Period the Corporation will take any action affecting the common shares of the Corporation, other than an action or an event described in the Dilution section above, which in the opinion of the directors would have a material adverse effect upon the rights of the Holder under this Warrant certificate, the Exercise Price and/or the number of common shares of the Corporation purchasable under this Warrant certificate will be adjusted in such manner and at such time as the directors may determine to be equitable in the circumstances. Failure of the taking of action by the directors so as to provide for an adjustment prior to the effective date of any action by the Corporation affecting the common shares of the Corporation will be deemed to be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances.

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d) No adjustment in the Exercise Price or in the number or kind of securities purchasable on the exercise of the Warrants will be made in respect of any event described in the Dilution section hereof if the Holder is entitled to participate in such event on the same terms mutatis mutandis as if the Holder had exercised the Warrants prior to or on the record date or effective date, as the case may be, of such event.

e) If the Corporation sets a record date to determine holders of common shares of the Corporation for the purpose of entitling such holders to receive any dividend or distribution or any subscription or purchase rights and will thereafter and before the distribution to such holders of any such dividend, distribution or subscription or purchase rights legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, no adjustment in the Exercise Price or the number of common shares of the Corporation purchasable upon the exercise of the Warrants will be required by reason of the setting of such record date.

f) In any case in which this Warrant certificate requires that an adjustment become effective immediately after a record date for an event referred to in the Dilution section above, the Corporation may defer, until the occurrence of such event:

i. issuing to the Holder, to the extent that the Warrants are exercised after such record date and before the occurrence of such event, the additional common shares of the Corporation issuable upon such exercise by reason of the adjustment required by such event; and

ii. delivering to the Holder any distribution declared with respect to such additional common shares of the Corporation after such record date and before such event;

provided, however, that the Corporation delivers to the Holder an appropriate instrument evidencing the right of the Holder, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of common shares of the Corporation purchasable upon the exercise of the Warrants.

g) If a dispute arises at any time with respect to any adjustment of the Exercise Price or the number of common shares of the Corporation purchasable pursuant to this Warrant Certificate, such dispute will be conclusively determined by the auditors of the Corporation or if they are unable or unwilling to act by such other firm of independent chartered accountants as may be selected by the directors, acting reasonably.

h) Adjustments to the Exercise Price or the number of common shares of the Corporation purchasable pursuant to this Warrant certificate may be subject to the prior approval of the TSX Venture Exchange.

As a condition precedent to the taking of any action which would require an adjustment pursuant to the Dilution section above the Corporation will take any action which may, in the opinion of the Corporation's legal counsel, be necessary in order that the Corporation may validly and legally issue as fully paid and non-assessable shares all of the common shares of the Corporation which the Holder is entitled to receive in accordance with the provisions of this Warrant certificate.

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A least twenty-one (21) days prior to any record date or effective date, as the case may be, for any event which requires or might require an adjustment in any of the rights of the Holder under this Warrant certificate, including the Exercise Price and the number of common shares of the Corporation which are purchasable under this Warrant certificate, the Corporation will deliver to the Holder, at the Holder’s registered address, a certificate of the Corporation specifying the particulars of such event and, if determinable, the required adjustment and the calculation of such adjustment. In case any adjustment for which a notice as mentioned in the paragraph above has been given is not then determinable, the Corporation will promptly after such adjustment is determinable deliver to the Holder, at the Holder’s registered address, a certificate providing the calculation of such adjustment. The Corporation hereby covenants and agrees that the register of transfers and share transfer books for the common shares of the Corporation will be open, and that the Corporation will not take any action which might deprive the Holder of the opportunity of exercising the rights of subscription contained in this Warrant certificate, during such twenty-one day period.

Covenants and Representations

The Corporation hereby represents and warrants that it is authorized to create and issue the Warrants and covenants and agrees that it will cause the common shares of the Corporation from time to time subscribed for and purchased in the manner provided in this Warrant certificate and the certificate representing such common shares of the Corporation to be issued and that, at all times prior to the Expiry Date, it will reserve and there will remain unissued a sufficient number of common shares of the Corporation to satisfy the right of purchase provided for in this Warrant certificate. The Corporation hereby further covenants and agrees that it will at its expense expeditiously use its best efforts to obtain the listing of such common shares of the Corporation (subject to issue or notice of issue) on each stock exchange or over-the-counter market on which the common shares of the Corporation may be listed from time to time. All common shares of the Corporation which are issued upon the exercise of the right of purchase provided in this Warrant certificate, upon payment therefor of the amount at which such common shares of the Corporation may be purchased pursuant to the provisions of this Warrant certificate, shall be and be deemed to be fully paid and non-assessable shares and free from all taxes, liens and charges with respect to the issue thereof. The Corporation hereby represents and warrants that this Warrant certificate is a valid and enforceable obligation of the Corporation, enforceable in accordance with the provisions of this Warrant certificate.

Miscellaneous

If any Warrant certificate is lost mutilated, destroyed or stolen, the Corporation may, on such reasonable terms as to cost and indemnity or otherwise as they may impose, respectively issue a replacement Warrant certificate similar as to denomination, tenor and date as the Warrant certificate so lost, mutilated, destroyed or stolen.

The Warrants represented hereby shall be exclusively governed by the laws in force in the Province of Alberta and the laws of Canada applicable therein.

If any one or more of the provisions or parts thereof contained in this Warrant certificate should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom and:

a) the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and

b) the invalidity, illegality or unenforceability of any provision or part thereof contained in this Warrant certificate in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Warrant certificate in any other jurisdiction.

9

Whenever used in this Warrant certificate, words importing the singular number only shall include the plural and vice versa and words importing gender shall include all genders.

Time shall be of the essence.

IN WITNESS WHEREOF the Corporation has caused its corporate seal to be affixed hereto and this certificate to be signed by the signature of its duly authorized officer effective November 30, 2013.

CAN-CAL RESOURCES LTD.
Per:
	Authorized Signatory

10

WARRANT EXERCISE FORM

TO: CAN-CAL RESOURCES LTD.
8205 Aqua Spray Ave.
Las Vegas, Nevada
89128

The undersigned hereby exercises the right to acquire __________ common shares of CAN-CAL RESOURCES LTD. as constituted on November 30, 2012 (or such number of other securities or property to which such Warrants entitle the undersigned in lieu thereof or in addition thereto under the provisions of the Warrant Certificate).

The common shares (or other securities or property) are to be issued as follows:

Name: ___________________________________________________________________________

(print clearly)

Address in full:____________________________________________________________________

_____________________________________________________________________

Number of Common Shares:___________________________________________________________

Note: If further nominees intended, please attach (and initial) schedule giving these particulars.

The undersigned hereby represents and warrants to the Corporation that the undersigned (check one):

o	i.	it is not a U.S. Person and the Warrants are not being exercised within the United States or on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States;
o	ii.	it was an original subscriber for Warrants, or a transferee, who was a U.S. Person at the time of the acquisition of such Warrants and the representations and warranties made by such person in connection with the acquisition of such Warrants remain true and correct on the date of exercise; or
o	iii.	it has delivered herewith to the Corporation a written opinion of counsel or other evidence satisfactory to the Corporation to the effect that the common shares have been registered under the U.S. Securities Act and applicable state securities laws or are exempt from registration thereunder.

Such securities (please check one):

(a) __________ should be sent by first class mail to the above address;

OR

(b) __________ should be held for pick up at the office of the Corporation at which this Warrant Certificate is deposited.

11

In the absence of instructions to the contrary, the securities or other property will be issued in the name of or to the holder hereof and will be sent by first class mail to the last address of the holder appearing on the register maintained for the Warrants.

DATED this ____ day of __________, 20___.

____________________________________	_________________________
Signature Guaranteed	(Signature of Warrantholder)

____________________________________

Print full name

____________________________________

Print full address

____________________________________

Print full address

12

INSTRUCTIONS:

1. For the purposes of the paragraphs above, the following words and phrases have the following meanings:

“United States” and “U.S. Person” have the meaning given to such terms under Regulation S of the U.S. Securities Act. For purposes of Regulation S. “U.S. Person” includes, with certain expectations, (i) any natural person resident in the United States; (ii) any partnership or corporation organized or incorporated under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. Person; (iv) any trust of which any trustee is a U.S. Person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if any individual) resident in the United States; and (viii) any partnership or corporation if (a) organized or incorporated under the laws of any jurisdiction other than the United States and (b) formed by a U.S. Person Headly for the purposes of investing in securities not registered under the U.S. Securities Act; and

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

2. The registered holder may exercise its right to receive common shares by completing this form and surrendering this form and the Warrant Certificate representing the Warrants being exercised to the Corporation at the address indicated under “Exercise of Warrants” in the Warrant Certificate. Certificates for common shares will be delivered or mailed within 3 business days after the exercise of the Warrants.

3. If the Exercise Form indicates that common shares are to be issued to a person or persons other than the registered holder of the Certificate, the signature of such holder of the Exercise Form must be guaranteed by an authorized officer of a Schedule “A” major chartered bank/trust company or a member of an acceptable medallion guarantee program. The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”. Please note - signature guarantees are not accepted from treasury branches or credit unions unless they are members of the “Stamp Medallion Program”. Please note - in USA signature guarantees must be done by members of the “Medallion Signature Guarantee Program” only.

4. If the Exercise Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to the Corporation.

13

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer and Principal Financial Officer

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

and Securities and Exchange Commission Release 34-46427

I, G. Michael Hogan, certify that:

1. I have reviewed this Annual Report on Form 10-K of Can-Cal Resources Ltd.;

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

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

4. As both the principal executive and financial officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual report is being prepared;

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

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

d) disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to affect, the small business issuer’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

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

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: April 16, 2013

/s/ G. Michael Hogan

G. Michael Hogan,

Principal Executive Officer and

Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report of Can-Cal Resources Ltd., a Nevada corporation (the "Company"), on Form 10-K for the period ended December 31, 2012, as filed with the Securities and Exchange Commission (the "Report"), G. Michael Hogan, Chief Executive Officer of the Company, and G. Michael Hogan, Principal Financial Officer of the Company, do hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

April 16, 2013

/s/ G. Michael Hogan

G. Michael Hogan,

Principal Executive Officer and

Principal Financial Officer

[A signed original of this written statement required by Section 906 has been provided to Can-Cal Resources Ltd., and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.]

