10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________

FORM 10-K

_______________________________________________

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

For the fiscal year ended December 31, 2012

OR

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

For the transition period from ______to______.

Commission File Number: 001-34996

______________________________________________

SPARTAN GOLD LTD.

(Exact name of registrant as specified in its charter)

___________________________________________

Nevada	27-3726384
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
122 Fourth Avenue, Suite 103 Indialantic, FL	32903
(Address of principal executive offices)	(Zip Code)

 Registrant’s telephone number, including area code: (480) 477-1585

_________________________________________

Securities registered under Section 12(b) of the Exchange Act:

None 

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.001 Par Value

(Title of class)

____________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o  Yes  x  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o  Yes  x  No

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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). x  Yes  o  No

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

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

Large Accelerated Filer  o      Accelerated Filer  o       Non-Accelerated Filer  o       Smaller Reporting Company x 

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

On June 30, 2012, the last business day of the registrant’s most recently completed second quarter, the aggregate market value of the Common Stock held by non-affiliates of the registrant was $2,100,660, based upon the closing price on that date of the Common Stock of the registrant on the OTC Bulletin Board system of $0.15. For purposes of this response, the registrant has assumed that its directors, executive officers and beneficial owners of 5% or more of its Common Stock are deemed affiliates of the registrant.

As of as of March 31, 2013 the registrant had 42,085,944 shares of its Common Stock, $0.001 par value, outstanding.   

SPARTAN GOLD LTD.

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

		Page
Cautionary Statement Concerning Forward-Looking Statements
PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	4
Item 1B.	Unresolved Staff Comments.	7
Item 2.	Properties.	7
Item 3.	Legal Proceedings.	7
Item 4.	Mine Safety Disclosures	7
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	8
Item 6.	Selected Financial Data.	9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	9
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	13
Item 8.	Financial Statements and Supplementary Data.	14
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	36
Item 9A.	Controls and Procedures.	36
Item 9B.	Other Information.	38
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	55
Item 11.	Executive Compensation.	57
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	58
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	59
Item 14.	Principal Accounting Fees and Services.	59
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	61
SIGNATURES		62

i

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements.” You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this report.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed under “Risk Factors” and elsewhere in this report, including, without limitation, in conjunction with the forward-looking statements included in this report. All forward-looking information in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements.

ii

PART 1

Item 1. Business

Overview

Spartan Gold Ltd. (the "Company", “Spartan”, “we”, “us” or “our”) is a U.S. based junior gold exploration company with gold exploration and development activities centered in both the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. Spartan’s Poker Flats gold prospect is located within the Carlin-Rain region, and the Ziggurat gold prospect is located within the Round Mountain-Northumberland Mining District.

Each of these regions is endowed with major gold deposits operated by many of the world leaders in the mining industry. Major mining projects in the Carlin Trend are currently operated by Newmont Mining Corporation (trading on the NYSE) to the north and west of the Poker Flats prospects.  Additionally, some of the major mining projects in the Round Mountain-Northumberland districts are currently operated by Barrick Gold Corporation / Kinross Gold Corporation (NYSE) and also Newmont Mining Corporation which exist in close proximity to the Ziggurat prospect.  The Company also has mining interests in the northeast region of Alabama in the historical Arbacoochee Mining District.  The Company is currently pursuing opportunities for several acquisition targets around the world and focusing on operational plans for current projects.  The directors, management and advisers of Spartan Gold have over 90 years of combined experience in the exploration and development of global mining projects.

Spartan's commitment to asset growth and increased shareholder value will be sustained by the development of highly prospective projects, accelerated exploration activities and the acquisition of viable resources. Spartan has selected an international board of directors experienced in undertaking exploration, development and funding of numerous energy and minerals projects around the world.

Company History

Spartan Gold Ltd. was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. with the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors. On September 24, 2009, the Company changed its name to Algoil, Inc. The central concept of Algoil, Inc. was making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil.

On May 21, 2010, the Company experienced a change in control. Magic Grace Ltd. (“Magic Grace”) acquired the majority of the issued and outstanding common stock of Algoil, Inc. in accordance with a stock purchase agreement by and between Andriy Kovalenko and Magic Grace. On the closing date, May 21, 2010, pursuant to the terms of the Stock Purchase Agreement, Magic Grace purchased from Mr. Kovalenko 14,290,000 (pre-split) shares of Company’s outstanding common stock for $187,500. In accordance with the agreement, all related party obligations were settled. Also on May 21, 2010, Real Challenge Group, Ltd. (“Real Challenge”) acquired 935,000 (pre-split) free-trading shares of the Company’s outstanding common stock in accordance with a stock purchase agreement by and between Andriy Kovalenko, as a duly authorized representative of the selling shareholders, and Real Challenge for $187,500. As a result of the change in control, the Company abandoned its original plan of developing and operating biodiesel facilities.

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd. The Company adopted a new strategic plan of gold exploration, development and mining.

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock. Subsequently, on August 12, 2010, Magic Grace contributed to the treasury, and the Company retired, 9,896,250 common shares of stock (395,850,000 as adjusted for the stock split). The effect of the stock split and retirement of shares increased the number of shares of common stock outstanding from 15,225,000 to 213,150,000 as of August 12, 2010.

On October 19, 2011, the Company issued 18,952,774 shares of its common stock to Sphere Resources, Inc. (“Sphere”) in conversion of a Secured Convertible Promissory Note totaling $379,055 (including accrued interest of $4,055). As a result of the share issuance, Sphere became the majority shareholder of the Company.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock. The effect of the reverse stock split decreased the number of shares of common stock outstanding from 632,892,868 to 31,644,658 as of November 9, 2011.

1

Our Strategy

We are currently focused on mineral exploration and development activities in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. We have options for the mineral concession rights at two projects in this region: Poker Flats and Ziggurat, both of which are located near existing operations of large mining corporations and have available mining and transportation infrastructures. Our strategy is to advance each of these projects to the drilling stage as aggressively as prudent financing will allow and to determine the presence of gold, silver or other precious mineral resources. If we are successful in doing so, we believe we can attract the attention of the existing mining companies already operating in the area or new mining companies to either enter into development agreements with us or to acquire the projects from us outright.

Additionally, we are currently identifying other acquisition opportunities.

