UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 20-F

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2010
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:

For the transition period from ____ to ______

Commission file number: 000-30780

MAX RESOURCE CORP.

 (Exact name of Registrant as specified in its charter)

Province of Alberta, Canada

(Jurisdiction of incorporation or organization)

2300 – 1066 West Hastings Street, Vancouver, British Columbia V6E 3X2 Canada

(Address of principal executive offices)

Stuart Rogers, President and CEO
Max Resource Corp.
2300 – 1066 West Hastings Street

Vancouver, British Columbia V6E 3X2 Canada

Tel: (604) 689-1749

Facsimile: (604) 648-8665

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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

(Title of Class)

Securities registered pursuant to Section 12(g) of the Act:  Common Shares, no par value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

(Title of Class)

Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual report:  21,699,230 common shares as at December 31, 2010

1

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

Yes o No x

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x

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

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 o No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one)

Large accelerated filer  o  Accelerated filer  o Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  o

International Reporting Standards as issued  

o

Other  x

by the International Accounting Standards Board

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17  x  Item 18  o

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No x

2

MAX Resource Corp.

Form 20-F Annual Report

Table of Contents

CONTENTS

3

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Annual Report on Form 20-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future.  These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.  Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.  Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur or be achieved,) are not statements of historical fact and may be forward-looking statements.  Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

·

risks related to our status as a passive foreign investment company for U.S. tax purposes;

·

risks related to our history of operating losses;

·

risks related to our lack of production history;

·

risks related to our limited financial resources;

·

risks related to our need for additional financing;

·

risks related to competition in the mining industry;

·

risks related to increased costs;

·

risks related to possible shortages in equipment;

·

risks related to mineral exploration activities;

·

risks related to our lack of insurance for certain activities;

·

risks related to all our properties being in the exploration stage;

·

risks related to uncertainty that our properties will ultimately be developed;

·

risks related to our management’s limited experience in mineral exploration;

·

risks related to fluctuations in precious and base metal prices;

·

risks related to the possible loss of key management personnel;

·

risks related to possible conflicts of interest;

·

risks related to our mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title;

·

risks related to governmental and environmental regulations;

·

risks related to our ability to obtain necessary permits;

·

risks related our status as a foreign corporation;

·

risks related to current economic conditions; and

·

other risks related to our securities.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the sections entitled “Risk Factors”, “Information on the Company” and “Operating and Financial Review and Prospects” and in the exhibits attached to this Annual Report on Form 20-F.  Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements.  The Company’s forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or

4

opinions change, except as required by law.  For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

All references in this Report on Form 20-F to the terms “we”, “our”, “us”, “the Company” and “MAX” refer to MAX Resource Corp. and its subsidiary.

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES

Certain disclosure in this Annual Report on Form 20-F has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of the United States securities laws.  The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in United States Securities and Exchange Commission (“SEC”) Industry Guide 7 under the United States Securities Act of 1933, as amended (the “Securities Act”).  Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC.  Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.  

“Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.  Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this Annual Report on Form 20-F and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

Conversion Table

In this Annual Report a combination of Imperial and metric measures are used.  Conversions from Imperial measure to metric and from metric to Imperial are provided below:

Imperial Measure          =	Metric Unit	Metric Measure       =	Imperial Unit
2.47 acres	1 hectare	0.4047 hectares	1 acre
3.28 feet	1 meter	0.3048 meters	1 foot
0.62 miles	1 kilometer	1.609 kilometers	1 mile
0.032 ounces (troy)	1 gram	31.1 grams	1 ounce (troy)
1.102 tons (short)	1 tonne	0.907 tonnes	1 ton
0.029 ounces (troy)/ton	1 gram/tonne	34.28 grams/tonne	1 ounce (troy/ton)

5

CURRENCY AND EXCHANGE RATES

Canadian Dollars Per U.S. Dollar

Unless otherwise indicated, all references in this annual report are to Canadian dollars.

The following table sets out the exchange rates for one United States dollar (“US$”) expressed in terms of one Canadian dollar (“Cdn$”) in effect at the end of the following periods, and the average exchange rates (based on the average of the exchange rates on the last day of each month in such periods) and the range of high and low exchange rates for such periods.

		Canadian Dollars Per U.S. Dollars
	2010	2009	2008	2007	2006	2005	2004
Average for the period	1.0054	0.8760	0.9441	0.9348	0.8820	0.8259	0.7697
Low for the period	0.9278	0.9755	1.0289	1.0905	0.9099	0.8690	0.8493

For the Month of
	May 2011	April 2011	March 2011	February 2011	January 2011	December 2010
High for the period	1.0537	1.0542	1.0324	1.0268	1.0140	1.0054
Low for the period	1.0195	1.0319	1.0083	1.0045	.9978	0.9825

The noon exchange rate on June 27, 2011 as reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars was US$1.00 = Cdn$0.9861.  

PART I

ITEM 1.

Identity of Directors, Senior Management and Advisers

Not applicable

ITEM 2.

Offer Statistics and Expected Timetable

Not applicable

ITEM 3.

Key Information

We were incorporated as Proven Capital Corp. on April 25, 1994 under the Business Corporations Act of Alberta (the “BCA”).  We changed our name to Cedar Capital Corp. on January 10, 1995 and subsequently to Vancan Capital Corp. on February 12, 2002.  On May 14, 2004, we changed our name to Max Resource Corp.  On June 27, 2007 we were registered as an extra-provincial company with the Registrar of Companies in British Columbia, pursuant to the Business Corporations Act of British Columbia (“BCABC”).

We are in the business of mineral property exploration and development.  The recoverability of amounts recorded for mineral properties and related deferred costs is dependent upon the discovery of economically recoverable reserves, our ability to obtain necessary financing to complete the development, and future production or proceeds from the disposition thereof.  We will depend almost exclusively on outside capital to complete the exploration and development of our mineral properties.  Such outside capital will include the sale of additional stock.  There can be no assurance that capital will be available as necessary to meet these continuing exploration and development costs or, if the capital is available, that it will be on terms acceptable to us.  The issuances of additional stock by the Company may result in a significant dilution in the equity interests of our current stockholders.  If we are unable to obtain financing in the amounts and on terms deemed acceptable, our business

6

and future success may be adversely affected.  Our ability to continue operations as a going concern is dependent upon our ability to obtain necessary financing.  To date, we have not generated any revenues from operations and will require additional funds to meet our obligations and the costs of our operations.  As a result, significant losses are anticipated prior to the generation of any profits.

We are a reporting issuer in British Columbia and Alberta and trade in Canada on the TSX Venture Exchange under the symbol MXR.   We are quoted in the United States on the OTC Bulletin Board under the symbol MXROF.  We were listed on the Frankfurt Stock Exchange on March 2, 2006 under the symbol M1D.

3.A

Selected Financial Data

This data is derived from our audited consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) and reconciled to accounting principles generally accepted in the United States (“U.S. GAAP”).  The following selected financial data has been extracted from the more detailed consolidated financial statements included herein (stated in Canadian Dollars, being the foreign currency our financial statements are denominated in, see “Currency and Exchange Rates”) and is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto included elsewhere herein.  The following information should be read in conjunction with “Item 5.  Operating and Financial Review and Prospects”.  

Selected Financial Data

US GAAP (Cdn$ in 000, except per share data)	Year Ended 12/31/10	Year Ended 12/31/09	Year Ended 12/31/08	Year Ended 12/31/07	Year Ended 12/31/06
Revenue	Nil	Nil	Nil	Nil	Nil
Net Income(Loss)Cdn. GAAP	($502)	($4,660)	($1,149)	($1,094)	($722)
Earnings(Loss) Per Share Cdn GAAP	($0.02)	($0.22)	($0.05)	($0.06)	($0.07)
Net Income(Loss) US GAAP	($837)	($4,973)	($3,490)	($2,186)	($886)
Earnings (Loss) Per Share US GAAP	($0.04)	($0.23)	($0.16)	($0.13)	($0.08)
Dividends Per Share Cdn GAAP	0	0	0	0	0
Dividends Per Share US GAAP	0	0	0	0	0
Working Capital	$2,317	$3,093	$4,345	$7,852	$846
Mineral Properties Cdn GAAP	$2,592	$2,142	$5,463	$2,886	$1,371
Mineral Properties US GAAP	$823	$644	$1,424	$1,187	$708
Long Term Debt Cdn GAAP	0	0	0	0	0
Shareholder’s Equity Cdn GAAP	$4,914	$5,268	$9,836	$10,767	$2,218
Shareholders’ Equity US GAAP	$3,074	$3,762	$5,790	$9,061	$1,548
Total Assets Cdn GAAP	$4,944	$5,325	$9,983	$10,801	$2,276
Total Assets US GAAP	$3,111	$3,826	$5,943	$9,103	$1,613

7

CDN GAAP (Cdn$ in 000, except per share data)	Year Ended 12/31/10	Year Ended 12/31/09	Year Ended 12/31/08	Year Ended 12/31/07	Year Ended 12/31/06
Revenue	Nil	Nil	Nil	Nil	Nil
Net Income(Loss)Cdn. GAAP	($502)	($4,660)	($1,149)	($1,094)	($722)
Earnings(Loss) Per Share Cdn GAAP	($0.02)	($0.22)	($0.05)	($0.06)	($0.07)
Net Income(Loss) US GAAP	($837)	($4,973)	($3,490)	($2,186)	($886)
Earnings (Loss) Per Share US GAAP	($0.04)	($0.23)	($0.16)	($0.13)	($0.08)
Dividends Per Share Cdn GAAP	0	0	0	0	0
Dividends Per Share US GAAP	0	0	0	0	0
Working Capital	$2,317	$3,093	$4,345	$7,852	$846
Mineral Properties Cdn GAAP	$2,592	$2,142	$5,463	$2,886	$1,371
Mineral Properties US GAAP	$823	$644	$1,424	$1,187	$708
Long Term Debt Cdn GAAP	0	0	0	0	0
Shareholder’s Equity Cdn GAAP	$4,914	$5,268	$9,836	$10,767	$2,218
Shareholders’ Equity US GAAP	$3,074	$3,762	$5,790	$9,061	$1,548
Total Assets Cdn GAAP	$4,944	$5,325	$9,983	$10,801	$2,276
Total Assets US GAAP	$3,111	$3,826	$5,943	$9,103	$1,613

There are several material differences between Canadian GAAP and U.S. GAAP that are applicable to the financial information disclosed or summarized herein.  Reference is made to Note 13 in the attached financial statements for an explanation of material differences between Canadian GAAP and U.S. GAAP.  

See “Currency and Exchange Rates” for disclosure of exchange rates between Canadian dollars and United States dollars.  Unless indicated otherwise, all references to dollars in this annual report are to Canadian dollars.

International Financial Reporting Standards (“IFRS”)

In January 2006, the Canadian Accounting Standards Board adopted a strategic plan, which includes the decision to move financial reporting for Canadian publicly accountable enterprises to a single set of globally accepted standards, IFRS, as issued by the International Accounting Standards Board. The effective implementation date of the conversion from Canadian generally accepted accounting principles (“Canadian GAAP”) to IFRS is December 1, 2011, with an effective transition date of December 1, 2010 for financial statements prepared on a comparative basis.  We are engaged in an assessment and conversion process which includes consultation with external consulting firms.  Our approach to the conversion to IFRS includes three phases.

·

Phase one, an initial general diagnostic of our accounting policies and Canadian GAAP relevant to our financial reporting requirements to determine the key differences and options with respect to acceptable accounting standards under IFRS. This phase was completed in late 2009.

·

Phase two, an in-depth analysis of the IFRS impact in those areas identified under phase one. During 2010, we substantially completed assessing and quantifying IFRS transition adjustments.  Our auditors are in the process of completing their review of these adjustments.  A summary of this analysis is provided in Table 2 below.

·

Phase three, the implementation of the conversion process, including the completion of the opening balance sheet as at December 1, 2010 together with related discussion and notes, has commenced.  Preliminary drafts of financial statement disclosures have been prepared in order to ensure systems are in place to collect the necessary data; to date no significant changes to current procedures have been identified.

8

Our IT accounting and financial reporting systems are not expected to be significantly impacted.

The above comments, including the summary in Table 2, should not be considered as a complete and final list of the changes that will result from the transition to IFRS as we intend to maintain a current and proactive approach based on changes in circumstances and no final determinations have been made. IFRS standards, and the interpretation thereof, are constantly evolving.  As a result, we expect there may be new or revised IFRS accounting standards prior to the issuance of our first IFRS financial statements. We are continuing to monitor IFRS accounting developments and updates and will assess their impact in the course of our transition process to IFRS.

Table 2.  Summary of financial statements impact on transition from Canadian GAAP to IFRS.

Key Area	Canadian GAAP (as currently applied)		IFRS		Analysis and preliminary conclusions
Property, plant and equipment (“PP&E”)	PP&E is recorded at historical cost. Depreciation is based on their useful lives after due estimation of their residual values.		PP&E can be recorded using the cost (on transition to IFRS, the then fair value can be deemed to be the cost) or revaluation models. Depreciation must be based on the useful lives of each significant component within PP&E.		PP&E will continue to be recorded at their historical costs due to the complexity and resources required to determine fair values on an annual basis. Based on an analysis of PP&E and our significant components, we have determined that no change to their useful lives is warranted and, therefore, depreciation expense will continue to be calculated using the same rates under IFRS.
Key Area	Canadian GAAP (as currently applied)	IFRS		Analysis and preliminary conclusions
Mineral properties	Exploration costs and option maintenance payments are expensed as incurred. If proven and probable reserves are established, costs incurred prospectively to develop the property are capitalized as incurred and depreciated using the unit-of-production depreciation method over the estimated life of the ore body.	IFRS 6 provides us with the option of expensing the exploration and evaluation costs as incurred, or deferring these costs until technical feasibility and commercial viability has been determined, at which point they are transferred to the development and production phase and allocated to specific projects.		The existing accounting policy will be maintained.
Asset retirement obligations (“ARO”)	Canadian GAAP limits the definition of ARO to legal obligations.   ARO is calculated using a current credit-adjusted, risk-free rate for upward adjustments, and the original credit-adjusted, risk-free rate for downward revisions.  The original liability is not adjusted for changes in current discount rates.	IFRS defines ARO as legal or constructive obligations. ARO is calculated using a current pre-tax discount rate (which reflects current market assessment of the time value of money and the risk specific to the liability) and is revised every reporting period to reflect changes in assumptions or discount rates. IFRS requires that, on transition, the net book value of the asset related to ARO be adjusted on the basis of the ARO balance existing at inception.		The broadening of this definition will not cause a significant change in our current estimates.   We expect to record a transition adjustment. In accordance with IFRIC 1, the effect of any changes to an existing ARO as a result of changes in market interest rates is added to or deducted from the cost of the related asset.   We will rely on the IFRS 1 exemption which allows a company to use current estimates of future reclamation costs and current amortization rates to determine the net book value on transition to IFRS.
Key Area	Canadian GAAP (as currently applied)	IFRS		Analysis and preliminary conclusions
Stock-based compensation	We recognize stock-based compensation on a straight line method and update the value of the options for forfeitures as they occur.   We included stock-based compensation in contributed surplus and previously recognized compensation cost is not reversed if a vested employee stock option expires unexercised.	Under IFRS, stock-based compensation is amortized under the graded method only.  In addition, we are required to update our value of options for each reporting period for expected forfeitures.   IFRS does not preclude us from recognizing a transfer of compensation costs within equity (i.e. from contributed surplus to deficit) after vesting.		We are in the process of quantifying the difference. We do not intend to transfer stock-based compensation expense included in contributed surplus to another component of equity.
Income taxes	There is no exemption from recognizing a deferred income tax for the initial recognition of an asset or liability in a transaction that is not a business combination.  The carrying amount of the asset or liability acquired is adjusted for the amount of the deferred income tax recognized. All deferred income tax assets are recognized to the extent that it is “more likely than not” that the deferred income tax assets will be realized.	A deferred income tax is not recognized if it arises from the initial recognition of an asset or liability in a transaction that is not a business combination, and at the time of the transaction affects neither accounting profit nor taxable profit. A deferred tax asset is recognized if it is “probable” that it will be realized.		We do not expect the difference in recognition of deferred income tax to have any significant change in the future. “Probable” in this context is not defined and does not necessarily mean “more likely than not”.  However, we do not expect this difference to have any impact in the future.

The above assessment and conclusions are based on the analysis completed by us as of the date of this report and may be subject to change.

The quantification of the amounts that resulted from the differences between Canadian GAAP and IFRS relating to the key standards are based on management’s estimates and decisions, and are subject to further internal review and audit by our external auditors.

9

3.B.

 Capitalization and Indebtedness

Not Applicable

3.C.

 Reasons for the Offer and Use of Proceeds

Not Applicable

3.D.

Risk Factors

Any investment in our common shares involves a high degree of risk.  You should consider carefully the following information before you decide to buy our common shares.  If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer.  In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares.  In particular, you should consider carefully the following risk factors:

We have a history of losses.

We have historically incurred losses and have no revenue from operations.  We incurred losses from operations of $502,315 the fiscal year ended December 31, 2010 and losses of $4,660,805 and $1,149,013 for the fiscal years ended December 31, 2009 and 2008, respectively.   As of December 31, 2010, we had a cumulative deficit of $9,919,986 (December 31, 2009: $9,417,671).  There can be no assurance that either the Company or our subsidiary will achieve profitability in the future or at all.

We have not identified any commercially viable mineral deposits.  We have not commenced development or commercial production on any of our properties.  We have no history of earnings or cash flow from operations.  We do not have a line of credit and our only present source of funds available may be through the sale of our equity shares or assets.  Even if the results of exploration are encouraging, we may not have the ability to raise sufficient funds to conduct further explorations to determine whether a commercially mineable deposit exists on any of our properties.  While additional working capital may be generated through the issuance of equity or debt, the sale of properties or possible joint venturing of the properties, we cannot assure you that any such funds will be available for operations on acceptable terms, if at all.

Very few mineral properties are ultimately developed into producing mines.

At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.   The business of exploration for minerals and mining involves a high degree of risk.  Few properties that are explored are ultimately developed into producing mines.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.

Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.  

Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis.  The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.

10

Additional financing may be needed for our business operations.

As at December 31, 2010, we had cash and cash equivalents on hand of $2,087,207.  We have sufficient working capital to fund our exploration activities on our mineral properties through fiscal 2011.  Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims.  While we believe we have sufficient working capital to fund our activities through our 2010 fiscal year, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral properties we acquire.  

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.  We believe the only realistic source of future funds presently available to us is through the sale of equity capital.  Any sale of share capital will result in dilution to existing shareholders.

Mineral exploration involves a high degree of risk against which we are not currently insured.

Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs.  We have relied on and will continue to rely upon consultants and others for exploration expertise.  

It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons.  Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.  

We may require permits and licenses that we may not be able to obtain.

Our operations may require licenses and permits from various governmental authorities.  There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire.

Our properties may not have been examined in detail by a qualified mining engineer or geologist.

Our properties are in an exploratory stage.  As a result, they may not have been examined in detail by a qualified mining engineer or geologist who could quantify exactly what their economic potential or value, if any, is.

Metal prices fluctuate widely.

Our business activities are significantly affected by the prices of precious metals and base metals on international markets.  The price of minerals affects our ability to raise financing, the commercial feasibility of our properties, the future profitability of our properties should they be developed and our future business prospects.  The prices of precious metals and base metals fluctuate widely and are affected by numerous factors beyond our control, including expectations with respect to the rate of inflation, the strength of the U.S. dollar and of other currencies, interest rates, and global or regional political or economic crisis.  The demand for and supply of precious metals and base metals may affect precious metals and base metals prices but not necessarily in the same manner as supply and demand affect the prices of other commodities.

The resource industry is very competitive.

Significant competition exists for the limited number of property acquisition opportunities available.  As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than our Company, we may be unable to acquire attractive mining properties on terms we consider acceptable.  

11

Competition in the precious and base metals mining industry is primarily for mineral rich properties which can be developed and exploited economically; the technical expertise to find, develop, and produce such properties; the labor to operate the properties; and the capital for the purpose of funding such properties.  Many competitors not only explore for and mine precious and base metals and minerals but conduct refining and marketing operations on a worldwide basis.  Such competition may result in our being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund our operations and develop our properties.  Our inability to compete with other mining companies for these resources may have a material adverse effect on our results of operation and business.  There can be no assurance that our exploration and acquisition programs will yield any reserves or result in any commercial mining operation.

Our operations may be adversely affected by environmental regulations.

Our operations may be subject to environmental regulations promulgated by government agencies from time to time.  Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution.  A breach of such legislation may result in the imposition of fines and penalties.  In addition, certain types of operations require the submission and approval of environmental impact assessments.  Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent.  Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants.  The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations.  We do not maintain environmental liability insurance.

Differences in U.S. and Canadian reporting of reserves and resources

The Company’s reserve and resource estimates are not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as the Company generally reports reserves and resources in accordance with Canadian practices. These practices are different from those used to report reserve and resource estimates in reports and other materials filed with the SEC.  It is Canadian practice to report measured, indicated and inferred resources, which are not permitted in disclosure filed with the SEC by United States issuers. In the United States, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.  United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves.

Further, "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC permits issuers to report "resources" only as in-place tonnage and grade without reference to unit of metal measures.

Accordingly, information concerning descriptions of mineralization, reserves and resources contained in this Annual Report, or in the documents incorporated herein by reference, may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.

As a foreign private issuer, our shareholders may have less complete and timely data.

We are a “foreign private issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”).  We are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act.  Therefore, we are not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders.  The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders’ activities in our securities.

12

Recent market events and conditions

Throughout 2008, 2009 and 2010, the U.S. credit markets experienced serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, sub-prime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These conditions caused a loss of confidence in the broader U.S. and global credit and financial markets and resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. These unprecedented disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many smaller companies. These disruptions could, among other things, make it more difficult for us to obtain, or increase its cost of obtaining, capital and financing for its operations.  The Company’s access to additional capital may not be available on terms acceptable to it or at all.

General economic conditions

The recent unprecedented events in global financial markets have had a profound impact on the global economy. Many industries, including the gold mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity.

A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to,

·

consumer spending,

·

employment rates,

·

business conditions,

·

inflation,

·

fuel and energy costs,

·

consumer debt levels,

·

lack of available credit,

·

the state of the financial markets,

·

interest rates,

·

and tax rates may adversely affect our growth and profitability.  

Specifically:

The global credit/liquidity crisis could impact the cost and availability of financing and our overall liquidity; the volatility of gold prices may impact our potential revenues, profits and cash flow; volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and the devaluation and volatility of global stock markets impacts the valuation of our equity securities

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

The trading market for our shares is not always liquid.

Although our shares trade on the TSX Venture Exchange, the Frankfurt Stock Exchange and the FINRA OTC Bulletin Board, the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.  In addition, trading volumes in our common shares can be volatile and if the trading volume of our common shares experiences significant changes, the price of our common shares could be adversely affected.  The price of our common shares could also be significantly affected by factors, many of which are beyond our control.

13

Our securities may be subject to penny stock regulation.

Our stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act Rules.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Our common shares are subject to these penny stock rules.  Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).  

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.

Our Passive Foreign Investor Company (“PFIC”) Status Has Possible Adverse Tax Consequences for U.S. Investors

Current holders of and potential investors in our common shares who are U.S. taxpayers should be aware that we believe we were a passive foreign investment company (“PFIC”) for the year ended December 31, 2010, and may continue to be a PFIC in future years.   If we are a PFIC for any year during a U.S. taxpayer’s holding period, then such U.S. taxpayers generally will be required to treat any so-called “excess distribution” received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distributions or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to our shares.  In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer.  A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to its shareholders.  However, U.S. taxpayers should be aware that there can be no assurance that we will satisfy record keeping requirements that apply to a QEF, or that we will supply U.S. taxpayers with information that such U.S. taxpayers require to report under the QEF rules, in event that we are a PFIC and a U.S. taxpayers wishes to make a QEF election.  Thus, U.S. taxpayers may not be able to make a QEF election with respect to their common shares.  Each U.S. taxpayer should consult its own financial advisor, legal counsel, or accountant regarding the availability of, and procedure for making, a QEF election.  A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s basis therein.  U.S. taxpayers are advised to seek the counsel of their professional tax advisors.  This paragraph is qualified in its entirety by the discussion below under the heading “Taxation—Certain U.S. Federal Income Tax Considerations.”  Each U.S. taxpayer should consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC rules and the acquisition, ownership, and disposition of our common shares.

14

We are a foreign corporation and most of our directors and officers are outside of the United States, which may make enforcement of civil liabilities difficult.

We are incorporated under the laws of the Province of Alberta, Canada and registered extra-provincially in the Province of British Columbia, Canada.  All of our directors and officers are residents of Canada, with the exception of Clancy Wendt (who resides in the United States), and part of our assets are located outside of the United States.  Consequently, it may be difficult for United States investors to effect service of process within the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon  judgments of United States courts predicated upon civil liabilities under the United States Securities Exchange Act of 1934, as amended.  A judgment of a US court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the US court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter.  There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.

Item 4.

 Information on the Company

4.A

History and Development of the Company

We were incorporated as Proven Capital Corp. on April 25, 1994 under the Business Corporations Act of Alberta.  We changed our name and consolidated our share capital as set forth below on the following dates:

Date	Name	Consolidation (Old:New)
April 25, 1994	Proven Capital Corp.	Not applicable
January 10, 1995	Cedar Capital Corp.	Not applicable
February 12, 2002	Vancan Capital Corp.	4:1
May 14, 2002	MAX Resource Corp.	Not applicable

On June 27, 2007 we were registered as an extra-provincial company with the Registrar of Companies in British Columbia, pursuant to the Business Corporations Act of British Columbia.

We have an authorized capital of an unlimited number of common shares and an unlimited number of preferred shares, none of which preferred shares are issued.

The trading symbol for the Company on the TSX Venture Exchange is “MXR” with the symbol on the OTC Bulletin Board being “MXROF”.  The trading symbol on the Frankfurt Exchange is “M1D”.

We are a reporting issuer in the United States and our annual report and 6K filings can be found on the SEC’s EDGAR system at www.sec.gov .  We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.

Our head office is located at 1066 West Hastings Street, Suite 2300, Vancouver, British Columbia, Canada, V6E 3X2.  Our telephone number is (604) 689-1749.

We have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets.

We are engaged in the business of acquiring and exploring resource properties.

Principal Expenditures And Divestitures

Since the beginning of the last three financial years, our principal capital expenditures and divestitures have been comprised principally of the acquisition, exploration and abandonment or disposition of our mineral properties, as described below.

15

Mineral Properties Now Held

Table Top Gold Project (Nevada)

On September 1, 2009 we entered into an Option Agreement with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration, granting us an option (the “Table Top Option”) to acquire a 100% interest in the Table Top gold project claims (“Table Top Project”) in Humboldt County, Nevada for the sum of US$300,000 (the “Table Top Purchase Price”) and a 3% NSR Royalty, 1% of which can be repurchased for US$1 million.  The Table Top Project consists of 48 claims and is located 10 miles west of the town of Winnemucca, Nevada.  Under the terms of the agreement we are required to make the following rental payments (the “Table Top Rental Payments”) in order to maintain the Table Top Option in good standing:

Date	Payment Amount (USD)
Upon execution of the Agreement (September 1, 2009)	$5,000 (paid)
On the First anniversary of the Agreement (September 1, 2010)	$25,000 (deferred)
On the Second anniversary of the Agreement (September 1, 2011)	$35,000
Each anniversary thereafter	$50,000

During 2010 we spent a total of $314,103 on exploration on the Table Top Project, including drilling.  Further drilling was completed in April 2011.  See “Special Notes regarding Forward Looking Statements”.  See Item 4.D, “Property, Plant and Equipment – Table Top Project”.

East Manhattan Wash gold project (Nye County, Nevada)

In December, 2007, we entered into an option agreement in conjunction with Max Resource, Inc., our wholly owned Nevada subsidiary, to acquire a 100 % interest in the East Manhattan Wash (“EMW”) claims in the Manhattan Mining District, Nye County, Nevada from MSM LLC, a Nevada corporation.   The property is comprised of 78 claims and is located 40 miles north of the town of Tonopah, Nevada. We made a cash payment of US$28,000 to MSM LLC and, in accordance with the terms of the option agreement, are required to make the following option payments:

Date	Payment Amount
Upon execution of the option agreement	$28,000 (US) (Paid)
First anniversary of effective date (December 4, 2008)	$20,000 (US) (Paid)
Second anniversary of effective date (December 4, 2009)	$25,000 (US) (Paid)
Third anniversary of effective date (December 4, 2010)	$40,000 (US) (Paid)
Fourth anniversary of effective date (December 4, 2011)	$50,000 (US)
Fifth anniversary of effective date (December 4, 2012)	$100,000 (US)

The payments due on the fourth and fifth anniversary are subject to securing a drill permit.

In addition we are required to make exploration expenditures totalling US$700,000 on the EMW claims in the second to fifth years (subject to receipt of the necessary drill permits),as follows:

·

on or before December 4, 2009,

US$50,000;

·

on or before December 4, 2010,

a further US$150,000

·

on or before December 4, 2011,

a further US$200,000

·

on or before December 4, 2012,

a further US$300,000

The EMW Property is subject to a 3% NSR royalty.  The option may be exercised by making all of the above option payments and exploration expenditures.  Upon full exercise of the option, we will own 100% of the project.

16

We made the following expenditures on this property during the fiscal years ending December 31, 2008, 2009 and 2010:

	2010	2009	2008
Drilling and assays	5,202	$       12,763	$        756
Geological consulting	29,923	35,133	7,688
Field expenses	3,632	5,552	1,214
	$       38,748	$       53,448	$    9,658

See Item 4.D, “Property, Plant and Equipment – East Manhattan Wash Gold Project”.