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10. Options (Details 2) (Options, USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Options
Options Outstanding
Shares outstanding - beginning balance		1,000,000
Shares granted
Shares cancelled
Shares exercised
Shares expired		(1,000,000)
Shares outstanding - ending balance
Weighted Average Exercise Price
Weighted average exercise price - beginning balance		$ 0.18
Weighted average exercise price - granted
Weighted average exercise price - expired		$ (0.18)
Weighted average exercise price - ending balance

XML

5. Property and Equipment (Details Narrative) (USD $)	12 Months Ended		213 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Property And Equipment Details Narrative
Depreciation expense	$ 6,162	$ 8,230	$ 264,946

XML

10. Options (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Option activity related to employees and consultants

		Weighted
	Options	Average
	Outstanding	Exercise Price
Balance, January 1, 2011	1,000,000	$	0.18
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	(1,000,000)		(0.18)
Balance, December 31, 2011	-		-
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	-		-
Balance, December 31, 2012	-	$	-

				Shares Underlying
Shares Underlying Options Outstanding				Options Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Options	Contractual	Exercise	Options	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.16 – $0.20	-0-	-0- years	$0.18	-0-	$0.00

Fair value of option grant

	December 31,		December 31,
	2012		2011
Average risk-free interest rates		-%		-%
Average expected life (in years)		-0-		-0-
Volatility		-%		-%

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12. Income Taxes (Details 1)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Taxes Details
Federal and state statutory rate	35.00%	35.00%
Change in valuation allowance on deferred tax assets	(35.00%)	(35.00%)

XML

10. Options (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Common Stock Warrants
Range of Exercise Prices, Minimum	$ 0.08
Range of Exercise Prices, Max	$ 0.15
Shares Underlying Shares Outstanding	15,280,394
Weighted Average Remaining Contractual Life, outstanding	1 year 19 days
Weighted Average Exercise Price, outstanding	$ 0.14
Shares Underlying Shares Exercisable	$ 15,280,394
Weighted Average Exercise Price, exercisable	$ 0.14
Stock Options
Range of Exercise Prices, Minimum	$ 0.16
Range of Exercise Prices, Max	$ 0.20
Shares Underlying Shares Outstanding	0
Weighted Average Remaining Contractual Life, outstanding	0 years
Weighted Average Exercise Price, outstanding	$ 0.18
Shares Underlying Shares Exercisable	$ 0
Weighted Average Exercise Price, exercisable	$ 0

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3. Related Party

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related party

Management Changes

On March 1, 2013, Dr. Michael Giuffre resigned from the Board of Directors.

On February 27, 2013, Mr. William J. Hogan resigned from the Board of Directors.

On August 12, 2012, Dr. Michael Giuffre was appointed to the Company’s Board of Directors. Compensation has not yet been determined.

On April 17, 2012 the Company appointed Ron Schinnour to the Board of Directors. Mr. Schinnour currently serves on the Board of Directors of FoodChek Systems Inc., a Company owned by another former member of the Company’s Board of Directors, William Hogan. Compensation has not yet been determined.

On January 30, 2012, the Company appointed Mr. Thompson MacDonald to the Board of Directors. Compensation has not yet been determined.

Notes Payable, Related Parties

From time to time we have received and repaid loans from Officers and Directors to fund operations. These related debts are fully disclosed in Note 6 below.

Compensation

On July 1, 2010, the Company entered into a twelve month employment agreement, subject to automatic monthly renewals, with the Company’s CEO, G. Michael Hogan. The terms of the agreement include a fixed annual salary of $120,000. The Company may elect to satisfy payment in shares of common stock in lieu of cash at a market value equal to $0.10 above the average closing trading price of the common stock for the preceding five (5) days from the date of such election. No payments have been made in cash or stock to date.

We owed accrued salaries to our CEO of $360,000 and $240,000 at December 31, 2012 and 2011, respectively.

On June 30, 2010, the Company entered into a consulting agreement, with a Board of Director’s consulting firm, Futureworth Capital Corp. The terms of the agreement include annual compensation of $60,000, payable monthly. The Company may elect to satisfy payment in shares of common stock in lieu of cash at a market value equal to $0.10 above the average closing trading price of the common stock for the preceding five (5) days from the date of such election. No payments have been made in cash or stock to date. As of December 31, 2012 we owed Futureworth Capital Corp. $180,000, as included in accounts payable, related parties, for service prior to, and during the service period under the consulting agreement. The consulting agreement was terminated on February 27, 2013 with Mr. William Hogan’s resignation from the Board of Directors.

Share Based Compensation

On September 30, 2012, the Company extended 2,439,920 previously granted and extended common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $91,215 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 1,301,312 previously granted and extended common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $48,649 and was recognized as interest expense during the year ended December 31, 2012.

On April 4, 2012, the Company sold 416,667 shares of its common stock and an equal number of warrants pursuant to unit offerings to a member of the Company’s Board of Directors in exchange for proceeds of $25,000. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 30, 2011, the Company extended 2,439,920 previously granted common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $22,047 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 1,301,312 previously granted common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $11,758 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

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2. Going Concern (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2012
Going Concern Details Narrative
Working capital	$ (611,286)

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1. Nature of Business and Summary of Significant Accounting Policies (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Nature Of Business And Summary Of Significant Accounting Policies Details Narrative
Finance charges associated with warrant modification	$ 238,419
Stock and stock options issued for services and compensation	$ 239,510	$ 69,464

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3. Related Party (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Accrued salaries owed to officer	$ 360,000	$ 240,000

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4. Prepaid Expenses (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Total prepaid expenses	$ 35,970	$ 21,499
UNLV Research Project
Total prepaid expenses	18,530
Bureau of Land Management
Total prepaid expenses	14,581	16,492
SEC fees
Total prepaid expenses		1,750
Rental fees
Total prepaid expenses		2,400
Insurance premiums
Total prepaid expenses		857
Director and Officer Insurance
Total prepaid expenses	$ 2,859

XML

2. Going Concern

12 Months Ended

Dec. 31, 2012

Going Concern

Going concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company had a net loss of $682,012 for the year ended December 31, 2012, has used net cash in operating activities of $7,102,909 from inception and had a working capital deficit of $611,286 at December 31, 2012. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management has plans to seek additional capital through private placements and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

XML

5. Property and Equipment (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Property And Equipment Details
Machinery and equipment	$ 1,000	$ 1,000
Transportation equipment	31,787	31,787
Furniture and fixtures	1,372	767
Property and Equipment, Gross	34,159	33,554
Less accumulated depreciation	(33,133)	(26,971)
Property and Equipment, Net	$ 1,026	$ 6,583

XML

11. Warrants (Details 1) (Common Stock Warrants, USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Common Stock Warrants
Options Outstanding
Shares outstanding - beginning balance	14,348,746	9,588,162
Shares granted	9,455,810	5,824,584
Shares cancelled
Shares exercised
Shares expired	(8,524,162)	1,064,000
Shares outstanding - ending balance	15,280,394	14,348,746
Weighted Average Exercise Price
Weighted average exercise price - beginning balance	$ 0.11	$ 0.13
Weighted average exercise price - granted	$ 0.13	$ 0.08
Weighted average exercise price - expired	$ (0.08)	$ (0.15)
Weighted average exercise price - ending balance	$ 0.14	$ 0.11

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BALANCE SHEETS (USD $)	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash	$ 1,316	$ 37,846
Prepaid expenses	35,970	21,499
Total current assets	37,286	59,345
Property and equipment (net of accumulated depreciation of $33,133 and $26,971, respectively)	1,026	6,583
Total assets	38,312	65,928
Current liabilities:
Accounts payable	44,988	25,936
Accounts payable, related parties	180,506	120,632
Accrued expenses	5,211	4,967
Accrued expenses, related parties	377,857	243,869
Unearned rental revenues	9,167	9,167
Notes payable, related parties, net of $448 and $-0- of unamortized common stock warrants at December 31, 2012 and 2011, respectively	30,843	53,062
Total current liabilities	648,572	457,633
Total liabilities	648,572	457,633
Commitments and contingencies (See Note 8)
Stockholders' (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and oustanding
Common stock, $0.001 par value, 100,000,000 shares authorized, 42,027,060 and 38,901,246 shares issued and outstanding as of December 31, 2012 and 2011, respectively	42,027	38,901
Subscriptions payable, -0-, and 50,000 shares at December 31, 2012 and 2011, respectively		1,500
Additional paid-in capital	9,710,504	9,248,673
(Deficit) accumulated during exploration stage	(10,362,791)	(9,680,779)
Total stockholders' (deficit)	(610,260)	(391,705)
Total liabilities and stockholders' (deficit)	$ 38,312	$ 65,928

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STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended		213 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (682,012)	$ 574,804	$ (10,362,791)
Depreciation and amortization	6,162	8,230	264,946
Bad debts			207,100
(Gain) loss on sale of fixed assets		23,673	(3,128)
Gain on extinguishment of debt		(1,152,039)	(1,152,039)
Stock based compensation granted for services	1,050	11,838	563,952
Stock based compensation granted for financing and interest	238,460	57,626	972,650
Beneficial conversion feature on convertible debenture			25,200
Loss on disposal of investment property			764,300
Undistributed earnings of affiliate			(174,300)
Gain on discontinued operations			(116,400)
Loss on foreign currency translation			8,500
Impairment of operating assets			443,772
Prepaid expenses	(14,471)	(3,072)	84,930
Accounts payable	19,052	(72,859)	(22,924)
Accounts payable, related parties	59,874	60,632	180,506
Accrued expenses	244	164,401	543,789
Accrued expenses, related parties	133,988	2,064	659,861
Unearned revenues			9,167
Net cash used in operating activities	(237,653)	(324,702)	(7,102,909)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment property			(1,083,600)
Proceeds from sale of investment property			319,300
Purchase of property and equipment	(605)		(770,016)
Proceeds from sale of property and equipment			26,100
Net cash used in investing activities	(605)		(1,508,216)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible debentures			128,800
Proceeds from notes payable			948,400
Principal payments on notes payable			(689,900)
Proceeds from notes payable, related parties	57,525		965,316
Principal payments on notes payable, related parties	(79,296)	(4,129)	(462,475)
Proceeds from the issuance of common stock	223,499	349,475	7,722,300
Net cash provided by financing activities	201,728	345,346	8,612,441
Net increase in cash	(36,530)	20,644	1,316
Cash, beginning of period	37,846	17,202
Cash, end of period	1,316	37,846	1,316
Supplemental disclosures:
Interest paid
Income taxes paid