Mineral Properties

Currently, we have completed two Option and Mining Claim Agreements to the mineral rights on two properties in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada and own the mineral rights to one property in the northeast region of Alabama. A description of each property is summarized below:

Poker Flats Property

On December 22, 2010, we entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC” or the “Optionor”) and Sphere Resources, Inc. (“Sphere”). The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in 64 lode mining claims located in the Carlin Mining District in Elko County Nevada, known as the “Poker Flats” Property.  Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company,

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $250,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement,

· The Company has paid to Optionor $25,000 upon executing the Option Agreement,

· Sphere has issued to Optionor 350,000 shares of Sphere Resources, Inc. common stock,

· Sphere will issue to Optionor an additional 150,000 shares of Sphere Resources, Inc. common stock when the Company obtains a 75% in the mineral rights,

· Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% Net Smelter Return (“NSR”) production royalty for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC and a 2% NSR to Sphere,

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 75% and MMC shall have the right to purchase up to 25% of the 3% NSR on mineral production from the Poker Flats Property retained by the owner of the mining claims subject to the Poker Flats Option Agreement, for one million U.S. dollars (U.S. $1,000,000) per NSR percentage point,

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 100% of the 2% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Poker Flats Property, under terms to be agreed upon by the Company and Sphere.

On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the Poker Flats property. Under the terms of the Agreement, Tomera grants, lets and leases exclusively to Spartan Gold the property, together will all ores and minerals of every kind, except geothermal resources, coal and oil and gas and other hydrocarbons, water and sand and gravel, in, or under the property, with the exclusive right to prospect and explore for, mine by any method now known or hereafter discovered, process, mill, prepare for market, store, sell, and dispose of the same; and together with all such rights-of-way and easements to the extent owned by Tomera, if any, through, over, on or appertaining to the property. The property initially contains 1,760 net mineral acres and may be modified to increase or decrease over time at the option of the Company.

2

Poker Flats is located approximately 20 miles south-southwest of Elko, Nevada in the Carlin-Rain Trend.  Poker Flats began with 500 acres in the Carlin region which is home to some of the world's leaders in the mining industry.  Neighboring mining projects north and south of Poker Flats include Newmont Mining Corporation, Gold Standard Ventures Corporation, and Premier Gold Mines Limited.  The Company expanded Poker Flats to 3,600 acres in 2011, which was reduced to 3,040 acres in October, 2012, and now holds an option for 75% majority ownership of this project.  The geological mapping process is under way and an updated NI 43-101 report was completed on November 22, 2011.  The new claim blocks and private mineral rights now included in the Poker Flats project are surrounded by Newmont Mining Corporation's Emigrant project on the northern border and several other productive projects including Newmont's Rain-Tess and Emigrant Mines, Premier Gold Mines Limited's Saddle gold prospect and Gold Standard Ventures Corporations' Railroad gold project.  The Company’s team has completed geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  

Additional geophysical, drilling and geological work is planned at Poker Flats under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Pinon and Railroad, and as the mineralization appears similar to those at Newmont's Emigrant and Rain Mines and at the Railroad deposit, additional exploration expenditures are justified for the Poker Flats property.

The exploration goal at the Poker Flats prospect is to identify a 500,000 to 1,000,000 ounce open-pit gold mining resource. A major mining project is currently being developed by Newmont Mining Corporation immediately north of the Poker Flats prospects.

Ziggurat Property

On December 27, 2010, we entered into an Option and Mining Claim Acquisition Agreement between MMC (the “Optionor”) and Sphere.  The agreement was amended on March 28 2011.  The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in 227 lode mining claims in Nye County, in the State of Nevada, known as the “Ziggurat” Property. Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company,

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $1,000,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement,

· The Company has paid to Optionor $25,000 upon executing the Option Agreement,

· The Company has paid to Optionor $35,000 in 2011,

· The Company shall pay to Optionor $25,000 on or before the second anniversary date of the Agreement ($5,000 paid as of December 31, 2012),

· The Company shall pay to Optionor $25,000 on or before the third anniversary date of the Agreement,

· Sphere has issued to Optionor 550,000 shares of Sphere Resources, Inc. common stock,

· Sphere will issue to Optionor an additional 250,000 shares of Sphere Resources, Inc. common stock when the Company obtains a 75% in the mineral rights,

· The Company granted a 2.5% NSR for any and all products that are produced from the Ziggurat mining claims to Sphere and a .5% NSR to MMC,

· If and when the Company elects to sell and convey all or a portion of its interest in the Ziggurat Property, the Company shall have the right to purchase up to 100% of the 2.5% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Ziggurat Property, under terms to be agreed upon by the Company and Sphere.

The Ziggurat property is located approximately 22 kilometers north of Kinross Gold Corporation and Barrick Gold Corporation’s Round Mountain and Gold Hill gold mines in Nye County, Nevada.  The Ziggurat property began with 1,140 acres in the prolific Round Mountain-Northumberland Trend. The neighboring Northumberland mining project is located eight kilometers to the northeast of Ziggurat, and is owned by mining industry world leader Newmont Mining Corporation.  The Company previously expanded Ziggurat to 6,860 acres in 2011, which was reduced to 4,540 acres in September 2012, and now holds an option for 75% majority ownership of this project.  Previous geophysical and geological interpretations indicate that the Ziggurat property has favorable characteristics for Carlin-style gold mineralization.  Since the property is situated in close proximity to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditures. Spartan's team has completed geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  

Additional geophysical, drilling and geological work is planned under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditure.

The exploration goal at the Ziggurat Property is to identify a multi-million ounce open-pit gold mining resource. Major mining projects are currently operated by Barrick Gold Corporation and Newmont Mining Corporation which exist both south and north of the Ziggurat Property, respectively.

3

Arbacoochee Gold Prospect

On October 22, 2010, we acquired the mineral rights to a Gold Prospect which is a tract of approximately 320 acres located in close proximity to the historic Arbacoochee Gold Mining District. This Prospect contains potentially minable placer located in Cleburne County, Alabama, 9 miles southeast of the city of Heflin. The property is located adjacent to the historic Gold Hill and is the central drain point for that hill. Most of the area’s historic gold production came from placer deposits near Gold Hill and Clear Creek. This property has not been worked in over 120 years. The recent price of gold has made the previously dormant properties a viable target to explore and bring online.

The Company assumed an existing mineral royalty agreement which requires the payment of 6% NSR overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.

Employees

As of December 31, 2012, the Company has five employees.

Patents and Trademarks

None.

Available Information

All reports of the Company filed with the SEC are available free of charge through the SEC’s Web site at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

Item 1A. Risk Factors

The following important factors among others, could cause our actual operating results to differ materially from those indicated or suggested by forward-looking statements made in this Form 10-K or presented elsewhere by management from time to time.

There is substantial doubt about the Company’s ability to continue as a going concern.

Our auditor's report on our 2012 consolidated financial statements expresses an opinion that substantial doubt exists as to whether we can continue as an ongoing concern. Because obtaining investment capital in not certain, or that our officers and directors may be unable or unwilling to loan or advance any additional capital to the Company, we may not have the funds necessary to continue our operations. See "December 31, 2012 Audited Financial Statements."

We have a limited operating history and are still in the exploration stage.