 Howell/Crowsnest Gold Project (British Columbia)

Due to a change in policy by the Government of British Columbia resulting in a moratorium on exploration in the area, we ceased exploration on this property and are in the process of negotiating payment of compensation with the government

On June 9, 2008, we entered into anoption agreement with Eastfield Resources Ltd. (“Eastfield”) whereby we can earn up to a 60% interest in the Howell Gold Project located one hour south of the town of Sparwood (by gravel road) in Southeast B.C.  Eastfield has the right to earn a 100% interest in the Howell property through an amended 1999 option agreement with Teck Cominco Metals Limited (“TCML”) and Goldcorp Inc. (“GI”) whereby outstanding commitments include a final exploration expenditure totaling $423,759 and cash payments of $100,000 to each of TCML and GI due by August 31, 2010.

 On July 24, 2009, we entered into an amending agreement with Eastfield, amending the June 9, 2008 Howell agreement to allow us to earn a 60% interest in the Howell Gold Project (“Howell Property”) and/or the Crowsnest Mineral Property (“Crowsnest Property”) projects over a four year period.  The Crowsnest Property is comprised of 14 claims totaling 3,163 hectares and is located approximately 10 km southeast of the Howell property.  

The terms of our option agreement (as amended) with Eastfield are as follows:

Property	Date	Cash Payment Amount	Issuance of Shares
Combined Howell Property & Crowsnest Property	On signing amending agreement (July 24, 2009)	$10,000 (paid)
	On signing amending agreement (July 24, 2009)		50,000 common shares (Issued)
	On or before 1st anniversary date (June 30, 2010)	$20,000	OR 50,000 common shares
	On or before June 30, 2011	$30,000
Howell Property	On or before August 31, 2010	$120,000*
Howell Property	On or before June 30, 2012	$40,000	200,000 Common shares
Crowsnest Property	On or before June 30, 2012	$40,000	200,000 Common shares
Howell Property	On or before June 30, 2013	$50,000	200,000 Common shares
Crowsnest Property	On or before June 30, 2013	$50,000	200,000 Common shares

*our portion of the $200,000 payment due to GI and TCML by August 31, 2010 pursuant to Eastfield’s underlying agreement with them.

In addition we are required under the agreement to make exploration expenditures as follows:

In the first and second years, $400,000 on the combined Howell and Crowsnest properties  as follows:

·

on or before June 30, 2010, $150,000;

·

on or before June 30, 2011, a further $250,000;

17

In the third and fourth years, $701,000 on the Howell Property as follows:

·

on or before June 30, 2012, $1.00

·

on or before June 30, 2013, a further $700,000

In the third and fourth years, $1,050,000 on the Crowsnest Property as follows:

·

on or before June 30, 2012 $350,000

·

on or before June 30, 2013, a further $700,000.

During the year ended December 31, 2008, we spent a total of $455,407 on the Howell Property as follows: drilling and assays: $238,709; geological consulting: $59,222; and field expenses: $157,476.  

During the year ended December 31, 2009, we spent a total of $3,078 for geological consulting fees on the Howell property, and we claimed a BC Mining Tax recovery in the amount of $20,684.  We also spent a total of $248,429 on exploration of the Crowsnest property, comprised of drilling and assays ($112,088), geological consulting ($52,524), and field expenses ($83,817) during 2009.   

During the year ended December 31, 2010, we spent a total of $613 for geological consulting fees on the Crowsnest property, and we received a BC Mining Tax recovery in the amount of $77,670.  We did not spend any money on the Howell property during 2010.

In February 2010 the Government of British Columbia announced that it intends to halt all ongoing mineral exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  The Company has been contacted by the Ministry of Energy, Mines and Petroleum Resources and discussions have been initiated with respect to compensation.  See Item 4.D, “Property, Plant and Equipment – Howell/Crowsnest Gold Project”.

Ravin Molybdenum/ Tungsten Property (Lander County, Nevada):

On September 10, 2007, and as amended on November 9, 2010, we entered into an option agreement (the “Ravin Option”) to acquire a 100 % interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the “Ravin Property”) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration for the sum of US$300,000 (the “Ravin Purchase Price”).

The following rental payments (the “Rental Payments”) are required in order to maintain the Ravin Option:

Date	Payment Amount
Upon execution of the option agreement	$5,000.00 USD (paid)
First anniversary of effective date (September 10, 2008)	$25,000.00 USD (paid)
Second anniversary of effective date (September 10, 2009)	$35,000.00 USD (paid)
Each anniversary thereafter (subject to increase to $US50,000 on certain triggering events)	$10,000.00 USD (paid)

The Ravin Option may be exercised at any time by payment of the Ravin Purchase Price and grant of a 3% NSR, 1% of which can be repurchased for US$1 million (the “Ravin Royalty”).  

During the year ended December 31, 2008 we spent a total of $479,720 on exploration of the Ravin Property comprised of drilling and assay costs ($257,384), geological consulting fees ($119,206), and field expenses ($94,601).  During the year ended December 31, 2009 we spent a total of $17,930 on exploration of the Ravin property comprised of drilling and assay costs ($3,939), geological consulting fees ($12,930), and field expenses ($1,071).  During the year ended December 31, 2010 we spent $639 on geological consulting for the Ravin property.   See Item 4.D, “Property, Plant and Equipment – Ravin Molybednum/Tungsten Property”.

18

Diamond Peak Property (Nevada)

On May 9, 2006, we entered into an Option Agreement, as amended on June 30, 2010, to acquire an option (the “Diamond Peak Option”) to purchase a 100% interest in the FMC claims in Eureka County, Nevada, (the “Diamond Peak Property”)  for the sum of US$300,000 (the “Diamond Peak Purchase Price”) plus a 3% NSR, 1% of which can be repurchased for US$1 million (the “Diamond Peak Royalty”), from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration.

Under the terms of the Diamond Peak Option Agreement, we issued 100,000 shares of the Company to the Wendt Family Trust and must make the following rental payments (the “Diamond Peak Rental Payments”) in order to maintain the Diamond Peak Option:

Date	Payment Amount (U.S funds)
Upon execution of the option agreement (May 9, 2006)	$25,000 (paid)
First anniversary of effective date (May 9, 2007)	$35,000 (paid)
Second anniversary of effective date (May 9, 2008)	$45,000 (paid subsequent to the period)
Third anniversary of effective date (May 9, 2009)	$50,000 (paid subsequent to the period)
On June 30, 2010 upon execution of the amending agreement	$25,000 (paid)
On May 9, 2011 (as amended)	$35,000
On May 9, 2012 (as amended)	$35,000
Each anniversary thereafter for 4 years (as amended)	$50,000

The Diamond Peak Option may be exercised at any time by payment of the Diamond Peak Purchase Price and grant of the Diamond Peak Royalty.  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such payments being credited against the Diamond Peak Royalty.  The Diamond Peak Rental Payments are not credited against the Royalty or the Purchase Price, but are not payable after the Option is exercised.

We entered into a mineral property option agreement on May 15, 2006, as amended effective September 30, 2009, with Kokanee Placer Ltd. (“Kokanee Placer”), a British Columbia company, whereby we granted to Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property (the “Kokanee Option”) in consideration of a cash payment of US$25,000 (paid) and the issuance of 100,000 common shares of “Kokanee Minerals Inc.” (“Kokanee”) (received subsequent to December 31, 2009), a public company (TSX V : KOK) which exchanged its shares for Kokanee Placer in conjuction with its public listing (completed in January, 2010).  

To maintain this agreement in good standing, Kokanee had agreed to make the following annual payments and share issuances to the Company:

-

By May 15, 2007 pay US$35,000 to the Company (received);

-

within five days after listing of Kokanee’s common shares on the TSX Venture Exchange, pay US$95,000 and issue 500,000 Kokanee shares to the Company (received); and

-

On or before May 9, 2010 and on each anniversary thereof up to and including May 9, 2016, pay US$50,000 to the Company; and

-

On commencement of commercial production, issue 1,000,000 Kokanee shares to the Company;

The Kokanee Option was also subject to Kokanee completing $1,000,000 in exploration on the Diamond Peak Property over a three year period.

In June 2010 Kokanee advised us that they would not be making the US$50,000 payment then due and would be abandoning their option.  We have reviewed all work conducted by Kokanee and conducted soil sampling and constructed roads and drill pads at Diamond Peak in preparation for drilling during 2011.   During 2010, we spent $21,248 on geological consulting, $9,220 on assays and $27,624 on field expenses at Diamond Peak.    See Item 4.D, “Property, Plant and Equipment – Diamond Peak Property.”

19

C de Baca Project (New Mexico):

In September 2005, we announced that we had entered into an agreement with Applied Geological Services, Inc. of Denver, Colorado for the acquisition of a total of 108 uranium exploration claims (the “Dat Claims”) in Socorro County, New Mexico.  Consideration for the acquisition of the Dat Claims (known also as the “C de Baca Project”) is an immediate US$10,000 cash payment with annual payments of US$10,000 until production.  After production, a royalty of 2% of revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  The obligation to make payments to Applied Geologic Services can be terminated at anytime by us by providing notice that we are abandoning the Dat Claims and agreeing to transfer them back to the vendor.

In 2007 we conducted a 14 hole drill program to follow up on historic Occidental Minerals drilling and we were successful in confirming historic uranium grades.  In March 2008 we received a Technical Report prepared by Michael G. Bersch, Phd. PG, which recommends further exploration at C de Baca that will include diamond drilling, project and regional scale geologic mapping.  During the year ended December 31, 2008 we spent $16,360 for geological consulting and $2,001 permitting on the C de Baca project. No money was spent on the project during the years ended December 31, 2010 and 2009.  See Item 4.D, “Property, Plant and Equipment – C de Baca Project”.

Majuba Hill Copper/Silver Project (Nevada):

On March 4, 2011 we entered into an option agreement to acquire up to a 75% interest in the Majuba Hill Copper/Gold/Silver property in Pershing County, Nevada (the “Majuba Hill Property”) from Claremont Nevada Mines LLC., Nevada. (the “Majuba Hill Option Agreement”).  The Majuba Hill Project encompasses 2,568 acres consisting of patented and unpatented lode mining claims and private mineral rights.   

The terms of the Majuba Hill Option Agreement with Claremont allow us to earn an initial 60% interest in the property over six years by spending US$6.5 Million on exploration of the property.  MAX can increase its interest in the property to 75% by spending a further $3.5 Million on exploration over a subsequent two year period.  The Majuba Hill property will be subject to a 3% NSR payable to the vendor, 1.5% of which may be purchased at any time for US$1.5 Million.   See Item 4.D, “Property, Plant and Equipment – Majuba Hill Copper/Silver Property”.

Properties Sold, Lost or Abandoned

Longtom Property (Target Claims)

By agreement dated April 16, 2003, we obtained the right to acquire a 50% interest or “ownership” in a mineral claim comprising 1,781.9 acres located in the Longtom Lake area of the Northwest Territories (the “Target 1 Claim”) by paying $15,000 and issuing 200,000 common shares at a price of $0.38 per share.

By agreement dated January 15, 2003, we entered into an agreement to acquire a 50% interest or “ownership” in a mineral claim located east of Hottah Lake in the Northwest Territories of Northern Canada (the “Target 2 Claim”).  We acquired our 50% interest in the claim by making cash payments totalling $15,000, issuing 200,000 common shares at a price of $0.20 each and agreeing to incur a minimum of $100,000 (since reduced to $50,000, which amount has already been incurred) in exploration expenditures on the Claim in stages by December 31, 2004.

Both of the Target Claims Agreements provided that we would enter into a single purpose joint venture agreement with David G. Lorne, or whoever he assigns his 50% interest to, to further explore and develop the Target Claims once we complete the exploration expenditure of our interest in each claim.  Mr. Lorne sold his 50% interest in the Target 1 and Target 2 claim to Alberta Star Development Corp., a Canadian company which trades on the TSX-Venture Exchange.  We subsequently abandoned our interest in the Target 2 claim but maintained our interest in the Target 1 claim.

20

During the year ended December 31, 2007, we recorded an impairment charge of $148,097 on the Target 1 Claim.  We did not spend any money on the property during 2008 or 2009.  During the fiscal year ended December 31, 2009, we elected to abandon our interest in the Target 1 claim as well.

The Gold Hill Property (Alaska):

On May 17, 2004, we entered into an option agreement with Zazu Exploration, Inc. (“Zazu”) to acquire its option to acquire a 90% interest, or “ownership”, in the Gold Hill Property near Cantwell, Alaska (the “Zazu Option Agreement”).   Zazu Exploration, Inc. is a privately-held Texas corporation, which holds a Lease on the Gold Hill Claims from GCO Minerals Company.

Under the terms of the Zazu Option Agreement, we paid $63,691 (US$48,200) and issued 100,000 shares valued at $47,000 and 100,000 warrants exercisable at $0.47 per share for a two year period.  In order to maintain the Option, we issued an additional 200,000 shares effective December 31, 2004 (issued at a value of $74,000).  We issued a further 200,000 shares effective December 31, 2005 (issued at a value of $120,000) to exercise the option acquired Zazu’s right to earn a 90% interest in the Gold Hill Property under its lease with GCO Minerals, subject to a NSR of 1% and GCO’s rights under the lease, and assumed all of Zazu’s obligations under its lease with GCO Minerals Corp. (“GCO”).  

We also completed the following minimum work commitments and made the following Advance Royalty Payments (in U.S. funds) as required under the GCO lease:

YEAR	WORK COMMITMENT	CUMULATIVE WORK COMMITMENT	ADVANCE ROYALTY
2004	$100,000 (incurred)	$100,000	$5,000 (paid)
2005	$150,000 (incurred)	$250,000	$15,000 (paid)
2006	Nil (deferred to 2007)	$250,000	$25,000 (paid)
2007	$250,000 (incurred)	$500,000	$25,000 (paid)
2008	$250,000 (incurred)	$750,000	$50,000 (paid)
2009	$500,000 (incurred)	$1,250,000	$75,000 (paid)
2010	$500,000 (incurred)	$1,750,000	$100,000
2011	$500,000	$2,250,000	$100,000

During the year ended December 31, 2008 we spent a total of $1,415,727 on exploration of the Gold Hill property.  This was comprised of drilling and assays of $916,983, field expenses of $281,726, geological and consulting costs of $196,384, licenses, permits and lease payments of $13,756 and travel costs of $6,878.  During the year ended December 31, 2009 we spent a total of $83,893 on exploration of the Gold Hill property.  This was comprised of field expenses of $11,928, geological and consulting costs of $51,570, licenses, permits and lease payments of $16,573 and travel costs of $3,822.  During the year ended December 31, 2009, we elected to abandon the Gold Hill property and wrote off $524,444 of acquisition costs and $2,593,472 of deferred exploration costs to operations during fiscal 2009.   Subsequent to the year ending December 31, 2009, we executed a Quit Claim Deed in favor of GCO relinquishing our right to all mineral claims staked by us in the area (GH 1 through GH 32),  thereby relinquishing our entire interest in the property.   

MacInnis Lake Uranium Project (Northwest Territories):

We entered into an option agreement dated April 1, 2005, as amended April 11, 2006, with Alberta Star Development Corp. (“Alberta Star”) to acquire up to a 50% interest or “ownership” in the MacInnis Lake Uranium Property, subject to a 2% NSR royalty, by

·

making cash payments totaling $30,000 (paid);

·

issuing to Alberta Star 200,000 of our shares (issued); and

·

performing exploratory work commitments totaling $2,000,000 over a five year period being

·

$250,000 on or before October 1, 2008;

·

$750,000 on or before October 31, 2009;

·

$500,000 on or before October 1, 2010 and

·

$500,000 on or before April 1, 2011.

21

We did not spend any money on the property during 2008 or 2009.  During the year ended December 31, 2009, we elected to abandon the MacInnis Lake property and wrote-off the remaining $1 of acquisition costs to operations.

NUSTAR Uranium Project (Colorado Plateau, Arizona):

On April 4, 2007, we entered into an agreement with NUSTAR Exploration LLC, a private Arizona limited liability corporation, for the acquisition of a 100% interest in 427 mineral claims located in the Arizona Strip of the Colorado Plateau in northwest Arizona.

Under the terms of our agreement with NUSTAR, we purchased a 100% interest in the NUSTAR Claims by making a cash payment to NUSTAR of US$128,100 and issuing 200,000 shares of our common stock, subject to a gross royalty of 4% (the “NUSTAR Royalty”) of sales revenue from commercial production of uranium from the NUSTAR Claims.  The agreement provided that we would have the right to purchase 3% of the 4% NUSTAR Royalty applicable to each breccia pipe identified on the NUSTAR Claims that went into commercial production, for the sum of $1,000,000.   

During the year ended December 31, 2009, we incurred $1,392 of geological consulting expenses on the Nustar project.  

In September 2009, we elected to abandon the Nustar project and wrote off $497,948 of acquisition costs and $5,488 of deferred exploration costs to operations during the period.  

Indata Gold/Copper Project (British Columbia):

We acquired our interest in this property (which is located 120 kilometers north of Fort St. James, in Northern British Columbia, Canada) (the “Indata Gold/Copper Property”) by agreement dated for reference June 9, 2008 with  Eastfield which granted us an option to earn up to a 60% interest in the Indata Gold/Copper Property by making the following cash  payments, share issuances and exploration expenditures

Payments/ Shares	Due	Exploration Expenditures	Due
$10,000	On signing (paid)	$250,000	June 1, 2009 (completed)
50,000 shares	Commencement of drilling (issued)	$250,000	June 1, 2010
$20,000 or 50,000 shares	June 1, 2009	$650,000	June 1, 2011
$35,000	June 1, 2010
$55,000 AND 200,000	June 1, 2011

We spent a total of $338,478 on the property in the year ended December 31, 2008 (Drilling: $172,893; Geological Consulting: $28,898; and Field Expenses: $136,687) and spent a further $5,470 on geological consulting in 2009.  

We elected to abandon this property in June, 2009 and no longer hold an interest in this property.  

4.B

Business Overview

During the fiscal year ended December 31, 2010, we

(i)

were advised by the Province of British Columbia that it intends to halt all mineral exploration work in the Flathead Valley where our Howell/Crowsnest Gold Project is located.  We were subsequently contacted by government representatives to discuss compensation.

(ii)

collected 163 soil samples from the East Manhattan Wash Gold project and completed assays of these samples.

(iii)

completed two core drill programs totaling 1,105 meters at the Table Top Project;

22

(iv)

were informed by Kokanee that they intend to abandon their option to purchase up to a 51% of the Diamond Peak Project;

(v)

collected 375 soil samples at the Diamond Peak Property and completed assays of same;

(vi)

assayed core from two holes drilled by Kokanee at the Diamond Peak Property that they had elected not to assay; and

(vii)

prepared roads and drill pads and received drill permits for drilling planned for the Diamond Peak Property in 2011

Subsequent to the fiscal year end, we entered into an agreement whereby we can earn up to a 75% interest in the Majuba Hill Property by spending US$10 Million over an eight year period.   We also completed a private placement of 2,016,755 units at $0.28 for gross proceeds of $564,691.

See “Principal Expenditures and Divestitures”.

Management & Employees

We do not have any employees other than our directors and officers.  

Our President and Chief Executive Officer, Stuart Rogers devotes approximately 80% of his business time to our affairs.  We had a management agreement dated May 8, 2002 with a private company owned by Mr. Rogers whereby he provided management services to us for $5,000 per month.  For the period December 1, 2003 to March 31, 2005, Mr. Rogers reduced the monthly fee to $2,500 per month to conserve the Company’s working capital.  On July 1, 2007, this amount was increased to $10,000 per month to reflect a substantial increase in the amount of time that Mr. Rogers has been required to devote to the Company’s affairs since that time.

In order to more accurately reflect the time and effort spent by Mr. Rogers on the Company’s behalf, a Consulting Agreement was entered into between West Oak Consulting Group, Inc. (“West Oak) and us, effective October 1, 2008.  Mr. Rogers is the sole shareholder and key employee of West Oak.  Pursuant to the Agreement, West Oak, through its key employee who acts as our President and CEO, performs management services on our behalf, will receive $10,000 per month for a period of 24 months.  The Agreement calls for an automatic renewal for a second 24 month period in the absence of either West Oak or us providing written notice of termination of the agreement.

Our Vice-President of Exploration, Mr. Clarence J. (Clancy) Wendt, entered into a Consulting Agreement with us effective October 1, 2008, which agreement is in force and effect for a period of 24 months, with a fee of US$10,000 per month being paid to him for his geological consulting services and the performance of duties associated with the position of Vice President, Exploration.  The agreement calls for an automatic renewal for a second 24 month period in the absence of either Mr. Wendt or us providing written notice of termination of the agreement.

Office Space

We utilize about 167 square feet of office space in Vancouver, British Columbia.  On September 1, 2010, we entered into a two year lease on these premises with a property management firm for $1,789 per month plus telephones.  

Looking forward to 2011, we anticipate that we will be able to fund our ongoing general operations through the next year from funds on hand.  However, due to the volatility in capital markets and continued depressed commodity prices for molybdenum and uranium, we took steps to reduce our general and administrative costs, primarily through reductions in advertising and promotional expenses.  The resulting cost savings were evident during fiscal 2009 and 2010 and will continue in subsequent periods.  We also plan to be selective in incurring exploration expenditures during fiscal 2011 through the balance of the fiscal year.  Due to the recent increase in the price of precious metals, we will continue to focus our exploration efforts on those properties we consider highly prospective for gold or silver.  This includes Table Top in Nevada, where a six hole drill program was completed in April, 2011, Diamond Peak in Nevada, where we have secured permits for drilling during 2011, Majuba Hill in Nevada, where we commenced a six hole core drilling program in June 2011 and East Manhattan Wash in Nevada, where we have commenced the drill permitting process.  

23

While conditions in the resource sector have improved since 2009, access to capital is still limited for early stage exploration companies and we will continue to review our project portfolio and may elect to reduce or eliminate exploration expenditures or abandon certain of our properties should we not deem it fiscally prudent to satisfy these obligations when they come due.  

As of June 15, 2011, we have funds on hand of approximately $2.0 Million which is expected to provide sufficient working capital to fund our exploration activities on our remaining properties through fiscal 2011, as outlined in Item 4D below. See “Special Note Regarding Forward Looking Statements”.

4C

Organizational Structure

The Company has only one subsidiary, MAX Resource, Inc., a wholly owned Nevada corporation incorporated in the fiscal year ending December 31, 2005 for the purpose of holding the Company’s mineral interests in Arizona, New Mexico and Nevada and for the purpose of securing work permits on its properties in those jurisdictions.  Throughout this report on Form 20-F, MAX Resource, Inc. and its parent company, MAX Resource Corp., are collectively referred to as the Company.

4.D

Property, Plants and Equipment

WE ARE AN EXPLORATION STAGE COMPANY AND HAVE NO MINERAL PRODUCING PROPERTIES AT THIS TIME.  ALL OF OUR PROPERTIES ARE EXPLORATION PROJECTS, AND WE RECEIVE NO REVENUES FROM PRODUCTION.  ALL WORK PRESENTLY PLANNED BY US IS DIRECTED AT DEFINING MINERALIZATION AND INCREASING UNDERSTANDING OF THE CHARACTERISTICS AND ECONOMICS OF THAT MINERALIZATION.  THERE IS NO ASSURANCE THAT A COMMERCIALLY VIABLE MINERAL DEPOSIT EXISTS IN ANY OF OUR PROPERTIES NOR DO WE ANTICIPATE SAME UNTIL AFTER COMPLETION OF FURTHER EXPLORATION WORK AND A COMPREHENSIVE EVALUATION BASED UPON UNIT COST, GRADE, RECOVERIES AND OTHER FACTORS CONCLUDE ECONOMIC FEASIBILITY.  THE INFORMATION CONTAINED HEREIN RESPECTING OUR MINERAL PROPERTIES IS BASED UPON INFORMATION PREPARED BY OR THE PREPARATION OF WHICH WAS SUPERVISED BY PROFESSIONAL GEOLOGIST, CLANCY J. WENDT,  OUR VICE-PRESIDENT OF EXPLORATION.   MR. WENDT IS A “QUALIFIED PERSON” PURSUANT TO CANADIAN SECURITIES NATIONAL INSTRUMENT 43-101 CONCERNING STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS.

Mineral Properties

Table Top Gold Project (Nevada)

Nature of Interest and Terms of Acquisition

This property consists of 48 claims covering approximately 960 acres located in Humboldt County, Nevada 10 miles west of the town of Winnemucca (the “Table Top Project”).

We hold our interest in this Property under an Option Agreement dated for reference September 1, 2009 with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.   Under the terms of the agreement, we have an option (the “Table Top Option”)  to acquire a 100% interest in the Table Top Gold Project for the sum of US$300,000 (the “Table Top Purchase Price”) and a 3% NSR Royalty, 1% of which can be repurchased for US$1 million.  We are required to make the following rental payments (the “Table Top Rental Payments”) are required in order to maintain the Option in good standing:

24

Date	Payment Amount (USD)
Upon execution of the Agreement (September 1, 2009)	$5,000 (paid)
On the First anniversary of the Agreement (September 1, 2010)	$25,000 (deferred)
On the Second anniversary of the Agreement (September 1, 2011)	$35,000
Each anniversary thereafter	$50,000

The option may be exercised at any time by payment of the Table Top Purchase Price, whereupon we will own 100% of the Property, subject to a 3% NSR royalty, 1% of which can be repurchased for US$1 million (the “Table Top Royalty”).  We are required to make minimum annual advance royalty payments of US$50,000 after exercise of the Table TopOption until commencement of sustained commercial production, with such payments being credited against the Table Top Royalty.  Rental Payments are not credited against the Table Top Royalty or the Table Top Purchase Price, but cease to be payable after the Table Top Option is exercised.

Description, Location and Access:

Table Top consists of 48 claims covering 960 acres all of which are located in Humboldt County, Nevada 10 miles northwest of the town of Winnemucca..  The property was originally comprised of the CJN 1-10 unpatented lode mining claims in section 10, T. 35 N., R. 36 E. Humboldt County, Nevada, under Nevada Mining Claim BLM Numbers  NMC 0998450-0998459 inclusive.  We subsequently staked and now hold the following 38 additional claims:

Name of Claims

BLM Serial Nos              

CJN 19-26

NMC 1009744-1009751

CJN 28

NMC 1009753

CJN 30

NMC 1009755

CJN 32

NMC 1009757

CJN 34

NMC 1009759

CJN 36

NMC 1009761

MXR 1-6

NMC 1017713-1017718

MXR 19-24

NMC 1017731-1017736

MXR 116-138

NMC 1017828-1017850

The property is accessible from Interstate Highway 80 to within 1 mile of the property and by gravel road to the property itself.  

There is no water or electricity available at the property site, with no surface water available within the property boundaries.

25

The following map indicates the location of the Table Top Project in Nevada

History of Exploration and Status:

The Table Top Project is located along the Kings River Rift, a regional geologic feature that appears to control mineralization in the area and which hosts multiple high grade vein-related gold systems.

During the 1980’s Gold Fields, Meridian Minerals and Sante Fe Mining conducted exploration on and around the Table Top Project.  A limited exploration program consisting of only ten reverse circulation drill holes was conducted to test anomalous, up to 1.1 g/t gold values in what was called jasperoid.  Trenches containing gold values up to 4 g/t over 5 feet were tested by the first drill hole, which contained 55 feet of 0.84 g/t Au (0.027 opt) from the surface down.  This hole was drilled vertically in a breccias zone.  The remaining nine drill holes, which were wide spaced (75 – 300 meters apart), contained little of significance.  A follow up analysis showed that the holes may have been drilled in the wrong direction and should have been drilled to the south instead of to the north.

The Table Top Project  is located in the Triassic rocks of the Raspberry formation which can be split into two general types: a north-western belt of sandstone, siltstone, and slate, locally calcareous but devoid of limestone; and a south-eastern belt of calcareous sandstone, siltstone and slate with prominent massive limestone beds 5 to 100 feet thick.  Bedding in these units trend northeast with steep dips to the southeast.

The mineralization in the Raspberry formation is generally in the form of silicification in veinlets and small pods in the limestone but in a few areas there is massive replacement of the limestone by silica.  The silica, where sampled, usually contains gold with values as high as 15.5 g/t.  Stibnite or stibnite casts can be found in the silica.

In April 2010 we conducted a 15 hole drill program at Table Top, drilling a total of 660 meters (2,156 feet).  Of fifteen holes drilled, ten intersected the mineralized structure and contained gold mineralization, including 27.4 meters of 0.467 g/t Au and 3 meters of 1.79 g/t gold.  The zone of mineralization continues for the entire length and is open to the northeast and southwest.  Gold mineralization also appears to increase in value as deeper zones are intersected.   

26

In addition to the 15 holes completed at The Table Top Project, three trenches were dug and sampled near the original drill hole reported by Gold Fields Mining Company that contained 50 feet of 0.027 opt Au.  The current core holes were drilled to be perpendicular to the strike of the mineralized zone and across mineralization which is hosted in a silicified tectonic breccia.  

All significant gold assays are listed below:

Hole	Angle	From (m)	To (m)	Width (m)	Gold (g/t)
MT 1	-45 degrees	6.09	12.2	6.11	0.749
Including		9.1	10.7	1.6	1.436
MT 2	-60 degrees	12.2	39.6	27.4	0.467
Including		27.4	35.0	7.6	0.760
MT 4	-45 degrees	16.7	22.8	6.1	0.614
Including		18.3	21.3	3.0	0.783
MT 5	-75 degrees	21.3	25.9	4.6	0.396
Including		24.4	25.9	1.5	0.794
MT 6	-60 degrees	16.8	21.3	4.5	0.545
Including		18.3	19.8	1.5	1.27
MT 7	- 75 degrees	22.9	24.4	1.5	0.734
MT 8	-45 degrees	10.7	18.3	7.6	0.664
Including		15.3	16.8	1.5	1.290
MT 9	- 75 degrees	28.9	30.4	1.5	0.451
MT 11	-45 degrees	18.3	19.8	1.5	0.558
MT 12	- 75 degrees	32.0	35.0	3.0	1.79
Including		32.0	33.5	1.5	2.562

The drill results at the Table Top Project indicate that MAX may have found a potential mineralized feeder similar to a Carlin Type gold system.  Multi-element geochemical values of arsenic, antimony and mercury are all extremely elevated with respect to background; numerous 1.5 m intercepts exceed 100 ppm arsenic and antimony, with thallium values in excess of 10 ppm.   All of these elevated values are directly associated with elevated (in excess of 100 ppb and as high as 2,562 ppb) gold values.  Silver, tellurium, selenium and base metal values are all low.  Geologic interpretation indicates the zone is a 20 meter to 30 meter wide, northeast striking and southeast dipping structural zone.  Gold and associated trace element mineralization is associated in and surrounding a silicified breccia (jasperoid).   Low grade gold mineralization associated with high grade trace elements is often found to occur in Carlin style gold feeder systems, as have lamprophyre dikes that have also been identified in this zone.  Lamprophyres are often found in Carlin systems and are indicative of deep seated structures where high grade gold deposits have been found in the recent past at Carlin systems (such as Meikle and Deep Star).  These deep targets were tested during drilling conducted in September, 2010.  