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6. Notes Payable, Related Parties (Details 2) (USD $)	12 Months Ended		213 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Interest expense	$ 243,042	$ 118,490	$ 1,708,487
Notes Payable Related Party
Interest expense	1,593	2,064
Notes payable
Interest expense		39,633
Commissions
Interest expense	1,050	7,720
Fair Value of Common Stock
Interest expense	1,050	10,337
Amortization Of Warrants
Interest expense	41
Fair Value of Warrants
Interest expense	238,419	57,626
Accounts Payable
Interest expense	$ 889	$ 1,110

XML

4. Prepaid Expenses (Tables)

12 Months Ended

Dec. 31, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid expenses

	December 31,		December 31,
	2012		2011
Prepaid portion of UNLV research project as disclosed below	$	18,530	$	–
Annual Bureau of Land Management fees		14,581		16,492
Securities and Exchange Commission filing fees (XBRL)		–		1,750
Rental fees		–		2,400
Health and auto insurance premiums		–		857
Directors and officers insurance		2,859		–
	$	35,970	$	21,499

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7. Unearned Rental Revenues (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Unearned Rental Revenues
Unearned rental revenue	$ 9,167	$ 9,167

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6. Notes Payable, Related Parties (Tables)

12 Months Ended

Dec. 31, 2012

Notes Payable Related Parties Tables

Notes payable, related parties

	December 31,		December 31,
	2012		2011
Note payable to the CEO, unsecured, bearing interest at 10%, due on demand.	$	26,291	$	–
Promissory note payable originated on November 30, 2012 with Futureworth Capital Corp., a consulting firm owned by our former Chairman of the Board of Directors, unsecured, bearing interest at 10%, matures on November 29, 2013. In connection with the promissory note, the Company granted warrants to purchase 20,000 shares of the Company’s common stock at an exercise price of $0.10. The warrants expire on November 29, 2014.		5,000		–
Note payable to a member of the Board of Directors, unsecured, due on demand, bearing interest at 8.25%, related party.		–		25,000
Note payable to the CEO, unsecured, non-interest bearing, due on demand, related party.		–		28,062
Total notes payable, related parties		31,291		53,062
Less: unamortized discount on common stock warrants		448		–
Less: current portion		30,843		53,062
Notes payable, related parties, less current portion	$	–	$	–

Components of interest expense by instrument type

	December 31,		December 31,
	2012		2011
Interest on notes payable, related parties	$	1,593	$	2,064
Interest on notes payable		–		39,633
Commissions on finance offerings		1,050		7,720
Fair value of common stock granted as commissions on finance offerings		1,050		10,337
Amortization of warrants granted on notes payable, related parties		41		–
Fair value of warrant extensions		238,419		57,626
Accounts payable related vendor finance charges		889		1,110
	$	243,042	$	118,490

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1. Nature of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

1. Nature of Business and Summary of Significant Accounting Policies

Nature of Business

Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) is a Nevada corporation incorporated on March 22, 1995.

The Company is an exploration company engaged in the exploration for precious metals, specifically focused on gold exploration projects. We have examined various prospective mineral properties for precious metals and acquired those deemed promising. We currently own, lease or have mining interest in four mineral properties in the southwestern United States (California and Arizona, as follows: Wikieup, Arizona; Cerbat, Arizona; Owl Canyon, California; and Pisgah, California).

Summary of Significant Accounting Policies

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is December 31.

The Company’s functional and reporting currency is the United States dollar (USD). Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, 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 the Canadian dollar (CDN). The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

Exploration Stage Company

The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred net losses of $10,362,791 and used net cash in operations of $7,102,909 for the period from inception (March 22, 1995) through December 31, 2012. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents include money market accounts which have maturities of three months or less. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost plus accrued interest, which approximates market value.

Long-Lived Assets

Fixed assets are recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Machinery and equipment 10 years

Transportation equipment 5 years

Furniture and fixtures 7 years

Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis.

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2012 and 2011, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Stock-Based Compensation

The Company has adopted FASB guidance on stock based compensation. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $239,510 and $69,464 for the years ended December 31, 2012 and 2011, respectively, based on the fair value of the common stock at the grant date.

Modification of Warrants

The Company extended a total of 6,417,496 warrants on September 30, 2012, which were originally granted on June 30, 2009 as part of debt financing arrangements. A modification of the terms or conditions of an equity award is treated as an exchange of the original award for a new award. The incremental (additional) cost is computed as any excess of the fair value of the modified award over the fair value of the original award immediately before modification. As a result, a total of $238,419 has been expensed as finance charges during the year ended December 31, 2012.

Income Taxes

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Mineral Claim Payments and Exploration Expenditures

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. We assess the carrying cost for impairment under the FASB ASC topic 360 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 subsequently incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Capitalized Mineral Costs

Mineral rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited; the value of mineral rights have diminished below cost, or the economic feasibility of extraction is limited, a write-down is affected against income in the period that such determination is made. The Company did not record any write downs during the years ended December 31, 2012 and 2011. Non-mining assets are recorded at cost of acquisition. These assets include the assets of the mining operation not included in the previous categories and all the assets of the non-mining operations. Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost of acquisition. Expenditure incurred to evaluate and develop new ore bodies, to define mineralization in existing ore bodies, to establish or expand productive capacity, is capitalized until commercial levels of production are achieved, at which time the costs will be amortized.

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

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BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Balance Sheets Parenthetical
Accumulated depreciation	$ 33,133	$ 26,971
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares Issued	42,027,060	38,901,246
Common Stock, Shares Outstanding	42,027,060	38,901,246
Common stock, Subscribed	0	50,000

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11. Warrants

12 Months Ended

Dec. 31, 2012

WarrantsAbstract

11. Warrants

Warrants Granted

On November 30, 2012, the Company granted 20,000 common stock warrants s to a former member of the Company’s Board of Directors with an exercise price of $0.10 per share for its common stock. These stock warrants were granted in connection with a $5,000 loan from the Director. These warrants are exercisable over two years from the date of grant at an exercise price of $0.10 per share.

On September 30, 2012, the Company extended 348,320 previously granted and extended common stock warrants issued to the Company’s former CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $13,022 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended 2,439,920 previously granted and extended common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $91,215 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 1,301,312 previously granted and extended common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $48,649 and was recognized as interest expense during the year ended December 31, 2012.

On September 30, 2012, the Company extended a total of 2,287,944 previously granted and extended common stock warrants issued amongst a total of five former investors, with an exercise price of $0.15 for an additional 21 months from their expiration on September 30, 2012. These warrants are fully vested and expire on June 30, 2014. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 216% and a call option value of $0.0374, was $85,533 and was recognized as interest expense during the year ended December 31, 2012.

On July 31, 2012, the Company granted 1,000,000 common stock warrants with an exercise price of $0.15 per share for its common stock. These stock warrants were granted in connection with the sale of 1,000,000 shares of common stock in exchange for proceeds of $100,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.15 per share.

On April 4, 2012, the Company granted a total of 874,982 common stock warrants amongst three individual investors with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 874,982 shares of common stock in exchange for total proceeds of $52,499. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On April 4, 2012, the Company granted 416,667 common stock warrants s to a member of the Company’s Board of Directors with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 874,982 shares of common stock in exchange for total proceeds of $25,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 150,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 150,000 shares of common stock in exchange for proceeds of $9,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 83,333 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 83,333 shares of common stock in exchange for proceeds of $5,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 166,666 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 166,666 shares of common stock in exchange for proceeds of $10,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On March 20, 2012, the Company granted 166,666 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 166,666 shares of common stock in exchange for proceeds of $10,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On February 15, 2012, the Company granted 100,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 100,000 shares of common stock in exchange for proceeds of $6,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

On February 15, 2012, the Company granted 100,000 common stock warrants with an exercise price of $0.08 per share for its common stock. These stock warrants were granted in connection with the sale of 100,000 shares of common stock in exchange for proceeds of $6,000. These warrants are exercisable over two years from the date of grant at an exercise price of $0.08 per share.

During the year ended December 31, 2011, the Company granted a total of 5,824,584 common stock warrants with an exercise price of $0.08 per share for its common stock amongst a total of thirty six investors. These stock warrants were granted in connection with financing activities related to the sale of common stock sold at various dates between January 4, 2011 and October 18, 2011. These warrants were exercisable upon issuance and expire two years from the date of grant, consisting of maturity dates between January 4, 2013 and October 18, 2011.

On June 30, 2011, the Company extended 348,320 previously granted common stock warrants issued to the Company’s former CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $3,147 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended 2,439,920 previously granted common stock warrants issued to the Company’s CEO, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $22,047 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 1,301,312 previously granted common stock warrants issued to the one of the Company’s directors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $11,758 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On June 30, 2011, the Company extended a total of 2,287,944 previously granted common stock warrants issued amongst a total of five former investors, with an exercise price of $0.15 for an additional 15 months from their expiration on June 30, 2011. These warrants are fully vested and expire on September 30, 2012. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 180% and a call option value of $0.0090, was $20,674 and was recognized as interest expense during the year ended December 31, 2011. These warrants were again extended for an additional 21 months with all other terms remaining consistent with these previously amended terms.

On December 31, 2010, the Company granted 2,146,666 common stock warrants with an exercise price of $0.08 per share. These stock warrants were granted in connection with the conversion of $128,800 of previously issued convertible debentures on December 31, 2010 to a total of nine investors in exchange for a total of 2,146,666 shares. These warrants were exercisable upon issuance and expire on December 31, 2012.

On January 22, 2010, the Company granted 40,000 stock warrants with an exercise price of $0.15 per share for its common stock. These stock warrants were granted in connection with financing activities relating to stock sold on January 22, 2010. These warrants were exercisable upon issuance and expired on March 31, 2011.

Warrants Expired

A total of 2,146,666 and -0- warrants expired during the years ended December 31, 2012 and 2011, respectively.

The following is a summary of information about the common stock warrants outstanding at December 31, 2012:

				Shares Underlying
Shares Underlying Warrants Outstanding				Warrants Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Warrants	Contractual	Exercise	Warrants	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.08 – $0.15	15,280,394	1.05 years	$0.14	15,280,394	$0.14

The following is a summary of the common stock warrant activity as of December 31, 2012.