We have only entered the field of precious metals exploration and mining within the past eighteen months, making it difficult to judge our prospects. As an exploration stage company, we face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with commencing new operations, including capital requirements and management’s potential underestimation of initial and ongoing costs. We face the risk that we may not be able to effectively implement our business plan. If we are not effective in addressing these risks, we may not develop a viable business or may not operate profitably. As a start-up company, we expect to incur significant operating losses for the near future, and there can be no assurance that we will be able to generate significant revenues or that any revenues generated will be sufficient for us to become profitable or thereafter maintain profitability.

If our strategy is unsuccessful, we will not be profitable and our stockholders could lose their investment.

There is no guarantee that our strategy for obtaining or developing our assets will be successful or that if successfully developed, will result in the Company becoming profitable. If our strategy is unsuccessful, we may fail to meet our objectives and not realize the revenues or profits from the business we pursue that may cause the value of the Company to decrease, thereby potentially causing our stockholders to lose their investment.

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.

4

It is more difficult for our shareholders to sell their shares because we are not, and may never be, eligible for NASDAQ or any national stock exchange.

We are not presently, nor is it likely that for the foreseeable future we will be, eligible for inclusion in NASDAQ or for listing on any United States national stock exchange.  To be eligible to be included in NASDAQ, a company is required to have not less than $4,000,000 in net tangible assets, a public float with a market value of not less than $5,000,000, and a minimum bid price of $4.00 per share. At the present time, we are unable to state when, if ever, we will meet the NASDAQ application standards.  Unless we are able to increase our net worth and market valuation substantially, either through the accumulation of surplus out of earned income or successful capital raising financing activities, we will never be able to meet the eligibility requirements of NASDAQ.  As a result, it will more difficult for holders of our common stock to resell their shares to third parties or otherwise, which could have a material adverse effect on the liquidity and market price of our common stock.

Although the our Common Stock is currently traded on the OTC Bulletin Board, there is no assurance any public market for our Common Stock will continue. There is also no assurance as to the depth or liquidity of any such market or the prices at which holders may be able to sell the Shares. An investment in these Shares may be totally illiquid and investors may not be able to liquidate their investment readily or at all when they need or desire to sell.

We will need significant additional capital, which we may be unable to obtain.

The Company’s capital requirements in connection with its development activities and transition to commercial operations have been and will continue to be significant. The funds raised in future Offerings may not be sufficient to develop commercial operations, and we will require additional funds to continue acquisition, development and testing, and to commercialize our physical assets. There can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all. Any future financing that may occur could be at a price that significantly dilutes the shareholders of the Company at that time.

Volatility of stock prices

In the event a public market continues for our Common Stock, market prices will be influenced by many factors, and will be subject to significant fluctuation in response to variations in operating results of the Company and other factors such as investor perceptions of the Company, supply and demand, interest rates, general economic conditions and those specific to the industry, developments with regard to the Company's activities, future financial condition and management.

We may not be able to effectively control and manage our growth, which would negatively impact our operations.

If the Company’s business and markets grow and develop, it will be necessary for us to finance and manage expansion in an orderly fashion. We may face challenges in managing and expanding our business and in integrating any acquired businesses with our own. Such eventualities will increase demands on our existing management, workforce and facilities. Failure to satisfy increased demands could interrupt or adversely affect our operations and cause administrative inefficiencies.

We may be unable to successfully execute any of our identified business opportunities or other business opportunities that we determine to pursue.

We currently have a limited operational infrastructure. In order to pursue business opportunities, we will need to build our infrastructure and operational capabilities. Our ability to do any of these successfully could be affected by any one or more of the following factors, among others, our ability to:

· raise substantial additional capital to fund the implementation of our business plan;

· execute our business strategy;

· manage the expansion of our operations and any acquisitions we may make, which could result in increased costs, high employee turnover or damage to customer relationships;

· attract and retain qualified personnel;

· manage our third-party relationships effectively; and

· Accurately predict and respond to the rapid technological changes in our industry and the evolving demands of the markets we serve.

The Company’s failure to adequately address any one or more of the above factors could have a significant impact on its ability to implement its business plan and its ability to pursue other opportunities that arise.

Competition

In the United States, there are numerous mining and exploration companies, both big and small. All of these mining companies are seeking properties of merit and funds. We will have to compete against such companies to acquire the funds to develop our mineral claims. The availability of funds for exploration is sometimes limited, and we may find it difficult to compete with larger and more well-known companies for capital. Even though we have the right to the minerals on our claims, there is no guarantee we will be able to raise sufficient funds in the future to maintain our mineral claims in good standing. Therefore, if the Company does not have sufficient funds for exploration, its claims might lapse and be staked by other mining interests. We might be forced to seek a joint venture partner to assist in the exploration of our mineral claims. In this case, there is the possibility that we might not be able to pay our proportionate share of the exploration costs and might be diluted to an insignificant carried interest. Even when a commercial viable ore body is discovered, there is no guarantee competition in refining the ore will not exist. Other companies may have long-term contracts with refining companies, thereby inhibiting our ability to process our ore and eventually market it. The exploration business is highly competitive and highly fragmented, dominated by both large and small mining companies. Success will largely depend on the Company’s ability to attract talent from the mining field and its ability to fund its operations. There is no assurance that our mineral expansion plans will be realized.

5

Limited liability of Directors and Officers.

The Company has adopted provisions to its Articles of Incorporation and Bylaws which limit the liability of its Officers and Directors, and provide for indemnification by the Company of its Officers and Directors to the full extent permitted by Nevada corporate law, which generally provides that its officers and directors shall have no personal liability to the Company or its stockholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or any transaction from which a director derives an improper personal benefit. Such provisions substantially limit the shareholder's ability to hold officers and directors liable for breaches of fiduciary duty, and may require the Company to indemnify its officers and directors.

Our operations are subject to various government regulations.

The research, development, distribution, marketing and selling of our products is subject to regulation by governmental regulatory authorities. Failure to comply with regulatory requirements could subject the Company to regulatory or judicial enforcement actions, including, but not limited to, seizures, injunctions, civil penalties, criminal prosecution, refusals to approve new exploration and development and suspensions and withdrawals of existing approvals.

We must comply with various government and environmental regulations. We also must comply with assurances guarding endangered, threatened or candidate fish, wildlife, plants or habitat. Should we be unable to effectively comply with these regulations, the results of the Company’s operations could be adversely affected.

Government Regulations

We are committed to complying with, and, to our knowledge, are in compliance, with all governmental and environmental regulations. Permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. We cannot predict the extent to which future legislation and regulation could cause additional expense, capital expenditures, restrictions, and delays in the exploration of our properties.