During the September program, two holes were drilled to test the down dip extension of the mineralized structure intersected in its earlier program to a new depth in the 250-1000 foot (76.2 – 304.8 meters) zone.  The drilling intersected the previous mineralized structures in both drill holes and confirms that the mineralization extends to depth.

27

Hole	Angle	Total Depth (m)	From (m)	To (m)	Width (m)	Gold (g/t)
MT 14	-70 degrees	120.4	73.1	79.2	6.1	0.53
			100.6	108.2	7.6	0.13
MT 15	-85 degrees	324.5	227.0	239.2	12.1	0.91
	Including		230.1	239.2	9.1	1.09

Hole MT-15 was drilled to a final depth of 1064.5 feet (324.5 m).  There is a very anomalous zone, greater than 97 ppb, from 630 feet to 740 feet in rocks that appear to be very permissive for mineralization.   This zone has not been seen at the surface and opens an additional area for exploration.  Drilling was resumed in March, 2011 targeting the mineralized system down dip and along strike, exploring for higher grade gold within the sedimentary (stibnite and calcite bearing carbonate rocks) package.  

A total of six holes (497 meters) were drilled at Table Top during April 2011, with all holes intersecting gold mineralization in excess of 100 ppb Au    Highlights included drill hole MT-18, which intersected 9.6 m of 1.04 g/tAu starting at a down hole depth of 42.7 m.   Holes MT-16, 17 and 18 intersected multiple intervals of gold mineralization exceeding 100 ppb.  These latter results indicate that gold mineralization is not confined to a single zone; MT-17 had four mineralized zones.  Mineralization has now been identified over a 500 meter strike length and is still open in both directions.  The only drill holes that missed the mineralized zone were found to have been drilled over the top of the system.    

We drilled 5 holes to the northeast of the mineralized structure intersected during drilling in 2010 to test its extension and confirmed that the mineralized zone extends at least another 89.9 m northeast of previous drilling.  Drilling intersected the previously identified mineralized structures in four of five drill holes, with thicknesses comparable to what was earlier recognized.    The sixth hole was drilled 155.1 m southwest of last year’s drilling to follow-up on 1+ g/t Au surface samples   

        Summary of gold intercepts in drill holes MT-16 through MT-21 (cutoff at 0.1 g/t).

Hole	Angle	From (m)	To (m)	Thickness (m)	Grade (Au g/t)
MT-16	-44	19.81	21.34	1.53	0.22
MT-17	-45	27.43	28.96	1.53	0.14
MT-17	-45	32.16	33.07	0.91	0.19
MT-17	-45	33.07	35.66	2.59	0.80
MT-17	-45	35.66	38.10	2.44	0.18
MT-17	-45	39.62	41.15	1.53	0.18
MT-17	-45	42.67	43.95	1.28	0.26
MT-18	-70	38.10	39.62	1.52	0.13
MT-18	-70	42.67	52.27	9.60	1.04
MT-19	-58	67.06	68.12	1.06	0.29
MT-19	-58	109.73	111.25	1.52	1.48
MT-20	-45	23.20	24.38	1.18	0.23
MT-20	-45	46.82	49.99	3.17	0.83
MT-20	-45	82.51	83.82	1.31	0.10
MT-21	-45	33.22	38.10	4.88	0.42

28

This current drill program confirms that previous interpretations are still valid regarding the occurrence of gold mineralization at The Table Top Project.  Gold mineralization continues both northeast and southwest of the previous drilling and remains roughly the same in grade and tenor.  One of the best intersects thus far was found in hole MT-18, with 1.3 m grading 2.33 g/t at 44.20 meters down hole.  It appears that grades, if not the thickness of mineralized zones, increase with depth.  

MAX is currently reviewing the 2010 and 2011 exploration data along with data from prior operators with a view to better understanding the mineralized system at The Table Top Project prior to further drilling.  A viable target still exists along strike to the northeast and southwest and down dip where the vertically standing outcrops bend, creating a zone of structural preparation.  

During the year ended December 31, 2010, the Company incurred consulting fees of $91,048, field expenses of $24,140 and drilling and assay costs of $198,915 at the Table Top Project.

Maintaining the claims in good standing in Nevada:

Under Bureau of Land Management rules for the State of Nevada, all holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 in each calendar year.   These amounts were paid when due prior to August 31, 2010

East Manhattan Wash Gold Project (Nye County, Nevada)

Nature of Interest and Terms of Acquisition

The East Manhattan Wash property (“EMW”) is comprised of 78 claims located 40 miles north of the town of Tonopah, Nevada in the Manhattan Mining District, Nye County, Nevada.

We acquired our interest in this property by agreement dated for reference December, 2007 with MSM LLC, a Nevada corporation granting Max Resource, Inc., our wholly owned Nevada subsidiary, an option to acquire a 100 % interest in the EMW claims.  

Under the terms of the option agreement we are required to make payments to MSM LLC in order to maintain the option in good standing, as follows:

DATE	PAYMENT AMOUNT
Upon execution of the Option Agreement	$28,000 USD (paid)
First anniversary of effective date (December 4, 2008)	$20,000 USD (paid)
Second anniversary of effective date (December 4, 2009)	$25,000 USD (paid)
Third anniversary of effective date (December 4, 2010)	$40,000 USD (paid)
Fourth anniversary of effective date (December 4, 2011)	$50,000 USD
Fifth anniversary of effective date (December 4, 2012)	$100,000 USD

The payments due on the fourth and fifth anniversary are subject to securing a drill permit.

In addition we are required to make exploration expenditures totalling US$700,000 on the EMW claims in the second to fifth years, subject to securing a drill permit, as follows:

DATE	EXPENDITURE REQUIRED
On or before December 4, 2009	$150,000 USD (fulfilled)
On or before December 4, 2010	Further $150,000 USD
On or before December 4, 2011	Further $200,000 USD
On or before December 4, 2012	Further $300,000 USD

EMW is subject to a 3% NSR royalty.  Upon full exercise of the option, we will own 100% of the project.

29

Description, Location and Access:

On November 11, 2007 as amended December 4, 2008 and December 21, 2010, we entered into an option agreement to acquire a 100 % interest in the EMW claims in the Manhattan Mining District, Nye County, Nevada from MSM LLC, a Nevada corporation.   The EMW property is comprised of 78 claims (1,560 acres) located 40 miles north of the town of Tonopah, Nevada.

The EMW claims are accessible by paved road to within 1 mile of the property and by gravel road to the property itself.  

There is no water or electricity available at the property site, with no surface water available within the property boundaries.

The property is comprised of the following claims:

Name of Claims

BLM Serial No’s              

EMW 1-18

NMC 958691-958708

EMW 27

NMC 958717

EMW 29

NMC 958719

EMW 31-35

NMC 958721-958725

EMW 37

NMC 977041

EMW 39

NMC 977042

EMW 41

NMC 977043

EMW 43-68

NMC 977044-977069

EMW 75

NMC 977070

EMW 77

NMC 977071

EMW 79

NMC 977072

EMW 81-100

NMC 977073-977092

EMW 113

NMC 977093

The following is a map of the location of EMW:

30

History of Exploration and Status:

Historically, there has been more than 1,000,000 ounces of gold produced in the Manhattan mining district.   Production has included the nearby Manhattan mine (1974-1990), an open-pit operation that produced 236,000 ounces of gold at an average grade of 0.08 ounces per ton (“opt”).  The Echo Bay East and West Pit deposits operated in the early 1990s, producing 260,000 ounces at an average grade of 0.06 opt.  The Round Mountain Mine (Kinross/Barrick), situated eight miles north of EMW, is a conventional open pit operation that has produced more than 12 million ounces of gold to date.  Recorded placer gold production from the district totals approximately 150,000 ounces from a major dredge operation and small-scale lode mines produced another 100,000 ounces.

The current exploration model suggests that deposits that will be found in the Manhattan District are related to the contact of the Manhattan Caldera Margin and structural intersections.  Gold is also related to the Cambrian-Ordivician Age Sedimentary rocks along the five mile long by one mile wide zone of the Caldera.  What is unique to this occurrence is that it is related to a lithic welded volcanic tuff.  More work is planned to determine how this mineralization is related to the overall normal mineralized gold system in the Manhattan District.  So far, it appears to be quite different and may be quite extensive.

In March 2009, we received the results of the first bulk sample taken from the EMW.  The sample weighed 793 pounds and was crushed to particles of less than 1 mm in size, then processed on a Wilfley Table to concentrate the heavy minerals.  A fired bead produced a gold/silver “button” which weighed 2.67 grams.  This button was analyzed using x-ray analyzer and contained approximately 80% gold and 20% silver.  This is equivalent to 6.1 grams per ton of gold/silver, or 4.9 g/t of gold and 1.2 g/t of silver.

In May of 2009, three large volume soil sampling grids were completed.  The “”Gold Pit Grid”, consists of 30 soil samples of 25 meter spacing over an area of approximately 800 by 200 feet.  The original bulk taken from an existing prospector’s pit on this grid graded at 4.9 g/t gold and 1.2 g/t silver.  The geology of the Gold Pit area consists of lithic rhyolitic and lapilli tuffs.  These tuffs are locally argillically altered with minor local silicification.

The “Old Drill Hole Grid” consists of 58 soil samples taken from an area covering approximately 900 feet by 400 feet which has been drilled by a previous operator.  As with the Gold Pit Grid described above, this grid  is located in a volcanic rhyolite lithic tuff  hosting coarse gold.

The “Gold Shaft Grid” consists of 30 soil samples on 25 meter spacing over an area of approximately 500 feet by 400 feet, with a single line running west from the main part of the grid along a ridge.  This grid is approximately 7,000 feet south of the Gold Pit grid with the geology of the area consisting of high angle, east striking altered inter-bedded phyllites, quartzites and limestones, cut by high angle, northeast striking structures.  The sediments are in contact with granite to the west.  

The Gold Pit” and The “Old Dill Hole” grids were sampled first by clearing a 1 meter by 1 meter area of surface debris, and then removing the organic (A) and root (B) soil horizon.  The sample was collected and consisted of a mixture of soils directly above the bedrock (C horizon) and a portion of the bedrock below the soil.  The sample was sieved to ¼ inch minus and bagged.  The holes ranged from 12 inches to 48 inches in depth.  The “Gold Shaft” holes ranged from 4 inches to 12 inches in depth.  The sampling program was designed to delineate the geometry of the native gold mineralization in these areas.  

Assay results from these samplings were received in July 2009.

In the Old Drill Hole grid, where 30 samples were taken, the values ranged from nil to 0.32 ppm Au.  The mineralized zone is 1200 feet long and 600 feet wide and is open in all four directions.   Further work is now planned to define the full areal extent of mineralization in this zone.  At the Gold Pit grid the area of significant mineralization was 1000 feet long and 250 feet wide.  Again values range from nil to 0.32 ppm Au. The zone is open to the north, east and west and further work is planned for this area, which contains the old prospector’s pit where samplings graded an equivalent of 4.9 g/t Au. The Gold Shaft grid samples did not indicate a mineralized

31

structure or an area of concentrated gold.  No real anomalous values of other trace elements were observed.  Outcrop samples of silicified zones will be sampled at a later date.

In November 2009, additional assay results from a total of 138 samples were received from ALS Chemex Laboratory Group in Reno, Nevada relating to the two main areas of interest, the Gold Pit Grid  and the Old Drill Hole Grid, which samples now indicate are joined.  The sample holes ranged from 12 inches to 48 inches in depth.  Significant values ranging from 0.05 ppm to 1.5 ppm Au were identified.  Results of samples taken from historic prospector pits to the southeast of the Old Drill Hole grid returned high gold values (0.96 g/t) which indicates that the mineralized zone continues and may be linked to another mineralized zone sampled by us further south.  

In September 2010 we completed additional soil sampling at EMW that was designed to further delineate the geometry of the native gold mineralization at EMW, which previously encompassed the “Gold Pit”, the “Old Drill Hole Grid” and now includes the “Southeast Extension”.  This sampling has filled in the open areas within these grids, where 163 new samples were taken with significant values ranging from 0.05 ppm to 1.27 ppm (1.27 g/t) gold.   While the total mineralized zone now exposed at surface encompasses an area in excess of 5,500 by 1,500 feet in size, the mineralized area is much larger but is covered by either overburden or alluvium.   

The Gold Pit, Old Drill Hole Grid and Southeast Extension are located in a volcanic rhyolite lithic tuff hosting coarse gold.  The sampling between the three pits has now enabled MAX to identify structural linear features seen in air photo images along with argillic alteration that appears to define where strong gold values may be found.  Historic pits dug by earlier prospectors have helped to define the areas of mineralization and to confirm the presence of gold.   Permitting is now underway for a core drilling program to determine the depth of the mineralization, extend the known mineralization below cover, and to see if it increases in grade.    See “Special Note on Forward Looking Statements”.

During the year ended December 31, 2010, MAX spent $29,923 on geological consulting, $3,623 on field expenses and $5,202 on drilling and assays at the EMW claims.

Maintaining the claims in good standing in Nevada:

Under Bureau of Land Management rules for the State of Nevada, all holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 in each calendar year.   These amounts were paid when due prior to August 31, 2010

Howell /Crowsnest Gold Project (British Columbia):

Due to a change in policy by the Government of British Columbia resulting in a moratorium on exploration in the area, we ceased exploration on this property and are in the process of negotiating payment of compensation with the government.

Nature of Interest and Terms of Acquisition

The Howell /Crowsnest Gold project is comprised of the Howell property, located one hour south of the town of Sparwood (by gravel road) in Southeast B.C., and the Crowsnest Property, which is located approximately 10 km southeast of the Howell property.  

We acquired our interest in the Howell Gold/Crowsnest Project pursuant to an option agreement dated for reference June 9, 2008, as amended July 24, 2009.  Under the terms of the agreement, as amended, we have the right to earn a 60% interest in the Howell Property and/or the Crowsnest Property projects over a four year period (the “Howell Crowsnest Options”). Eastfield has the right to earn a 100% interest in the Howell property through an amended 1999 option agreement with TCML and GI by completing outstanding commitments include a final exploration expenditure totaling $423,759 and cash payments of $100,000 to each of TCML and GI due by August 31, 2010.  Eastfield holds the Crowsnest Property directly.  

32

Under the terms of our option agreement (as amended), we are required to make the following payments and share issuances to Eastfield in order to keep the Howell/Crowsnest Option in good standing:

Property	Date	Cash Payment Amount	Issuance of Shares
Combined Howell Property & Crowsnest Property	On signing amending agreement (July 24, 2009)	$10,000 (paid)
	On signing amending agreement (July 24, 2009)		50,000 common shares (Issued)
	On or before 1st anniversary date (June 30, 2010)	$20,000	OR 50,000 common shares
	On or before June 30, 2011	$30,000
Howell Property	On or before August 31, 2010	$120,000
Howell Property	On or before June 30, 2012	$40,000	200,000 Common shares
Crowsnest Property	On or before June 30, 2012	$40,000	200,000 Common shares
Howell Property	On or before June 30, 2013	$50,000	200,000 Common shares
Crowsnest Property	On or before June 30, 2013	$50,000	200,000 Common shares

*our portion of the $200,000 payment due to GI and TCML by August 31, 2010 pursuant to Eastfield’s underlying agreement with them.

In addition we are required under the agreement to make exploration expenditures as follows:

In the first and second years, $400,000 on the combined Howell and Crowsnest properties  as follows:

·

on or before June 30, 2010, $150,000; (completed)

·

on or before June 30, 2011, a further $250,000;

In the third and fourth years, $701,000 on the Howell Property as follows:

·

on or before June 30, 2012, $1.00

·

on or before June 30, 2013, a further $700,000

In the third and fourth years, $1,050,000 on the Crowsnest Property as follows:

·

on or before June 30, 2012 $350,000

·

on or before June 30, 2013, a further $700,000.

Howell Property

The Howell Property is comprised of 4,760 hectares in Southeast B.C. located one hour by gravel road south of the town of Sparwood, straddling the drainages of Twenty-Nine Mile Creek and Howell Creek.   The property is 40 kilometers south of the Elk Valley Coal Mine and can be accessed via all-weather logging haul roads and secondary logging roads that cut through the middle of the property.

There is no electricity available at the property site, with surface water abundant within the property boundaries.  

The following map indicates the location of the Howell Property in Southeastern British Columbia:

33

All Howell claims are in the Fort Steele Mining Division of British Columbia.  The claim numbers are as follows:

Claim Name	Record #	Area (Hectares)	Expiry Month	Expiry Year
Howell 1	209981	500	1-Nov	2011
Howell 2	209982	500	1-Nov	2011
Howell 3	209983	500	1-Nov	2011
Howell 4	210011	500	1-Nov	2010
Howell 5	210012	200	1-Nov	2010
Ysoo	366755	450	1-Nov	2010
Ysoo 2	537475	528	20-Jul	2010
Ysoo 3	537488	127	20-Jul	2010
Howell 6	530467	527	24-Mar	2010
Howell 7	530473	527	24-Mar	2010
Howell 9	537493	401	20-Jul	2010
		4,760

Maintaining the claims in good standing in British Columbia:

The Province of British Columbia requires that exploration work in the amount of $4.00 per hectare per year be completed on a claim in the first three years of a claim’s existence.  The amount of assessment work required to keep the claims in good stead increases to $8.00 per hectare per year after the third anniversary. An equal amount of cash may be paid in substitution to exploration expenditures (cash in lieu).  Excess expenditures incurred in any year can be filed up to an amount that moves the expiry date ten years into the future.  A filing fee of $0.40 per hectare per year is also required.  

34

The majority of the Howell Property are now past their 3^rd anniversary and the amount of exploration required to advance the expiry dates of all the Howell claims by one year is $38,080 plus a filing fee of $1,904.   The Howell Property currently has assessment work credits filed on it which satisfies British Columbia requirements for varying expiry dates by claim during2010 and 2011 in accordance with the expiry dates listed in the preceding table.

History of Exploration and Status:

The Howell Project  is underlain by a thick sequence of Paleozoic limestones and sedimentary rocks and older Proterozoic sediments.  Mid-Cretaceous intrusions occurring as sills, dykes, plugs and diatremes intrude these units.  Gold mineralization occurs disseminated in limestone and with quartz stockworks in syenite intrusives and Proterozoic sediments.  Prior drilling has included 1.23 g/t gold over 58 metres, 0.95 g/t gold over 39 metres, 0.65 g/t gold over 82 metres, and 0.57 g/t gold over 149 metres.  A diamond drill hole from 2006, collared to the west of the surface expression of the important Palaeozoic limestone, penetrated a near surface fault and intersected 43 metres grading 0.42 g/t gold to the bottom of the hole at 66 metres.  Hole HW-606 effectively expands the prospective area for the target model.  The last sample in this hole graded 0.44 g/t gold indicating a need to drill deeper and test the target along strike; the first hole of the 2008 drill program will deepen this hole to approximately 200 metres.

Prior exploration at the Howell Property  has included 6,197 metres of drilling in 49 holes.  Several holes have also intersected significant “manto style” silver-lead-zinc intercepts in limestone.  These include 15.3 g/t silver , 0.40% lead and 2.40% zinc over 7.5 metres and 51.5 g/t silver, 1.98% lead, 1.87% zinc, and 0.32 g/t gold  over 7.6  metres.  An important additional target which will be tested during the 2008 drill program is Carbonate Replacement Deposit (“CRD”) style mineralization in the general vicinity of hole HRC-15 (located 1,100metres to the west of the first hole of the current program), drilled by Placer Dome Inc. in 1988, which intersected 7.6 metres grading 51.5 g/t silver, 1.98% lead, 1.87% zinc, and 0.32 g/t gold.   This CRD style mineralization has not been actively explored at Howell during past exploration efforts.  

Drilling commenced at the Howell Property on July 21, 2008.  Twelve diamond drill holes were completed totaling 1,312 metres of NQ core and two new soil grids were established.  Two distinct styles of mineralization were targeted; carbonate hosted gold and CRD.

The highlights of the 2008 drill program were as follows:

Hole	From (m)	To (m)	Width (m)	Gold g/t
HW-08-06 ext	23.7	204.0	180.7	0.26
Including	23.7	74.0	50.7	0.47
HW-08-07	88.1	92.0	3.9	0.65
And	132.0	138.0	6.0	0.53
HW-08-09	8.5	129.0	120.5	0.30
Including	8.5	30.5	22.0	0.78
HW-08-10	8.0	10.0	2.0	0.79
HW-08-15	23.3	68.0	44.7	0.41
Including	23.3	44.0	20.7	0.53

No CRD mineralization was identified in drill core during the 2008 drill program although one of the soil grids (the southeastern grid) is believed to indicate such mineralization with a number of samples collected in 2008 returning very anomalous values in gold, silver, zinc and lead including values to 130 g/t silver and 1.4% lead in soil.  Holes HW-08-12 and HW-08-13 were drilled during the current program to test for CRD mineralization in the area where reverse circulation hole HRC-15, drilled by Placer Dome in 1988, had intersected 7.6 metres of apparent CRD mineralized dolomite grading 1.5% zinc, 1.4% lead, and 53.2 g/t silver.  Holes HW-08-12 and HW-08-13 were lost at 35 and 86 metres respectively, which was well short of the target depth, due to drilling difficulties.  

35

A number of additional targets exist at the Howell Property including a stockwork quartz system in limestone that has returned up to 3 grams gold in previous sampling and will be considered for further work in 2009.  Of the 119 samples collected in 2008 on the southeastern grid, which is 1.5 kilometres to the south of the 2008 CRD drill targets, 16 exceeded 100 ppm gold (maximum 714 ppb), 27 exceeded 500 ppm zinc (maximum 9,527 ppm) and 9 exceeded 400 ppm lead (maximum 14,000 ppm).  The southeastern grid was established in 2008 to fill in an area to the north of manto style zinc, lead, silver mineralization which was identified during reverse circulation drilling completed by Placer Dome in 1988 (HRC-2 with 7.5 metres grading 2.4% Zn, 0.40% Pb and 15.3 g/t Ag).  Reconnaissance prospecting in this area, completed by Eastfield in 1999, sampled a 300 metre northeast trending syenite intrusive that returned a value of 2.75 grams gold from the single sample collected.  Review of a subsequent airborne geophysical survey completed in 2004 highlighted this feature.

Crowsnest Property

The Crowsnest Property is comprised of 3,269 hectares in Southeast B.C. located one and one half hours by gravel road south of the town of Sparwood, and is located approximately 10 km southeast of the Howell Property.   The property can be accessed via all-weather logging haul roads and secondary logging roads that cut through the middle of the property.

There is no electricity available at the property site, with surface water abundant within the property boundaries.  

The following map indicates the location of the Crowsnest Property in Southeastern British Columbia:

36

All Crowsnest Property claims are in the Fort Steele Mining Division of British Columbia.  The claim numbers are as follows:

Claim Name	Record #	Area (Hectares)	Expiry Month	Expiry Year
Aubyrd 4	406552	375	October 31	2012
Aubyrd 5	406551	500	October 31	2012
Aubyrd 6	406550	500	October 31	2012
Aubyrd 7	406553	250	October 31	2012
Aubyrd 8	406554	150	October 31	2012
Aubyrd 9	406555	500	October 31	2012
Crowsnest Lookout	504310	317	January 19	2012
Crowsnest Revenge	504297	85	January 19	2012
Connector	517530	127	July 12	2012
Lower Connector	520838	63	October 6	2010
Connector	631166	275	September 9	2012
Crowhop	596987	105.7	January 5	2012
Hole In One	601795	21.1	March 28	2012
TOTAL AREA		3,269 hectares

Maintaining the claims in good standing in British Columbia:

The Crowsnest Property consists of thirteen claims totaling 3,269 hectares. All claims have sufficient assessment work filed to cover the claims until 2012.  The Province of British Columbia requires that exploration work in the amount of $4.00 per hectare per year be completed on a claim in the first three years of a claim’s existence.  The amount of assessment work required to keep the claims in good stead increases to $8.00 per hectare per year after the third anniversary. An equal amount of cash may be paid in substitution to exploration expenditures (cash in lieu).  Excess expenditures incurred in any year can be filed up to an amount that moves the expiry date ten years into the future.  A filing fee of $0.40 per hectare per year is also required.  Most of the Crowsnest claims are past their third year and consequently an exploration expenditure of $12,152 plus a filing fee of $1,307.60 is required to advance the dates for each year beyond 2012.

History of Exploration and Status:

Gold mineralization of the Crowsnest Property occurs in limestone, siltstone or syenite.  The property is underlain by a thick sequence of Pennsylvanian and Mississippian carbonate and clastic rocks, of which the Mississippian Rundle Group shows the greatest exposure.  Mid-Cretaceous syenite and trachyte intrusions as sills, dykes, plugs and possible diatremes intrude these units.  

Prior exploration at the Crowsnest Property has included many samples of float and rubble on the “B” Grid which has returned extraordinarily high gold analysis.  This includes a float sample collected in 1989 by Placer Dome Inc. in, which is described as an intrusive breccias that returned a gold assay of 524.41 g/t gold ≈ 15.2 ounces per ton.  Other high grade float samples have returned assays to 620.0 g/t gold ≈ 18.0 ounces per ton.    

We conducted a due diligence site visit at the Crowsnest Property to review previous field work and to assess the potential of the property in June 2009.  

An exploration permit was issued in August 2009 which allowed us to move forward with our 2009 drill program at the Crowsnest Property.  This drill program included a total of 26 reverse circulation drill holes and two new trenches.  The trenches were sampled and drilled to the west of the original Discovery Trench area.

37

Significant gold assays returned from the 2009 drill program are as follows:

Hole	Angle	From (m)	To (m)	Width (m)	Gold g/t
RC 09-2	-60	0	3.0	3.0	3.52
Including		0	1.5	1.5	6.67
RC 09-5	Vertical	0	3.0	3.0	3.55
Including		1.5	3.0	1.5	6.40
RC 09-6	-60	0	6.5	6.5	6.34
Including		1.5	3.0	1.5	16.52
RC 09-7	Vertical	0	6.1	6.1	19.03
Including		0	1.5	1.5	50.26
Including		1.5	3.0	1.5	23.60
RC 09-9	Vertical	0	1.5	1.5	2.49
RC 09-14	Vertical	0	1.5	1.5	2.07
RC 09-16	Vertical	0	3.0	3.0	5.42
Including		0	1.5	1.5	6.65
RC 09-21	-60	16.8	18.3	1.5	3.42
RC 09-25	Vertical	0	3.0	3.0	2.51
Including		1.5	3.0	1.5	3.14

In December 2009 we received the results of the Metallic Screen assays conducted by Acme on all samples from our reverse circulation drill program at the Crowsnest Property.  Our previously reported findings were verified by this assay, including those from hole RC 09-7 (19.03 g/t Au over 6.1 m., including 1.5 m. of 50.26 g/t Au).  Significant gold assays (over 2 g/t Au) are listed below:

Hole	Angle	From (m)	To (m)	Width (m)	Gold g/t
RC 09-2	-60 degrees	0	3.0	3.0	3.52
Including		0	1.5	1.5	6.67
RC 09-5	vertical	0	3.0	3.0	3.55
Including		1.5	3.0	1.5	6.40
RC 09-6	-60 degrees	0	6.5	6.5	6.34
Including		1.5	3.0	1.5	16.52
RC 09-7	vertical	0	6.1	6.1	19.03
Including		0	1.5	1.5	50.26
Including		1.5	3.0	1.5	23.60
RC 09-9	vertical	0	1.5	1.5	2.49
RC 09-14	vertical	0	1.5	1.5	2.07
RC 09-16	vertical	0	3.0	3.0	5.42
Including		0	1.5	1.5	6.65
RC 09-21	-60 degrees	16.8	18.3	1.5	3.42
RC 09-25	vertical	0	3.0	3.0	2.51
Including		1.5	3.0	1.5	3.14

An additional 6 drill holes returned values ranging from 0.5 g/t to 1.86 g/t Au over minimum 1.5 meter intervals.  In addition, we had planned to conduct an extensive exploration program during 2010, to extend the area of high grade mineralization at the Crowsnest Property with new targets identified and a review of historic data, however, on February 9, 2010 the Government of the Province of British Columbia announced that it intended to halt all ongoing exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  Accordingly, we will not be able to conduct any further exploration or development work on the property nor will we be able to sell our interest in the property to third parties.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.  No prospective compensation has been quantified or agreed to at this time.  

38

Ravin Molybdenum/ Tungsten Property (Lander County, Nevada)

Nature of Interest and Terms of Acquisition

The Ravin molybdenum/tungsten property in Lander County, Nevada (the “Ravin Property”) is comprised of 50 claims located 20 miles north of the town of Austin in Central Nevada.  We acquired our interest in this property by agreement dated for reference September 10, 2007, as amended November 9, 2010, with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration granting us an option to acquire a 100 % interest in the Ravin Property for the sum of US$300,000 (the “Ravin Option”).  

The following rental payments (the “Ravin Rental Payments”) are required in order to maintain the Ravin Option:

Date	Payment Amount
Upon execution of the option agreement	$5,000.00 USD (paid)
First anniversary of effective date (September 10, 2008)	$25,000.00 USD (paid)
Second anniversary of effective date (September 10, 2009)	$35,000.00 USD (paid)
Each anniversary thereafter (subject to increase to $US50,000 on certain triggering events)	$10,000.00 USD (paid)

The Ravin Option may be exercised at any time by payment of the Ravin Purchase Price and grant of a 3% NSR, 1% of which can be repurchased for US$1 million (the “Ravin Royalty”).  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such payments being credited against the Ravin Royalty.  The Ravin Rental Payments are not credited against the Ravin Royalty or the Ravin Purchase Price, but are not payable after the Ravin Option is exercised.