				Weighted
	Warrants			Average
	Outstanding			Exercise Price
Balance, January 1, 2011		9,588,162		$	0.13
Granted		5,824,584			0.08
Cancelled		–			–
Exercised		–			–
Expired		(1,064,000	)		(0.15	)
Balance, December 31, 2011		14,348,746			0.11
Granted		9,455,810			0.13
Cancelled		–			–
Exercised		–			–
Expired		(8,524,162	)		(0.08	)
Balance, December 31, 2012		15,280,394		$	0.14

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Apr. 08, 2013	Jun. 30, 2012
Document And Entity Information
Entity Registrant Name	Can Cal Resources LTD
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Entity Central Index Key	0001083848
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		42,027,060
Entity Public Float			$ 1,362,566
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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12. Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

12. Income Taxes

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

As of December 31, 2012, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. The Company had approximately $8,395,720 and $8,076,600 of federal net operating losses at December 31, 2012 and 2011, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2029.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

	December 31,			December 31,
	2012			2011
Deferred tax asset:
Net operating loss carry forwards	$	2,938,500		$	2,826,810
Total deferred tax assets:		2,938,500			2,826,810
Less: Valuation allowance		(2,938,500	)		(2,826,810	)
Net deferred tax assets	$	–		$	–

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2012 and 2011.

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

	December 31,	December 31,
	2012	2011
Federal and state statutory rate	35%	35%
Change in valuation allowance on deferred tax assets	(35%)	(35%)

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

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STATEMENTS OF OPERATIONS (USD $)	12 Months Ended		213 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Income Statement [Abstract]
Material sales			$ 245,500
Cost of sales			263,400
Gross loss			(17,900)
Operating expenses:
Exploration costs	51,837	46,499	647,686
General and administrative	291,571	311,743	7,305,542
Depreciation	6,162	8,230	264,946
Officer salary	120,000	120,000	1,201,176
Impairment of operating assets			443,772
Total operating expenses	469,570	486,472	9,863,122
Net operating loss	(469,570)	(486,472)	(9,881,022)
Other income (expense):
Other income	3,100	12,400	69,798
Interest income			52,945
Interest expense	(243,042)	(118,490)	(1,708,487)
Rental revenue	27,500	39,000	422,408
Gain (loss) on disposal of fixed assets		(23,673)	3,128
Gain on extinguishment of debts		1,152,039	1,152,039
Total other income (expense)	(212,442)	1,061,276	(8,169)
Loss before provision for income taxes	(682,012)	574,804	(9,889,191)
Provision for income taxes
Net income (loss) from continuing operations	(682,012)	574,804	(9,889,191)
Income from discontinued operations
Income from discontinued operations			116,400
Loss on disposal of operations (net of taxes)			(590,000)
Net income (loss)	$ (682,012)	$ 574,804	$ (10,362,791)
Weighted average number of common shares outstanding - basic and fully diluted	40,941,949	36,285,342
Net (loss) per share - basic and fully diluted	$ (0.02)	$ 0.02

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6. Notes Payable, Related Parties

12 Months Ended

Dec. 31, 2012

Notes Payable Related Parties

Notes payable related parties

Notes payable, related parties consisted of the following as of December 31, 2012 and 2011, respectively:

	December 31,		December 31,
	2012		2011
Note payable to the CEO, unsecured, bearing interest at 10%, due on demand.	$	26,291	$	–
Promissory note payable originated on November 30, 2012 with Futureworth Capital Corp., a consulting firm owned by our former Chairman of the Board of Directors, unsecured, bearing interest at 10%, matures on November 29, 2013. In connection with the promissory note, the Company granted warrants to purchase 20,000 shares of the Company’s common stock at an exercise price of $0.10. The warrants expire on November 29, 2014.		5,000		–
Note payable to a member of the Board of Directors, unsecured, due on demand, bearing interest at 8.25%, related party.		–		25,000
Note payable to the CEO, unsecured, non-interest bearing, due on demand, related party.		–		28,062
Total notes payable, related parties		31,291		53,062
Less: unamortized discount on common stock warrants		448		–
Less: current portion		30,843		53,062
Notes payable, related parties, less current portion	$	–	$	–

During the year ended December 31, 2011, in connection with the cancellation of obligations with certain debt holders, the Company recognized a gain of $870,035 representing the entire carrying value of the amounts due on four promissory notes that have been extinguished in accordance with the statute of limitations, consisting of total principal of $360,550 and total accrued interest of $509,485 as of December 31, 2011.

The following presents components of interest expense by instrument type for the years ended December 31, 2012 and 2011, respectively:

	December 31,		December 31,
	2012		2011
Interest on notes payable, related parties	$	1,593	$	2,064
Interest on notes payable		–		39,633
Commissions on finance offerings		1,050		7,720
Fair value of common stock granted as commissions on finance offerings		1,050		10,337
Amortization of warrants granted on notes payable, related parties		41		–
Fair value of warrant extensions		238,419		57,626
Accounts payable related vendor finance charges		889		1,110
	$	243,042	$	118,490

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5. Property and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

5. Property and Equipment

Property and Equipment consists of the following:

	December 31,			December 31,
	2012			2011
Machinery and equipment	$	1,000		$	1,000
Transportation equipment		31,787			31,787
Furniture and fixtures		1,372			767
		34,159			33,554
Less accumulated depreciation		(33,133	)		(26,971	)
	$	1,026		$	6,583

Depreciation expense totaled $6,162 and $8,230 for the years ended December 31, 2012 and 2011, respectively.

During 2011, we disposed of an Arc Furnace classified as machinery with a cost basis of $32,386 that had accumulated depreciation of 8,713 and was no longer in service. No proceeds were received from the disposals and a $23,673 loss on disposal of fixed assets was recognized in the statement of operations.

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5. Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property And Equipment Tables

Schedule of property and equipment

	December 31,			December 31,
	2012			2011
Machinery and equipment	$	1,000		$	1,000
Transportation equipment		31,787			31,787
Furniture and fixtures		1,372			767
		34,159			33,554
Less accumulated depreciation		(33,133	)		(26,971	)
	$	1,026		$	6,583

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13. Gain from Extinguishment of Debt

12 Months Ended

Dec. 31, 2012

Gain From Extinguishment Of Debt

13. Gain from Extinguishment of Debt

During the year ended December 31, 2011, in connection with the settlement of obligations involving our former CEO, Ron Sloan, the Company recognized a gain of $282,004 representing the entire carrying value of the amounts due to Mr. Sloan for unpaid accrued salary earned prior to January 1, 2010 which were forgiven by Mr. Sloan on November 19, 2011.

During the year ended December 31, 2011, in connection with the cancellation of obligations with certain debt holders, the Company recognized a gain of $870,035 representing the entire carrying value of the amounts due on four promissory notes that have been extinguished in accordance with the statute of limitations, consisting of total principal of $360,550 and total accrued interest of $509,485 as of December 31, 2011.

The Company evaluated the classification of this gain and determined that the gain does not meet the criteria for classification as an extraordinary item. As a result, the gain has been included as “Gain on extinguishment of debt” under “Other income (expense)” within income from continuing operations in the accompanying Statement of Operations for the year ended December 31, 2011

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9. Changes in Securities

12 Months Ended

Dec. 31, 2012

Changes In Securities

Changes in Securities

2012

On August 1, 2012 the Company issued 17,500 shares of its common stock to satisfy the $1,050 of subscriptions payable realized pursuant to common stock granted on March 20, 2012 as commission on the sale of securities.

On July 31, 2012, the Company sold a total of 1,000,000 shares of its common stock and an equal number of warrants pursuant to unit offerings to an individual investor in exchange for proceeds of $100,000. The warrants are exercisable over two years at an exercise price of $0.15 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 4, 2012, the Company sold 416,667 shares of its common stock and an equal number of warrants pursuant to unit offerings to a member of the Company’s Board of Directors in exchange for proceeds of $25,000. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 4, 2012, the Company sold a total of 874,982 shares of its common stock and an equal number of warrants pursuant to unit offerings amongst three individual investors in exchange for total proceeds of $52,499. The warrants are exercisable over two years at an exercise price of $0.08 per share. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 20, 2012, the Company sold a total of 566,665 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $34,000 received amongst four investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 20, 2012, the Company granted a total of 17,500 shares of its common stock as commissions on the sale of securities. The total fair value of the common stock was $1,050 based on the fair market value of the Company’s common stock on the date of grant. The Company elected not to net these commissions against the proceeds received from the sales and recognized the $1,050 of finance costs as interest expense within the statement of operations. The shares were subsequently issued in April of, 2012.

On March 20, 2012 the Company issued 50,000 shares of its common stock to satisfy the $1,500 of subscriptions payable realized pursuant to common stock granted to an employee for services on December 29, 2011.

On February 15, 2012, the Company sold a total of 200,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $12,000 received amongst two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

2011

On December 29, 2011 the Company granted 50,000 shares of common stock to an employee for services rendered. The fair value of the common stock was $1,500 based on the closing price of the Company’s common stock on the date of grant. The shares were authorized, but unissued and recognized as a subscription payable as of December 31, 2011.

On October 24, 2011, the Company issued a total of 218,793 shares of its common stock as commissions on the sale of securities amongst three different sales persons. The total fair value of the common stock was $12,078 based on the closing price of the Company’s common stock on the date of grant. The Company elected not to net these commissions against the proceeds received from the sales and recognized the $12,078 of finance costs as interest expense within the statement of operations.

On October 18, 2011, the Company sold a total of 200,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $12,000 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On October 14, 2011, the Company sold a total of 150,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $9,000 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On September 26, 2011, the Company sold a total of 700,000 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $42,000 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On July 12, 2011, the Company sold 84,000 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds $5,040. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 29, 2011, the Company sold a total of 1,067,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $64,020 from five investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 22, 2011, the Company sold a total of 595,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $35,700 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On June 10, 2011, the Company sold a total of 565,250 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $33,915 from six investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On May 31, 2011, the Company sold a total of 255,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $15,300 from two investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On April 1, 2011, the Company sold a total of 320,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $19,200 from three investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On March 16, 2011, the Company sold a total of 698,334 shares of common stock and an equal number of warrants pursuant to a unit offering in exchange for total proceeds of $41,900 from four investors. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On February 25, 2011, the Company sold 170,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $10,200. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 26, 2011, the Company sold 85,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,100. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 26, 2011, the Company sold 85,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,100. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 5, 2011, the Company issued a total of 2,146,666 shares of its par value common stock to satisfy subscriptions payable outstanding as of December 31, 2010 related to debts converted by a total of nine investors in the amount of $128,800.