Our activities are not only subject to extensive federal, state, and local regulations controlling the mining of, and exploration for, mineral properties, but also the possible effects of such activities upon the environment. Future legislation and regulations could cause additional expense, capital expenditures, restrictions, and delays in the exploration of our properties, the extent of which cannot be predicted. Permits may also be required from a variety of regulatory authorities for many aspects of mine operation and reclamation. In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards, existing laws, and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We are not presently aware of any specific material environmental constraint affecting its properties that would preclude the economic development or operation of any specific property. It is reasonable to expect that compliance with environmental regulations will increase our costs. Such compliance may include feasibility studies on the surface impact of our proposed exploration operations; costs associated with minimizing surface impact; water treatment and protection; reclamation activities, including rehabilitation of various sites; on-going efforts at alleviating the mining impact on wildlife; and permits or bonds as may be required to ensure the Company’s compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide not to proceed with exploration on any of its mineral properties. We are prepared to engage professionals, if necessary, to ensure regulatory compliance, but in the near term we expect the activities to require minimal regulatory oversight.

If the Company decides to operate internationally, there are risks which could adversely affect operating results.

Currently, we have no projects, projections or foreign interest involving international operations.  However, the Company may in the future, given the opportunity, decide to pursue projects, business, or otherwise conduct operations internationally.  Doing business in foreign countries does subject the Company to additional risks, any of which may adversely impact future operating results, including:

· international political, economic and legal conditions;

· our ability to comply with foreign regulations and/or laws affecting operations and projects;

· difficulties in attracting and retaining staff and business partners to operate internationally;

· language and cultural barriers;

· seasonal reductions in business activities and operations in the countries where our international projects are located;

· integration of foreign operations;

· potential adverse tax consequences; and

· potential foreign currency fluctuations.

6

Factors beyond the control of the Company.

Projects for the acquisition and development of the Company’s products are subject to many factors, which are outside our control. These factors include general economic conditions in North America and worldwide (such as recession, inflation, unemployment, and interest rates), proximities to utilities and transportation, shortages of labor and materials and skilled craftsmen and price of materials and competitive products and the regulation by federal and state governmental authorities.

Lack of diversification

Because of the limited financial resources that the Company has, we do not currently intend to diversify our operations. Our inability to diversify our activities into more than one area will subject the Company to economic fluctuations and therefore increase the risks associated with the Company’s operations.

If we borrow money using the Company’s assets as collateral, our shareholders could lose all of their investment, if the collateral was to be foreclosed.

We may borrow money secured by the Company’s assets as collateral. The terms of the loan and the payments required to be made under the loan documents may reduce the return that the Company may otherwise generate. Should we fail to satisfy the terms of any loan, the Company assets pledged to secure such loan may be at risk to foreclosure or other similar process to satisfy the amount borrowed for the loan.

Future changes in financial accounting standards and other applicable regulations by various governmental regulatory agencies may cause lower than expected operating results and affect our reported results of operations.

Changes in accounting standards and their application may have a significant effect on our reported results on a going forward basis and may also affect the recording and disclosure of previously reported transactions. New standards have occurred and will continue to occur in the future. For example, in December 2004, the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 “Compensation, Stock Compensation” (“Topic No. 718”) became effective which requires us to expense stock options at fair value effective January 1, 2006. Under Topic No. 718, the recognition of compensation expense for the fair value of stock options reduces our reported net income and net income per share subsequent to implementation; however, this accounting change will not have any impact on the cash flows of our business. Under the prior rules, expensing of the fair value of the stock options was not required.  For the year ended December 31, 2012, 4,000,000 options were granted resulting in compensation expense of $80,000. Any future issuances of stock options will cause additional compensation expense to be recognized. 

The Sarbanes-Oxley Act of 2002 and various new rules subsequently implemented by the Securities and Exchange Commission (“SEC”) and the NASDAQ National Market have imposed additional reporting and corporate governance practices on public companies.

In addition, if we do not adequately continue to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in the future, we may not be able to accurately report our financial results or prevent error or fraud, which may result in sanctions or investigation by regulatory authorities, such as the SEC. Any such action could harm our business, financial results or investors’ confidence in our company, and could cause our stock price to fall.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company’s principal offices are located at 122 Fourth Avenue, Suite 103, Indialantic, FL 32903. This office space is used by the Company’s executive management team and is approximately 275 square feet. The office space is leased for approximately $1,000 per month on a month-to-month basis.   The Company believes that the current facilities are suitable for its current needs.

Item. 3. Legal Proceedings

None.

Item. 4. Mine Safety Disclosures

As the Company is its exploration stage, no mining activities have occurred as of the date of this report. Therefore, this item is not applicable.

7

PART II

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

Market Information

As the Company is a “smaller reporting company,” it is not required to provide the performance graph required in paragraph (e) of Item 201.

We have one class of securities, Common Voting Equity Shares ("Common Stock"). Our common stock is currently traded on the Over the Counter Bulletin Board (“OTCBB”) under the symbol "SPAG.QB". As of December 31, 2012, the Company’s common stock was held by 220 shareholders of record, which does not include shares that are held in street or nominee name.

The Company’s shares commenced trading on or about October 19, 2010. The closing share prices presented below represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commission to the dealer and have been adjusted for the one-for-twenty reverse stock split which occurred on November 9, 2011. The following chart is indicative of the fluctuations in the stock prices:

	For the Year Ended				For the Year Ended
	December 31, 2012				December 31, 2011
		High		Low		High		Low
First Quarter	$	1.80	$	0.20	$	20.00	$	9.94
Second Quarter	$	0.93	$	0.15	$	18.00	$	2.00
Third Quarter	$	0.16	$	0.06	$	3.20	$	1.60
Fourth Quarter	$	0.40	$	0.03	$	2.38	$	1.00

Our authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.001per share. The holders of our common stock:

· have equal ratable rights to dividends from funds legally available if and when declared by our board of directors;

· are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;

· do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

· are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our securities.

The Company’s transfer agent is Empire Stock Transfer, Henderson, Nevada.

Dividend Distributions

We have not historically and do not intend to distribute dividends to stockholders in the foreseeable future.

Securities authorized for issuance under equity compensation plans

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the Plan to the Company’s directors, officers, consultants and other service providers. The Plan was approved by a majority of stockholders of the Company on April 13, 2012.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  As of the date of this report options to purchase 4,000,000 shares of common stock have been granted to the Company’s officers.

Penny Stock

Our common stock is considered to be a "penny stock" under the rules the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:

8

· contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading;

· contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

· contains a toll-free telephone number for inquiries on disciplinary actions;

· defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

· contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:

· bid and offer quotations for the penny stock;

· the compensation of the broker-dealer and its salesperson in the transaction;

· the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and

· monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules that require that prior to a transaction in a penny stock not otherwise exempt from those 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 acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

Related Stockholder Matters

None.

Purchase of Equity Securities

None.

Item 6. Selected Financial Data.

As the Company is a “smaller reporting company,” this item is inapplicable.

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

You should read the following discussion of our results of operations and financial condition with the audited financial statements and related notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and that involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this report. Actual results may differ materially from those contained in any forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Statements.”