Description, Location and Access:

The Ravin Property is a historic Freeport/Huston Oil and Minerals Metal property that was explored during the late 1970’s and early 1980’s.  The property is comprised of the following 50 claims:

Name of Claims

BLM Serial Nos              

MOLY 20

NMC 964209

MOLY 22

NMC 964211

MOLY 24

NMC 964213

MOLY 26

NMC 964215

MOLY 28

NMC 964217

MOLY 30

NMC 964219

MOLY 32

NMC 964221

MOLY 67-90

NMC 964256-064279

MOLY 115

NMC 964304

MOLY 117

NMC 964306

MOLY 119

NMC 964308

MOLY 121

NMC 964310

MOLY 123

NMC 964312

MOLY 125-138

NMC 964314-964327

The Ravin Property is located 20 miles north of the town of Austin, Nevada and is accessible by paved road to within 5 miles of the property and by gravel road to the property itself.  

39

The following is a map of the location of the Ravin Property:

There is no water or electricity available at the property site, with no surface water available within the property boundaries.  See “Principal Expenditures and Divestitures”.  

Our 2008/2009 drilling program at the Ravin Property commenced on July 10, 2009.  Due to a serious lack of water in the area and a loss of circulation during drilling due to silicified and broken quartz breccia the core results for the first three diamond drill holes were poor, and we encountered drilling delays and additional costs.  An additional 5 drill holes were completed at the Ravin Property using a reverse circulation drill. Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  Due to the ongoing water problems lost circulation and poor recoveries encountered, the high grade mineralization of Molybdenum reported at a depth of 790 feet by a previous operator was not tested, and we terminated drill hole DDH-08-04 early.

History of Exploration and Status:

Strong surface molybdenum and tungsten mineralization occurs within Cambrian sediments which have been intruded by two separate Cretaceous granitic to quartz monzonite plutons.  The Raven Pluton is the largest and crops out over an area of about 2 square miles.  The smaller Cadro Pluton crops out over a ½ square mile area in the northwest part of the project.  The Cadro Pluton appears to be responsible for a majority of the hydrothermal alteration and molybdenum mineralization seen on the project.

Historically, the property had been explored by Union Carbide, Houston Oil and Minerals and Freeport Exploration.  Union Carbide drilled three core holes with the deepest hole drilled to a depth of 500 feet.   Houston Oil subsequently acquired the property in 1978 and drilled six core holes in the Reward tungsten pit.  As part of a regional rock and soil geochemistry program, Houston Oil identified a coherent molybdenum soil anomaly.  They drilled two diamond drill holes and the best intercept encountered was 40 feet of 0.66% Mo.   

Freeport optioned the property in 1981 and drilled 17 rotary and core drill holes to test a molybdenum-copper-fluorine anomaly found within the Cambrian sedimentary units.  The anomalous zone showed strong structural control and is thought to be associated with the contact zone of the Cadro Pluton.  Some of the historic drill holes exist in the form of reports and summaries of the drilling, exploration, drill logs and assays but none of the original assay sheets are available.  

40

All but 4 drill holes encountered molybdenum mineralization and highlights included:

Drill Hole

Interval

Width

Grade

Rw 80-2, 81-2c

600-650 feet

50 feet

0.053% MoS2

800-900 feet

100 feet

0.047% MoS2

Rw 80-7

100-350 feet

250 feet

0.105% MoS2

Rw 81-11c

150-350 feet

200 feet

0.052% MoS2

Rw 81-13c

550-800 feet

250 feet

0.052% MoS2

1650-1700 feet

50 feet

0.055% MoS2

Rw 81-14c

600-650 feet

50 feet

0.051% MoS2

The above historic information provided is for reference only and the reader should not infer or assert that the information is correct, reliable, relevant or accurate and should not be relied upon.

Diamond drilling commenced in July, 2008 at the Ravin Property and was hampered by lack of water in the area and loss of circulation during drilling due to drilling through silicified and broken quartz breccia, resulting in poor core results for the first three diamond drill holes, drilling delays and additional costs.  An additional 5 drill holes were completed at the Ravin Property in October 2008 using a reverse circulation drill.  Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  

Results of 2008 Diamond Drill Holes

Drill Hole Number	From/To (Feet)	Interval (Feet)	Mo%
DDH 08-04	109.6 – 146.4 146.4-156.3 156.3-174.6 210.0-213.2 275.4-276.6 292.0-295.0 320.0-341.5 405.0-421.4 441.6-451.2 471.0-477.0 484.1-502.1	36.8 9.9 18.3 3.2 1.2 3 21.5 16.4 9.6 6 18	0.0983 0.0489 0.2133 0.1046 1.397 0.7368 0.0884 0.0832 0.0713 0.0616 0.0466
DDH 08-8 Includes	565-575.8 699.0-709.4	10 10	0.0945 0.1024
DDH 08-11	36.8-47.0 51.8-57.0 90.0-93.5 167.3-188.6 226.8-230.8 274.4-281.9 317.4-331.1 344.8-350.6 387.5-392.7 407.7-411,4 476.3-479.0 494.7-498.0	10.2 5.2 3.5 21.3 4 7.5 13.7 5.8 5.2 4.3 3 3.3	0.0476 0.0571 0.0653 0.0549 0.1848 0.0766 0.0336 0.0622 0.0850 0.1265 0.2059 0.1875

41

Results from Reverse Circulation Drilling

Drill Hole Number	From/To (feet)	Interval (feet)	Mo%	Cu%
RC 08-02 Includes	0-500 10-20 0-50 400-450 0-100 350-500 375-385	500 10 50 50 100 150 10	0.022 0.09 0.045 0.066 0.031 0.034 0.14	0.039 0.06 0.04 0.097 0.07
RC 08-03 Includes	0-200 50-100 250-300	200 50 50	0.055 0.061 0.026	0.062
RC 08-05	0-540		0.02	0.03
RC 08-07 Includes	0-300 50-100 250-300	300	0.016 0.023 0.03
RC 08-09 Includes	0-350 0-50 50-150	50 100	0.025 0.032 0.042	0.019 0.029

Our 2009 drilling program at the Ravin Property commenced on July 10, 2009.  Due to a serious lack of water in the area and a loss of circulation during drilling due to silicified and broken quartz breccia the core results for the first three diamond drill holes were poor, and we encountered drilling delays and additional costs.  An additional 5 drill holes were completed at the Ravin Property using a reverse circulation drill. Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  Due to the ongoing water problems lost circulation and poor recoveries encountered, the high grade mineralization of Molybdenum reported at a depth of 790 feet by a previous operator was not tested, and we terminated drill hole DDH-08-04 early.

The water problems encountered during the 2007 and 2008 drilling seasons have been resolved and with a program of loss circulation to increase recoveries, further work, which may include drilling, will be considered when the market price for molybdenum warrants.   See “Special Note on Forward Looking Statements”.

Maintaining the claims in good standing in Nevada:

Under Bureau of Land Management rules for the State of Nevada, all holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 in each calendar year.   These amounts were paid when due prior to August 31, 2010

Diamond Peak Property (Nevada)

Nature of Interest and Terms of Acquisition

We acquired our interest in this property pursuant to an option agreement (the “Diamond Peak Option Agreement”)  dated for reference May 9, 2006 and amended September 30, 2009, with the Wendt Family Trust of Reno, Nevada granting us an option (the “Diamond Peak Option”) to purchase a 100% interest in the FMC claims in Eureka County, Nevada, (the “Diamond Peak Property”) for the sum of US$300,000 (the “Diamond Peak Purchase Price”) plus a 3% NSR, 1% of which can be repurchased for US$1 million (the “Diamond Peak Royalty”).   The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration.   

42

Under the terms of the Diamond Peak Option Agreement, we issued 100,000 shares of the Company to the Wendt Family Trust and must make the following rental payments (the “Diamond Peak Rental Payments”) in order to maintain the Diamond Peak Option:

Date	Payment Amount (U.S funds)
Upon execution of the option agreement (May 9, 2006)	$25,000 (paid)
First anniversary of effective date (May 9, 2007)	$35,000 (paid)
Second anniversary of effective date (May 9, 2008)	$45,000 (paid subsequent to the period)
Third anniversary of effective date (May 9, 2009)	$50,000 (paid subsequent to the period)
On June 30, 2010 upon execution of the amending agreement	$25,000 (paid)
On May 9, 2011 (as amended)	$35,000
On May 9, 2012 (as amended)	$35,000
Each anniversary thereafter for 4 years (as amended)	$50,000

The Diamond Peak Option may be exercised at any time by payment of the Diamond Peak Purchase Price and grant of the Diamond Peak Royalty.  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such payments being credited against the Diamond Peak Royalty.  The Diamond Peak Rental Payments are not credited against the Diamond Peak Royalty or the Diamond Peak Purchase Price, but are not payable after the Diamond Peak Option is exercised.

We entered into a mineral property option agreement on May 15, 2006, amended effective September 30, 2009, with Kokanee Placer (the “Kokanee Option”) whereby we granted to Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property in consideration of a cash payment of US$25,000 (paid) and the issuance of 100,000 common shares of “Kokanee Minerals Inc.” (“Kokanee”) (received subsequent to December 31, 2009), a public company (TSX V Symbol KOK) which exchanged its shares for Kokanee Placer in conjuction with its public listing (completed in January, 2010).  

To maintain this agreement in good standing, Kokanee had agreed to make the following annual payments and share issuances to the Company:

-

By May 15, 2007 pay US$35,000 to the Company (received);

-

within five days after listing of Kokanee’s common shares on the TSX Venture Exchange, pay US$95,000 and issue 500,000 Kokanee shares to the Company (received); and

-

On or before May 9, 2010 and on each anniversary thereof up to and including May 9, 2016, pay US$50,000 to the Company; and

-

On commencement of commercial production, issue 1,000,000 Kokanee shares to the Company;

The Kokanee Option was also subject to Kokanee completing $1,000,000 in exploration on the Diamond Peak Property over a three year period.

In June 2010 Kokanee advised us that they would not be making the US$50,000 payment then due and would be abandoning their option.  We subsequently obtained a quit claim deed from Kokanee with respect to the property and their interest in the property has been extinguished, subject to Kokanee's continuing obligation for the cost of reclamation resulting from their work on the property.  We have reviewed all work conducted by Kokanee and conducted soil sampling and constructed roads and drill pads at the Diamond Peak Property in preparation for drilling during 2011.   

Description, Location and Access:

The Diamond Peak Property is comprised of  48 unpatented lode mining claims located 32 miles north of the town of Eureka, Nevada and the Archimedes gold deposit owned by Barrick Gold Corporation.  It is accessible by 50 miles of improved dirt road and partial pavement north from Eureka, Nevada, and from Elko south by 40 miles of pavement and 22 miles of dirt road.  The area supports a strong horse population; many trails crisscross the project area.

43

There is no water or electricity available at the site.  Some surface water is available, as streams flow year round through canyons which traverse the property in the center and southern portions of the claim block.    

The Diamond Peak Property is comprised of the FMC 31-49, and 57-75 unpatented lode mining claims represented by Bureau of Land Management Nevada Mining Claim numbers NMC 887137-887155 and NMC 887156-887174 inclusive as well as the LS86-95 unpatented lode mining claims represented by Bureau of Land Management Nevada Mining Claim numbers NMC 937603-937612.   See “Principal Expenditures and Divestitures”.

The following map shows the location of the Diamond Peak Property:

44

History of Exploration and Status

The Diamond Peak Property is a historic MK Gold Gold/Base Metal property that was explored during the late 1990’s and is located at the southern end of the prolific Carlin trend, which contains numerous gold deposits.  The property comprises 38 claims located 32 miles north of the town of Eureka, Nevada.  Strong surface mineralization occurs in a 2 mile long band of silicified and intensely clay altered rocks, 200 to 300 feet wide, on the hanging wall side of a major north striking normal fault, called the West Fault.

During the work done by MK Gold in 1999, which included 17 holes and 10,085 feet of drilling, MK Gold encountered significant values of gold and base metals that included:

5 feet of 0.067 oz/st Au in hole DV 99-4 ; 5 feet of 0.062 oz/st Au in hole DV 99-5; and 11.6 % of Zinc over 5 feet within 60 feet of surface along the West Fault in the Chainman formation in hole DV 99-15.  

The above historic information provided is for reference only and the reader should not infer or assert that the information is correct, reliable, relevant or accurate and should not be relied upon.

Although no extensive intervals of mineralization were encountered, the drilling did indicate that more work was needed to find an economic mineralized system.  The recommendations by MK Gold were to continue exploration and drill deep (>2,000 foot) diamond drill holes to the Web and Joana formations.

At the time, the base metal values were not considered as important and were not part of further considerations.  Current prices of zinc, silver, and lead make this a very important target for further exploration.  There are three intrusives that contain significant base and precious metal signatures along their edges.  These have not been drilled and could contain skarn mineralization that may be economic.  Future exploration would include conducting geophysical surveys to better define the intrusive contacts and define drill targets for future work.   

We entered into a mineral property option agreement on May 15, 2006, which was subsequently amended as of September 30, 2009 with Kokanee Placer Ltd. (“Kokanee”), particulars of which are described above under the heading “Nature of Interest and Terms of acquisition”, whereby we granted to Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property.

Kokanee completed a program of exploration on the Diamond Peak Property in 2006 in order to satisfy their first year obligation of $100,000 in expenditures.   This initial exploration program included an induced polarization survey over 4 kilometers of strike length.  The results of this survey were used to identify drill targets for a drill program to be undertaken on completion of Kokanee’s listing on the TSX-Venture Exchange in January 2010.  Kokanee drilled two holes at the Diamond Peak Property in May 2010 and subsequently advised us that they did not intend to make the US$50,000 option payment then due and would be abandoning their option on the property.  They have provided us with all their data on the property as well as the drill core from the two holes they drilled but did not elect to assay.  We subsequently assayed this drill and found that one of these holes, DP-02, contained an intercept of 0.588 g/t gold over 7.62 meters (25 feet) beginning at 155 feet, inclusive of a higher grade zone of 1.359 g/t gold over 1.52 meters (5 feet).  Hole DP-02 was a vertical hole drilled at the same location as a 60 degree angle hole drilled by MK Gold in 1999 that reported 2.08 g/t Au over 5 feet.  

In September 2010 we conducted an extensive soil sampling program at the Diamond Peak Property.  A total of 375 samples were collected, with assay results as high as 5.8 g/t Ag, 4.3 g/t Ag and 3.2 g/t Ag in soils confirming the high silver zone in the southern part of the property and its continuation to the east.     In addition, an outcrop sample recently taken from the silver zone in the southern portion of the property has returned an assay grade of 53.5 g/t silver.   Gold values to 90 ppb Au were obtained that confirm many of the gold zones previously examined and have also identified a new zone on the west side of the northern part of the property that has not yet been drilled.   Zinc values were returned as high as 648 ppm Zn that indicate that the mineralized system is far larger than originally thought, extending to the east of both the gold zone in the northern portion of the property and the silver zone in the south.   Zinc geochemistry along the northeastern side of the property remains open and contains values greater than 200 ppm Zn along 600 feet of strike length.

45

MAX intends to explore all of these areas during drilling in 2011.  Drill permits have been received and roads and drill pads have been cleared at the Diamond Peak Property, with drilling to begin as soon as a drill rig becomes available.

Maintaining the claims in good standing in Nevada:

Under Bureau of Land Management rules for the State of Nevada, all holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 in each calendar year.   These amounts were paid when due on August 31, 2010.

C de Baca Project (New Mexico)

Nature of Interest and Terms of Acquisition

We acquired our initial interest in the C de Baca Project by agreement dated for reference September 2005 with Applied Geological Services, Inc. of Denver, Colorado for the acquisition of a total of 108 uranium exploration claims (the “Dat Claims”) in Socorro County, New Mexico.  Consideration for the acquisition of the Dat Claims (known also as the “C de Baca Project”) was an immediate US$10,000 cash payment with annual payments of US$10,000 until production.  After production, a royalty of 2% of revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  The obligation to make payments to Applied Geologic Services can be terminated at anytime by us by providing notice that we are abandoning the Dat Claims and agreeing to transfer them back to the vendor.  

Description, Location and Access:

The C de Baca Project is located approximately 14 miles north of the town of Magdalena and 100 miles south of the town of Albuquerque, New Mexico.  The claims have excellent road access by both gravel and cross county roads.  All of the claims are located on U.S. Forest Service Lands.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.

The C de Baca Project was originally comprised of 108 unpatented lode mining claims, the DAT 1 to DAT 108 claims, represented by Bureau of Land Management New Mexico Mining Claim numbers NMMC 172161-172268 and NMMC 887156-887174 inclusive.  These claims were recorded on October 6, 2005.  The project size was expanded in 2008 through our staking of an additional 83 unpatented lode mining mineral claims along the northern and southern boundaries of our current claim block at C de Baca, bringing our total holdings to 191 claims.  The additional 83 claims, the DAT 109 to 191, were recorded on March 18, 2008 and are represented by Bureau of Land Management New Mexico Mining Claim numbers NMMC184704 to NMMC184786 inclusive. In 2010, the number of claims was reduced to include only the following claims:  

Name of Claims  BLM Serial Nos

DAT 15-46  NMC 172174-172206

DAT 69   NMC 172229

DAT 71   NMC 172231

DAT 73   NMC 172233

DAT 75   NMC 172235

DAT 77   NMC 172237

DAT 79   NMC 172239

DAT 81   NMC 172241

DAT 83   NMC 172243

DAT 85   NMC 172245

DAT 87   NMC 172247

DAT 89   NMC 172249

DAT 91   NMC 172251

DAT 93   NMC 172253

DAT 95   NMC 172255

DAT 97   NMC 172257

DAT 99   NMC 172259

46

The following map shows the location of the C de Baca Project:

Maintaining the claims in good standing in New Mexico:

Under Bureau of Land Management rules for the State of New Mexico Office, all locators and holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 of each calendar year.   This amount was paid in August, 2010.

History of Exploration and Status:

The C de Baca Project was explored during the early 1980’s by OxyMin, a wholly-owned subsidiary of Occidental Petroleum.  The uranium host is a 3500+ foot wide south-trending sequence of strongly reduced braided stream deposits grading into a system of alluvial fan and flood plain sediments.  This geochemically well-defined depositional trend favors uranium deposition along the margins of the system where the reduced (altered) sands range in thickness from 150-200 feet.  During the exploration, 216 drill holes were drilled in specific areas of the claim block and roughly defined the eastern limits of the favourable system.   

47

The best drill hole had 7.5 feet of 0.20 U3O8 at a depth of 291 feet.  Due to the geological formations in the area, OxyMin felt that the property may be amenable to “in-situ leaching, subject to further exploration.

On May 21, 2007, we commenced a 14 hole rotary drill program at C de Baca Project and, on June 5, 2007, we announced the results from the first drill hole, CDB-1.  These results confirmed a historic drill result achieved by Oxymin of 5.5 feet of 0.043% eU308 at 300 feet and a second mineralized zone of 4 feet of 0.024% eU3O8 at 317 feet down hole.

The results reported by us at CDB-1 were through gamma ray probe readings by Jet West Geophysical Services LLC of Farmington, New Mexico and include:

Hole #

Total Depth

Interval

Mineralization

CDB-1

378.0 feet

300-305.5

0.043% eU3O8

Containing

301.0-301.5

0.06% eU3O8

Containing

301.5-302.0

0.10% eU3O8

Containing

302.0-302.5

0.09% eU3O8

Containing

302.5-303.0

0.05% eU3O8

Second Zone

317.5-321.5

0.024% eU3O8

On June 19, 2007, we announced the results from a further six drill holes, CDB-2 to CDB-7, of which Hole CDB-6 returned 6.5 feet of 0.136% eU3O8 beginning at a depth of 155.5 feet (including 0.368% eU3O8 from 157.5-159.0 feet) and 5 feet of 0.167% eU3O8 from 170 -175 feet.  Results include the following:

Hole #

Total Depth

Interval

Mineralization

CDB-2

347 feet

270.0-282.0

0.0226 % eU₃0₈

CDB-3

347 feet

261.5-264.5

0.031 % eU₃0₈

293.0-297.0

0.014 % eU₃0₈

CDB-4

181 feet

160.5-164.0

0.036% eU₃0₈

Including

162.0-162.5

0.07% eU₃0₈

CDB-5

210 feet

180-182.0

0.019% eU₃0₈

184.5-190.0

0.074% eU₃0₈

Including

186.5-189.0

0.173% eU₃0₈

CDB-6

200 feet

155.5-162.0

0.136% eU₃0₈

170.0-175.0

0.167% eU₃0₈

Including

157.5-159.0

0.368% eU₃0₈

Including

173.0-173.5

0.76% eU₃0₈

CDB-7

235 feet

201.0-208.0

0.052% eU₃0₈

Including

205.0-207.0

0.094% eU₃0₈

On July 9, 2007, we announced the results from the final seven drill holes at the C de Baca Projects.  Highlights included drill hole CDB-10A, which contained 2.0 feet of 0.065% eU₃0₈ at a depth of 295.5 feet.

Results from these drill holes at the C de Baca Project, CDB 8 to CDB-14, along with the first seven holes announced earlier, continue to confirm historic drill results reported by Oxymin in the early 1980’s.  Results are tabulated as follows:

Hole #	Total Depth	Interval	Mineralization
CDB-8	248 feet	184.5 – 194.5	0.0159% eU308
CDB-9	346 feet	306.5-310.0	0.034 % eU308
		328.5-330.0	0.015% eU308
CDB-10	311 feet		Anomalous
CDB-10A	209 feet	295.5-297.5	0.065% eU308
CDB-11	319 feet	286.5-294.0	0.037% eU308
CDB-12	336 feet	202.0 – 203.5	0.0.012% eU308
CDB-13	229 feet	176.5 – 180.5	0.0162% eU308
			0.015% eU308
CDB-14	238 feet	199.5-200.0	0.026% eU308
		217.0 – 217.5	0.025% eU308

48

This initial 14 hole mud rotary drill program was designed to confirm historic drill results reported by Oxymin during exploration of the C de Baca Project during the 1980’s.  While the results of these drill holes were within expectations, the results from drill hole CDB-10 were affected by the intersection of an unknown basaltic dike.  We drilled an offset hole, CDB-10a, to avoid intersecting the basaltic dike and to better test the main zone of uranium mineralization.  This hole successfully encountered 2.0 feet of 0.065% eU₃0₈ at a depth of 295.5 feet.   

Gamma, Spontaneous Potential (SP), and Resistivity values were logged by Jet West Geophysical Services LLC of Farmington, New Mexico.  The Gamma portion of the down-hole logging tool was calibrated by uranium-industry standard values located in mines at Grants, New Mexico.  In situ uranium grades, expressed as equivalent U3O8 (“eU3O8”) are calculated using the digital gamma ray values acquired by the down-hole logging tool and uranium industry standard techniques for gamma log interpretation.  Down-hole gamma log interpretation has historically been found to be an accurate representation of in situ grades for uranium mineralization in the Magdelana District.  Chemical assays of samples will be done and used to determine relative trace element concentrations as a guide to future drilling.

In 2008, Michael Bersch, PhD, PG, completed a National Instrument 43-101 Technical Report on the C de Baca Project. This report has been filed on SEDAR and is available on our website at www.maxresource.com.  Dr. Bersch’s report recommends further exploration at the C de Baca Project that will include diamond drilling, project and regional scale geologic mapping and sampling.  

Majuba Hill Project (Nevada)

Nature of Interest and Terms of Acquisition

On March 4, 2011 we entered into an option agreement  to acquire up to a 75% interest in the Majuba Hill Copper/Gold/Silver property in Pershing County, Nevada (the “Majuba Hill Option”)from Claremont Nevada Mines LLC., Nevada.  The Majuba Hill Property encompasses 2,568 acres consisting of patented and unpatented lode mining claims and private mineral rights.   

The terms of the Majuba Hill Option Agreement with Claremont allow us to earn an initial 60% interest in the property over six years by spending US$6.5 Million on exploration of the property, as follows.  

Cumulative

Performance Date

Annual Amount

Amount

By the first anniversary date

$   500,000

    $   500,000

By the second anniversary date     

$   750,000

    $1,250,000

By the third anniversary date     

$ 1,000,000

    $2,250,000

By the fourth anniversary date     

$ 1,250,000

    $3,500,000

By the fifth anniversary date     

$ 1,500,000

    $5,000,000

By the sixth anniversary date     

$ 1,500,000

    $6,500,000

We can increase our interest in the Majuba Hill Property to 75% by spending a further $3.5 Million on exploration over a subsequent two year period.   

In addition, we are also required to make annual advance royalty payments of US$20,000 to a third party, JR Exploration LLC, a Nevada limited liability company, on the effective date of the Option Agreement and each anniversary thereafter.   The Majuba Hill Property is also be subject to a 3% NSR payable to the vendor, 1.5% of which may be purchased at any time for US$1.5 Million.   

Description, Location and Access:

The Majuba Hill Property is located approximately 54 miles west of Winnemucca, Nevada.   It can be accessed by driving approximately 140 miles northeast from Reno on U.S.  Interstate Highway 80 to the town of Imlay and then heading west from Interstate 80 on 23 miles of dirt roads maintained year round by Pershing County.  

49

There is no water or electricity available at the property site, with no surface water available within the property boundaries.

The Majuba Hill Property is comprised of the following unpatented and patented mineral claims and mineral rights:

Unpatented Mining Claims.

Claim Name

BLM NMC Nos.

AP-1 to AP-4

917098 to 917101

MH-1 to MH -15

918603 to 918617

MHA - 1 to MHA – 16

1042860 to 1042875

MH - 17 to MH – 89

1042876 to 1042948

Fee Lands, Patented Mining Claims and Mineral Rights.

Majuba Hill, Majuba Hill No. 1 and Majuba Hill No. 3 patented mining claims, Patent No. 1033600, Mineral Survey No. 4610

Mineral rights in Section 35, T33N, R31E, MDB&M

The following map shows the location of the Majuba Hill Property:

History of Exploration and Status:

The Majuba Hill Property is centered on the mid-Tertiary age Majuba Hill intrusive complex which is about 4,700 feet in diameter.  The lithologic assemblage is a cross-cutting series of intrusives ranging from rhyolite to latite with multiple stages of flow-banded units, intrusive breccias, and radial dikes.  These are all emplaced into steeply dipping, northeast striking Triassic argillite.

Breccia textures are very diverse and typically include tourmaline as:

·

Breccia matrix

·

Cross-cutting veinlets

·

Disseminated tourmaline in the mineralized areas

Since 1907, production and exploration at Majuba Hill has produced significant copper results with associated silver and gold.  Published production data show that prior to 1947 Mason Valley Mines Co. and Greenan-Kerr produced 4,000 tons @ 12 % Cu and slightly less than 23,000 tons @ 4% Cu respectively.   Majuba also has the rare distinction of being one of the few tin producers (350 tons @ 2 to 4% tin) in the western United States.  Historically, copper and tin were mined from underground workings at Majuba.  Copper, silver, and tin ore was taken from stopes along the Majuba Fault, which cuts northwesterly across the nested series of intrusives, intrusive breccias, and dikes.  Gold values are also reported from the historic record.  The ore stopes and workings extended to about 500 feet below the surface and 250 feet along the fault.  

The Last Chance (Frisco) mine in section 1, T32N, R31E was developed along a fault with a trend similar to the Majuba Fault.  Last Chance operated intermittently and produced silver (up to 40 opt Ag), lead (up to 15%), and gold (up to 0.10 opt Au) from an 830 foot tunnel and a 117 foot deep shaft.  No drilling or exploration appears to have ever been completed down dip or along the strike of the fault at the Last Chance.

Total production reported from historic underground mines in the project area (see Nevada Bureau of Mines and Geology Bulletin 86) included:

·

184,000 ounces of silver

·

5,800 ounces of gold

·

2.2 million lbs of copper

·

21,000 lbs of tin

·

885,800 lbs of lead

The current land position at Majuba Hill was assembled by Minterra Resource Corp. and conducted a 14 hole reverse-circulation drill program totaling 8,590 feet on the property in 2007.  Highlights of results from this drilling reported by Minterra in 2007-8 included:

MH Hole #	Total Depth (ft)	Interval	Copper %	Silver (opt)
MH-2	160-390	230 ft	0.37%	0.426 opt
Including	295-320	25 ft	1.36%
Including	340-350	10 ft		3.50 opt
MH-3	220-355	135 ft		0.58 opt
Including	220-290	70 ft	0.59%
MH-4	310-340	30 ft		1.12 opt
Including	335-340	5 ft		2.90 opt
MH-5	0-290	290 ft	0.28%
Including	0-15	15 ft	1.18%
Including	0-100	100 ft		0.99 opt
Including	5-20	15 ft		4.00 opt
MH-6	0-145	145 ft	0.49%	1.85 opt
Including	110-125	15 ft		5.10 opt
MH-7	85-400	315 ft	0.34%	0.70 opt
Including	225-245	20 ft		2.09 opt

50

These copper and silver drill results were encouraging but were not followed up as Minterra ceased operations in 2009.  All data collected by Minterra between March 2006 and May 2008, including geophysical data (a 14.4 line-km IP survey), assay certificates, interpretive maps, cross sections and digital data is available to MAX.    The combination of geology, geochemistry and drill results still point to the patented lode claims around the historic Majuba Mine as a significant copper/silver target.   Exploration is currently underway at the Majuba Hill Property; with core drilling having begun on the Copper Stope target area in June 2011.

Item 4.A

Unresolved Staff Comments

Not applicable.

Item 5.  Operating and Financial Review and Prospects

The following discussion of our operating results explains material changes in our consolidated results of operations for the fiscal year ended December 31, 2010 compared to the prior fiscal years ended December 31, 2009 and 2008.  The discussion should be read in conjunction with the consolidated financial statements to December 31, 2010 and the related notes included in Item 17 of this report.  Management’s discussion and analysis of our operating results in this section is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto.  This discussion contains forward-looking statements, the accuracy of which involves risks and uncertainties and our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, those risk factors described elsewhere in this report.  Our consolidated financial statements have been prepared in Canadian dollars and in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"), which differ in significant respects from accounting principles generally accepted in the United States ("U.S. GAAP").  As such, this discussion of our financial condition and results of operations is based on the results prepared in accordance with Canadian GAAP.  The significant differences between Canadian GAAP and U.S. GAAP as applicable to our financial statements are summarized in Note 14 to our consolidated financial statements for the fiscal year ended December 31, 2010.

