Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:

		September 30, 2012		December 31, 2011
Yellow Hammer Site
Initial Lease Fee	$	175,000	$	175,000
Asset Retirement Obligation		30,908		30,908
Total		205,908		205,908

Kiewit, Cactus Mill and all other sites
Initial Lease Fee		600,000		600,000
Annual Lease Payment		50,000		-
Asset Retirement Obligation		26,913		26,594
Total		676,913		626,594

Blue Fin Claims
Initial Claim Fee		2,735		2,735

Total		2,735		2,735

Total Mineral Properties and Leases	$	885,556	$	835,237

The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting originally of 419 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and seven Utah state mineral leases located on state trust lands, all covering approximately 33 square miles. In August 2010 and 2011, as a result of further evaluation, the Company allowed certain of the claims and interests to lapse back to Clifton Mining. The Company has retained 299 unpatented claims, including the unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands. All but four of these mining claims and interests were obtained under the terms of the Amended and Restated Lease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company as lessors. Rights to the four Yellow Hammer patented claims were obtained under the terms of the Amended and Restated Lease Agreement dated July 24, 2009, with the Jeneane C. Moeller Family Trust. The properties are located approximately 190 miles west-southwest of Salt Lake City, Utah, and 56 miles south southeast of Wendover, Utah. The Company intends to concentrate its exploration activities on the Kiewit project consisting of seven of the unpatented Kiewit claims, the Clifton Shears, Cane Springs, Oquirrh Springs, the Frankie, the Rustler, the Lion Vein, and the Lucy L sites. Each of these is a potential near-term development target. Mineral extraction activities on the property at this time will be open-pit and the Company anticipates conducting underground mining exploration in the future. Annual lease fees are required on the 299 claims that make up the Company’s Gold Hill property. Of these, four claims are within the Yellow Hammer site. Annual claims fees are currently $140 per claim plus administrative fees. The Company renewed 299 of the above claims in August 2012, at a total cost of about $42,159.

The Company, through its lease agreement with Clifton Mining, has purchased all data, core samples and related reports from Dumont Nickel Inc. (which in 2010 changed its name to DNI Metals Inc. and was the former owner of the leases) associated with the aforementioned properties. In addition, the Company has access to all data and related information available and held by Clifton Mining. Desert Hawk has made application for a Large Mining Operations Permit to construct a heap leach facility and commence production activities on these claims. Tentative approval of the NOI was received from the Utah Division of Oil, Gas and Mining (DOGM) on September 28, 2012. A 30 day public comment period closes November 13, 2012. Conditional final approval will be issued if there are no substantive public comments. The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000.

In January 2010 the Company submitted a Notice of Intent to Commence Large Mining Operations application to DOGM for three surface mines and a leach gold operation on the Kiewit unpatented claims. In February 2010 the Company submitted a Plan of Operations to the Bureau of Land Management. The Plan of Operations is deemed to be substantially complete and along with the Environmental Assessment is expected to be issued by the BLM during fourth quarter 2012.

Located on the Cactus Mill site are two process facilities. A 150 ton per day mill built by Woodman Mining and operated until the 1980’s using equipment to process copper, gold, silver, and tungsten ores from the district. In addition, there is a second facility, constructed in the 1990’s, for custom milling precious metals concentrates. Equipment from both mills was used to construct a 240 ton per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims. In September 2010 the Company completed its rebuild of the pilot mill and testing of the pilot plan was conducted. Commencement of processing activities began in fourth quarter 2010. Pursuant to the Company’s lease agreement with Clifton Mining, it has access to Cane Springs, a natural flowing spring approximately 1,000 feet above the Cactus Mill site, as well as the Cane Springs mine shaft located approximately one-quarter mile south of the Cactus Mill property. The Company holds a permit from the Utah Division of Oil, Gas and Mining for the pilot plant which allows flotation and gravity concentration. The Company commenced operation of the Cactus Mill pilot plant in November 2010, and processed and sold concentrates on a pilot test basis through June of 2011. Operations at the Cactus Mill pilot plant have been temporarily suspended.

The Company holds a Small Mine Permit for the Yellow Hammer site from the Utah Division of Oil, Gas and Mining and has posted reclamation bonds totaling $60,800. This permit stipulates that the Company may conduct exploration or mining operations on these claims so long as such activities are limited to an area within nine acres.

Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:

		Three Months Ended September 30, 2012		Three Months Ended September 30, 2011		Nine Months Ended September 30, 2012		Nine Months Ended September 30, 2011
Assaying	$	940	$	3,390	$	13,541	$	15,609
Permitting		56,406		50,557		203,247		98,485
Geological consulting fees		-		20,579		-		84,759
Maps and miscellaneous		-		473		77		5,782
Total Exploration Expenditures	$	57,346	$	74,999	$	216,865	$	204,635