Overview

The Company was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. with the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors. On September 24, 2009, the Company changed its name to Algoil, Inc. The central concept of Algoil, Inc. was making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil.

On May 21, 2010, the Company experienced a change in control. Magic Grace Ltd. (“Magic Grace”) acquired the majority of the issued and outstanding common stock of Algoil, Inc. in accordance with a stock purchase agreement by and between Andriy Kovalenko and Magic Grace. On the closing date, May 21, 2010, pursuant to the terms of the Stock Purchase Agreement, Magic Grace purchased from Mr. Kovalenko 14,290,000 (pre-split) shares of Company’s outstanding common stock for $187,500. In accordance with the agreement, all related party obligations were settled. Also on May 21, 2010, Real Challenge Group, Ltd. (“Real Challenge”) acquired 935,000 (pre-split) free-trading shares of the Company’s outstanding common stock in accordance with a stock purchase agreement by and between Andriy Kovalenko, as a duly authorized representative of the selling shareholders, and Real Challenge for $187,500. As a result of the change in control, the Company abandoned its original plan of developing and operating biodiesel facilities.

9

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd. Spartan Gold now operates as a U.S. based junior gold exploration and mining company. We have acquired the mineral rights to a property in Alabama and entered into an option agreement to acquire the mineral rights to certain properties located in Nevada. We are currently evaluating exploration activities on these properties to ascertain the feasibility of commencing production.

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock. Subsequently, on August 12, 2010, Magic Grace contributed to the treasury, and the Company retired, 9,896,250 common shares of stock (395,850,000 as adjusted for the stock split). The effect of the stock split and retirement of shares increased the number of shares of common stock outstanding from 15,225,000 to 213,150,000 as of August 12, 2010.

On October 19, 2011, the Company issued 18,952,774 shares of its common stock to Sphere Resources, Inc. (“Sphere”) in conversion of a Secured Convertible Promissory Note totaling $379,055 (including accrued interest of $4,055). As a result of the share issuance, Sphere became the majority shareholder of the Company.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock. The effect of the reverse stock split decreased the number of shares of common stock outstanding from 632,892,868 to 31,644,658 as of November 9, 2011. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented prior to November 9, 2011. The total number of authorized common shares and the par value thereof was not changed by the split.

Plan of Operation

The immediate goal of Spartan’s management is to secure and augment the prospective land holdings under the Mexivada option agreements located in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. We have options for the mineral concession rights at two projects in this region: Poker Flats and Ziggurat, both of which are located near existing operations of large mining corporations and have available mining and transportation infrastructures in place.

Both properties, Ziggurat and Poker Flats, require geological and geochemical mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work, in order to better define future drill and exploration targets. Our strategy is to advance each of these projects to the drilling stage as aggressively as prudent financing will allow and to determine the presence of gold, silver or other precious mineral reserves. An updated NI 43-101 technical report will be produced for Ziggurat and Poker Flats once the geological work, including subsequent interpretation of results, has been completed.

If we are successful in doing so, we believe we can attract the attention of the existing mining companies already operating in the area or new mining companies to either enter into development agreements with us or to acquire the projects from us outright.

Additionally, we are currently identifying other acquisition opportunities.

Critical Accounting Policies and Estimates

Our principal accounting policies are described in Note 2 of the audited financial statements included elsewhere in this report. The preparation of the financial statements in accordance with accounting principles generally accepted in the Unites States (“U.S. GAAP”) requires management to make significant judgments and estimates. Some accounting policies have a significant impact on amounts reported in these financial statements. Our financial position and results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. Significant accounting policies, including areas of critical management judgments and estimates, include the following:

Mineral Property Costs

The Company has been in the exploration stage since July 8, 2010 and has not yet realized revenues from its planned operations.  It is primarily engaged in the acquisition, exploration, and development of mining properties for gold and other precious metals.  In accordance with the Securities and Exchange Commission Industry Guide 7, mineral property acquisition costs are capitalized and mineral property option payments and exploration costs are expensed to operations as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, the costs then incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

10

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the Plan to the Company’s directors, officers, consultants and other service providers. The Plan was approved by a majority of stockholders of the Company on April 13, 2012.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  As of the date of this report options to purchase 4,000,000 shares of common stock have been granted to the Company’s officers.

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

Results of Operations

Year ended December 31, 2012 compared to the year ended December 31, 2011 and For the Period July 8, 2010 (Inception of Exploration Stage) to December 31, 2012

Revenues

The Company had no revenue for the period from July 8, 2010 (inception of exploration stage) to December 31, 2012 as we are still in the exploration stage.

Operating and Other Expenses

For the year ended December 31, 2012 our total operating expenses were $805,526 compared to $16,995,059 for the year ended December 31, 2011 resulting in a decrease of $16,189,533.  The decrease is attributable to option payments (primarily stock based compensation in the amount of $15,059,760) on mineral properties of $15,269,760 for the year ended December 31, 2011 compared to option payments of $25,000 for the year ended December 31, 2012, mineral property expenditures of $56,560 and mineral exploration costs of $20,417 for the year ended December 31, 2012 compared to mineral property expenditures of $36,560 and mineral exploration costs of $300,316 for the year ended December 31, 2011. General and administrative expenses decreased $684,874 due primarily to decreases consulting, legal and professional fees of $195,458; stock based compensation of $414,733; costs and fees associated with being a publicly-traded company of $24,407; and general office, travel and overhead expense of $26,500.

We incurred $62,019 of interest expense for the year ended December 31, 2012, consisting of the accretion of loan discounts, compared to $379,054 of interest expense for the year ended December 31, 2011, primarily consisting of the accretion of discounts of common stock and warrants issued in connection with a promissory note totaling $374,999. For the year ended December 31, 2012, a gain on the settlement of debt was realized in the amount of $75,000. As a result, net loss was $792,545 for the year ended December 31, 2012 compared to $17,374,113 for the year ended December 31, 2011.

For the period from July 8, 2010 (inception of exploration stage) to December 31, 2012, total expenses and net loss were $18,454,740, composed of general and administrative expenses of $2,226,027, mineral exploration costs of $320,733, mineral property expenditures of $93,120, mineral property option payments of $15,344,760, impairment of mineral property costs of 104,027, gain on the settlement of debt of $75,000 and interest expense of $441,073.

11

Liquidity and Capital Resources

Overview

For the years ended December 31, 2012 and 2011, we funded our operations through loans from shareholders and officers and third parties, while for the year ended December 31, 2011 we also funded our limited operations through financing activities consisting of private placements of equity securities with outside investors and issuance of a secured convertible note payable to a related party. Our principal use of funds during the year ended December 31, 2012 has been for mineral exploration, ongoing acquisition of mineral property rights and general corporate expenses.