Overview

Our business is exploration for minerals.  We do not have any properties that are in development or production. We have no earnings and, therefore, finance these exploration activities by the sale of our

equity securities or through joint ventures with other mineral exploration companies.  The key determinants of our operating results include the following:

·

Our ability to identify quality mineral exploration properties and acquire them on favorable terms;

·

The cost of our exploration activities;

·

our ability to finance our exploration activities and general operations;

·

our ability to identify and exploit commercial deposits of mineralization; and

·

the write-down and abandonment of mineral properties as exploration results provide further information relating to the underlying value of such properties

These determinates are affected by a number of factors, most of which are largely out of our control, including the following:

·

The competitive demand for quality mineral exploration properties;

·

Political and regulatory climate in countries where properties of interest are located;

·

Regulatory and other costs associated with maintaining our operations as a public company;

·

the costs associated with exploration activities; and

·

the cost of acquiring and maintaining our mineral properties.

51

Our primary capital and liquidity requirements relate to our ability to secure funds, principally through the sale of our securities, to raise sufficient capital to maintain our operations and fund our efforts to acquire mineral properties with attractive exploration targets and conduct successful exploration programs on them.  We anticipate this requirement will continue until such time as we have either discovered sufficient mineralization on one or more properties with sufficient grade, tonnage and type of mineralization to support the commencement of sustained profitable mining operations and are thereafter able to place such property or properties into commercial production or until we have obtained sufficient positive exploration results on one or more of our properties to enable us to successfully negotiate a joint venture with a mining company with greater financial resources than us or some other suitable arrangement sufficient to fund our operations.  

Our success in raising equity capital is dependant upon factors which are largely out of our control including:

·

market prices for gold and other precious and base metals;

·

the market for our securities; and

·

the results from our exploration activities.

Continuing effects from the global financial crisis including poor conditions in the U.S. housing market and the credit quality of mortgage backed securities, coupled with slow growth and high levels of unemployment, continued during 2010, causing a loss of confidence in the broader U.S. and global credit and financial markets.  In addition, during 2010 new economic stresses emerged including extraordinarily high levels of government debt, major currency instability and a growing sovereign debt crisis.  These events in turn resulted in international bailouts for Greece and Ireland, and threats of bailouts for Spain, Portugal and other countries.  In the US, the effect of unprecedented levels of government funded stimulus, institutional bailouts, "quantitative easing" and other expansionist monetary policies has led to deterioration of the US dollar and its role as a reserve currency.  These factors could, among other things, make it more difficult for us to obtain capital and financing for our operations in the future as well as increase our costs of obtaining such capital.  Access to additional capital, when required, may not be available to us on acceptable terms or at all.

The most significant factors affecting our operations during the past year were related to reduction in the demand for, and in the prices of, uranium and base metals and a corresponding collapse in the market for shares of junior exploration companies.  These factors are expected to have a significant effect on our operations during the next fiscal year and thereafter so long as we continue in our present business of mineral exploration.  During 2010, the prices of gold and other metals have experienced significant price volatility, with gold maintaining prices substantially higher than the previous five years, as a result of global economic uncertainty.  While the price of gold is significantly higher due to its risk premium, this has not had a commensurate impact on the share prices for junior gold exploration companies, and the general market for the shares of junior exploration companies, in all commodities remains uncertain.  In prior years, there has been a significant increase in general mineral exploration activity, resulting in greater competition for mineral properties and the resources employed in mineral exploration, and a corresponding increase in the prices demanded for suitable exploration properties and the costs associated with mineral exploration.  We anticipate the market for precious and other metals will continue to be volatile but will improve the short and medium term, resulting in a improved outlook for our ability to raise equity capital, but also an increase in exploration costs and the costs for acquiring new exploration properties due to an increase in competition in the sector.

Accordingly, while we anticipate our operating results will be most significantly affected by the results of our exploration activities on our existing properties, we anticipate we may see opportunities to acquire additional capital on more favourable terms than would have been the case in the past..  See “Special Note Regarding Forward Looking Statements” and “Risk Factors”.

52

Accounting Policies

We have adopted a number of accounting policies and made a number of assumptions and estimates in preparing our financial reporting, which are described in Note 2 to the attached audited consolidated financial statements.  These policies, assumptions and estimates significantly affect how our historical financial performance is reported and also your ability to assess our future financial results.  In addition, there are a number of factors which may indicate our historical financial results will not be predictive of anticipated future results.  You should carefully review the following disclosure, together with the attached consolidated financial statements and the notes thereto, including, in particular, the statement of significant accounting policies set out in Note 2 to such statements.  

Going Concern Assumptions

As described in Note 1 to our consolidated financial statements, our financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue in operation for the foreseeable future and will be able to realize assets and discharge our liabilities in the ordinary course of operations.  We do not have any mineral properties in production, and have not yet generated any revenues and have a history of losses.   Our continuation as a going concern is uncertain and dependent on our ability to discover commercial mineral deposits on our properties and place them into profitable commercial production and our ability to sustain our operations until such time.  This, in turn depends on our ability to continue to fund our operations by the sale of our securities and other factors which are largely out of our control.  Although we have been successful in the past in obtaining financing, it cannot be assured that adequate financing or financing on acceptable terms can be obtained in the future.  In the event we cannot obtain the necessary funds, it will be necessary to delay, curtail or cancel further exploration on our properties.  Our consolidated financial statements do not reflect adjustments to the carrying values and classifications of assets and liabilities that might be necessary should we not be able to continue in our operations, and the amounts recorded for such items may be at amounts significantly different from those contained in our consolidated financial statements.

Treatment of Mineral Property Costs

As we are at the exploration stage, we capitalize the acquisition and exploration costs of our mineral properties under Canadian GAAP.  Should any of these properties be placed into production, such costs would be amortized over the life of the properties on a unit-of-production basis.  Should exploration results of any of our properties prove unsatisfactory, we would then abandon such property or properties, and write off costs incurred up to that time.  The impact on our net loss for the fiscal period would be dependent upon the amount of costs deferred up to the time of the write-off.

Use of Estimates

The preparation of financial statements in conformity with Canadian 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 these estimates.  Significant areas requiring the use of management estimates relate to the determination of impairment of mineral property interests and the determination of fair value for stock based transactions.  Where estimates have been used financial results as determined by actual events could differ from those estimates.

Stock-Based Compensation

We have granted stock options to directors and employees as described in Note 6 to the attached audited consolidated financial statements.  We adopted the accounting standards of the Canadian Institute of Chartered  Accountants regarding stock-based compensation and other stock-based payments.  The standard requires that all stock-based awards be measured and recognized using a fair value based method.   Fair values are determined using the Black-Scholes option pricing model.  Any consideration paid by employees on the exercise of the options is credited to share capital.

53

5.A  

Operating Results

Fiscal Year Ended December 31, 2010 compared to the Fiscal Year Ended December 31, 2009

During the year ended December 31, 2010, we incurred operating expenses of $566,064 as compared to operating expenses of $768,473 for the year ended December 31, 2009.  The significant changes during the current fiscal year compared to the same period a year prior are as follows:

Consulting expense increased to $60,920 during the year ended December 31, 2009 from the $55,394 incurred during the same period a year prior due to increased expenditures on geological consulting for project review.

Stock-based compensation expense totaling $65,114 (a non-cash expense) was incurred during the year ended December 31, 2010, a decrease from the $86,256 incurred during the same period a year prior.  The decrease during the year ended December 31, 2010 was due to a decrease in the number of stock option grants during the current period.

Investor relations expenses decreased to $158,252 during the year ended December 31, 2010 from the $337,024 incurred during the same period a year prior.  This was primarily due to decreased expenditures on investor relations consultants and advertising during the current fiscal period.   

Management fees remained at $120,000 during the year ended December 31, 2010 pursuant to a contract with our President, entered into and effective July 1, 2007.

Office expenses increased to $38,172 during the year ended December 31, 2010 from the $25,285 incurred during the prior year due to our moving our head office during the current year as well as increased expenditures for communications and office supplies.

During the year ended December 31, 2009, we incurred $23,079 of Part XII.6 tax on the filing of certain tax documents related to a flow-through financing completed in 2007.  There was no comparable expense during the year ended December 31, 2010.

Professional fees increased slightly to $97,772 during the year ended December 31, 2010 from the $96,697 incurred during the same period a year prior due to an increase in legal fees related to preparation of regulatory filings.  Transfer agent and filing fees expense were reduced to $13,031 during the year ended December 31, 2009 from the $16,181 incurred during the same period a year prior.  This was primarily due to a reduction in share transfer activity during the current fiscal period as compared to the prior fiscal year.

During the year ended December 31, 2010 we incurred travel costs of $24,870 for attendance at trade shows, broker presentations and project review.  This represents a slight increase from the $22,808 incurred for travel expenses during the same period a year prior.  

During the year ended December 31, 2010 we recorded a gain of $39,893 on mineral property option payments received.  This gain related to the Company’s Diamond Peak Property in Nevada, where we received a property option payment from Kokanee Minerals in excess of what we had paid for the property as at March 31, 2010.   There was no comparable gain during the prior year.

Interest income decreased to $23,856 during the year ended December 31, 2010 from the $95,470 earned during the prior year due primarily to our maintaining a lower cash balance during the current year.

During the year ended December 31, 2009 we recognized a write-off of mineral properties totaling $3,987,802 due to the abandonment of the NUSTAR project, Gold Hill property and Indata property.  We did not record any mineral property write-offs during the year ended December 31, 2010.

54

As a result of the foregoing, our loss for the year ended December 31, 2010 was $502,315 as compared to $4,660,805 for the year ended December 31, 2009.

Fiscal Year Ended December 31, 2009 compared to the Fiscal Year Ended December 31, 2008

During the year ended December 31, 2009, we incurred operating expenses of $768,473 as compared to operating expenses of $1,202,346 for the year ended December 31, 2008.  The significant changes during the current fiscal year compared to the same period a year prior are as follows:

Consulting expense decreased to $55,394 during the year ended December 31, 2009 from the $86,762 incurred during the same period a year prior due to reduced expenditures on geological consulting for project review.

Stock-based compensation expense totaling $86,256 (a non-cash expense) was incurred during the year ended December 31, 2009, a decrease from the $451,965 incurred during the same period a year prior.  The decrease during the year ended December 31, 2009 was due to a decrease in the number of stock option grants and reduced amounts estimated for stock-based compensation expense as a result of lower interest rates and a reduced volatility in the trading price of our shares during the current period, key inputs in the Black-Scholes option pricing model used to calculate this expense amount.

Investor relations expenses decreased to $337,024 during the year ended December 31, 2009 from the $385,710 incurred during the same period a year prior.  This was primarily due to decreased expenditures on investor relations consultants and advertising during the current fiscal period.   

Management fees remained at $120,000 during the year ended December 31, 2009 pursuant to a contract with our President, entered into and effective July 1, 2007.

During the year ended December 31, 2009 office and general expenses increased to $25,285 from the $24,439 incurred during the same period a year prior due to additional staff levels during the current period.

During the year ended December 31, 2009, we incurred $23,079 of Part XII.6 tax on the filing of certain tax documents related to a flow-through financing completed in 2007.  There was no comparable expense during the same period a year prior.

Professional fees increased to $96,697 during the year ended December 31, 2009 from the $82,757 incurred during the same period a year prior due to an increase in consulting fees paid for additional accounting staff.  Transfer agent and filing fees expense were reduced to $16,181 during the year ended December 31, 2009 from the $18,840 incurred during the same period a year prior.  This was primarily due to a reduction in financing and share issuance activity during the current fiscal period as compared to prior fiscal years when we completed large financings

During the year ended December 31, 2009 we incurred travel costs of $22,808 for attendance at trade shows, broker presentations and project review.  This represents a decrease from the $50,713 incurred for travel expenses during the same period a year prior.   

Interest income decreased to $95,470 during the year ended December 31, 2009 from the $273,890 earned during the same period a year prior when we maintained a higher average daily cash balance.

Our loss for the year ended December 31, 2009 was $4,660,805 as compared to a loss for the year ended December 31, 2008 of $1,149,014, reflecting a write down of our mineral properties of $3,987,802 (as compared to $484,306 for the year ended December 31, 2008).

55

5.B

Liquidity and Capital Resources

Since our incorporation, we have financed our operations almost exclusively through the sale of our common shares to investors.  We expect to finance operations through the sale of equity in the foreseeable future as we have no source of revenue from our business operations. There is no guarantee that we will be successful in arranging financing on acceptable terms.  As it is uncertain when we will generate revenues sufficient to fund our operating activities, if ever, we are dependent on raising additional equity or debt capital.

At December 31, 2010, we had working capital of $2,257,858, inclusive of cash and cash equivalents on hand of $2,087,207.  This compares to working capital of $3,093,457 at December 31, 2008, inclusive of cash and cash equivalents on hand. We have no exposure to any asset-backed commercial paper  investments.

We have two properties that we need to satisfy certain minimum work commitments on during 2011 in order to maintain our interests.  These properties are EMW and the Majuba Hill Property in Nevada.   See “Tabular Disclosure of Contractual Obligations”.   In order to maintain our interest in EMW, we are required to undertake US$150,000 in exploration work on this property during 2011 but this requirement has been by the vendor until such time as we are granted a drill permit from the U.S. Forest Service.  At Majuba Hill, we are required to spend US$500,000 by March of 2012 in order to maintain our interest in that property.   To satisfy this commitment, we commenced an exploration program at Majuba Hill in June 2011 that includes core drilling and is budgeted at US$600,000.  See “Special Note Regarding Forward Looking Statements”.

At the Howell/Crowsnest properties, we were required to spend $150,000 by June 30, 2010 in order to maintain our interest in the properties, however, due to a government moratorium on exploration actives in the location of these properties, we were not be able to make any of these expenditures and believe we will not be legally obligated to do so under the terms of our agreements.  See Item 4D “Howell Gold /Crowsnest Project”.   

Current Economic Conditions

While 2010 saw significant economic improvement over the 2009, many of the effects of the 2008/2009 global financial crisis continued in 2010 and a number of new economic stresses, many likely causued or exacerbated by government responses to the crisis, including extraordinarily high levels of government debt, major currency instability and a growing sovereign debt crisis developed.  These new economic stresses in turn resulted in international bailouts for Greece and Ireland, and threats of bailouts for Spain and Portugal. In the US, the effect of unprecedented levels of government funded stimulus, institutional bailouts, "quantitative easing" and other expansionist monetary policies has led to deterioration of the US dollar and its role as a reserve currency.  These and other factors have made for extremely volatile commodity and capital markets and an environment in which it is more difficult to raise additional capital.  MAX has taken precautions and implemented initiatives to preserve its cash requirements.  We have reviewed our mineral properties and have written down or abandoned a number of properties described in detail above.  We have several commitments in the future (this coming year and beyond) on its mineral properties and we may be forced to abandon and write-off other properties if we do not have the means to meet these commitments, or if we do not feel it is fiscally prudent to do so.  However, we currently have sufficient cash to meet all obligations during fiscal 2011 and do not believe that any additional write-down of our mineral properties are required at this time.  We will be reviewing our mineral property commitments as well as our capital position on an ongoing basis during fiscal 2011 and may abandon additional properties when obligations become due if management deems it necessary in order to maintain the long-term viability of the Company.  

We intend to pursue both the acquisition of mineral properties which we consider to be highly prospective for gold, uranium and other metals and to maintain and explore our current properties while conserving capital during these difficult economic times.  We will require substantial additional capital to achieve our goal of discovering significant economic mineralization on one or more of our properties.  Until such time as we are able to make such a discovery and thereafter place one or more of our properties into commercial production or negotiate one or more joint venture agreements, we will be largely dependent upon our ability to raise capital from the sale of our securities to fund our operations.  We believe that our current capital resources will be sufficient to fund our general operations through 2012.  

56

We do not anticipate being able to obtain revenue from commercial operations in the short term and anticipate we will be required to raise additional financing in the future to meet our working capital and on-going cash requirements.  We intend to raise such financing through sales of our equity securities by way of private placements, and/or the exercise of warrants.  We may also secure additional exploration funding through option or joint venture agreements on our mineral properties; or through the sale of our mineral properties, royalty interests or capital assets, or borrow to meet our working capital requirements.  While we have in the past been able to raise sufficient funds to sustain our exploration programs, there is no assurance that we will continue to be able to do so.  If, for any reason, we are not able to access the capital market, our resources during this period will be limited to cash on hand and any revenues we are able to generate from joint venture or similar arrangements we may hereafter enter into. If we are unable to secure sufficient funds to pursue such proposed acquisitions and exploration to the level desired, we will adjust our proposed activities to reflect the amount of capital available to us after providing for sufficient working capital to maintain our existing operations.  At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  See “Special Note Regarding Forward Looking Statements” and “Risk Factors”.

5.C

Research and Development, Patents and Licenses, etc.

We are a mineral exploration company and we do not carry on any research and development activities.

5.D

Trend Information

The Majuba Hill Property is primarily is prospective for copper and silver, the Ravin Property is prospective for molybdenum, the C de Baca Property is prospective for uranium, our Tabletop and EMW properties are prospective for gold and our Diamond Peak Propertyis prospective for gold, silver and zinc.

The overall trend for the price of gold and silver has been upward during the past year due to the uncertainty in the financial sector, while the price of other minerals, such as uranium, molybdenum and other base metals have remained depressed due to lack of demand as a result of the current global recession.  We anticipate that the continuing weakness in the price of minerals, with the exception of gold and silver, as well as a lack of new capital for the mineral exploration sector in general, will  make the acquisition of quality gold exploration prospects less expensive, as well as decreasing the costs of exploration generally.  Metal prices cannot be predicted with accuracy and our plans will be largely dependent upon the timing and outcome of metal markets, particularly the price of gold, uranium, zinc and molybdenum which is entirely outside of our control.  See “Special Note Regarding Forward Looking Statements”.

The market for gold, silver and copper are homogeneous, integrated commodities markets with a large number of both suppliers and buyers.  These markets are not ones which are particularly susceptible to the influence of one or more large suppliers or buyers.  As at June 17,  2011 gold traded at US$1,539 per ounce, silver traded at US$35.84 per ounce and copper traded at US$4.1284 per pound.

There are a smaller number of producers of molybdenum than there are for commodities such as gold.  Molybdenum prices have increased from US$7.60/lb in 2000 to over US$35/lb in 2007.  The price of molybdenum was holding steady in 2008 until October when it collapsed to approximately US$11/lb.  At June 17, 2011 the price of molybdenum was US$16.3293/lb.

Our C de Baca mineral property is prospective for uranium. There are fewer producers of uranium in the world than there are for some other commodities such as copper and gold.  The market for uranium is a homogeneous, integrated commodities market.  The market is not one which is particularly susceptible to the influence of one or more large suppliers or buyers.  The world average grade from producing uranium mines is 0.15 per cent U3O8, with spot uranium prices having risen from a cyclical low of US$7.10 per pound in late 2000 to a high of US$138.00 per pound on June 1, 2007.  At June 13, 2011, the most recent date for which we could find a quote for the sale of uranium, the spot price was US$54.75/lb.

57

5.E

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

5.F

Tabular Disclosure of Contractual Obligations

The following table summarizes our contractual obligations at December 31, 2009 and the effect these obligations are expected to have on our liquidity and cash flows in future periods.  

Contractual Obligations	Payment Due By Period
	Total Remaining	Less than a year	1-3 Years	4-5 Years	After 5 Years
Diamond Peak (1)  Option Payments	US$280,000	US$35,000	US$95,000	US$150,000	Nil
C de Baca Option (2)  Option Payments	US$440,000	US$10,000	US$20,000	US$20,000	US$390,000
East Manhattan Wash (3) Option Payments Work Commitment	US$150,000 $600,000	US$50,000 US$100,000	US$100,000 US$500,000	Nil Nil	Nil Nil
Ravin Project (4) Option Payments	US$390,000	US$10,000	US$20,000	US$20,000	US$340,000
Howell Project (5) Option Payments Share issuances Work Commitment		Force majeure
Crowsnest Project(6) Option Payments Share Issuance Work Commitment		Force majeure
Howell Project & Crowsnest Project combined (2010 & 2011) (7) Option Payments Share Issuances Work Commitment		Force majeure
Table Top Project(8) Option Payment	US$460,000	US$25,000	US$85,000	US$100,000	US$250,000
Capital  (Finances) Lease Obligations	NIL
Operating Lease (9) Obligations	$30,413	$21,468	$8,945	Nil	Nil
Purchase Obligations Equipment	NIL
Other Long-term Liabilities	NIL
Total Contractual Obligations and Commitments	US$2,350,413	US$251,468	US$828,945	US$290,000	US$980,000

⁽¹⁾

These are option payments pursuant to an option agreement dated May 9, 2006, as amended, between us and The Wendt Family Trust of Reno, Nevada.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 “Information on the Company” – “Description of Property” - “Diamond Peak Property”)

⁽²⁾

These are option payments pursuant to an option agreement dated September, 2005 between us and Applied Geological Services, Inc.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 “Information on the Company” – “Description of Property” - “C de Baca Project”)

⁽³⁾

These are option payments pursuant to an option agreement dated November 11, 2007, as amended, between us and MSM L.L.C.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 “Information on the Company” – “Description of Property” - “East Manhattan Wash”)

58

⁽⁴⁾

These are option payments pursuant to an option agreement dated September 9, 2007, as amended, between us and The Wendt Family Trust.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 “Information on the Company” – “Description of Property” - “Ravin Molybdenum/Tungsten Property”)

⁽⁵⁾

These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 “Information on the Company” – “Description of Property” - “Howell Gold Gold/Crowsnest Property”)

⁽⁶⁾

These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property. In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 “Information on the Company” – “Description of Property” “Crowsnest  Gold Property”

⁽⁷⁾

These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd. that affect both Howell and Crowsnest Properties.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in the Properties. In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 “Information on the Company” – “Description of Property – “Howell/Crowsnest Property”)

⁽⁸⁾

These are option payments pursuant to an option agreement dated September 1, 2009 between us and  Energex, LLC.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property. (See Item 4 “Information on the Company” – “Description of Property” – “Table Top Gold Property”.

⁽⁹⁾

These are lease payments due monthly for office space in Vancouver leased from a property rental company for a term of two years, effective September 1, 2010.

Item 6.  Directors, Senior Management and Employees

6.A

Directors and Senior Management

The following is a list of the current directors and senior officers of the Company, their municipalities of residence, their current position with the Company and their principal occupations:

Name of Director	Age	Principal Occupation	Position with  Company
STUART ROGERS, Vancouver, BC	54	President of the Company President of West Oak Capital Group Inc.	President, Chief Executive Officer & Director
PAUL JOHN, Penticton, BC	63	Businessman	Director
TIM COUPLAND, Delta, BC	52	President and CEO of Alberta Star Development Corp.	Director
CLARENCE J. WENDT Reno, Nevada	72	Independent professional geologist	Director, Vice President Exploration
DANIEL T. MACINNIS, Vancouver, BC	59	President, MAG Silver Corp.	Director
CHRISTOPHER CHERRY, Vancouver, BC	32	Chartered Accountant	Chief Financial Officer

The following describes the business experience of our directors and executive officers, including other directorships held in reporting companies:

Stuart Rogers

Mr. Rogers has been involved in the venture capital community since 1987.  He is currently the President of West Oak Capital Group, Inc., a privately held investment banking firm specializing in the early stage finance of technology projects through the junior capital markets in Canada and the United States, and has served as a director of client companies listed on the TSX Venture Exchange, the Toronto Stock Exchange, NASDAQ Small Capital Market and FINRA OTC Bulletin Board.  Currently, Mr. Rogers acts as a director or officer of TerraX

59

Minerals Inc. and Alberta Star Development Corp., both reporting issuers on the TSX Venture Exchange in Canada.

Paul John

Mr. John graduated from the University of Victoria, B.C. with a Bachelor of Arts degree, majoring in Economics and Political Science.  From 1971 to 1979, he worked with the Hudson Bay Company, a national Canadian department store chain, rising to the senior executive level.  In 1980, he acquired a Work Wear World franchise in the interior of British Columbia, developing this initial location into 19 stores in B.C. and the Yukon Territories, with annual sales of $18 million in 1999.

In 1999, Mr. John sold his chain of Work Wear World stores to Mark’s Work Warehouse, a publicly traded company listed on the Toronto Stock Exchange, and was appointed as General Manager for Western Canada for their “Work World” franchised locations.  He held this position until 2001, when he was appointed General Manager, Franchises for Work World, a position he held until 2010.  He is currently a self-employed businessman.

Tim Coupland

Mr. Coupland is currently the President and CEO of Alberta Star Development Corp. (TSX-V: ASX; OTC BB: ASXSF), and Arctic Hunter Uranium Inc.,our joint venture partner on the Target 1 and MacInnis Lake uranium properties in the Northwest Territories.  Mr. Coupland holds a bachelor’s degree from Simon Fraser University and is an accomplished mineral landman and explorer, with over 20 years experience with both public and private companies working in the mineral exploration field in Canada.  Mr. Coupland was the lead negotiator who secured drill permits and the access and benefits agreement with the Sahtu Dene First Nations on their traditional territories in the Northwest Territories, where Alberta Star was focused on the development of the Eldorado and Contact Lake iron oxide, copper, gold and uranium projects.  Over the past ten years, Mr. Coupland has successfully developed long term business relationships with many Canadian First Nations & Metis Groups living in Canada’s Northwest Territories. Tim Coupland is currently serving as a director and/or officer of Alberta Star Development Corp, Arctic Hunter Uranium Inc. both reporting issuers on the TSX Venture Exchange in Canada, and Dynamic Gold Corp an OTC BB listed company. 

 Daniel T. MacInnis

Mr. MacInnis is currently the President and CEO of MAG Silver Corp.  MAG Silver is listed on the TSX Venture Exchange in Canada and on the AMEX in the United States. He has over 31 years of experience in mineral exploration and experience with mineral property acquisitions and joint venture negotiations.  Mr. MacInnis is a registered Professional Geologist (P.Geo.) in British Columbia and obtained a B.Sc. in Geology from Saint Francis Xavier University (Nova Scotia) in 1974.

Christopher Cherry, CA, CGA

Mr. Cherry has over nine years experience as an accountant and auditor, with KPMG and Davidson and Company in Vancouver.  He achieved the Certified General Accountant designation in August 2004 and the Chartered Accountant designation in February 2009.  Mr. Cherry is a financial controller with iO Corporate Services Ltd., a private company that provides administrative services to several public companies. In addition to serving as our CFO,  Mr. Cherry currently serves as Chief Financial Officer to Reva Resources Corp., Black Isle Resources Corp., Mexivada Mining Corp., Teslin River Resources Corp., AVC Venture Capital Corp., Caerus Resource Corporation, Gold Port Resources Ltd. And Stoneshield Capital Corp.He is a director of Valiant Minerals, Acadia Resources Corp. and Remington Resources Inc.

Clarence (Clancy) J. Wendt, P. Geo

Mr.  Wendt received his B.S. degree from San Diego State University in 1967.  He began his career at Stauffer Chemical and worked at various companies until returning to the University of Arizona where he obtained his M.S. degree in 1978.  After this he worked at Duval Corporation and other companies until becoming District Manager for Westmont Mining.  He is credited with the Mt. Hamilton gold/molybdenum discovery in Nevada and

managed the programs which led to the discovery of other deposits in the Carlin Trend.  Mr. Wendt is currently a director of Santa Fe Minerals Corp., a reporting issuer on the TSX Venture Exchange.

Mr. Wendt has been a consulting geologist since 1992, specializing in exploration and evaluation of mineral deposits.  He is a registered geologist in Arizona, British Columbia, Canada, and a Chartered Professional Geologist in Australia and writes reports for various exchanges.  He is a member of SME, SEG, FAusIMM(CP), PDAC, a former Trustee of the NWMA and Member of the Board of Directors of the Mining Club of the Southwest. In addition, Mr. Wendt is the recipient of the President’s Award from the NWMA, the Ben F. Dickerson Award, and is a past President of the Geological Society of Nevada.

Mr. Wendt has prior experience in gold, base metal and uranium exploration with such notable exploration companies as Phillips Uranium, Teton Exploration, Duval and Westmont.  He has conducted all phases of uranium, gold and base metal exploration, from conceptual targeting to drilling and evaluation, with extensive experience in the United States and Mexico as well as Central and South America.

There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which the foregoing individuals were selected to be a director or executive officer, nor are there any family relationships among any of our directors and officers.

6.B.

Compensation

The following fairly reflects all material information regarding compensation paid to our directors and officers in our fiscal year ended December 31, 2010.

Summary Compensation Table

NAME AND PRINCIPAL POSITION	YEAR	ANNUAL COMPENSATION			LONG-TERM COMPENSATION
		Salary	Bonus	Other Annual Compensation	Awards		LTIP payouts	All Other Compensation
					Restricted Stock Awards	Securities Underlying Options/ SAR’s
Stuart Rogers President, Chief Executive Officer  and Director	2010	Nil	Nil	$120,000(1)	Nil	nil	Nil	Nil
Paul John Director	2010	Nil	Nil	Nil	Nil	nil	Nil	Nil
Tim Coupland Director	2010	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Daniel T. MacInnis Director	2010	Nil	Nil	Nil	Nil	nil	Nil	Nil
Christopher Cherry Chief Financial Officer	2010	Nil	Nil	$42,000	Nil	nil	Nil	Nil
Clarence J. Wendt Vice President Exploration	2010	Nil	Nil	US$120,000 (2)	Nil	nil	Nil	Nil

(1)

the $120,000 represents a management fee paid to a company controlled by Stuart Rogers.  

(2)

this compensation is paid to Mr. Wendt pursuant to a consulting agreement entered into by Mr. Wendt for provision of geological consulting services, and for performance of duties normally associated with the position of VP Exploration.