On January 4, 2011, the Company sold 680,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $40,800. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On January 4, 2011, the Company sold 170,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $10,200. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

2010

On December 31, 2010, the Company converted $128,800 of previously issued convertible debentures to a total of nine investors in exchange for a total of 2,146,666 shares, at $0.06 per share, and a total of 2,146,666 warrants exercisable at $0.08 per share over a two year term, that were not issued until January 5, 2011. The shares were presented as a subscription payable of $128,800 at December 31, 2010. A total of $3,598 of accrued interest was forgiven by the note holders, as presented in other income. The total estimated value of the warrants granted as an inducement for conversion using the Black-Scholes Pricing Model, based on a volatility rate of 179% and a call option value of $0.0347, was $74,403, as presented in the income statement as interest expense.

Finders acting in connection with the conversion are entitled to receive aggregate fees of $2,790 and 46,500 shares of common stock. The fair market value of the common stock payable based on the closing stock price at the grant date was $2,790.

On December 31, 2010, the Company cancelled 26,993 previously granted shares to related parties.

On March 17, 2010, the Company received $12,125 in payment on a rescission receivable outstanding at December 31, 2009.

On January 20, 2010, the Company issued 40,000 shares of its common stock and an equal number of warrants pursuant to a unit offering in exchange for proceeds of $5,000. The warrants are exercisable over fifteen months at an exercise price of $0.15 per share.

On January 20, 2010, the Company received $25,000 in payment on a subscription receivable outstanding at December 31, 2009.

2009

During the year ended December 31, 2009, the Company issued 2,926,600 shares of its common stock and an equal number of warrants pursuant to a unit offering whereby each recipient received one share of common stock and one warrant certificate for a unit price of $0.125. The Company recorded proceeds from the offering of $340,825 and a subscription receivable in the amount of $25,000, subsequently paid in January 2010.

During the year ended December 31, 2009, the Company issued a total of 107,000 shares of its restricted common stock to individuals for services rendered to the Company. As of December 31, 2009, the Company recorded an expense of $14,260 representing the fair value of the grant.

On December 31, 2009, the Company authorized the issuance of 9,000 and 6,000 shares of its restricted common stock to a director and officer of the Company, respectively for services performed for the Company. As of December 31, 2009, we recorded an expense of $1,200, representing the fair value of the issuance on the date of grant.

On June 30, 2009, certain note holders elected to convert the principal balance of their notes together with accrued interest into shares of the Company’s common stock at a rate of $0.125 per share. In addition, the Company agreed to issue a warrant to purchase two shares of the Company’s common stock for each share converted. The total principal balance converted was $369,500 and was converted into 2,956,000 common shares. Total accrued interest converted was $29,093 or 232,741 common shares.

2008

During the year ended December 31, 2008, the Company issued 32,500 shares of common stock and warrants to purchase 32,500 shares common stock for cash totaling $8,124. The warrants are fully vested upon grant, expire in two years and have an exercise price of $0.35 per share.

2007

During the twelve months ended December 31, 2007, we sold 1,238,167 restricted common shares to 72 Canadian residents and 4 US residents for a total of $375,534 and issued warrants to purchase 492,795 restricted common shares, exercisable between $0.35 and $0.65 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

On June 29, 2007, the Company also issued 4,000 shares of restricted common stock for services rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $2,000.

On April 30, 2007, the Company also issued 50,000 shares of restricted common stock as part of a settlement agreement with a former officer of the Company for compensation of accrued salaries. The common stock was rendered to a U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act. The shares were valued at a total of $22,000. In addition to monthly cash payments of $3,500 per month the Company has recorded debt forgiveness of $147,419 in accordance with the terms of the settlement agreement. Due to the related party nature of the transaction the gain has been recorded to additional paid in capital, therefore there has been no impact on the Company’s net loss.

2006

During the twelve months ended December 31, 2006, we sold 2,622,213 restricted common shares to 76 Canadian residents, 8 US residents, 5 Israeli Nationals and 1 Swiss National for a total of $688,000, and issued warrants to purchase 2,348,213 restricted common shares, exercisable between $0.25 to $.45 per share. These securities were issued in private transactions, with respect to the Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to the U.S. citizen, in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 8,500 restricted common shares for a total value of $2,325 and these securities were issued to one U.S. resident in reliance on the exemption provided by Section 4(2) of the 1933 Act.

On August 22, 2006, the Company entered into an agreement to purchase mining claims located in Mohave County, Arizona in exchange for 1,000,000 shares of the Company’s par value common stock. The Company recorded an asset totaling $400,000, the fair value of the underlying shares.

On July 11, 2006, the Company issued 206,767 shares of its par value common stock pursuant to the convertible debenture agreement entered into on January 24, 2006 whereby the Company received a $40,000 convertible at a rate of $0.20 per share bearing interest of 10% per annum. The note holder elected to convert all accrued interest totaling $1,895 into 6,767 shares of the Company’s par value common stock.

On July 3, 2006, the Company issued 2,200 shares of its par value common stock for services received by an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $462, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase 2,200 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $373, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 8,800 shares of its par value common stock for services received from an individual. As of September 30, 2006, the Company recorded consulting expense in the amount of $2,200, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 8,800 shares of the Company’s common stock at an exercise price of $0.25 for a period of 2 years. The Company recorded an expense in the amount of $1,812, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, an officer of the Company elected to convert half of his accrued salary in exchange for 385,714 shares of common stock valued at $81,000, the fair value of the shares issued on the date of grant. Additionally, the Company granted a warrant to purchase up to 385,714 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $65,418, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

On July 3, 2006, the Company issued 56,821 shares of its common stock for conversion of a note in the amount of $11,932 from a shareholder of the Company. Additionally, the Company granted a warrant to purchase up to 56,821 shares of the Company’s common stock at an exercise price of $0.25 for a period of two years. The Company recorded an expense in the amount of $9,637, the fair value of the warrant on the date of grant. Fair value was determined using the Black Scholes option pricing model based on the following assumptions: expected dividends: $-0-; volatility: 187%; risk free interest rate: 5.12%.

2005

During the twelve months ended December 31, 2005, we sold 712,500 restricted common shares to 21 Canadian residents for a total of $142,500, and issued warrants to purchase 712,500 restricted common shares, exercisable at $0.25 per share. These securities were issued in private transactions in reliance on the exemption from registration with the SEC provided by Regulation S.

A prior U.S. shareholder exercised other warrants, at exercise prices ranging from $0.22, for proceeds of $11,000, which resulted in the issuance of 50,000 restricted common shares. These securities were issued in private transactions in reliance on the exemption available under Section 4(2) of the 1933 Act.

We also issued, for services, 349,545 restricted common shares for a total value of $69,800 valued at fair market value at date of issuance and granted 13,575 warrants (exercisable for two years at $0.25 per share) valued at fair market value at date of issuance. These securities were issued to two Canadian residents, and one Mexican Corporation in reliance on the exemption from registration available under Regulation S, and one U.S. resident, in reliance on the exemption provided by Section 4(2) of the 1933 Act.

2004

During 2004, 2,255,586 restricted common shares were issued to one hundred and seven (107) Canadian residents or companies controlled and owned by Canadian resident investors for $431,425 and 10,000 restricted common shares were issued to one U.S. resident investor for $2,000 (245,000 shares were priced at $0.18 per share, 1,620,131 shares were priced at $0.20 per share, 261,200 shares were priced at $0.25 per share, and 139,255 shares were issued as a 25% premium on the conversion of warrants, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 1,319,308 of these restricted common shares, the investors were also issued warrants to purchase 1,259,308 additional restricted common shares at $0.25 per share and 60,000 additional restricted common shares at $0.20 per share. With respect to 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.25, and with respect to another 245,000 restricted common shares, the investors were also issued warrants to purchase 245,000 additional restricted common shares at $0.50 per share. Of these, we also sold 5,000 shares to a director of the Company for proceeds of $1,000 and issued warrants to purchase 5,000 restricted common shares, exercisable at $0.25 per share for a two year period. All warrants will expire two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 702,760 restricted common shares were issued in conversion of $99,657 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.216 for 92,593 shares ($20,000 of the debenture); $0.160 for 31,250 shares ($5,000 of the debenture); $0.144 for 34,722 shares ($5,000 of the debenture); $0.128 for 544,195 shares ($69,657 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion). These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 215,336 restricted common shares were issued in payment of $40,932 of services by Luis Vega, consulting geologist. The price per share was determined by dividing the amount owed by the average closing price of the Company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2004, 15,367 restricted common shares were issued in payment of accounts payable amounting to $3,842. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During 2004, 87,388 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $15,247. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

On December 22, 2004, 2,500 restricted common shares were issued to Karen Barra, a U.S. resident, for services amounting to $500. The price per share was $0.20 based on private placement offering for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

On March 1, 2004, in connection with the conversion of $82,687 in notes payable and $225,595 in accrued officers’ salary payable, we issued 1,233,127 restricted common shares at $0.25 per share and 1,233,127 warrants, with an exercise price of $0.30 and expiring on March 1, 2006, to two officers, two directors, and a former director and his insurance agency. These persons and the insurance agency are accredited investors.

Between February 10 and March 31, 2004, 75,000 restricted common shares were issued to Jeff Whitford, a Canadian resident, for investor relation services, in the amount of $15,000. In addition, Mr. Whitford received 50,000 warrants at an exercise price of $0.20 per share; the warrants will expire between February 2006 and March 2006. The warrants were valued at $12,200 utilizing the Black Scholes model. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

On February 4, 2004, 10,000 restricted common shares were issued to Yvonne St. Pierre, a Canadian resident, for computer-related services, in the amount of $2,500. These shares were issued pursuant to the exemption provided by Regulation S of the 1933 Act.