Liquidity and Capital Resources during the year ended December 31, 2012 compared to the year ended December 31, 2011

As of December 31, 2012, we had cash of $11,137 and deficit in working capital of $278,455. The Company generated a negative cash flow from operations of $156,387 for the year ended December 31, 2012 compared to negative cash flow from operations of $910,881 for the year ended December 31, 2011. The negative cash flow from operating activities for the year ended December 31, 2012 is primarily attributable to the Company's net loss from operations of $792,545, offset by noncash mineral property expenditures of $20,000, noncash stock based compensation of $470,307, stock issuable for finance fees of $12,500, depreciation of $2,029, accretion of discount to loan payable for beneficial conversion feature of $62,019, and net cash from changes in operating assets and liabilities of $144,303, offset by a gain on the settlement of debt of $75,000. Cash used in operations for the year ended December 31, 2011 is primarily attributable to the Company's net loss from operations of $17,374,113, offset by noncash mineral property expenditures (primarily stock based compensation in the amount of $15,059,760) of $15,234,760, noncash stock compensation of $649,900, depreciation of $1,776, accretion of discount to note payable for stock and warrants issued and beneficial conversion feature of $374,999, interest accrued on note payable of $4,055, and net cash from changes in operating assets and liabilities of $197,742.

Cash used in investing activities is attributable the purchase of equipment of $6,089 during the year ended December 31, 2011 compared to $0 for the year ended December 31, 2012.

During the year ended December 31, 2012, the Company raised $62,020 from loans from third parties and $118,000 from advances from related parties. The Company made payments of $17,360 on the advances from third parties during the year ended December 31, 2012. During the year ended December 31, 2011, the Company raised $650,000 by issuing common stock to outside investors, received $200,000 in proceeds from the issuance of a note payable to a related party, and received $50,000 in advances from a related party

We will require additional financing during the current fiscal year according to our planned exploration activities. We plan to spend approximately $1,500,000 in the next twelve months to carry out exploration and administration activities on our Nevada mineral properties. We presently do not have sufficient financing to enable us to complete these activities and will require additional financing to perform future exploration work on all of our mineral properties. Our actual expenditures on these activities will depend on the amount of funds we have available as a result of our financing efforts. There is no assurance that we will be able to raise the necessary financing.

In January, 2011, we entered into a $5,000,000 financing commitment agreement with Geneva Switzerland based Knightstown Business Ltd (“Knightstown”).  On January 25, 2011, the Company received the first tranche of $500,000 from Knightstown under the agreement and issued 41,667 shares of its stock at $12 per share in the private placement. A second investment of $150,000 was received on April 26, 2011 and the Company issued 12,500 shares of its stock at $12 per share in the private placement.  Knightstown had committed to additional funding of $4,500,000 over the following six month period from the date of the agreement.  The commitment period expired with no additional investments made by Knightstown and the agreement has not been renewed.

In February, 2011, we entered into an investment banking agreement with Century Pacific Securities, Inc. (“Century Pacific”).  Under terms of the agreement, Century Pacific will represent the Company in a best-efforts capacity in a $10,000,000 Private Placement into Public Equity (PIPE) transaction.  If completed, the private placement will be for an offering of equity securities in the form of Spartan Gold’s common stock.  Century Pacific is a licensed broker-dealer and a member of FINRA (Financial Industry Regulatory Authority).  As of the date of this report, the term period has expired with no additional investments generated by Century Pacific and the agreement has not been renewed.

On September 7, 2011, the company issued a $375,000 Secured Convertible Promissory Note (“Promissory Note”) to Sphere Resources Inc. (“Sphere”) for $200,000 of cash proceeds and conversion of the $175,000 due in connection with the March 28, 2011 Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 for its Poker Flats and Ziggurat properties. The Promissory Note was secured by all of the assets and property of the Company, was interest bearing at 8 per annum, due on or before September 30, 2011, and was convertible into shares of common stock of the Company at a conversion price of $0.02 per share.

Additionally, on September 7, 2011, the Company issued 1,250,000 shares of its common stock and warrants to purchase an additional 1,250,000 shares at $2.00 to Sphere in connection with the issuance of the $375,000 Promissory Note.

As of September 30, 2011, the Company had not repaid the Promissory Note and was in default. On October 6, 2011 the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Promissory Note of $375,000 plus accrued interest of $4,055, it agreed to convert the total amount owed of $379,055 into 18,952,774 shares of its common stock, per the terms of the Promissory Note, on October 19, 2011.

12

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion. Additionally on December 27, 2012, a vendor elected to convert $22,140 of accounts payable and accrued expenses due to them for 442,800 shares of the Company’s common stock at a conversion rate of $0.05 per share.

On December 27, 2012, Sphere elected to convert $142,640 of advances due to them for 2,852,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion. Effective December 31, 2012, Sphere entered into an agreement with the Company’s third party lender whereby the debt of $62,020 owed by Spartan was assigned to Sphere. On December 31, 2012, Sphere elected to convert the $62,020 for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share.

Going Concern

Our independent auditors included an explanatory paragraph in their report on the accompanying consolidated financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/ or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. The Company has conducted private placements of its common stock, which have generated funds to satisfy the initial cash requirements of its planned Nevada exploration ventures. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

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

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

As the Company is a “smaller reporting company,” this item is inapplicable.

13

Item 8. Financial Statements and Supplementary Data.

Index		Page
Report of Independent Registered Public Accounting Firm – Dale Matheson Carr-Hilton Labonte LLP		15
Consolidated Financial Statements
	Consolidated Balance Sheets	16
	Consolidated Statements of Operations	17
	Consolidated Statements of Cash Flows	18
	Consolidated Statement of Stockholders’ Equity (Deficit)	20
Notes to Consolidated Financial Statements		22

14

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Spartan Gold Ltd.

We have audited the accompanying consolidated balance sheets of Spartan Gold Ltd. (an exploration stage company) as of December 31, 2012 and 2011and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended and for the period from July 8, 2010 (date of inception of exploration stage) to December 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion these consolidated financial statements present fairly, in all material respects, the financial position of Spartan Gold Ltd. as of December 31, 2012 and 2011 and the results of its operations and its cash flows for the years then ended and for the period from July 8, 2010 (date of inception of exploration stage) to December 31, 2012, in accordance with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DALE MATHESON CARR-HILTON LABONTE LLP

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED ACCOUNTANTS

April 15, 2013

Vancouver, Canada

15

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Balance Sheets

	December 31,
	2012			2011
ASSETS
Current assets:
Cash	$	11,137		$	4,864
Prepaid expenses		–			4,163
Total current assets		11,137			9,027
Property and equipment, net		2,284			4,313
Total assets	$	13,421		$	13,340
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable (Note 7)	$	187,379		$	54,235
Accrued expenses (Note 7)		74,213			221,981
Due to related parties (Note 7)		28,000			50,000
Total current liabilities		289,592			326,216
Commitments and contingencies (Note 11)
Stockholders' deficit (Note 8):
Common stock $.001 par value 1,000,000,000 shares authorized, 42,085,944 and 31,644,658 shares issued and outstanding, at December 31, 2012 and 2011, respectively		42,086			31,645
Common stock issuable, 250,000 and nil shares issuable at December 31, 2012 and 2011, respectively		12,500			–
Additional paid-in capital		18,332,114			17,525,805
Deficit accumulated from prior operations		(208,131	)		(208,131	)
Deficit accumulated during the exploration stage		(18,454,740	)		(17,662,195	)
Total stockholders' deficit		(276,171	)		(312,876	)
Total liabilities and stockholders' deficit	$	13,421		$	13,340

See accompanying notes to consolidated financial statements.