60

We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors and members of our administrative, supervisory or management bodies.  We have no formal plan for compensating our directors for their services in their capacity as directors.  The board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. Other than indicated above, no director received any compensation for his or her services as a director, including committee participation and/or special assignments.

6.C

Board Practices

Stuart Rogers, Paul John, Tim Coupland and Daniel T. MacInnis have acted as our directors since May 8, 2002, June 18, 2002, September 5, 2006 and December 7, 2005, respectively.  Clancy Wendt was appointed to our board of directors at our Annual General Meeting held on June 30, 2010.  

The directors will, unless they choose to resign, hold office until the next annual general meeting of the shareholders at which time they may stand for re-election.  We are required to hold an annual general meeting once in every calendar year and not longer than fifteen months from the last annual general meeting.

We are party to a consulting agreement with West Oak Capital Group, Inc., a private company owned by Stuart Rogers, whereby it is entitled to be paid $10,000 per month for management services.  We are also party to a consulting agreement with Clarence Wendt,  whereby he is entitled to be paid USD$10,000 per month for provision of geological consulting services and duties normally associated with the position of Vice President, Exploration.  No other directors have service contracts with us, nor are they entitled to any termination benefits.

There are no service contracts with the Company for the directors providing for benefits upon termination of their service save and except for Mr. Rogers, as set out in the Consulting Agreements referred to above.  Under the terms of that Agreement, in the event of termination.

By the Company upon an “Event of Default” by the Consultant (as defined in Agreement) or by the Consultant for any reason other than an Event of Default by Company, the Company shall pay to the Consultant all amounts accruing hereunder up to and including the effective date of Termination.

By the Consultant due to an Event of Default by the Company or by the Company for any reason other than an Event of Default by the Consultant (as defined in the Agreement), the Company shall pay the Consultant:

·

The full amount of monthly Fees multiplied by the number of months remaining in the Term of the Agreement;

·

The full amount of any Bonus then due and owing, provided that, in the absence of any bona fide award by the Compensation Committee made more than 60 days prior to the effective date of Termination, the amount of such Bonus shall be deemed to be equal to 50% of the total amount of Fees and Bonuses paid to the Consultant and the Key Employee within the 24 months prior to the effective date of Termination;

·

The full amount of any Expenses incurred up to the effective date of Termination;

·

Any Options then outstanding shall be deemed to be extended and exercisable for 90 days following the expiry of the Term.

·

Reference is made to the full text of the Consulting Agreements which are attached as exhibits to this Report. See Item 19 “Exhibits”.  Other than the foregoing, we do not currently have any retirement, pension, bonus, profit-sharing or similar plans and none are proposed at this time.

The Company does not have an executive committee or a remuneration committee.

Audit Committee

Our audit committee is comprised of Tim Coupland, Paul John and Stuart Rogers.  The specific functions and responsibilities of the audit committee are set forth in our audit committee charter.

61

Tim Coupland and Paul John are Independent directors.  We have determined that Stuart Rogers qualifies as an audit committee financial expert, pursuant to SEC regulations.  Each of Tim Coupland and Paul John satisfy the independence and financial literacy requirements for audit committee members under the SEC rules and regulations and Rule 803 of the NYSE AMEX Company guide.  Since Stuart Rogers is not independent, the Audit Committee does not satisfy the requirements of Rule 10A-3 of the US Securities Exchange Act of 1934.

The Audit Committee’s primary function is to review the annual audited financial statements with our external auditor (the “Auditor”) prior to presentation to the Board and to make recommendations thereon, together with recommendations to the Board with respect to such financial statements and compensation payable to the Auditor.  The audit committee also reviews our interim un-audited quarterly financial statements prior to finalization and publication.  The Audit Committee also provides review oversight with respect to pre-approval of all non-audit services to be provided by the Auditor to the Company and a number of other related matters including issues related to a change of auditors and establishing procedures for treatment of complaints regarding accounting, internal accounting controls or auditing matters.  

Our audit committee also establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters; and establishes procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.  The specific functions and responsibilities of the audit committee are set forth in our audit committee charter. See, “Audit Committee Financial Expert” for information related to audit committee independence and financial expert.

The Audit Committee meets as a separate committee of the board as and when needed to carry out its functions and keeps formal minutes of its proceedings.  

6.D

Employees

We do not have any employees other than our directors and officers.  

6.E

Share Ownership

The following table sets forth the shareholdings, to the best of our knowledge, owned beneficially, directly or indirectly, by our directors and officers as of June 15, 2011.  There were 23,730,985 common shares issued and outstanding as of June 15, 2011.  

Name	Number of Shares Owned	Percentage of Outstanding Common Shares
Stuart Rogers	592,605	2.49%
Paul John	413,750	1.74%
Tim Coupland	125,000	0.53%
Daniel MacInnis	Nil	Nil
Christopher Cherry	Nil	Nil
Clancy Wendt	490,000	2.06%

Statements as to securities beneficially owned by directors and officers, or as to securities over which they exercise control or direction, are based upon information obtained from such directors and officers and from records available to the Company.  

62

The following incentive stock options are outstanding to our directors and officers as at June 15, 2011:

Name	Shares that may be Purchased Upon Exercise of Option	Exercise Price	Expiry Date
Stuart Rogers (West Oak Capital)	100,000 150,000	$0.17 $0.35	October 31, 2011 August 1, 2011
Paul John	175,000 25,000	$0.35 $0.17	August 1, 2011 October 31, 2011
Tim Coupland	50,000 150,000	$0.35 $0.17	August 1, 2011 October 31, 2011
Daniel MacInnis	200,000	$0.35	August 1, 2011
Christopher Cherry	200,000	$0.17	October 31, 2011
Clancy Wendt	200,000 50,000	$0.35 $0.17	August 1, 2011 October 31, 2011

We have an incentive stock option plan which was approved by the shareholders of the Company at the Annual General Meeting of Shareholders held on September 21, 2009 (the “Stock Option Plan”).  This Stock Option Plan provides for equity participation in the Company by our directors, officers, employees and consultants through the acquisition of common shares pursuant to the grant of options to purchase common shares.  The exercise price for options granted under the Stock Option Plan is determined by the closing trading price on the day immediately preceding the date of grant, less any discounts permitted by the TSX Venture Exchange or such other stock exchange on which the common shares are listed.  We have reserved and authorized up to 20% (4,339,846) of our issued treasury shares for issuance under the Stock Option Plan to our directors and key employees.

Under the Stock Option Plan, the aggregate number of optioned common shares granted to any one optionee in a 12-month period must not exceed 5% of the issued and outstanding common shares.  The number of optioned common shares granted to any one consultant in a 12-month period must not exceed 2% of the issued and outstanding common shares.  The aggregate number of optioned common shares granted to an optionee who is employed to provide investor relations activities must not exceed 2% of our issued and outstanding common shares in any 12-month period.

Options will be exercisable for a term of up to ten years, subject to earlier termination in the event of death or the optionee’s cessation of services to the Company; and options granted under the stock option plan are non-assignable, except by will or the laws of descent and distribution.

The policies of the TSX-Venture Exchange limited the granting of stock options to our directors, officers, employees and consultants and provided limits on the length, number and exercise price of such options.

 On August 1, 2008, we granted incentive stock options to directors, officers and consultants totaling 1,150,000 common shares at an exercise price of $0.35 per share for a period of three years.  We also, by agreement of the optionees, cancelled 875,000 options that were granted in July 2007.  On October 31, 2008, we granted a further 575,000 options to directors and officers at an exercise price of $0.17 per share for a period of three years.  

On July 3, 2009, we granted 250,000 incentive stock options to a consultant at an exercise price of $0.17 per share for a period of two.  On October 19, 2009, we granted a further 250,000 options to consultants at an exercise price of $0.40 per share for a period of two years, of which 50,000 of these options were cancelled in January 2010 when the consultant ceased to provide services to us.

On April 6, 2010, we granted 50,000 incentive stock options to a consultant at an exercise price of $0.25 per share for a period of two years.  On April 12, 2010, we granted 250,000 incentive stock options to a consultant at an exercise price of $0.40 per share for a period of two years.   A further 50,000 incentive stock options, exercisable at $0.25 for a two year period, were granted to a consultant on September 21, 2010.  

As at December 31, 2010, there were 2,525,000 stock options outstanding and exercisable.

63

Item 7.

Major Shareholders and Related Party Transactions

7.A

Major Shareholders

As used in this section, the term "beneficial ownership" with respect to a security is defined as: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling  arrangement  or  any  other  contract,  arrangement  or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such  beneficial ownership.

As of the date of this annual report, there are 23,730,985 common shares issued and outstanding in our capital stock.  We are authorized to issue an unlimited number of common shares and preferred shares.  We have not issued any preferred shares since our incorporation.

As of the date of this annual report, no persons known to us were the beneficial owner of more than five percent of our outstanding common shares.

Of our 52 registered shareholders at May 31 2011, 34 are Canadian residents representing 21,501,477 common shares or 90.61% of our issued and outstanding common shares.  We have 18 registered US shareholders holding 2,229,508 common shareholders or 9.39% of our issued and outstanding common shares.   The remaining common shares of the Company are held by brokerages and other intermediaries and the Company cannot determine the residency of the beneficial holders of those shares.

Each of our issued common shares entitles the holder to one vote in general meeting.  There are no disproportionate or weighted voting privileges.

We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.

There are no arrangements the operation of which at a subsequent date may result in a change in our control.

Our registrar and transfer agent is Computershare Trust Company of Canada, which is located at 3^rd Floor, 510 Burrard Street, Vancouver, British Columbia, Canada Tel: (604) 661-9400.

7.B

Related Party Transactions

Three month period ended March 31, 2011:

During the three month period ended March 31, 2011, we have not entered into transactions or loans with any (a) enterprises that directly or indirectly control, are controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting rights which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a substantial interest in the voting power is owned by any of the foregoing individuals (a “Related Party”) or over which such a person is able to exercise significant influence, except as follows:

64

§	We paid $30,000 to a private company controlled by Stuart Rogers, our President, for management fees pursuant to an agreement with Mr. Rogers.
§	We paid US$30,000 to Clancy Wendt, our Vice-President of Exploration, for consulting fees pursuant to an agreement with Mr. Wendt.

Fiscal Year ended December 31, 2010:

In the fiscal year ended December 31, 2010, we did not enter into transactions or loans with any Related Party except as follows:

§	We continue to hold rights under an Option Agreement that was entered into in 2009 whereby we can acquire a 100% interest in the Table Top claims in Humboldt Country, Nevada from Energex LLC, a private Nevada corporation wholly owned by Clancy J. Wendt, our Vice President of Exploration.
§	We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the “Ravin Property”) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.
§	We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the “Diamond Peak Property”, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration
§	We paid CD$120,000 to a private company controlled by Stuart Rogers, our President, for management fees;
§	We paid CD$120,000 to a private company controlled by Clancy Wendt, our Vice President Exploration, for consulting fees;

Fiscal Year ended December 31, 2009:

In the fiscal year ended December 31, 2009, we have not entered into transactions or loans with any Related Party, except as follows:

§	We entered into an Option Agreement to acquire a 100% interest in the Table Top claims in Humboldt Country, Nevada from Energex LLC, a private Nevada corporation wholly owned by Clancy J. Wendt, our Vice President of Exploration.
§	We paid CD$120,000 to a private company controlled by Stuart Rogers, our President, for management fees;
§	We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin Property from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.
§	We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the “Diamond Peak Property”, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration

65

Fiscal Year ended December 31, 2008:

In the fiscal year ended December 31, 2008, we did not enter into transactions or loans with any Related Party, except as follows:

§	We paid CD$120,000 to a private company controlled by Stuart Rogers, our President, for management fees;
§	We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin Property from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.
§	We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the “Diamond Peak Property”, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration

Our directors or officers must disclose in writing to us the nature and extent of any interest they have in a material contract, or proposed material contract, with us.  Such disclosure must be made immediately after the director or officer becomes aware of the contract or proposed contract.  A director who is required to disclose an interest in a material contract or proposed material contract may not vote on any resolution to approve the contract except in very limited circumstances.

Stock option compensation to our directors and officers is disclosed elsewhere in this Form 20F.  See Item 6.E “Share Ownership”.

7.C

Interests of Experts and Counsel

Not Applicable.

Item 8.

Financial Information

8.A

Consolidated Statements and other Financial Information

The following financial statements for the year ended December 31, 2010 have been audited by an independent auditor and are accompanied by an audit report, are attached and incorporated herein:

(a)

Consolidated Balance Sheets;

(b)

Consolidated Statements of Operations, Comprehensive loss and Deficit;

(d)

Consolidated Cash Flow Statements;

(e)

related notes and schedules required by the comprehensive body of accounting standards pursuant to which the financial statements are prepared; and

(f)

a note analyzing the changes in each caption of shareholders’ equity presented in the balance sheet.

Incorporated herewith are the comparative financial statements covering the latest three financial years, audited in accordance with a comprehensive body of auditing standards.

Export Sales

The Company had no export sales in its latest financial year ended December 31, 2010 and, as a result, the percentage of export sales for the Company was zero.

Legal Proceedings

To the best of our knowledge, there are no currently pending or threatened legal proceedings that could have a material effect on our business, results of operations or financial condition.

66

Dividend Policy

We have never declared or paid any cash dividends on our common shares.  As we do not have any earnings, we do not anticipate paying cash dividends on the common shares for the foreseeable future.  Future dividends on the commons shares will be determined by the Board of Directors in light of circumstances existing at the time, including our earnings and financial condition.  There is no assurance that dividends will ever be paid.  See “Special Note Regarding Forward Looking Statements”.

8.B

Significant Changes

There have been no significant changes since the date of the audited financial statements included herein.

Item 9.

The Offer and Listing

9.A

Offer and Listing Details

Our common shares trade on the TSX Venture Exchange under symbol “MXR” and on the FINRA Over The Counter Bulletin Board under symbol “MXROF”.   On March 2, 2006, our shares were listed with the Frankfurt Stock Exchange under the trading symbol “M1D”.

Our principal trading market in volume is the TSX Venture Exchange.  The closing price of our common shares on the TSX Venture Exchange on June 24, 2011 was $0.22  The following table sets forth the high and low closing prices in Canadian funds of our common shares traded on this Canadian exchange:

Annual Periods

High

Low

January 1, 2006 to December 31, 2006

$0.98

$0.33

January 1, 2007 to December 31, 2007

$1.65

$0.55

January 1, 2008 to December 31, 2008

$0.75

$0.07

January 1, 2009 to December 31, 2009

$0.66

$0.09

January 1, 2010 to December 31, 2010

$0.45

$0.15

Quarterly Periods

High

Low

January 1, 2009 to March 31, 2009

$.018

$0.09

April 1, 2009 to June 30, 2009

$0.26

$0.10

July 1, 2009 to September 30, 2009

$0.40

$0.12

October 1, 2009 to December 31, 2009

$0.66

$0.26

January 1, 2010 to March 31, 2010

$0.45

$0.18

April 1, 2010 to June 30, 2010

$0.28

$0.16

July 1, 2010 to September 30, 2010

$0.29

$0.15

October 1, 2010 to December 31, 2010

$0.28

$0.21

January 1, 2011 to March 31, 2011

$0.53

$0.23

Monthly Periods

High

Low

April 2010

$0.28

$0.21

May 2010

$0.25

$0.17

June 2010

$0.21

$0.16

July 2010

$0.21

$0.16

August 2010

$020

$0.15

September 2010

$0.29

$0.15

October 2010

$0.27

$0.22

November 2010

$0.26

$0.23

December 2010

$0.28

$0.21

January 2011

$0.29

$0.23

February 2011

$0.33

$0.23

March 2011

$0.53

$0.31

April 2011

$0.48

$0.32

May 2011

$0.40

$0.24

67

9.B.

Plan of Distribution

Not Applicable.

9.C.

Markets

The common shares of the Company were listed for trading on the TSX-Venture Exchange on the 15^th day of June, 1994.

Our common shares have been quoted for trading on the FINRA OTC Bulletin Board since November 8, 2000.

Our common shares were listed on the Frankfurt Stock Exchange on March 2, 2006 with the symbol “M1D”.

9.D.

Selling Shareholders

Not Applicable.

9.E.

Dilution

Not Applicable.

9.F.

Expenses of the Issue

Not Applicable.

Item 10.

Additional Information

10.A

Share Capital

Not applicable.

10.B

Memorandum and Articles of Association

We were incorporated under the Business Corporations Act of Alberta (the “Alberta BCA”) by registration of our articles of incorporation and bylaws.  Pursuant to the provisions of the Alberta BCA, a company may conduct any business that it is not restricted by the terms of its articles or bylaws from conducting.  Our articles and bylaws contain no such restrictions.

On June 27, 2007, we were registered under the Business Corporations Act of British Columbia as an extra-provincial company in British Columbia.

Our directors are required to disclose to the board of directors the nature and extent of their interest in any proposed transaction or contract and must thereafter refrain from voting in respect thereof.  An interested director may be counted in the quorum when a determination as to such director’s remuneration is being considered but may not vote in respect thereof.  The directors have an unlimited power to borrow money, issue debt obligations and mortgage or charge our assets provided such actions are conducted bona fide and in our best interests.  There are no mandatory retirement ages for directors or any required shareholdings.

All holders of common shares are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as the board of directors may from time to time determine.  All holders of common shares will share equally on a per share basis in any dividend declared by the board of directors.  The dividend entitlement time limit will be fixed by the board of directors at the time any such dividend is declared.  Each outstanding common share is entitled to one vote on all matters submitted to a vote of our shareholders at a general meeting.  There are no cumulative voting rights attached to any of our shares and, accordingly, the holders

68

of more than half of the shares represented at a general meeting can elect all of the directors to be elected in a general meeting.  All directors stand for re-election annually.  Upon any liquidation, dissolution or winding up, all common shareholders are entitled to share ratably in all net assets available for distribution after payment to creditors.  The common shares are not convertible or redeemable and have no preemptive, subscription or conversion rights.  In the event of a merger or consolidation, all common shareholders will be entitled to receive the same per share consideration.

The rights of shareholders may only be altered by the shareholders passing a special resolution at a general meeting.  A special resolution may only be passed when it has been circulated to all shareholders by way of information circular and then must be passed by seventy-five percent of the votes cast at the general meeting.

The board of directors may call an annual or extraordinary general meeting when required.  One or more shareholders holding in aggregate five percent or more of our issued shares may requisition an extraordinary meeting and the directors are required to hold such meeting within four months of such requisition.  Only registered shareholders or persons duly appointed by proxy may be admitted to meetings unless otherwise permitted by the chairman of the meeting.

There are no federal Canadian limitations or restrictions on the right to own our common shares.

Some regulatory restrictions, and disclosure obligations, would apply to persons purchasing 5% or more of our issued and outstanding common shares.  Persons resident outside of Canada might be subject to foreign investment review regulations if they were to purchase a controlling interest in the Company.

There are no provisions in our bylaws or articles of incorporation that would have the effect of delaying, deferring or preventing a change in control.

There are no provisions in our bylaws or articles of incorporation that establish any threshold for disclosure of ownership.  However, the Alberta and British Columbia Securities Commission require that persons that are the registered owners of, and/or have voting control over 10% or more of our common shares must file insider reports disclosing securities holdings and must disclose any plans to acquire additional securities above that 10%.

10.C

Material Contracts

The following are the material contracts which we, or any of our subsidiaries, have entered into in the last two years immediately prior to date of this report.  See “Principal Expenditures and Divestitures”:

§	Mineral Property Option Agreement between Claremont Nevada Mines, LLC and us dated March 4, 2011to acquire up to a 75% interest in the Majuba Hill project located in Pershing County, Nevada.
§	Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated May 23, 2008 to acquire a 60% interest in the Indata project located in North Central B.C.
§	Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated  June 9, 2008 to acquire a 60% interest in the Howell property in southeastern B.C – amended on July 24, 2009 to include the option of a 60% interest in the Crowsnest Mineral property adjacent thereto.
§	Consulting Agreement between us and West Oak, dated October 1, 2008, for provision of management services.
§	Consulting Agreement between us and Clarence Wendt dated October 1, 2008 for provision of geological consulting services.
§	Mineral Property Option Agreement between Energex LLC and us dated September 1, 2009, for the acquisition of a 100% interest in 32 claims known as the Table Top claims, located in Humboldt County, 10 miles northwest of the town of Winnemucca, Nevada.
§	Amending Agreement dated for reference September 30, 2009 between us and Kokanee Placer Ltd. amending our option agreement dated May 15, 2006 granting Kokanee an option to purchase a 51% interest in our Diamond Peak Property

69

§	Amending Agreement dated for reference November 9, 2010 between us and Energex, LLC amending our Option Agreement dated September 9, 2007 for the acquisition of a 100% Ravin molybdenum/tungsten property in Lander County, Nevada
§	Option Agreement dated March 4, 2011 between the Company and Claremont Nevada Mines LLC., granting an option to purchase up to a 75% interest in the Majuba Hill Property

We have not entered into any other material agreements other than in the ordinary course of its business.  

We have excluded management and public relations agreements, geological data access agreements, geological consulting agreements, professional services and other generic agreements as being in the ordinary course of our business.

10.D

Exchange Controls

There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital (including, without limitation, foreign exchange controls), or that affect the remittance of dividends, interest or other payments to non-resident holders of our Common Shares.  However, any such remittance to a resident of the United States may be subject to a withholding tax pursuant to the reciprocal tax treaty between Canada and the United States.  For further information concerning such withholding tax, see “Item 10.E Taxation”

There are no limitations under the laws of Canada, the Province of Alberta, or in our charter or other constituent documents with respect to the right of non-resident or foreign owners to hold and/or vote our common shares.  However, the Investment Canada Act (the “Act”), enacted on June 20, 1985, as amended, requires the prior notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a “non-Canadian” of “control” of a “Canadian business,” all as defined in the Act.  For the purposes of the Act, “control” can be acquired through the acquisition of all or substantially all of the assets used in the Canadian business, or the direct or indirect acquisition of interests in an entity that carries on a Canadian business or which controls the entity which carries on the Canadian business.  Under the Act, control of a corporation is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where more than one-third, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact through the ownership of voting shares.  Other rules apply with respect to the acquisition of non-corporate entities.

Investments requiring review and approval include direct acquisition of Canadian businesses with assets with a gross book value of $5,000,000 or more; indirect acquisitions of Canadian businesses with assets of $50,000,000 or more; and indirect acquisitions of Canadian businesses where the value of assets of the entity or entities carrying on business in Canada, control of which is indirectly being acquired, is greater than $5,000,000 and represents greater than 50% of the total value of the assets of all of the entities, control of which is being acquired.

Pursuant to the World Trade Organization Agreement Implementation Act, the Act was amended to provide that the value of the business acquisition threshold (the “Threshold”) above described is increased from those levels outlined where the acquisition is by a World Trade Organization Investor or by a non-Canadian other than a World Trade Organization Investor where the Canadian business that is the subject of the investment is immediately before the investment controlled by a World Trade Organization Investor.  The Threshold is to be determined yearly in accordance with a formula set forth in the Act.  For 2010, the Threshold was determined to be $299,000,000.

A World Trade Organization Investor includes an individual, other than a Canadian, who is a national of a World Trade Organization Member, or who has the right of permanent residence in relation to that World Trade Organization Member.

70

Different provisions and considerations apply with respect to investment to acquire control of a Canadian business that, as defined in the Act or regulations:

·

engages in production of uranium and owns an interest in a producing uranium property in Canada;

·

provides financial services;

·

provides transportation services;

·

is a cultural business.

If an investment is reviewable, an application for review in the form prescribed by regulation is normally required to be filed with the Ministry of Industry, Director of Investment prior to the investment taking place and the investment may not be consummated until the review has been completed and ministerial approval obtained.  Applications for review concerning indirect acquisitions may be filed up to 30 days after the investment is consummated.  Applications concerning reviewable investments in culturally sensitive and other specified activities referred to in the preceding paragraph are required upon receipt of a notice for review.  There is, moreover, provision for the Minister (a person designated as such under the Act) to permit an investment to be consummated prior to completion of review if he is satisfied that delay would cause undue hardship to the acquirer or jeopardize the operation of the Canadian business that is being acquired.

10.E

Taxation

Certain United States Federal Income Tax Consideration

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares.  In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty.  Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.  Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.  This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.  In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, U.S. court decisions, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document.  Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary.  This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

71

U.S. Holders

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes:

·

an individual who is a citizen or resident of the U.S.;

·

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia;

·

an estate whose income is subject to U.S. federal income taxation regardless of its source; or

·

a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

Non-U.S. Holders

For purposes of this summary, a “non-U.S. Holder” is a beneficial owner of common shares that is not a U.S. Holder.  This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common shares.  Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders:  (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are dealers in securities or currencies or U.S. Holders that are traders in securities that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options

 or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) partnerships and other pass-through entities (and investors in such partnerships and entities); or (i) U.S. Holders that own or have owned  (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company.  This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are (a) U.S. expatriates or former long-term residents of the U.S. subject to Section 877 of the Code, (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Canadian Act (as defined below); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute “taxable Canadian property” under the Canadian Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention.  U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.

If an entity that is classified as a partnership for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such partnership and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners.  This summary does not address the tax consequences to any such partner.  Partners of entities that are classified as partnerships for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.

72

Tax Consequences Not Addressed

This summary does not address the U.S. state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax or foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares.  Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax and foreign tax consequences of the acquisition, ownership, and disposition of common shares.

Passive Foreign Investment Company Rules

If the Company is considered a “passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”) at any time during a U.S. Holder’s holding period, the following sections will generally describe the U.S. federal income tax consequences to the U.S. Holder of the acquisition, ownership, and disposition of common shares.

PFIC Status of the Company

The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets.  “Gross income” generally means all revenues less the cost of goods sold, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporation’s commodities are stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business, and certain other requirements are satisfied.

For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate

share of the income of such other corporation.  In addition, for purposes of the PFIC income test and asset test described above, “passive income” does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a “related person” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.

In addition, under certain attribution rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company which is also a PFIC (a ‘‘Subsidiary PFIC’’), and will be subject to U.S. federal income tax on their proportionate share of (i) a distribution on the shares of a Subsidiary PFIC and (ii) a disposition or deemed disposition  of shares of a Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC.

The Company believes that it qualified as a PFIC for the tax year ended December 31, 2010 and may continue to be a PFIC in future years.  The determination of whether a corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations.  In addition, whether a corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document.  Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or a Subsidiary PFIC) concerning its PFIC status or that the Company (and each subsidiary) was not, or will not be, a PFIC for any tax year.  Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the Company and each subsidiary .

73

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether such U.S. Holder makes an election to treat the Company as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”) or a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”).  A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and (b) any excess distribution received on the common shares.  A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the common shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares, and any “excess distribution” received on common shares, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective common shares.  The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income.  The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year.  A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.

If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years.  A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold on the last day of the last tax year for which the Company was a PFIC.

QEF Election

A U.S. Holder that makes a QEF Election for the first tax year in which its holding period of its common shares begins, generally, will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares.  However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) and the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder.  Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain.  A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company.  However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election.  If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge.  If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.

74

A U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election.  In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely.  A QEF Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding period for the common shares in which the Company was a PFIC.  A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year.

A QEF Election will apply to the tax year for which such QEF Election is made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election.  If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC.  Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.

U.S. Holders should be aware that there can be no assurance that we will satisfy record keeping requirements that apply to a QEF, or that we will supply U.S. Holders with information that such U.S. Holders require to report under the QEF rules, in event that we are a PFIC and a U.S. Holder wishes to make a QEF Election.  Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares.  Each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the availability of, and procedure for making, a QEF Election.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock.  The common shares generally will be “marketable stock” if the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and other requirements and the laws of the country in which such foreign exchange is located, together with the rules of  such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange ensure active trading of listed stocks.  

If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter.

A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares.  However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares.

75

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder’s tax basis in such common shares.  A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (i) such U.S. Holder’s adjusted tax basis in the common shares, over (ii) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election.  In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years).

A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be “marketable stock” or the IRS consents to revocation of such election.  Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable.  Hence, the Mark-to-Market Election will not be effective to eliminate the interest charge described above with respect to deemed dispositions of Subsidiary PFIC stock or distributions from a Subsidiary PFIC.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations).  However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election.  For example under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC.  Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit.  

The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with their own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

In addition, a U.S. Holder who acquires common shares from a decedent will not receive a “step up” in tax basis of such common shares to fair market value.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

76

U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares

The following discussion is subject to the rules described above under the heading “Passive Foreign Investment Company Rules.”

General Taxation of Distributions

Subject to the PFIC rules discussed above, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes.  A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates.  To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares.  (See “ Sale or Other Taxable Disposition of common shares” below).  However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income.  Dividends received on common shares generally will not be eligible for the “dividends received deduction”.  In addition, the Company does not anticipate that its distributions will be eligible for the preferential tax rates applicable to long-term capital gains.  In addition, the Company does not anticipate that its distributions will constitute qualified dividend income eligible for the preferential tax rates applicable to long term capital gains.  The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

Sale or Other Taxable Disposition of Common Shares

Subject to the PFIC rules discussed above, upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of.  Subject to the PFIC rules discussed above, gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.

Preferential tax rates apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust.  There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation.  Deductions for capital losses are subject to significant limitations under the Code.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time).  

If the foreign currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes.  Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

77

Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder who pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid.  Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax.  This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income.  In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.”  In addition, this limitation is calculated separately with respect to specific categories of income.  Dividends paid by the Company generally will constitute “foreign source” income and generally will be categorized as “passive category income.”  Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of common shares generally will be treated as “U.S. source” for purposes of applying the U.S. foreign tax credit rules unless the gain is subject to tax in Canada and its resourced as “foreign source” under the Canada U.S. Tax Convention and such U.S. Holder elects to treat such gain or loss as “foreign source”.  The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under U.S. federal income tax law and Treasury regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation.  Penalties for failure to file certain of these information returns are substantial.  U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, and, if applicable mark-to-market and QEF elections.