2003

During 2003, 673,410 restricted common shares were issued to nineteen (19) Canadian residents or companies controlled and owned by Canadian resident investors for $134,682 and 150,000 restricted common shares were issued to 12 U.S. resident investors for $30,000 (all shares were priced at $0.20 per share, representing premiums of up to 25% and discounts ranging from 0% to approximately 25% from market prices at the time of issuance). With respect to 237,410 restricted common shares, the investors were also issued warrants to purchase 474,820 additional restricted common shares and with respect to 473,500 restricted common shares, the investors were also issued warrants to purchase 473,500 additional restricted common shares; all warrants were priced at $0.20 per share and will expire two years from the date of issuance. With respect to 112,500 restricted common shares, the investors were also issued 112,500 warrants to purchase additional restricted common shares, at a price of $0.25 per share for a period of two years from the date of issuance. The shares and warrants were sold to Canadian investors pursuant to the exemption provided by Regulation S of the 1933 Act, and the shares and warrants sold to U.S. investors were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 364,305 restricted common shares were issued in conversion of $35,000 principal and interest on a debenture held by Dutchess Fund. The conversion prices were $0.099 for 50,710 shares ($5,000 of the debenture); $0.112 for 44,643 shares ($5,000 of the debenture); $0.061 for 81,433 shares ($5,000 of the debenture); $0.067 for 75,075 shares ($5,000 of the debenture); and $0.1334 for 112,444 shares ($15,000 of the debenture). All of the prices were determined by the conversion formula in the debenture (80% of the average bid prices for the three lowest (out of 15) trading days before conversion. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

During 2003, 205,166 restricted common shares in payment of $31,500 of services by Luis Vega, consulting geologist. The price per share was determined by dividing the amount owed by the average closing price of the Company’s stock for each day’s service. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On March 14, 2003, 24,960 restricted common shares were issued to Catherine Nichols, a Canadian resident, for marketing services amounting to $5,000. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

During the period from July 15 to December 31, 2003, 112,326 restricted common shares in payment of $22,250 of investor relations services by Jeffrey Whitford, a Canadian resident who is a consultant to the Company. The price per share was based on the average monthly closing share prices for the period. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

33,600 restricted common shares were issued to pay $4,200 of legal services provided by Stephen E. Rounds, outside company counsel. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by section 4(2) of the 1933 Act.

On December 30, 2003, 5,208 restricted common shares were issued to Terry Brown, a Mexican resident, for technical consulting services amounting to $1,250. The price per share was based on the average closing share price for the period during which the services were rendered. These shares were sold pursuant to the exemption provided by Regulation S of the 1933 Act.

2002

In November 2002, the Company issued 52,292 restricted common shares to four individuals in exchange for various services, valued at approximately $9,900.

During October 2002, the Company issued 35,679 shares of the Company’s common stock for $4,600 in cash related to the Dutchess Private Equities Fund, net of offering costs of $700.

During September 2002, the Company issued 32,281 shares of the Company’s common stock for $5,500 in cash related to the Dutchess Private Equities Fund, net of offering costs of $200, and issued 30,000 shares to Joseph B. LaRocco, attorney for Dutchess Fund and DRH Investment Company, LLC for legal services to such entities.

From July 1, 2002 through December 24, 2002, 609,720 restricted common shares were issued to 20 investors (19 whom are Canadian residents or companies controlled and owned by Canadian residents, and one who is a resident of Great Britain) for $152,400 cash ($0.25 per share, representing prices that ranged from 22% over market to approximately 40% below market prices at the time of issuance). The investors also were issued warrants to purchase a total of 609,720 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

On June 21, 2002, 40,000 restricted common shares were issued to Financial Communications Corp. for public relations services, valued at approximately $14,000.

From March 1, 2002 through June 3, 2002, 369,600 restricted common shares were issued to 48 investors (all Canadian residents or companies controlled and owned by Canadian residents) for $92,400 cash ($0.25 per share, representing discounts ranging from 0% to approximately 50% from market prices at the time of issuance). These investors also were issued warrants to purchase 369,600 additional restricted shares, at a price of $0.25 per share; the warrants will expire two years from the date of issuance. No commissions were paid.

On February 11, 2002, 10,000 restricted common shares were sold to one investor (a Canadian resident) for $3,500 cash ($0.35 per share, representing a discount of approximately 50% from market price). This investor also was issued warrants to purchase 10,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire February 11, 2004. Complete information about the Company was provided to these investors. These shares and warrants were sold pursuant to the exemption provided by Regulation S of the 1933 Act. No commissions were paid.

On January 31, 2002, we issued 309,677 restricted common shares to a lender (First Colony Merchant) for payment of past due and current interest on debt, $119,800. No commissions were paid.

On January 8, 2002, we sold 36,000 restricted common shares to three investors (one Canadian resident, and two private companies controlled and owned by Canadian residents) for $12,600 cash ($0.35 per share, representing a discount of approximately 50% from market price). These investors also were issued warrants to purchase 36,000 additional restricted shares, at a price of $0.35 per share; the warrants will expire January 8, 2004.

2001

On December 12, 2001 the Board of Directors approved the sale of 40,000 shares of restricted common stock.

On November 2, 2001 the Board of Directors approved the sale of 82,888 shares of restricted common stock.

During October, 2001 the Company signed an Investment Agreement with two funds (Dutchess Private Equities Fund LP and DRH Investment Company LLC) to sell to those funds up to $8,000,000 in common stock of the Company, for a period of three years. In connection with the Investment Agreement, the Company issued 606,059 shares of restricted common stock to Dutchess Fund and its advisor, and to a broker-dealer firm, for services valued at $400,000, to induce those entities to enter into the Investment Agreement and perform services contemplated under such agreement. The Company also issued 37,000 shares of restricted common stock to the attorney for Dutchess Fund.

In September, 2001, the Board of Directors authorized the sale of 20,000 shares of its common stock to an individual.

2000

On November 24, 2000, the Company borrowed $300,000 from a lender. As part of the transaction, the Company issued 45,000 shares of its common stock as a loan placement fee and granted the lender an option to purchase up to 300,000 shares of its common stock. On November 24, 2000, the lender exercised its option in full and purchased 300,000 shares of Can-Cal’s common stock.

In July 2000 the Board of Directors authorized the sale of 74,009 shares of its common stock to eight persons, all of whom reside outside the United States. During the third quarter 46,670 shares were sold and the remaining 27,339 shares were sold during the fourth quarter. All of those shares were issued on December 15, 2000.

On July 3, 2000, the Board of Directors exercised the option to acquire technology related to the extraction and processing of ore and, in accordance with the agreement with the two owners of that technology, issued 200,000 shares of Can-Cal’s common stock to them.

On February 27, 2000, the Board of Directors approved the sale of 500,000 shares of common stock to three of its directors (all of whom reside in Canada), an offshore trust and another person affiliated with the Company.

1999

On November 9, 1999 the board approved the issuance of 10,000 shares of common stock to an investor.

On September 7, 1999 the Board approved the sale of 20,000 shares of common stock to an investor.

On August 24, 1999 the Board approved the sale of 274,000 shares of common stock to various investors.

On July 21, 1999 the Board approved the sale of 357,500 shares of common stock to various investors.

On April 1, 1999 the Board approved the sale of 1,000 shares of restricted common stock in return for equipment.

On March 17, 1999 the Board approved the issuance of 40,000 shares of Can-Cal common stock in return for equipment.

On March 15, 1999 the Board approved the sale of 86,000 shares of Can-Cal common stock to various investors.

On March 10, 1999 the Board approved the sale of 295,500 shares of Can-Cal common stock to various investors.

On March 1, 1999 the Board approved the issuance of 32,121 shares of Can-Cal common stock in return for services rendered.

On February 8, 1999 the Board approved the sale of 70,000 shares of Can-Cal common stock to a Board member.

On February 1, 1999, the Board of Directors approved the Sale of 62,500 shares of Can-Cal common stock to a Board member.

1998

During December, 1998 the Board approved the sale of 263,059 restricted common shares to various investors.

In October, 1998 the Board approved the sale of 172,450 restricted common shares to various investors.

In July, 1998 the Board approved the issuance 122,000 restricted common shares to various investors.

1997

During December, 1997 the Board approved the issuance of 42,000 restricted common shares in return for services rendered.

During November, 1997 the Board approved the sale of 124,683 restricted common shares to various investors.

On October 27, 1997 the Board approved the issuance of 2,181,752 restricted common shares to ARUM, LLC to repay an existing debt of $315,046 and to purchase a property located in San Bernadino County, California, known as the Pisgah property.

On February 13, 1997 the Board approved the acquisition of Scotmar Industries, Inc. 200,000 shares of Can-Cal common stock were issued in return for all of the issued and outstanding stock of the acquired company.

On January 15, 1997 the Company issued 500,000 shares of Can-Cal common stock along with a cash payment of $100,000 in exchange for a 50% interest in S&S Joint Venture. Additionally, the Company agreed to loan the joint venture up to $48,000.

1996

During 1996 the Company issued 3,441,217 shares of Can-Cal common stock to various investors resulting in cash proceeds of $628,400.

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7. Unearned Rental Revenues

12 Months Ended

Dec. 31, 2012

Unearned Rental Revenues

7. Unearned Rental Revenues

On May 1, 1998, we entered into an agreement with Twin Mountain Rock Venture (“Twin Mountain”) to lease our property located in San Bernardino County, California for a period of ten years. Further, we will make available to Twin Mountain a minimum of 600,000 tons of finished material during the term of the agreement in exchange for a minimum annual royalty payment in the amount of $22,500. The initial agreement expired on April 30, 2008. Twin Mountain elected to utilize the renewal option for an additional ten-year period with an increased minimum annual royalty of $27,500. As of December 31, 2012 and 2011, we had unearned revenue from this agreement totaling $9,167 and $9,167, respectively.

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8. Commitment and Contingencies

12 Months Ended

Dec. 31, 2012

Commitment And Contingencies

Commitments and Contingencies

Mining claims - The Company has a lease and purchase option agreement covering six patented claims in the Cerbat Mountains, Hualapai Mining District and Mohave County Arizona. The Company pays $1,500 per quarter as minimum advance royalties. The Company has the option to purchase the property for $250,000 plus interest at a rate of 8% compounded annually from and after the date of its exercise of the option to purchase the property. If the Lessee exercises its option to purchase, all funds paid to Lessors shall be credited toward the purchase price as of the date the payments were made.

Mining reclamation costs - Mining and reclamation permits, and an air quality permit have been issued by the California regulatory agencies in the names of both Twin Mountain, our joint venture partner, and the Company. The Company posted a cash bond in the amount of $1,379 (1% of the total bond amount) and Twin Mountain has posted the remainder of the $137,886 bond. If Twin Mountain defaults, we would be responsible for reclamation of the property, but reclamation costs incurred in that event would be paid in whole or part by the bond posted by us and Twin Mountain. Reclamation costs are not presently determinable.