16

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Statements of Operations

	For the Year Ended December 31,						For the Period July 8, 2010 (Inception of Exploration Stage) to December 31,
	2012			2011			2012
Operating expenses:
General and administrative (Notes 7 and 8)	$	703,549		$	1,388,423		$	2,226,027
Mineral property impairment (Note 4)		–			–			104,027
Mineral property option payments (Note 4)		25,000			15,269,760			15,344,760
Mineral property expenditures (Note 4)		56,560			36,560			93,120
Mineral property exploration costs (Note 4)		20,417			300,316			320,733
Total operating expenses		805,526			16,995,059			18,088,667
Other income (expense):
Gain on settlement of debt (Note 9)		75,000			–			75,000
Interest expense (Notes 5 and 6)		(62,019	)		(379,054	)		(441,073	)
Net loss	$	(792,545	)	$	(17,374,113	)	$	(18,454,740	)
Net loss per share - Basic and diluted	$	(0.02	)	$	(1.13	)
Weighted average number of shares outstanding during the period - Basic and diluted		31,782,782			15,361,636

See accompanying notes to consolidated financial statements.

17

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

	For the Year Ended December 31,						For the Period July 8, 2010 (Inception of Exploration Stage) to December 31,
	2012			2011			2012
Cash flows used in operating activities:
Net loss	$	(792,545	)	$	(17,374,113	)	$	(18,454,740	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		2,029			1,776			3,805
Stock-based compensation		470,307			649,900			1,125,455
Stock issuable for finance fees		12,500			–			12,500
Accretion of discount on secured convertible promissory note for commitment shares and warrants		–			344,594			344,594
Accretion of beneficial conversion feature on secured convertible promissory notes and loans		62,019			30,405			92,424
Interest accrued on secured convertible promissory note		–			4,055			4,055
Non-cash mineral property expenditures		20,000			15,234,760			15,254,760
Impairment of mineral rights		–			–			104,027
Gain on settlement of debt		(75,000	)		–			(75,000	)
Changes in operating assets and liabilities:
Prepaid expenses		4,163			(4,163	)		–
Accounts payable		74,899			29,524			124,164
Accrued expenses		65,241			172,381			287,222
Net cash used in operating activities		(156,387	)		(910,881	)		(1,176,734	)
Cash flows used in investing activities:
Purchase of property and equipment		–			(6,089	)		(6,089	)
Acquisition of mineral rights		–			–			(50,000	)
Net cash used in investing activities		–			(6,089	)		(56,089	)
Cash flows from financing activities:
Advances from third parties		62,020			–			62,020
Advances from related parties		118,000			50,000			168,000
Payments to related parties		(17,360	)		–			(17,360	)
Proceeds from issuance of note payable, related parties		–			200,000			200,000
Proceeds from sale of common stock		–			650,000			831,300
Net cash provided by financing activities		162,660			900,000			1,243,960
Net increase (decrease) in cash		6,273			(16,970	)		11,137
Cash at beginning of year		4,864			21,834			–
Cash at end of year	$	11,137		$	4,864		$	11,137
Supplemental disclosure of cash flow information:
Cash paid for interest	$	–		$	–		$	–
Cash paid for taxes	$	–		$	–		$	–

See accompanying notes to consolidated financial statements.

Continued

18

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows (Continued)

		For the Year Ended December 31,								For the Period July 8, 2010 (Inception of Exploration Stage) to December 31,
		2012				2011				2012
Non-cash investing and financing activities:
	Benefical conversion feature on secured loan		$	(62,019	)		$	–			$	(62,019	)
	Additional paid in capital		$	62,019			$	–			$	62,019
	Conversion of accrued compensation to common stock:
	Accrued compensation		$	(79,764	)						$	(79,764	)
	Common stock		$	1,595							$	1,595
	Additional paid in capital		$	78,169							$	78,169
	Conversion of amounts due to related parties to common stock:
	Amounts due to related parties		$	(204,660	)						$	(204,660	)
	Common stock		$	4,093							$	4,093
	Additional paid in capital		$	200,567							$	200,567
	Conversion of secured convertible promissory note and accrued interest to common stock
	Secured convertible promissory note		$	–			$	(379,055	)		$	(379,055	)
	Common stock		$	–			$	18,953			$	18,953
	Additional paid in capital		$	–			$	360,102			$	360,102
	Conversion of related party payable to capital		$	–			$	–			$	19,603
	Additional paid in capital		$	–			$	–			$	(19,603	)
	Value of mineral rights contributed to the Company		$	–			$	–			$	(54,027	)
	Additional paid in capital		$	–			$	–			$	54,027
	Contribution of 19,792,500 shares of common stock to treasury by principal shareholder:		$	–			$	–			$	(129,851	)
	Additional paid in capital		$	–			$	–			$	129,851
	Retirement and cancellation of 19,792,500 shares of common stock:
	Common stock		$	–			$	–			$	(19,793	)
	Treasury stock		$	–			$	–			$	129,851
	Deficit accumulated from prior operations		$	–			$	–			$	(110,058	)

See accompanying notes to consolidated financial statements.

19

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Statement of Stockholders' Deficit