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares generally may be subject to information reporting and backup withholding tax, at the rate of 28%, (and increasing to 31% for payments made after December 31, 2012) if a U.S. Holder (a) fails to furnish such U.S.  Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.  However, certain exempt persons, such as corporations, generally are excluded from these information reporting and backup withholding rules.  Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a

U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.  Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

Certain Canadian Federal Income Tax Consequences

The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the Company (the "Shareholder"), and who at all material times for the purposes of the Income Tax Act (Canada) (the "Canadian Act") deals at arm's length with the Company,  holds all common shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada.  It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.

78

This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the  "Treaty") as amended.  This summary takes into account all specific proposals to amend the Canadian Act and the  regulations thereunder  publicly announced  by the government of Canada to the date hereof and the Company's understanding of the current published administrative and assessing practices of Canada Customs and Revenue  Agency.  It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any provincial, territorial or foreign income tax law or treaty.

This summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.

A Shareholder generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the Common share constitutes "taxable Canadian property" to the Shareholder for purposes of the Canadian Act and the Shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty.  A Common share that is disposed of by a Shareholder will not constitute taxable Canadian property of the  Shareholder provided that the Common share is listed on a stock  exchange that is  prescribed for the purposes of the Canadian Act (the Toronto  Stock Exchange is so prescribed), and that neither the Shareholder, nor one or more persons with whom the Shareholder did not deal at arm's length, alone or together at any time in the five years immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Company.  

In addition, the Treaty generally will  exempt a Shareholder who is a resident of the United  States for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not derived  principally from real  property (including resource property) situated in Canada or that the Shareholder does not have, and has not had within the 12-month period preceding the  disposition, a "permanent establishment" or "fixed  base," as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada.  The Treaty may not be available to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S.  Any dividend on a Common share, including a stock dividend, paid or credited, or deemed to be paid or credited,  by the Company to a Shareholder  will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty.  Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross amount of the dividend.  It is Canada Customs and Revenue Agency’s position that the Treaty reductions are not available to a Shareholder that is a "limited liability company" resident in the United States. The Company will be required to withhold any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.

ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.

10.F     Dividends and Paying Agents

Not Applicable.

10.G

Statement by Experts

Not Applicable.

79

10.H

Documents on Display

We have filed with the Securities and Exchange Commission this annual report on Form 20-F, including exhibits, under the Securities and Exchange Act of 1934.

We are subject to the informational requirements of the Securities Exchange Act of 1934 and file reports and other information with the Securities and Exchange Commission.  Reports and other information which we file with the Securities and Exchange Commission, including this Annual Report on Form 20-F, may be inspected and copied at the public reference facilities of the Securities and Exchange Commission at:

100 F Street, NE

Washington D.C.  20549

You can also obtain copies of this material by mail from the Public Reference Section of the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549, at prescribed rates.  Additionally, copies of this material may also be obtained from the Securities and Exchange Commission's internet site at http://www.sec.gov.  The Commission's telephone number is 1-800-SEC-0330.  Copies of the above material contracts may be inspected at our principal executive office at the address on the face page of this Report during normal business hours.

10.I     Subsidiary Information

As of June 15, 2011, we have one subsidiary, MAX Resources, Inc., a wholly owned Nevada corporation.

Item 11.

Quantitative and Qualitative Disclosures About Market Risk

We were incorporated under the laws of Alberta, Canada and our financial results are quantified in Canadian dollars.  We raise equity funding through the sale of securities denominated in Canadian dollars, whereas the majority of our obligations and expenditures with respect to our properties will be incurred in US Dollars.  Variations in the exchange rate may give rise to foreign exchange gains or losses that may be significant.  Market risks relating to our operations, if we begin production, are anticipated to result primarily from changes in interest rates, foreign exchange rates and commodity prices, as well as credit risk concentrations.  We do not use financial instruments for trading purposes and are not parties to any leverage derivatives.  We do not currently engage in hedging transactions.  See “Currency and Exchange Rates” and Item 4 – “Information on the Company”.

Item 12.

Description of Securities Other than Equity Securities

The required disclosure is not applicable.  

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

We have had no material defaults in payment of principal, interest or sinking or purchase fund installments or other material defaults relating to indebtedness.

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds

 The required disclosure is not applicable.  

Item 15.

Controls and Procedures

(a) Disclosure Controls and Procedures

80

At the end of the period covered by this annual report for the fiscal year ended December 31, 2010, an evaluation was carried out under the supervision of, and the with the participation of, the Company’s management, including its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act).  Based upon that evaluation, the Company’s CEO and CFO have concluded that the disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 (b) Managements’ Annual Report on Internal Control Over Financial Reporting

Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) of the Exchange Act of 1934, as amended.  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Internal control over financial reporting includes policies and procedures that:

(i)

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;

(ii)

provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles;

(iii)

provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and

(iv)

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

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of fiscal year ended December 31, 2010 based on the framework in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (the “Framework”).  

Based on this evaluation, our management concluded that, as of fiscal year ended December 31, 2009, there were  no deficiencies they considered to be material weaknesses.

(c)  Attestation Report of the Registered Public Acounting Firm

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which permits the Company to provide only management’s report in this Annual Report. The Dodd-Frank Act permits a “non-accelerated filer” to provide only management’s report on internal control over financial reporting in an Annual Report and omit an attestation report of the issuer’s registered public accounting firm regarding management’s report on internal control over financial reporting

81

(d) Changes in Internal Control Over Financial Reporting

Based upon their evaluation of our controls, our CEO and CFO have concluded that, there were no significant changes in our internal control over financial reporting or in other factors during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16.  

Reserved

16A.

Audit Committee Financial Expert

We have determined that Stuart Rogers qualifies as an audit committee financial expert, pursuant to SEC regulations and the other members of the audit committee ( Tim Coupland and Paul John) satisfy the financial literacy requirements for audit committee members and are independent members of the Audit Committee as determined in accordance with Section 803 of the NYSE – Company Guide and Rule 10A-3 of the Exchange Act.  Mr. Rogers does not qualify as independent under Rule 10A-3 of the Exchange Act or Section 803 of the NYSE-AMEX Company Guide.  

16.B

Code of Ethics

We have not adopted a formal code of ethics.  We have concluded that a written code of ethics would serve little practical purpose for us in deterring wrongdoing and promoting ethical conduct and full, fair and accurate public disclosure and compliance with applicable laws and regulatory requirements.  Since our operations are currently relatively small, most of our important activities are conducted directly by or under the direct supervision of our directors and senior officers.  All of our current directors and officers have held their positions for a number of years and are familiar with our operations and our informal requirements for conduct.  In light of the lack of perceived benefit from adopting a formal code considered against the time and cost for management to consider and implement a code, we have decided not to do so at the present time.  We will continue to monitor the possible benefits of adopting a formal code of ethics, particularly as our operations expand and will consider whether we should adopt a formal code of ethics at a future date.  

16.C

Principal Accountant Fees and Services

(a)

Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements, together with services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $25,500 for the year ended December 31, 2010 and $24,892 for the year ending December 31, 2009.

(b)

Audit-Related Fees

 The aggregate fees billed for each of the last two fiscal years for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of our financial statements but are not reported under paragraph (a) of this Item were approximately $2,500 for the year ending December 31, 2010, and  $2,500 for the year ending December 31, 2009.

(c)

Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were approximately $5,000 for the year ending December 31, 2010 and $6,000 for the year ending December 31, 2009.

82

(d)

All Other Fees

The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant other than services disclosed in paragraphs (a) through (c) of this Item were $ nil for the year ending December 31, 2010 and $ nil in the year ending December 31, 2009.

(e)

Pre-Approval Policies

Our Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audits, audit-related services, tax services and other services provided by the auditor.  Any services provided by our independent auditor that are not specifically included within the scope of the audit must be pre-approved by our audit committee prior to any engagement.  Our audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimus exception before the completion of the engagement.

16.D

Exemptions from the Listing Standards for Audit Committees

Not applicable.

16.E

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no repurchases by or on behalf of the Company or any affiliated purchaser, including any repurchases made pursuant to a publicly announced plan or program or made pursuant to a plan or program that was not announced publicly, in the last fiscal year.  We made no open market repurchases.

16.F

Change in Registrant’s Certifying Accountant

Not Applicable

16.G

Corporate Governance

Not Applicable

83

PART III

FINANCIAL STATEMENTS

Item 17.

Financial Statements

We are furnishing the following financial statements and reports:

Auditor’s Report dated April 28, 2011

Consolidated Balance Sheets at December 31, 2010 and 2009

Consolidated Statements of Operations, Comprehensive Loss and Deficit for the years ended December 31, 2010, 2009 and 2008

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008

Notes to the Consolidated Financial Statements

All financial statements herein, unless otherwise stated, have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”).  These principles, as they pertain to our consolidated financial statements, differ from United States’ generally accepted accounting principles (“U.S. GAAP”) in a number of material respects, which are set out elsewhere herein.  See Note 13 to the attached consolidated financial statements.

84

Item 18.

Financial Statements

Not applicable as our consolidated financial statements have been prepared in accordance with Item 17.

Item 19.

Exhibits

The following exhibits are filed as part of this Annual Report:

1.  

Certificate of Incorporation and Certificate of Amendment and Registration of Restated Articles and Bylaws ⁽¹⁾

4.  Material Contracts

4.1

Management Agreement dated May 8, 2002 between Vancan Capital Corp. and West Oak Capital Group Ltd. ⁽²⁾

4.2

Option Agreement dated May 17, 2004 between MAX Resource Corp. and Zazu Exploration, Inc. to acquire an interest in the Gold Hill Project near Cantwell, Alaska. ⁽³⁾

4.3

Mineral Property Option Agreement with Alberta Star Development Corp. to acquire up to a 50% interest in the MacInnis Lake Uranium Property dated April 1, 2005. ⁽³⁾

4.4

Mineral Property Option Agreement between the Wendt Family Trust and the Company dated May 9, 2006 optioning 100% of the Diamond Peak Property to the Company. ⁽⁴⁾

4.5

Mineral Property Option Agreement between Kokanee Placer Ltd. and the Company dated May 15, 2006 granting Kokanee Place Ltd. the right to acquire up to a 51% interest in the Diamond Peak Property. ⁽⁴⁾

4.6

Agreement dated September 22, 2005 between the Company and Applied Geological Services, Inc. regarding the acquisition by the Company of the C de Baca Project claims. ⁽⁴⁾

4.7

Agreement dated April 4, 2007 between NUSTAR Exploration LLC and the Company for the acquisition of the mineral claims in Colorado Plateau, Arizona. ⁽⁵⁾

4.8

Mineral Property Option Agreement dated September 10, 2007 between Energex LLC and us to acquire a 100% interest in the Ravin Property ⁽⁶⁾

4.9

Mineral Property Option Agreement between MSM LLC and us dated December, 2007 to acquire a 100% interest in the East Manhattan Wash claims in the Manhattan Mining District, Nye County, Nevada. ⁽⁶⁾

4.10

Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated June 9, 2008 to acquire a 60% interest in and to the Indata project located in North Central B.C. ⁽⁶⁾

4.11

Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated June 9, 2008 to acquire a 60% interest in and to the Howell property in southeastern B.C. ⁽⁶⁾

4.12

Consulting Agreement dated October 1, 2008 between MAX Resource Corp. and West Oak Capital Group, Inc. ⁽⁷⁾

4.13

Consulting Agreement dated October 1, 2008 between MAX Resource Corp. and Clarence Wendt; ⁽⁷⁾

4.14

Mineral Property Option Amending Agreement between Eastfield Resource Ltd. And us dated July 24, 2009 to acquire up to a 60% interest in and to either the Howell property or the Crowsnest property in southeastern BC ⁽⁸⁾

85

4.15

Mineral Property Lease and Option to Purchase Agreement between Energex, LLC and us, and dated September 1, 2009 to acquire the Table Top property in Humboldt County, Nevada. ⁽⁸⁾

4.16

Amending agreement dated November 9, 2010 between the Company and with Energex, LLC amending option to purchase a 100% interest in the Ravin Property

4.17

Amending agreement dated September 30, 2009 between the Company and the Wendt Family Trust amending option to purchase a 100% interest in the Diamond Peak Property

4.18

Option Agreement dated March 4, 2011 between the Company and Claremont Nevada Mines LLC., granting an option to purchase up to a 75% interest in the Majuba Hill Property

8.1

Subsidiary of the Company

12.1

Section 302 Certification of CEO

12.2

Section 302 Certification of CFO

13.1

Section 906 Certification of CEO and CFO

⁽¹⁾

 incorporated by reference from our Form 20-F that was originally filed with the commission on June 8, 2001.

⁽²⁾

incorporated by reference from our Form 20-F that was originally filed with the commission on June 27, 2003.

⁽³⁾

 incorporated by reference from our Form 20-F that was originally filed with the commission on June 29, 2005.

⁽⁴⁾

 incorporated by reference from our Form 20-F that was originally filed with the commission on June 30, 2006.

⁽⁵⁾

incorporated by reference from our Form 20-F that was originally filed with the commission on July 2, 2007.

⁽⁶⁾

 incorporated by reference from our Form 20-F that was originally filed with the commission on June 25, 2008.

⁽⁷⁾

incorporated by reference from our Form 20-F that was originally filed with the commission on April 22, 2009.

⁽⁸⁾

incorporated by reference from our Form 20-F that was originally filed with the commission on April 2, 2010.

86

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

MAX RESOURCE CORP.

Dated:  June  27, 2011

“Stuart Rogers”

By:  Stuart Rogers, Chief Executive Officer

“Christopher Cherry”

By:  Christopher Cherry , Chief Financial Officer

87

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010

(Expressed in Canadian Dollars)

88

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Max Resource Corp.

We have audited the accompanying consolidated financial statements of Max Resource Corp. which comprise the consolidated balance sheets as at December 31, 2010 and 2009, and the consolidated statements of operations, comprehensive loss and deficit and cash flows for the years ended December 31, 2010, 2009 and 2008, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence that we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Max Resource Corp. as at December 31, 2010 and 2009, and the results of its operations and its cash flows for the years ended December 31, 2010, 2009 and 2008 in accordance with Canadian generally accepted accounting principles.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which describe certain conditions that give rise to doubt about the Company’s ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might result from this uncertainty.

“DMCL”

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

April 28, 2011

89

MAX RESOURCE CORP. (An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed In Canadian Dollars)
		December 31,					December 31,
					2010		2009
ASSETS
CURRENT
Cash and cash equivalents			$			2,087,207	$	3,118,960
Receivables and prepaids						11,138		22,203
Taxes recoverable						15,287		9,753
Marketable securities (Note 3)						174,000		-
						2,287,632		3,150,916
EQUIPMENT (Note 4)						2,254		3,218
RECLAMATION BONDS (Note 5)						61,983		28,356
MINERAL PROPERTIES (Note 5)						2,592,248		2,142,513
			$			4,944,117	$	5,325,003
LIABILITIES
CURRENT
Accounts payable and accrued liabilities			$			29,774	$	57,459
SHAREHOLDERS’ EQUITY
SHARE CAPITAL (Note 7)
Authorized:	Unlimited number of voting common shares without par value
	Unlimited number of preferred shares without par value
Issued and outstanding:	21,699,230 common shares (2009: 21,699,230)					13,003,168		13,003,168
SHARE PURCHASE WARRANTS (Note 7)						288,562		288,562
CONTRIBUTED SURPLUS (Note 7)						1,458,599		1,393,485
DEFICIT						(9,919,986)		(9,417,671)
ACCUMULATED OTHER COMPREHENSIVE INCOME (Note 3)						84,000		-
						4,914,343		5,267,544
				$		4,944,117	$	5,325,003

NATURE OF OPERATIONS (Note 1)

COMMITMENTS (Note 5)

SUBSEQUENT EVENTS (Note 13)

APPROVED BY THE DIRECTORS:

“PAUL JOHN”	“STUART ROGERS”
Paul John – Director	Stuart Rogers – Director

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

90

MAX RESOURCE CORP. (An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
YEAR ENDED DECEMBER 31, (Expressed In Canadian Dollars)
		2010	2009	2008
EXPENSES
Amortization	$	964	$1,930		$ -
Consulting		60,920	55,394		86,762
Consulting – stock-based compensation (Note 7)		65,114	86,256		66,794
Investor relations – stock-based compensation		-	-		142,172
Management fees (Note 6)		120,000	120,000		120,000
Management and directors fees – stock-based compensation		-	-		242,999
Office and general		38,172	25,285		24,439
Part XII.6 tax		-	23,079		-
Professional fees		97,772	96,697		82,757
Transfer agent, filing fees and shareholder relations		158,252	337,024		385,710
Travel and promotion		24,870	22,808		50,713
LOSS BEFORE OTHER ITEMS AND INCOME TAXES		(566,064)	(768,473)		(1,202,346)
OTHER ITEMS
Gain on mineral property option payments received (Note 5)		39,893	-		-
Interest income		23,856	95,470		273,890
Impairment of mineral properties (Note 5)		-	(3,987,802)		(484,306)
LOSS BEFORE INCOME TAXES		(502,315)	(4,660,805)		(1,412,762)
Future income tax recovery (Note 8)		-	-		263,748
NET LOSS FOR THE YEAR		(502,315)	(4,660,805)		(1,149,014)
DEFICIT, BEGINNING OF YEAR		(9,417,671)	(4,756,866)		(3,607,852)
DEFICIT, ENDING OF YEAR	$	(9,919,986)	$(9,417,671)		$(4,756,866)
BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.02)	$(0.22)		$(0.05)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – basic and diluted		21,699,230	21,670,736		21,584,202

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

MAX RESOURCE CORP. (An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE INCOME
YEAR ENDED DECEMBER 31, (Expressed In Canadian Dollars)
		2010	2009	2008
LOSS FOR THE YEAR	$	(502,315)	$(4,660,805)	$(1,149,014)
Other comprehensive gain:
Unrealized gain on available for sale marketable securities		84,000	-	-
COMPREHENSIVE LOSS FOR THE YEAR	$	(418,315)	$(4,660,805)	$(1,149,014)
ACCUMULATED OTHER COMPREHENSIVE INCOME, BEGINNING OF YEAR	$	-	$ -	$ -
Other comprehensive gain:
Unrealized gain on available for sale marketable securities		84,000	-	-
ACCUMULATED OTHER COMPREHENVISE INCOME, END OF YEAR	$	84,000	$ -	$ -

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

91

MAX RESOURCE CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,

(Expressed In Canadian Dollars)

		2010	2009	2008
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net loss for the year	$	(502,315)	$(4,660,805)	$(1,149,014)
Adjustments for items not involving cash:
Amortization		964	1,930	-
Gain on mineral property option payments received		(39,893)	-	-
Stock-based compensation - consulting, management    and investor relations expense		65,114	86,256	451,965
Impairment of mineral properties		-	3,987,802	484,306
Future income tax recovery		-	-	(263,748)
Changes in non-cash working capital items:
Decrease in receivables and prepaids		11,065	77,342	108,501
Decrease (increase) in taxes recoverable		(5,534)	4,179	3,207
Decrease in accounts payable and accrued    liabilities		(27,685)	(117,212)	(4,934)
CASH USED IN OPERATING ACTIVITIES		(498,284)	(620,508)	(369,717)
INVESTING ACTIVITIES
Reclamation bonds		(33,627)	-	88
Purchase of equipment		-	(5,148)	-
Mineral property acquisition and exploration costs		(676,246)	(632,745)	(2,914,138)
Mineral property option payments		176,404	-	-
CASH USED IN INVESTING ACTIVITIES		(533,469)	(637,893)	(2,914,050)
DECREASE IN CASH AND CASH EQUIVALENTS		(1,031,753)	(1,258,401)	(3,283,767)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		3,118,960	4,377,361	7,661,128
CASH AND CASH EQUIVALENTS, END OF YEAR	$	2,087,207	$3,118,960	$4,377,361

CASH AND CASH EQUIVALENTS CONSISTS OF:
Cash	$	87,207	$118,960	$207,693
Term deposits		2,000,000	3,000,000	4,169,668
	$	2,087,207	$3,118,960	$4,377,361

SUPPLEMENTARY CASH FLOW DISCLOSURE (Note 9)

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

92

MAX RESOURCE CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010

 (Expressed In Canadian Dollars)

NOTE 1.

NATURE OF OPERATIONS

The Company was incorporated under the Business Corporations Act (Alberta) on April 25, 1994.  The Company is in the business of mineral property exploration and development.  The recoverability of amounts recorded for mineral properties and related deferred costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development, and future production or proceeds from the disposition thereof.  To date, the Company has not generated any revenues from operations and will require additional funds for expenditures and the costs of its operations.  As a result, further losses are anticipated prior to the generation of any profits.

The Company's future capital requirements will depend on many factors, including costs of exploration of its properties, cash flow from and used in operations, and global market conditions. The Company's anticipates recurring operating losses and growing working capital needs to operate its business.  The Company has sufficient funds on hand to cover anticipated operating expenses and the costs of budgeted exploration programs for the next year.

These financial statements are prepared on a going concern basis, which implies the Company will continue realizing its assets and discharging its liabilities in the normal course of business and will be able to fund exploration programs.  Should the Company be unable to continue as a going concern, significant adjustments to asset values may be required.  The Company’s ability to continue as a going concern will depend almost exclusively on access to external capital to complete the exploration and development of mineral properties. Such outside capital will include the sale of additional stock.  There can be no assurance that capital will be available as necessary to meet continuing exploration and development costs or, if the capital is available, that it will be on terms acceptable to the Company.  The issuances of additional shares by the Company may result in a significant dilution in the equity interests of its current shareholders.

NOTE 2.

SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada for financial statements.  Except as indicated in Note 12, they also comply, in all material respects, with accounting principles generally accepted in the United States.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Max Resource, Inc., a Nevada company, which was incorporated on August 24, 2005 Inter-company balances and transactions have been eliminated upon consolidation.   

Use of estimates

The preparation of financial statements in conformity with Canadian 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 these estimates.  Significant areas requiring the use of management estimates relate to useful lives of assets for depreciation and amortization, the recoverability of mineral property interests, the determination of future income taxes, asset retirement obligations, and the determination of fair value for stock based transactions and financial instruments.  Where estimates have been used financial results as determined by actual events could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments which are readily convertible to specified amounts of cash without penalty and with maturities of three months or less when purchased.  

Equipment

Equipment is recorded at cost with amortization provided using the declining balance basis at 30% per annum.

Mineral properties

The Company initially records its interests in and expenditures on mineral properties at cost.  If impairment is indicated then fair value is used if such amount is less than carrying value.  Where specific exploration programs are planned and budgeted by management, the cost of mineral properties and related exploration expenditures are capitalized until the properties are placed into commercial production, sold, abandoned or determined by management to be impaired in value.  These costs will be amortized over the estimated useful lives of the properties following the commencement of production or written off if the properties are sold or abandoned.

Costs include cash or other consideration paid and the fair value of shares or other non-cash consideration issued, if any, on the acquisition of mineral properties.  Costs related to properties acquired under option agreements or joint ventures, where payments are made at the sole discretion of the Company, are recorded in the accounts at such time as the payments are made.  For properties held jointly with other parties, the Company only records its proportionate share of acquisition and exploration costs.  The proceeds from options granted are deducted from the cost of the related property and any excess is deducted from other remaining capitalized property costs.  The Company does not accrue estimated future costs of maintaining its mineral properties in good standing.

Capitalized costs as reported on the balance sheet represent costs incurred to date and may not reflect actual, present, or future values.  Recovery of carrying value is dependent upon future commercial success or proceeds from disposition of the mineral interests.

Management evaluates each mineral interest on a reporting period basis or as events and circumstances warrant, and makes a determination based on exploration activity and results, estimated future cash flows and availability of funding as to whether continuing costs are capitalized or charged to operations.  Mineral property interests, where future cash flows are not reasonably determinable, are evaluated for impairment based on management’s intentions and determination of the extent to which future exploration programs are warranted and likely to be funded.

General exploration costs not related to specific properties and general administrative expenses are charged to operations in the year in which they are incurred.

The Company does not have any producing mineral properties and all of its efforts to date have been exploratory in nature.  Upon the establishment of commercial production, carrying values of deferred acquisition and exploration costs will be amortized over the estimated production life using the units of production method.

The Company receives mining exploration tax credits for certain qualifying work done on its properties. The benefits related to such mining exploration tax credits are credited against exploration costs in the period in which the Company can reasonably estimate the amounts to be received and establish their ultimate recovery.

Asset retirement obligations

The Company reviews and recognizes legal obligations associated with retirement of tangible long-lived assets, including rights to explore or exploit natural resources. When such obligations are identified and measurable, the estimated fair values of the obligations are recognized on a systematic basis over the remaining period until the obligations are expected to be settled.  Resource property related retirement obligations are capitalized as part of carrying values and are accounted for in the same manner as all other capitalized costs.

Future site restoration costs

The Company records future site restoration costs as asset retirement obligations when they are known or likely and they can be reliably determined and measured.  Actual site restoration expenditures are charged to the accumulated provision account as incurred.

NOTE 2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of long-lived assets

The Company follows the recommendations of the Canadian Institute of Chartered Accountants (“CICA”) Handbook section 3063, “Impairment of Long-Lived Assets”. Section 3063 establishes standards for recognizing, measuring and disclosing impairment of long-lived assets held for use. The Company conducts its impairment test on long-lived assets when events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is recognized when the carrying amount of an asset to be held and used exceeds the undiscounted future net cash flows expected from its use and disposal. If there is impairment, the impairment amount is measured as the amount by which the carrying amount of the asset exceeds its fair value, calculated using discounted cash flows when quoted market prices are not available.

Stock-based compensation

The Company follows CICA Handbook Section 3870, which establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services.  The standard requires that all stock-based awards be measured using a fair value methodology.  Under the standard all awards are measured and expensed or allocated to specific asset accounts, as applicable, in the period of grant or modification. The fair value of options and other stock-based awards issued or altered in the period, are determined using the Black-Scholes option pricing model.  Upon the exercise of stock options or agents warrants, the fair value of the share based award is allocated to share capital.

Income taxes

Income taxes are accounted for using the liability method, which requires the recognition of taxes payable or refundable for the current period and future tax liabilities and assets for future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The measurement of current and future tax liabilities and assets is based on provisions of enacted tax laws and the effects of future changes in tax laws or rates. The measurement of future tax assets is reduced, if necessary, by a valuation allowance, where, based on available evidence, the probability of realization of the future tax asset does not meet a more likely than not criterion. The Company has not recognized potential future benefit amounts as the criteria for recognition under generally accepted accounting principals (“GAAP”) have not been met.

Loss per share

The Company is using the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments.  The treasury stock method assumes that proceeds received from in-the-money stock options are used to repurchase common shares at the prevailing market rate.

Basic loss per share figures have been calculated using the weighted average number of shares outstanding during the respective periods.  Diluted loss per share figures are equal to those of basic loss per share for each year since the effects of the share purchase warrants and stock options have been excluded as they are anti-dilutive.

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity from transactions and other events from non owner sources.  Other comprehensive income (loss) refers to items that are excluded from net income (loss) calculated in accordance with GAAP.  The Company’s other comprehensive income (loss) represents changes in shareholders’ equity arising from unrealized gains and losses on financial assets classified as available-for-sale.  

Financial instruments

The Company’s financial instruments consist of cash and cash equivalents, receivables, marketable securities, and accounts payable. The value of the Company’s arm’s length short term financial instruments is estimated by management to approximate their carrying values due to their immediate or short-term maturity.  

Cash and cash equivalents are classified as held for trading; receivables are classified as loans and receivables; marketable securities are designated as available for sale which are measured at fair value; and accounts payable are classified as other financial liabilities.

93

NOTE 2

.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements of the fair value of financial assets and liabilities.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 -Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Net Smelter Royalties (“NSR”) are a form of derivative financial instrument.  The fair value of the Company’s right to purchase the NSR is not determinable at the current stage of the Company’s exploration program.  No value has been assigned by management. The Company does not engage in any form of derivative or hedging instruments.

Translation of foreign currency

The financial statements of the Company's integrated foreign subsidiary is translated into Canadian dollar equivalents using the temporal method whereby all monetary assets and liabilities are translated at the rate of exchange at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date.  Income and expenses are translated at rates which approximate those in effect on transaction dates. Gains and losses arising from translation of foreign currency monetary assets and liabilities at each period end are included in earnings.  Transaction amounts denominated in foreign currencies are translated into their Canadian dollar equivalents at exchange rates prevailing at the transaction date. Gains and losses arising from translation of foreign currency monetary assets and liabilities and transactions are included in earnings.

New accounting pronouncements with future effective dates, not yet adopted

International Financial Reporting Standards (“IFRS”)

In 2006, the Canadian Accounting Standards Board (“AcSB”) published a strategic plan that will significantly affect financial reporting requirements for Canadian companies.  The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period.  In February 2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada’s own generally accepted accounting principles.  The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010.  Management has determined that the adoption of IFRS will not have a material impact on the financial statements of the Company or its business, except for expanded disclosures in the financial statements.  

Business combinations – section 1582, consolidated financial statements – section 1601 and non-controlling interests – section 1602

The CICA issued three new accounting standards in January 2009:  Section 1582, “Business Combinations”, Section 1601, “Consolidated Financial Statements” and Section 1602, “Non-Controlling Interests”.  These new standards will be effective for fiscal years beginning on or after January 1, 2011.  Section 1582 replaces section 1581 and establishes standards for the accounting for a business combination.  It provides the Canadian equivalent to IFRS 3, “Business Combinations”.  Section 1601 and 1602 together replace section 1600, “Consolidated Financial Statements”.  Section 1601 establishes standards for the preparation of consolidated financial statements.  Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination.  It is equivalent to the corresponding provisions of IFRS IAS-27, “Consolidated and Separate Financial Statements”.  The Company is in the process of evaluating the requirements of the new standards.

94

NOTE 3

.

MARKETABLE SECURITIES

During the year ended December 31, 2010, the Company received an option payment, consisting of 600,000 shares with a market value of $90,000, from Kokanee Placer Ltd. (“Kokanee”), a publically traded British Columbia company. .  The Company records these shares at fair value (Note 2).  As at December 31, 2010, the fair value of these shares was $174,000.  During the year ended December 31, 2010, the Company recognized an unrealized gain of $84,000 on it marketable securities. The gain has been recorded as Other Comprehensive Income.