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10. Options

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Options

Option Plan

Options granted for employee and consulting services - The 2003 Non-Qualified Option Plan was established by the Board of Directors in June 2003 and approved by shareholders in October 2003. A total of 1,500,000 shares of common stock are reserved for issuance under this plan.

Options Granted

There were no options issued during the years ended December 31, 2012 through 2007.

On June 7, 2006, the Company granted options to buy 500,000 shares of the Company’s common stock at an exercise price of $0.20 with a five year term from the date of issuance to the former Directors of the Company.

On June 7, 2006, the Company granted options to buy 250,000 shares of the Company’s common stock at an exercise price of $0.20 with a three year term from the date of issuance to an unrelated consultant.

On May 22, 2006, the Company granted options to buy 250,000 shares of the Company’s common stock at an exercise price of $0.20 with a three year term from the date of issuance to an unrelated consultant.

On October 1, 2003, the Company granted options to buy 500,000 shares of the Company’s common stock at an exercise price of $0.16 with a ten year term from the date of issuance to a former employee of the Company.

Options Exercised

On June 19, 2006, a consultant exercised 100,000 options of 250,000 that were originally granted on May 22, 2006 in exchange for $20,000 of proceeds.

Options Cancelled

On June 6, 2011, options to purchase 500,000 shares of common stock, exercisable at $0.20 per share, held by our former CEO expired.

On June 6, 2011, options to purchase 500,000 shares of common stock, exercisable at $0.16 per share, held by a former employee expired due to his previous resignation.

On June 6, 2009, options to purchase 250,000 shares of common stock, exercisable at $0.20 per share, held by outside consultants expired.

On May 21, 2009, the remaining 150,000 options of the original 250,000 options granted to a consultant on May 22, 2006 expired.

In accordance with ASC 505, “Share-Based Payment”; the Company recognized the fair value of the options in the statement of operations on the date of grant. The following is a summary of information about the stock options outstanding at December 31, 2012.

				Shares Underlying
Shares Underlying Options Outstanding				Options Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Options	Contractual	Exercise	Options	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.16 – $0.20	-0-	-0- years	$0.18	-0-	$0.00

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

	December 31,		December 31,
	2012		2011
Average risk-free interest rates		-%		-%
Average expected life (in years)		-0-		-0-
Volatility		-%		-%

The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During 2012 and 2011, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The following table summarizes the Company’s option activity related to employees and consultants:

		Weighted
	Options	Average
	Outstanding	Exercise Price
Balance, January 1, 2011	1,000,000	$	0.18
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	(1,000,000)		(0.18)
Balance, December 31, 2011	-		-
Granted	-		-
Cancelled	-		-
Exercised	-		-
Expired	-		-
Balance, December 31, 2012	-	$	-

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6. Notes Payable, Related Parties (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Notes payable, related party	$ 31,291	$ 53,062
Unamortized discount on common stock warrants	448
Current portion	30,843	53,062
Notes payable, related party, long term portion
Notes Payable CEO Interest Bearing
Notes payable, related party	26,291
Futureworth Capital
Notes payable, related party	5,000
Board of Directors
Notes payable, related party		25,000
Notes Payable CEO Non Interest Bearing
Notes payable, related party		$ 28,062

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1. Nature of Business and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Nature of Business

Nature of Business

Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) is a Nevada corporation incorporated on March 22, 1995.

The Company is an exploration company engaged in the exploration for precious metals, specifically focused on gold exploration projects. We have examined various prospective mineral properties for precious metals and acquired those deemed promising. We currently own, lease or have mining interest in four mineral properties in the southwestern United States (California and Arizona, as follows: Wikieup, Arizona; Cerbat, Arizona; Owl Canyon, California; and Pisgah, California).

Basis of Presentation

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is December 31.

The Company’s functional and reporting currency is the United States dollar (USD). Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, 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 the Canadian dollar (CDN). The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

Exploration Stage Company

Exploration Stage Company

The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred net losses of $10,362,791 and used net cash in operations of $7,102,909 for the period from inception (March 22, 1995) through December 31, 2012. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents include money market accounts which have maturities of three months or less. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost plus accrued interest, which approximates market value.

Long-Lived Assets

Long-Lived Assets

Fixed assets are recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful life of the related asset as follows:

Machinery and equipment 10 years

Transportation equipment 5 years

Furniture and fixtures 7 years

Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The Company will assess the recoverability of equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis.

Basic and Diluted Loss Per Share

Basic and Diluted Loss Per Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2012 and 2011, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Stock-Based Compensation

Stock-Based Compensation

The Company has adopted FASB guidance on stock based compensation. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $239,510 and $69,464 for the years ended December 31, 2012 and 2011, respectively, based on the fair value of the common stock at the grant date.

Modification of Warrants

Modification of Warrants

The Company extended a total of 6,417,496 warrants on September 30, 2012, which were originally granted on June 30, 2009 as part of debt financing arrangements. A modification of the terms or conditions of an equity award is treated as an exchange of the original award for a new award. The incremental (additional) cost is computed as any excess of the fair value of the modified award over the fair value of the original award immediately before modification. As a result, a total of $238,419 has been expensed as finance charges during the year ended December 31, 2012.

Income Taxes

Income Taxes

The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

Uncertain Tax Positions

Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Mineral Claim Payments and Exploration Expenditures

Mineral Claim Payments and Exploration Expenditures

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. We assess the carrying cost for impairment under the FASB ASC topic 360 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 subsequently incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the established life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Capitalized Mineral Costs

Capitalized Mineral Costs

Mineral rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited; the value of mineral rights have diminished below cost, or the economic feasibility of extraction is limited, a write-down is affected against income in the period that such determination is made. The Company did not record any write downs during the years ended December 31, 2012 and 2011. Non-mining assets are recorded at cost of acquisition. These assets include the assets of the mining operation not included in the previous categories and all the assets of the non-mining operations. Mining assets, including mine development and infrastructure costs and mine plant facilities, are recorded at cost of acquisition. Expenditure incurred to evaluate and develop new ore bodies, to define mineralization in existing ore bodies, to establish or expand productive capacity, is capitalized until commercial levels of production are achieved, at which time the costs will be amortized.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

- Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

- Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

In October 2012, the FASB issued Accounting Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

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11. Warrants (Table)

12 Months Ended

Dec. 31, 2012

Warrants Table

Schedule of common stock warrants

				Shares Underlying
Shares Underlying Warrants Outstanding				Warrants Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
Range of	Underlying	Remaining	Average	Underlying	Average
Exercise	Warrants	Contractual	Exercise	Warrants	Exercise
Prices	Outstanding	Life	Price	Exercisable	Price
$0.08 – $0.15	15,280,394	1.05 years	$0.14	15,280,394	$0.14

				Weighted
	Warrants			Average
	Outstanding			Exercise Price
Balance, January 1, 2011		9,588,162		$	0.13
Granted		5,824,584			0.08
Cancelled		–			–
Exercised		–			–
Expired		(1,064,000	)		(0.15	)
Balance, December 31, 2011		14,348,746			0.11
Granted		9,455,810			0.13
Cancelled		–			–
Exercised		–			–
Expired		(8,524,162	)		(0.08	)
Balance, December 31, 2012		15,280,394		$	0.14

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12. Income Taxes (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deferred tax asset:
Net operating loss carry forwards	$ 2,938,500	$ 2,826,810
Total deferred tax assets:	2,938,500	2,826,810
Less: Valuation allowance	(2,938,500)	(2,826,810)
Net deferred tax assets