NOTE 4

.

EQUIPMENT

	December 31, 2010			December 31, 2009
	Cost	Accumulated Amortization	Net Book Value	Cost	Accumulated Amortization	Net Book Value
Equipment	$5,148	$2,894	$2,254	$5,148	$1,930	$3,218

NOTE 5.

MINERAL PROPERTIES

	Balance December  31, 2008	Additions (Recoveries)	Write-off	Balance December 31, 2009	Additions	Option Payments / Recoveries Received	Balance December 31, 2010
Acquisition costs:
Target Claims, NWT	$                 1	$               -	$              (1)	$                 -	$                -	$                 -	$                 -
Gold Hill, AK	432,944	91,500	(524,444)	-	-	-	-
MacInnis Lake, NWT	1	-	(1)	-	-	-	-
C de Baca, NM	172,563	16,339	-	188,902	17,570	-	206,472
Diamond Peak, NV	48,737	1,370	-	50,107	134,463	(148,841)	35,729
Nustar Claims, AZ	497,948	-	(497,948)	-	-	-	-
Ravin, NV	116,043	60,560	-	176,603	17,985	-	194,588
East Manhattan, NV	105,451	45,888	-	151,339	53,631	-	204,970
Howell, BC	27,500	10,000	-	37,500	-	-	37,500
Crowsnest, BC	-	8,817	-	8,817	-	-	8,817
Indata, BC	22,500	-	(22,500)	-	-	-	-
Table Top, NV	-	30,318	-	30,318	40,402	-	70,720
	1,423,688	264,792	(1,044,894)	643,586	264,051	(148,841)	758,796
Exploration costs:			-
Gold Hill, AK	2,509,579	83,893	(2,593,472)	-	-	-	-
C de Baca,  NM	235,596	-	-	235,596	-	-	235,596
Nustar Claims, AZ	4,096	1,392	(5,488)	-	-	-	-
Ravin, NV	486,418	17,930	-	504,348	639	-	504,987
East Manhattan, NV	9,658	53,448	-	63,106	38,748	-	101,854
Howell, BC	455,407	(17,606)	-	437,801	-	-	437,801
Crowsnest, BC	-	248,429	-	248,429	613	(77,670)	171,372
Indata, BC	338,478	5,470	(343,948)	-	-	-	-
Table Top, NV	-	9,647	-	9,647	314,103	-	323,750
Diamond Peak	-	-	-	-	58,092	-	58,092
	4,039,232	402,603	(2,942,908)	1,498,927	412,195	(77,670)	1,833,452
	$   5,462,920	$  667,395	$(3,987,802)	$  2,142,513	$  676,246	$ (226,511)	$  2,592,248

Target Claims, Northwest Territories, Canada

During 2003, the Company acquired a 50% interest in a mineral claim located in the Longtom Lake area of the Northwest Territories (the “Target 1 Claim”).  During the year ended December 31, 2007, the Company recorded an impairment charge of $148,097 on the Target 1 Claim and during the year ended December 31, 2009, the Company elected to abandon the Target Claims and wrote-off the remaining $1 of acquisition costs to operations.

Gold Hill Property, Alaska, United States

During 2004, the Company entered into an option agreement to acquire an interest in the Gold Hill claims near Cantwell, Alaska.  During the year ended December 31, 2009, the Company elected to abandon the Gold Hill property and wrote off $524,444 of acquisition costs and $2,593,472 of deferred exploration costs to operations.

MacInnis Lake, Northwest Territories, Canada

The Company entered into an option agreement dated April 1, 2005, as amended April 11, 2006 and September 29, 2008, with Alberta Star Development Corp. (“Alberta Star”), a company with a common director. Under the agreement the Company could earn an interest in the MacInnis Lake Uranium Project in the Northwest Territories.

During the year ended December 31, 2008, the Company recorded an impairment charge of $484,306 on the MacInnis Lake property and during the year ended December 31, 2009, the Company elected to abandon the MacInnis Lake property and wrote-off the remaining $1 of acquisition costs to operations.

C de Baca, New Mexico, United States

On September 22, 2005, the Company entered into an agreement to acquire a total of 108 claims (the “Dat Claims”) in Socorro County, New Mexico, pursuant to an agreement with Applied Geologic Services, Inc. of Denver, Colorado.  Consideration for the acquisition of the Claims was US$10,000 cash payment (paid), with annual payments of US$10,000 until the commencement of production.  After commencement of production, a royalty of 2% of gross revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  

As at December 31, 2010, the Bureau of Land Management (“BLM”) of New Mexico holds a $18,888 reclamation bond (2009 - $18,888) from the Company to guarantee reclamation of the environment on the C de Baca property.

95

NOTE 5.

MINERAL PROPERTIES (continued)

Diamond Peak, Nevada, United States

On May 9, 2006, the Company entered into an Option Agreement, as amended June 30, 2010, to acquire a 100% interest in the claims in Eureka County, Nevada, the “Diamond Peak Property”, from The Wendt Family Trust.  The Wendt Family Trust is controlled by Clancy J. Wendt, the Vice President of Exploration for the Company.  The terms of the Option Agreement require the issuance to the Wendt Family Trust of 100,000 escrowed shares (issued) of the Company with a fair value of $40,000 and the following rental payments:

Date

Payment Amount

Upon execution of the Agreement

$ 25,000 (U.S.) (paid)

May 9, 2007

   35,000 (U.S.) (paid)

May 9, 2008

   45,000 (U.S.) (paid)

May 9, 2009

   50,000 (U.S.) (paid)

June 30, 2010 (on execution of amending agreement)

   25,000 (U.S.) (paid)

May 9, 2011 (as amended)

   35,000 (U.S.)

May 9, 2012 (as amended

   45,000 (U.S.)

Each anniversary thereafter for 4 years (as amended)

$ 50,000 (U.S.)

The Company may purchase the property for US$300,000.   If the option to purchase the property is exercised during the term of the rental payments, no further property rental payments will be due.  The Diamond Peak property will be subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the property.

On May 15, 2006, the Company entered into a mineral property Option Agreement with Kokanee whereby it granted Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property in consideration of certain cash payments totalling US$470,000, the issuance of 600,000 common shares of Kokanee and incur mineral exploration commitments of $1,000,000 (Note 3).

During the year ended December 31, 2010, the Company received cash of $98,734 (US$95,000) and 600,000 common shares of Kokanee valued at $90,000 for total proceeds received of $188,734 on the Diamond Peak property.  As the Company had only incurred costs of $148,841 at that point, a gain on option payments received of $39,893 has been recorded.  In June 2010, Kokanee advised the Company that they would not make the annual option payment of US$50,000 then due and would be abandoning their option on the property.

Diamond Peak, Nevada, United States (continued)

During the year ended December 31, 2010, the Company incurred consulting fees of $21,248 drilling and assaying fees of $9,220 and field expenses of $27,624 on the Diamond Peak property (2009 - $Nil).

As at December 31, 2010, the BLM holds a $14,500 reclamation bond (2009 - $Nil) from the Company to guarantee reclamation of the Diamond Peak property.

Nustar Claims, Arizona, United States

On April 4, 2007, the Company entered into an agreement with Nustar Exploration LLC, a private Arizona limited liability corporation, for the acquisition of a 100% interest in 427 mineral claims located in northwest Arizona.  During the year ended December 31, 2009, the Company elected to abandon the Nustar project and wrote off $497,948 of acquisition costs and $5,488 of deferred exploration costs.

Ravin Claims, Nevada, United States

On September 10, 2007, as amended November 9, 2010, the Company entered into an Option Agreement with Energex LLC (“Energex”), a Nevada corporation, for the acquisition of a 100% interest in the Ravin property,

96

NOTE 5.

MINERAL PROPERTIES (continued)

consisting of mineral claims located in Lander County, Nevada.  Energex is wholly-owned by Clancy J. Wendt, the Vice President of Exploration for the Company.

The terms, as amended, of the Option Agreement with Energex require the payment of $4,996 (US$5,000) on execution of the agreement (paid), $26,722 (US$25,000) by September 10, 2008 (paid), $38,700 (US$35,000) by September 10, 2009 (paid) and $10,650 (US$10,000) by September 10, 2010 (paid), with an additional US$10,000 on each anniversary thereafter, subject to increase to US$50,000 upon certain triggering events.  The Ravin Property is subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the project.  In addition, the Company has paid filing fees of $106,185, which have been included in acquisition costs.

During the years ended December 31, 2010 and 2009, the Company incurred the following exploration costs on the Ravin Claims:

	2010	2009
Drilling and assays	$ -	$ 3,929
Geological consulting	639	12,930
Field expenses	-	1,071
	$ 639	$ 17,930

As at December 31, 2010, the BLM holds a $8,046 reclamation bond (2009 - $8,046) from the Company to guarantee reclamation of the environment on the Ravin property.

East Manhattan, Nevada, United States

On November  11, 2007 as amended December 4, 2008 and December 21, 2010, the Company entered into an Option Agreement with MSM LLC (“MSM”), a Nevada corporation, for the acquisition of a 100% interest in the East Manhattan Wash mineral claims located in Nye County, Nevada.

The terms of the Option Agreement with MSM call for the payment of $27,874 (US$28,000) on execution of the agreement (paid), $25,029 (US$20,000) by December 4, 2008 (paid), $26.603 (US$25,000) by December 4, 2009 (paid), $40,560 (US$40,000) by December 4, 2010 (paid), US$50,000 by December 4, 2011 and US$100,000 by December 12, 2012, subject to securing a drill permit.  

East Manhattan, Nevada, United States (continued)

In addition, the Company must make exploration expenditures totalling US$700,000 on the claims including the following minimum expenditures, subject to receipt of drill permits and securing a drill rig which to December 31, 2010 has not been received (i) on or before the second anniversary, US$50,000 (deferred until drill rig secured); (ii) on or before the fourth anniversary, a further US$150,000; (iii) on or before the fifth anniversary, a further US$200,000; and (iv) on or before the sixth anniversary, a further US$300,000.  The East Manhattan Property is subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the project.

During the years ended December 31, 2010 and 2009, the Company incurred the following exploration costs on the East Manhattan Project:

	2010	2009
Drilling and assays	$       5,202	$      2,763
Geological consulting	29,923	35,133
Field expenses	3,623	5,552
	$     38,748	$     53,448

NOTE 5.

MINERAL PROPERTIES (continued)

Howell and Crowsnest, British Columbia, Canada

On June 9, 2008, the Company entered into an Option Agreement with Eastfield Resources Ltd. (“Eastfield”), whereby the Company may acquire a 60% interest in the Howell Gold Project in Southeast British Columbia.  On July 23 2009, the Company agreed with Eastfield to amend the Howell property agreement to allow the Company to earn a 60% interest in either the Howell or the Crowsnest projects over a four year period by making cash payments totalling $60,000 to Eastfield ($10,000 paid on signing of the amended agreement), issuing 50,000 shares (issued) and by completing aggregate exploration expenditures on both properties of $400,000 by the second anniversary date (June 30, 2011).  Following that date, the Company can earn its 60% interest in Howell by making further cash payments totalling $90,000, issuing 400,000 shares and spending a further $700,000 on exploration prior to June 30, 2013.  To earn its 60% interest in Crowsnest, the Company must make further cash payments to Eastfield of $90,000, issue 400,000 shares and spend a further $1,050,000 on exploration at Crowsnest prior to June 30, 2013.

In February 2010, the Government of British Columbia announced that it intends to halt all ongoing mineral exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  The Company has been contacted by the Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.  The agreement with Eastfield remains in good standing with all payment requirements suspended pending resolution of payment of compensation from the government of British Columbia.

In October 2010, the Company received $77,670 as a mining tax credit for mineral exploration in British Columbia.

During the years ended December 31, 2010 and 2009, the Company incurred the following exploration costs on the Howell property:

	2010	2009
Geological consulting	$         -	$ 3,078
BC mining tax recovery	-	(20,684)
	$         -	$ (17,606)

During the years ended December 31, 2010 and 2009, the Company incurred the following exploration costs on the Crowsnest property:

	2010	2009
Drilling and assays	$          -	$ 112,088
Geological consulting	613	52,524
Field expenses	-	83,817
	$     613	$ 248,429

Indata, British Columbia, Canada

On June 9, 2008, the Company entered into an Option Agreement with Eastfield for the acquisition of a 60% interest in the Indata Project in North Central British Columbia.

During the year ended December 31, 2009, the Company elected to abandon the Indata property and wrote off $22,500 of acquisition costs and $343,948 of deferred exploration costs to operations.  

Table Top, Nevada, United States

On August 31, 2009, the Company entered into an Option Agreement with Energex to acquire a 100% interest in the Table Top claims in Humboldt County Nevada.

NOTE 5.

MINERAL PROPERTIES (continued)

The terms of the Option Agreement with Energex require the payment of $5,400 (US$5,000) upon execution of the Agreement (paid), US$25,000 on the first anniversary of the Agreement (deferred until results from the March 2011 drill program received), US$35,000 on the second anniversary of the Agreement and US$50,000 on each anniversary thereafter for a term of ten years, subject to renewal.  The Company may buy the property at any time for US$300,000, at which point the annual payments will cease.  The Table Top property is subject to a 3% NSR royalty.  Upon full exercise of the Option Agreement, the Company will own 100% of the project.

During the years ended December 31, 2010 and 2009, the Company incurred the following explorations costs on the Table Top Property:

	2010	2009
Geological consulting	$       91,048	$                 -
Drilling and assaying	198,915	-
Field expenses	24,140	-
	$     314,103	$                 -

At December 31, 2010, the BLM holds a $19,127 reclamation bond (2009 - $Nil) from the Company to guarantee reclamation of the environment on the Table Top property.  At December 31, 2010 an additional bond of $1,422 (2009 - $1,422) is held on properties previously fully impaired.

NOTE 6.

RELATED PARTY TRANSACTIONS

During the year ended December 31, 2010, management fees of $120,000 (2009 - $120,000; 2008 - $120,000) were incurred to a private company controlled by a director.  

During the year ended December 31, 2010, consulting fees of US$120,000 (2009 - US$120,000; 2008 - US$120,000) were incurred to a director for geologic consulting services.  

This transactions were measured at the exchange amount as agreed to by the related parties.

NOTE 7.

SHARE CAPITAL

Authorized:

Unlimited number of voting common shares without par value

Unlimited number of preferred shares without par value

	Number of Shares	Share Capital	Share Purchase Warrants	Contributed Surplus
Common Shares Issued:
Balance at December 31, 2008	21,649,230	$ 12,996,918	$   288,562	$   1,307,229
Shares issued for mineral property (Note 4)	50,000	6,250	-	-
Stock-based compensation	-	-	-	86,256
Balance at December 31, 2009	21,699,230	13,003,168	288,562	1,393,485
Stock-based compensation	-	-	-	65,114
Balance at December 31, 2010	21,699,230	$ 13,003,168	$   288,562	$   1,458,599

Stock Options

The Company has a stock option plan where the directors are authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 20% of the issued and outstanding common stock of the Company to a maximum of 4,309,846.  Under the plan, the exercise price of each option shall not be less than the closing price of the Company’s shares on the date of grant less any discount permitted by the TSX Venture Exchange (“TSX-V”) and vesting terms are at the discretion of the board of directors.  The options can be granted up to a maximum term of 5 years as long as the Company is classified as a Tier 2 issuer under the policies of the TSX -V.

On July 3, 2009, the Company granted stock options to a consultant for the right to purchase 250,000 common shares at a price of $0.17 per share to July 3, 2011.  These options vested immediately.  The total fair value of $23,720 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.16% and an expected volatility of 140%.  The granting of these options resulted in stock based compensation expense of $23,720 being recorded in fiscal 2009.

On October 19, 2009, the Company granted stock options to two consultants entitling them to purchase 250,000 common shares at a price of $0.40 per share to October 19, 2011.  Of these options, 200,000 vested immediately, and 50,000 options vest over a 1 year period.  The total fair value of $73,572 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.52% and an expected volatility of 123.5%.  The granting of these options resulted in a stock based compensation expense of $62,536 being recorded in fiscal 2009.  Subsequent to December 31, 2009, the 50,000 stock options were cancelled and the remaining $11,036 will not be recorded as the consultant ceased to provide services as of January 1, 2010.

On April 6, 2010, the Company granted stock options to a consultant entitling him to purchase 50,000 common shares at a price of $0.25 per share to April 6, 2012.  These options vested immediately.  The total fair value of $7,230 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.86% and an expected volatility of 149%.  The granting of these options resulted in a stock based compensation expense of $7,230 being recorded in fiscal 2010.

On April 12, 2010, the Company granted stock options to a consultant entitling him to purchase 250,000 common shares at a price of $0.40 per share to April 12, 2012.  These options vested immediately.  The total fair value of $52,375 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.86% and an expected volatility of 180%.  The granting of these options resulted in a stock based compensation expense of $52,375 being recorded in fiscal 2010.

On September 21, 2010, the Company granted stock options to a consultant entitling him to purchase 50,000 common shares at a price of $0.25 per share to September 21, 2012.  These options vested immediately.  The total fair value of $5,509 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.42% and an expected volatility of 105%.  The granting of these options resulted in a stock based compensation expense of $5,509 being recorded in fiscal 2010.

The following table summarizes information on stock option transactions:

	Outstanding Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life	Weighted average grant date fair value
Balance, December 31, 2008	1,850,000	$  0.34	2.33 years
Options granted	500,000	0.29	2.00 years	$ 0.19
Options cancelled and expired	(125,000)	0.95	-
Balance, December 31, 2009	2,225,000	0.29	1.67 years
Options granted	350,000	0.36	2.00 years	$ 0.24
Options cancelled and expired	(50,000)	0.40	-
Balance, December 31, 2010	2,525,000	$  0.30	0.76 years

Exercisable at December 31, 2010 2,525,000 $  0.30 0.76 years

NOTE 7.

SHARE CAPITAL (continued)

Stock Options (continued)

The following incentive stock options were outstanding at December 30, 2010:

Number of options outstanding	Exercise Price	Expiry Date
250,000	$0.17	July 3, 2011
1,150,000	0.35	August 1, 2011
200,000	0.40	October 19, 2011
575,000	0.17	October 31, 2011
50,000	0.25	April 6, 2012
250,000	0.40	April 12, 2012
50,000	0.25	September 21, 2012
2,525,000

Warrants  

The following table summarizes information about warrant transactions:

	Outstanding Warrants	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Balance, December 31, 2008	250,000	$         1.23	0.79 years
Warrants cancelled and expired	(250,000)	1.23	-
Balance, December 31, 2009 and 2010	-	$          -	-

NOTE 8.

INCOME TAXES

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Company’s loss before income taxes.  The components of these differences are as follows:

	2010	2009	2008
Loss before taxes for the year	$  (502,315)	$ (4,660,805)	$   (1,412,762)
Expected income tax recovery at blended rate	30%	34%	31%
	(149,390)	(1,582,176)	(437,956)
Non-deductible items	19,463	25,877	140,109
Other	116,757	261,129	280,234
Change in valuation allowance	13,170	1,295,170	(246,135)
Future income tax recovery	$                  -	$                  -	$      (263,748)

The significant components of the Company’s tax effected future income tax assets are as follows:

	2010	2009
Non-capital losses	$  2,104,551	$970,682
Equipment	1,171	1,503
Resource properties	2,619	1,074,772
Share issuance costs	46,864	95,078
	2,155,205	2,142,035
Valuation allowance	(2,155,205)	(2,142,035)
Net future tax assets	$                  -	$ -

The Company has non-capital losses of approximately $3,146,000 (2009: $2,670,000) which may be available to offset future income for Canadian income tax purposes which expire over the next twenty years.  In addition, there are resource-related expenditures of approximately $1,004,000 (2009: $1,121,000) which may be used to offset future taxable Canadian resource income indefinitely, subject to annual rates prescribed by the Canadian Income Tax Act.  The Company also has foreign tax losses totalling approximately US$3,766,000 (2009: US$825,000) which may be available to reduce future year’s taxable income and which will expire, if not utilized, commencing in 2027. In addition, there are foreign resource-related expenditures of approximately US$1,616,000 (2009: US$3,745,000) available to reduce taxable income in future years.

Due to the uncertainty of realization of these loss carryforwards and resource pools, the benefits have not been reflected in the financial statements as the Company has provided a full valuation allowance for the potential future tax assets resulting from these loss carryforwards and resource pools.

NOTE 9.

SUPPLEMENTARY CASH FLOW DISCLOSURE

		2010	2009
Cash paid for: Interest	$	-	$ -
Income taxes	$	-	$ -

During the year ended December 31, 2010, the Company received 600,000 common shares of Kokanee with a fair value of $90,000 for an option payment on the Diamond Peak property (Notes 3 and 5).

During the year ended December 31, 2009, the Company issued 50,000 common shares with a fair value of $6,250 for the acquisition requirements of the Crowsnest property (Note 5).

During the year ended December 31, 2010, the Company incurred mineral property expenditures of $5,436 (2009 - $28,400) included in accounts payable and accrued liabilities.

NOTE 10.

SEGMENTED INFORMATION

The Company's operates in one business segment and two geographical segments.  Income, loss and assets are located in the following geographic locations:

		Canada		United States		Consolidated
December 31, 2010
Interest income	$	23,856	$	-	$	23,856
Amortization	$	-	$	964	$	964
Stock-based compensation	$	65,114	$	-	$	65,114
Net loss	$	(440,332)	$	(61,983)	$	(502,315)
Additions (reductions) to long-lived assets	$	(77,056)	$	559,454	$	482,398
Identifiable assets	$	2,942,545	$	2,001,572	$	4,944,117
December 31, 2009
Interest income	$	95,470	$	-	$	95,470
Amortization	$	-	$	1,930	$	1,930
Stock-based compensation	$	86,256	$	-	$	86,256
Net loss	$	(982,129)	$	(3,678,676)	$	(4,660,805)
Additions to long-lived assets	$	255,110	$	417,433	$	672,543
Identifiable assets	$	3,883,462	$	1,441,541	$	5,325,003
December 31, 2008
Interest income	$	273,890	$	-	$	273,890
Amortization	$	-	$	-	$	-
Stock-based compensation	$	451,965	$	-	$	451,965
Net loss	$	(1,084,476)	$	(64,538)	$	(1,149,014)
Additions to long-lived assets	$	843,885	$	2,217,016	$	3,060,901
Identifiable assets	$	5,331,055	$	4,651,059	$	9,982,114

NOTE 11.

CAPITAL MANAGEMENT

The capital of the Company is derived primarily form share capital.  Operating  working capital represents the capital (current assets less current liabilities) under management. The Company’s objectives when managing capital are to: (i) preserve capital and minimize shareholder dilution, (ii) obtain the best available net return, and (iii) maintain liquidity.

The Company manages the capital structure and makes adjustments  for changes in economic conditions and the risk characteristics of  its operations. To maintain or adjust the capital structure, the Company may issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents and investments it holds.

The Company’s policy is to invest excess cash in highly liquid, fully guaranteed, bank-sponsored instruments.  

The Company is not subject to externally imposed capital restrictions.  There were no changes to the capital management approach in the year.

NOTE 12.

RISK MANAGEMENT

Management of Industry Risk

The Company is engaged in mineral exploration and manages related industry risk issues directly.  The Company may be at risk for environmental issues and fluctuations in commodity pricing.  Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations.

Management of Financial Risk

The Company’s financial instruments are exposed to certain financial risks, which include credit risk, liquidity risk, and market risk.

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to fulfil an obligation causing the other party to incur a financial loss.  The Company is exposed to credit risks arising from its cash holdings.  The Company manages credit risk by placing cash with reputable Canadian financial institutions and management believes the risk of loss to be remote. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.  

Liquidity Risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due.  To manage liquidity risk, the Company reviews additional sources of capital to continue its operations and discharge its commitments as they become due.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.  Market risk comprises three types of risk: currency risk, interest rate risk and price risk.

Currency Risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.  The Company’s functional currency is the Canadian dollar.  There is moderate currency risk to the Company as some mineral property interests are located in the United States.

The Company manages its exposure to this risk by operating in a manner that minimizes its exposure to the extent practical.  The Company does not engage in any form of derivative or hedging instruments to reduce its foreign currency risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.  The Company is not exposed to significant interest rate risk.

NOTE 13.

SUBSEQUENT EVENTS

On March 4, 2011 the Company entered into an option agreement (“Agreement”) to acquire up to a 75% interest in the Majuba Hill Copper/Gold/Silver property in Pershing County, Nevada from Claremont Nevada Mines LLC., (“Claremont”) of Nevada.  The terms of the Agreement with Claremont allow the Company to earn an initial 60% interest in the property over six years by spending US$6,500,000 on exploration of the property.  The Company can increase its interest in the property to 75% by spending a further $3,500,000 on exploration over a subsequent two year period.  The Majuba Hill property will be subject to a 3% NSR payable to the vendor, 1.5% of which may be purchased at any time for US$1,500,000.  

On April 4, 2011 the Company completed a non-brokered private placement of 2,016,755 units at a price of $0.28 per unit for gross proceeds of $564,691.  Each unit is comprised of one common share and one warrant, with each warrant entitling the holder to purchase an additional common share at an exercise price of $0.38 per share until April 4, 2013.  Cash finder’s fees of $35,412 were paid with respect to a portion of this placement.

NOTE 14.

UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”) which differ in certain respects with accounting principles generally accepted in the United States and from practices prescribed by the Securities and Exchange Commission (collectively “US GAAP”).  Material differences to these financial statements are as follows:

a)

Exploration stage enterprise:

Under US accounting standards, the Company is considered to be an enterprise in the exploration stage as substantially all of its efforts have been directed towards the investigation of business opportunities and exploration of resource properties.  Accounting principles for exploration stage enterprises require the specific disclosure of this fact and the presentation of certain cumulative information from the inception of the exploration stage.  However, it does not require any changes in the measurement of assets, liabilities, revenues or expenses from that set out in the financial statements prepared in accordance with Canadian GAAP.

Statement of stockholders’ equity:

US accounting standards require a separate Statement of Stockholders’ Equity disclosing historical transactions from inception.  The information required in this statement is otherwise presented in the current and prior years’ notes to the consolidated financial statements.

c)

Mineral property costs:

Under Canadian GAAP, mineral property acquisition, exploration and development costs may be deferred and amortized as disclosed in Note 2.  Under US GAAP, pursuant to EITF 04-2, mineral rights are classified as tangible assets and accordingly acquisition costs are capitalized as mineral property costs.  Under US GAAP mineral property exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized.  As of the date of these financial statements, the Company has determined that all exploration costs should be expensed under US GAAP as the Company has not established any proven or probable reserves on its mineral properties.

d)

Stock-based compensation:

The Company has previously granted stock options to certain directors, employees and consultants.  Under Canadian GAAP, prior to 2003, no compensation expense was recorded in connection with the granting of stock options.  Under previous US GAAP, the Company accounted for stock-based compensation in respect of stock options granted to directors and employees using the intrinsic value based method in accordance with APB Opinion No. 25.  Stock options granted to non-employees were accounted for by applying the fair value method using the Black-Scholes option pricing model in accordance with Statement of Financial Accounting Standards No. 123 (“SFAS 123”).  Commencing January 1, 2003, under Canadian GAAP the Company expenses the fair value of all stock options granted and under US GAAP has elected to prospectively change its accounting policy to account for all stock options granted in accordance with SFAS 123.  On December 16, 2004, the FASB issued SFAS 123(R), “Share-Based Payment”, which is a revision of SFAS 123.  SFAS 123(R) supersedes APB Opinion 25, and amends SFAS 95, “Statement of Cash Flows”.  SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values at the date of grant.  As a result, effective January 1, 2003, there was no material difference between the Company’s accounting for stock options under US GAAP versus Canadian GAAP.  

e)

Summary of financial statement information

The effect of the accounting differences for mineral property costs and stock-based compensation are as follows:

Consolidated Balance Sheets	Year ended December 31,			Cumulative from April 25, 1994 (inception)
	2010	2009	2008	to December 31, 2010
Total assets, Canadian GAAP	$   4,944,117	$5,325,003	$9,982,114
Mineral property exploration costs	(1,833,452)	(1,498,927)	(4,039,232)
Total assets, US GAAP	$     ,110,665	$3,826,076	$5,942,882
Deficit, Canadian GAAP	$ (9,919,986)	$(9,417,671)	$(4,756,866)	$(9,919,986)
Mineral property exploration costs	(1,833,452)	(1,498,927)	(4,039,232)	(1,833,452)
Stock-based compensation	(6,611)	(6,611)	(6,611)	(6,611)
Deficit, US GAAP	$11,760,049)	$(10,923,209)	$(8,802,709)	$(11,760,049)

97

NOTE 14.

UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

Consolidated Statements of Operations
Net loss, Canadian GAAP	$ (502,315)	$(4,660,805)	$(1,149,014)	$ (9,919,986)
Mineral property exploration costs	(334,525)	(311,848)	(2,340,177)	(4,763,275)
Stock-based compensation	-	-	-	(6,611)
Net loss, US GAAP	$ (836,840)	$(4,972,653)	$(3,489,191)	$(14,689,872)
Basic net loss per share, US GAAP	$ (0.04)	$(0.23)	$(0.16)

Consolidated Statements of Cash Flows
Cash used in operating activities, Canadian GAAP	$(498,284)	$(620,508)	$(369,717)	$(3,596,282)
Mineral property exploration costs	(334,525)	(402,603)	(2,340,177)	(5,947,397)
Cash used in operating activities, US GAAP	$(832,809)	$(1,023,111)	$(2,709,894)	$(9,543,679)
Cash used in investing activities, Canadian GAAP	$(533,469)	$(637,892)	$(2,914,050)	$(6,832,050)
Mineral property exploration costs	334,525	402,603	2,340,177	5,840,514
Cash used in investing activities, US GAAP	$(198,944)	$(235,290)	$(573,873)	$ (991,536)
Net cash provided by financing activities, Canadian GAAP and US GAAP	$ -	$ -	$ -	$4,931,208

Recent accounting pronouncements adopted:

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for the Company beginning July 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. The adoption of this new guidance had no impact on the Company’s financial statements.

Recent Accounting Guidance Not Yet Adopted

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

98