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STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $)	Common Stock	Subscription receivable	Subscription payable	Rescision liability receivable	Unamortized equity grants	Foreign currency adjustment	Additional paid-in capital {1}	(Deficit) accumulated during exploration stage {1}	Total
Balance, Value at Mar. 21, 1995
Net income (loss)								$ (1,000)	$ (1,000)
Balance, Value at Dec. 31, 1995								(1,000)	(1,000)
Prior period adjustment								497,900	497,900
Common shares issued for services, Value	3,400						625,000		628,400
Common shares issued for services, Shares	3,441,217
Net income (loss)								(497,000)	(497,000)
Balance, Value at Dec. 31, 1996	3,400						625,000	(100)	628,300
Balance, Shares at Dec. 31, 1996	3,441,217
Common shares issued for services, Value	3,000						1,051,400		1,054,400
Common shares issued for services, Shares	3,006,435
Net income (loss)								(1,044,700)	(1,044,700)
Balance, Value at Dec. 31, 1997	6,400						1,676,400	(1,044,800)	638,001
Balance, Shares at Dec. 31, 1997	6,447,652
Common shares issued for cash, Value	600						211,200		211,800
Common shares issued for cash, Shares	557,509
Foreign currency translation adjustment						8,500			8,500
Net income (loss)								(353,000)	(353,000)
Balance, Value at Dec. 31, 1998	7,000					8,500	1,887,600	(1,397,800)	505,300
Balance, Shares at Dec. 31, 1998	7,005,161
Common shares issued for cash, Value	1,200						572,600		573,800
Common shares issued for cash, Shares	1,248,621
Foreign currency translation adjustment						(8,500)			(8,500)
Prior period adjustment								15,000	15,000
Elimination of subsidiary upon disposal								116,400	116,400
Net income (loss)								(1,038,500)	(1,038,500)
Balance, Value at Dec. 31, 1999	8,200						2,460,200	(2,304,900)	163,500
Balance, Shares at Dec. 31, 1999	8,253,782
Common shares issued for cash, Value	1,200						948,400		949,600
Common shares issued for cash, Shares	1,119,009
Net income (loss)								(962,500)	(962,500)
Balance, Value at Dec. 31, 2000	9,400						3,408,600	(3,267,400)	150,600
Balance, Shares at Dec. 31, 2000	9,372,791
Common shares issued for cash, Value	800						81,500		82,300
Common shares issued for cash, Shares	785,947
Net income (loss)								(704,500)	(704,500)
Balance, Value at Dec. 31, 2001	10,200						3,490,100	(3,971,900)	(471,600)
Balance, Shares at Dec. 31, 2001	10,158,738
Common shares issued for cash, Value	1,100						269,900		271,000
Common shares issued for cash, Shares	1,093,280
Options granted for services							7,100		7,100
Deemed interest on beneficial conversion feature of notes payable, related party							20,500		20,500
Amortization of loan fees		8,200		8,200	8,200				24,600
Common shares issued for repayment of note payable, related party, Value	300						119,500		119,800
Common shares issued for repayment of note payable, related party, Shares	309,677
Warrants granted for loan fees on convertible notes payable, related party		(16,700)		(16,700)	(16,700)		16,700		(33,400)
Common shares issued for services, Value	100						23,800		23,900
Common shares issued for services, Shares	92,292
Common shares issued for loan fees, related party, Value		(13,500)		(13,500)	(13,500)		13,500		(27,000)
Common shares issued for loan fees, related party, Shares	30,000
Net income (loss)								(709,300)	(709,300)
Balance, Value at Dec. 31, 2002	11,700	(22,000)		(22,000)	(22,000)		3,961,100	(4,681,200)	(774,400)
Balance, Shares at Dec. 31, 2002	11,683,987
Common shares issued for cash, Value	800						163,900		164,700
Common shares issued for cash, Shares	823,410
Options granted for services							61,300		61,300
Deemed interest on beneficial conversion feature of notes payable, related party							38,300		38,300
Amortization of loan fees		15,000		15,000	15,000				45,000
Common shares issued for repayment of note payable, related party, Value	400						77,900		78,300
Common shares issued for repayment of note payable, related party, Shares	364,305
Common shares issued for services, Value	400						63,800		64,200
Common shares issued for services, Shares	381,260
Net income (loss)								(711,100)	(711,100)
Balance, Value at Dec. 31, 2003	13,300	(7,000)		(7,000)	(7,000)		4,366,300	(5,392,300)	(1,033,700)
Balance, Shares at Dec. 31, 2003	13,252,962
Common shares issued for cash, Value	2,300						431,300		433,600
Common shares issued for cash, Shares	2,265,586
Warrants granted for services							12,200		12,200
Deemed interest on beneficial conversion feature of notes payable, related party							17,600		17,600
Amortization of loan fees		7,000		7,000	7,000				21,000
Common shares issued for repayment of note payable, related party, Value	300						82,400		82,700
Common shares issued for repayment of note payable, related party, Shares	330,747
Common shares issued for repayment of note payable, Value	700						99,000		99,700
Common shares issued for repayment of note payable, Shares	702,760
Common shares issued in satisfaction of accounts payable and accrued liabilities, Value	900						228,500		229,400
Common shares issued in satisfaction of accounts payable and accrued liabilities, Shares	917,747
Warrants granted for interest expense							280,200		280,200
Common shares issued for services, Value	400						73,800		74,200
Common shares issued for services, Shares	390,224
Net income (loss)								(1,030,500)	(1,030,500)
Balance, Value at Dec. 31, 2004	17,900						5,591,300	(6,422,800)	(813,600)
Balance, Shares at Dec. 31, 2004	17,860,026
Common shares issued for cash, Value	1,100						222,200		223,300
Common shares issued for cash, Shares	1,112,045
Net income (loss)								(421,800)	(421,800)
Balance, Value at Dec. 31, 2005	19,000						5,813,500	(6,844,600)	(1,012,100)
Balance, Shares at Dec. 31, 2005	18,972,071
Common shares issued for cash, Value	2,595						685,405		688,000
Common shares issued for cash, Shares	2,622,213
Options granted for services							123,500		123,500
Warrants granted for services							2,200		2,200
Common shares issued for repayment of note payable, related party, Value	57						11,843		11,900
Common shares issued for repayment of note payable, related party, Shares	56,821
Common shares issued for repayment of note payable, Value	207						41,693		41,900
Common shares issued for repayment of note payable, Shares	206,767
Common shares issued in satisfaction of accounts payable and accrued liabilities, Value	385						80,615		81,000
Common shares issued in satisfaction of accounts payable and accrued liabilities, Shares	385,714
Common shares issued for asset acquisition, Value	1,000						399,000		400,000
Common shares issued for asset acquisition, Shares	1,000,000
Warrants granted in satisfaction of accounts payable and accrued liabilities							65,400		65,400
Warrants granted in satisfaction of notes payable, related parties							9,600		9,600
Warrants granted in satisfaction of debt conversion							40,000		40,000
Common shares issued for services, Value	20						4,980		5,000
Common shares issued for services, Shares	19,500
Net income (loss)								(621,000)	(621,000)
Balance, Value at Dec. 31, 2006	23,264						7,277,736	(7,465,600)	(164,600)
Balance, Shares at Dec. 31, 2006	23,263,086
Common shares issued for cash, Value	1,237						374,296		375,533
Common shares issued for cash, Shares	1,238,167
Common shares issued in satisfaction of accrued wages, related party, Value	50						21,950		22,000
Common shares issued in satisfaction of accrued wages, related party, Shares	50,000
Debt forgiveness, related party							147,419		147,419
Common shares issued for services, Value	4						2,010		2,014
Common shares issued for services, Shares	4,000
Net income (loss)								(604,913)	(604,913)
Balance, Value at Dec. 31, 2007	24,555						7,823,411	(8,070,513)	(222,547)
Balance, Shares at Dec. 31, 2007	24,555,253
Common shares issued for cash, Value	33						8,091		8,124
Common shares issued for cash, Shares	32,500
Net income (loss)								(1,016,661)	(1,016,661)
Balance, Value at Dec. 31, 2008	24,588						7,831,502	(9,087,174)	(1,231,084)
Balance, Shares at Dec. 31, 2008	24,587,753
Common shares issued for cash, Value	2,926	(25,000)					362,899		340,825
Common shares issued for cash, Shares	2,926,600
Common shares issued for repayment of note payable, related party, Value	3,189						395,404		398,593
Common shares issued for repayment of note payable, related party, Shares	3,188,741
Warrants granted in satisfaction of debt conversion							78,961		78,961
Common shares issued in satisfaction of accrued wages, related party, Shares	3,188,741
Common shares cancelled per rescission order, Value	(127)						(55,660)		(55,787)
Common shares cancelled per rescission order, Shares	(126,898)
Rescission liability receivable				(12,125)					(12,125)
Common shares issued for services, Value	122						15,338		15,460
Common shares issued for services, Shares	122,000
Net income (loss)								(595,554)	(595,554)
Balance, Value at Dec. 31, 2009	30,698	(25,000)		(12,125)			8,628,444	(9,682,728)	(1,060,711)
Balance, Shares at Dec. 31, 2009	30,698,196
Common shares issued for cash, Value	40	25,000					4,960		30,000
Common shares issued for cash, Shares	40,000
Receipt of payment on rescission liability receivable				12,125					12,125
Common shares issued for debt conversion			128,800						128,800
Finance costs on inducement of conversion							74,403		74,403
Common shares granted for commissions			2,790						2,790
Common shares cancelled, Value	(27)						27
Common shares cancelled, Shares	(26,993)
Net income (loss)								(572,855)	(572,855)
Balance, Value at Dec. 31, 2010	30,711		131,590				8,707,834	(10,255,583)	(1,385,448)
Balance, Shares at Dec. 31, 2010	30,711,203
Common shares issued for cash, Value	5,825						343,650		349,475
Warrants granted for services									11,838
Common shares granted for commissions, 50,000 shares			1,500
Common shares issued for debt conversions, Value	2,146		(128,800)				126,654
Common shares awarded for commissions, Value	219		(2,790)				12,909		10,338
Common shares awarded for commissions, Shares	218,793
Extension of previously granted warrants, 6,377,496 warrants							57,626		57,626
Net income (loss)								574,804	574,804
Balance, Value at Dec. 31, 2011	38,901		1,500				9,248,673	(9,680,779)	(391,705)
Balance, Shares at Dec. 31, 2011	38,901,246
Common shares issued for cash, Value	3,058,314
Common shares issued for cash, Shares	3,059						220,440
Warrants granted for services									1,050
Common shares awarded for commissions, Value	17,500						1,033		1,050
Common shares awarded for commissions, Shares	17
Extension of previously granted warrants, 6,377,496 warrants							238,419		238,419
Common shares issued for services, Value	50,000		(1,500)				1,450
Common shares issued for services, Shares	50
Warrants granted as debt offering costs, 20,000 warrants							489		489
Net income (loss)								(682,012)	(682,012)
Balance, Value at Dec. 31, 2012	$ 42,027						$ 9,710,504	$ (10,362,791)	$ (610,260)
Balance, Shares at Dec. 31, 2012	42,027,060

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4. Prepaid Expenses

12 Months Ended

Dec. 31, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses

Prepaid expenses consisted of the following as of December 31, 2012 and December 31, 2011, respectively:

	December 31,		December 31,
	2012		2011
Prepaid portion of UNLV research project as disclosed below	$	18,530	$	–
Annual Bureau of Land Management fees		14,581		16,492
Securities and Exchange Commission filing fees (XBRL)		–		1,750
Rental fees		–		2,400
Health and auto insurance premiums		–		857
Directors and officers insurance		2,859		–
	$	35,970	$	21,499

On April 23, 2012 and May 10, 2012, the Company paid $30,000 and $5,000, respectively to the University of Nevada Las Vegas (UNLV) as part of a research project on our Wikieup property to be conducted from May 1, 2012 through September 30, 2013. These fees were paid pursuant to a donation to the UNLV’s Economic Geology Research Program Fund, and will be amortized over the duration of the project on a straight line basis. The project will use both field and laboratory analyses to investigate the surface geology of the property in order to address the following questions:

1. Is there geologic evidence consistent with the presence of a porphyry copper system within the area of Can-Cal's claim block?

2. Is there evidence to support the hypothesis that the property represents the root zone of a porphyry system that has been decapitated and transported into the valley to the east?

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12. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes Tables

Schedule of deferred tax assets

	December 31,			December 31,
	2012			2011
Deferred tax asset:
Net operating loss carry forwards	$	2,938,500		$	2,826,810
Total deferred tax assets:		2,938,500			2,826,810
Less: Valuation allowance		(2,938,500	)		(2,826,810	)
Net deferred tax assets	$	–		$	–

Schedule of statutory income tax rate

	December 31,	December 31,
	2012	2011
Federal and state statutory rate	35%	35%
Change in valuation allowance on deferred tax assets	(35%)	(35%)

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10. Options (Details 1)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Options Details 1
Average risk-free interest rates
Average expected life (in years)	0 years	0 years
Volatility

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14. Subsequent Events

12 Months Ended

Dec. 31, 2012

Subsequent Events [Abstract]

Subsequent events

On March 1, 2013, Dr. Michael Giuffre resigned from the Board of Directors.

On February 27, 2013, Mr. William J. Hogan resigned from the Board of Directors.