For the period from September 6, 2007 (Inception) to December 31, 2012

																Deficit
													Deficit			accumulated			Total
							Common stock				Additional		accumulated			during the			stockholders’
	Common stock						issuable				paid-in		from prior			exploration			equity
	Shares			Amount			Shares		Amount		capital		operations			stage			(deficit)
Opening balance, September 6, 2007 (Inception)		–		$	–			–	$	–	$	–	$	–		$	–		$	–
Common stock issued to founders at $.0005 per share		24,000,000			24,000			–		–		–		(12,000	)		–			12,000
Common stock issued for cash at $0.01 per share		3,250,000			3,250			–		–		29,250		–			–			32,500
Net loss for the period September 6, 2007 (inception) to December 31, 2007		–			–			–		–		–		(24,400	)		–			(24,400	)
Balance, December 31, 2007		27,250,000			27,250			–		–		29,250		(36,400	)		–			20,100
Common stock issued for cash at $0.005 per share under a private placement		3,000,000			3,000			–		–		12,000		–			–			15,000
Common stock issued for cash at $0.01 per share under a private placement		200,000			200			–		–		1,800		–			–			2,000
Net loss for the year ended December 31, 2008		–			–			–		–		–		(36,538	)		–			(36,538	)
Balance, December 31, 2008		30,450,000			30,450			–		–		43,050		(72,938	)		–			562
Net loss for the year ended December 31, 2009		–			–			–		–		–		(13,375	)		–			(13,375	)
Balance, December 31, 2009		30,450,000			30,450			–		–		43,050		(86,313	)		–			(12,813	)
Contribution of related party loan		–			–			–		–		19,603		–			–			19,603
Contribution of shares to treasury by principal shareholder, retired and cancelled		(19,792,500	)		(19,793	)		–		–		129,851		(110,058	)		–			–
Contribution of shares by shareholders to purchase Arbacoochee mineral rights at $0.009711 per share		–			–			–		–		54,027		–			–			54,027
Shares awarded - executive employment agreements contributed by principal shareholder at $0.00656 per share		–			–			–		–		5,248		–			–			5,248
Common stock issued for cash at $6.00 per share under a private placement		30,217			30			–		–		181,270		–			–			181,300
Net loss for the year ended December 31, 2010		–			–			–		–		–		(11,760	)		(288,082	)		(299,842	)
Balance, December 31, 2010		10,687,717		$	10,687			–	$	–	$	433,049	$	(208,131	)	$	(288,082	)	$	(52,477	)

See accompanying notes to consolidated financial statements.

Continued

20

SPARTAN GOLD LTD.

(An Exploration Stage Company)

Consolidated Statement of Stockholders' Deficit (Continued)

For the period from September 6, 2007 (Inception) to December 31, 2012

Deficit

Deficit

accumulated

Total

Common stock

Additional

accumulated

during the

stockholders'

Common stock

issuable

paid-in

from prior

exploration

equity

Shares

Amount

Shares

Amount

capital

operations

stage

(deficit)

Common stock issued for cash at $12.00 per share under a private placement

54,167

55

–

–

649,945

–

–

650,000

Shares issued to consultant for services at $13.00 per share

50,000

50

–

–

649,850

–

–

649,900

Common stock issued under option agreement to acquire mineral rights at $18.00 per share

650,000

650

–

–

11,699,350

–

–

11,700,000

Common stock issued in connection with secured convertible promissory note

1,250,000

1,250

–

–

201,452

–

–

202,702

Warrants to purchase 1,250,000 shares of common stock issued in connection with secured convertible promissory note

–

–

–

–

141,892

–

–

141,892

Beneficial conversion feature of secured convertible promissory note

–

–

–

–

30,405

–

–

30,405

Warrants to purchase 349,975 shares of common stock issued under option agreements to acquire mineral rights

–

–

–

–

3,359,760

–

–

3,359,760

Conversion of secured convertible promissory note to common stock

18,952,774

18,953

–

–

360,102

–

–

379,055

Net loss for the year ended December 31, 2011

–

–

–

–

–

–

(17,374,113

)

(17,374,113

)

Balance, December 31, 2011

31,644,658

31,645

–

–

17,525,805

(208,131

)

(17,662,195

)

(312,876

)

Shares awarded under executive employment agreement

50,000

50

–

–

24,950

–

–

25,000

Warrants to purchase 900,000 shares of common stock issued to consultants for services to be rendered

–

–

130,167

–

–

130,167

Common stock issued in lieu of cash compensation

5,855,286

5,855

–

–

286,909

292,764

Common stock issued for services

442,800

443

–

–

21,697

22,140

Compensation expense of stock options issued to employees

–

–

–

–

80,000

–

–

80,000

Common stock issued in conversion of amounts due to related party

4,093,200

4,093

–

–

200,567

–

–

204,660

Beneficial conversion feature of secured loan payable

–

–

–

–

62,019

–

–

62,019

Common stock issuable for finance fees

–

–

250,000

12,500

–

–

–

12,500

Net loss for the year ended December 31, 2012

–

–

–

–

–

–

(792,545

)

(792,545

)

Balance, December 31, 2012

42,085,944

$

42,086

250,000

$

12,500

$

18,332,114

$

(208,131

)

$

(18,454,740

)

$

(276,171

)

See accompanying notes to consolidated financial statements

21

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 1 – Nature of Business, Presentation, and Going Concern

Organization

Spartan Gold Ltd., (“Spartan” or the “Company”), was incorporated in Nevada on September 6, 2007.

On May 21, 2010, the Company experienced a change in control and the Company abandoned its original plan of developing and operating biodiesel facilities to concentrate on gold exploration and mining.

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd.  The Company now operates as a U.S. based junior gold exploration and mining company.  The Company is engaged in exploration activities on its properties to ascertain the feasibility of commencing production.

Stock Splits

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock.

All common share and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented prior to November 9, 2011. The total number of authorized common shares and the par value thereof was not changed by the stock splits.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”). 

Exploration Stage Company

As of July 8, 2010, the Company became an “exploration stage company” as defined in the SEC Industry Guide 7, and is subject to compliance with ASC Topic 915 “Development Stage Entities”. For the period from September 6, 2007 (Inception) to July 8, 2010, the Company was a “development stage company” in accordance with ASC Topic 915. Deficits accumulated prior to becoming an “exploration stage company” have been separately presented in the accompanying consolidated balance sheets and statements of stockholders’ equity (deficit). To date, the Company's planned principal operations have not fully commenced.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $792,545 and $17,374,113 for the years ended December 31, 2012 and 2011, respectively, and has incurred cumulative losses since inception of its exploration stage of $18,454,740. The Company has a stockholders’ deficit of $276,171 at December 31, 2012.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate revenues, its ability to continue to raise investment capital, and implement its business plan.  No assurance can be given that the Company will be successful in these efforts.

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

22

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 2 – Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations and the inputs used in calculating stock-based compensation and transactions. Actual results could differ from those estimates and would impact future results of operations and cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of Spartan Gold Ltd. and its wholly-owned subsidiary, Andhra Blue Limited.  All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2012 and 2011, respectively, the Company had no cash equivalents.

Mineral Property Costs

The Company has been in the exploration stage since July 8, 2010 and has not yet realized revenues from its planned operations.  It is primarily engaged in the acquisition, exploration, and development of mining properties for gold and other precious metals.  In accordance with the SEC Industry Guide 7, mineral property acquisition costs are capitalized and mineral property option payments and exploration costs are expensed to operations as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, the costs then incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Fair Value of Financial Instruments

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - fair value measurements are those derived from inputs other than quoted prices included within 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 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

23

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 2 – Summary of Significant Accounting Policies (Continued)

Fair Value of Financial Instruments (Continued)

Financial instruments classified as Level 1 - quoted prices in active markets include cash.

Financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments.  Changes in such judgments could have a material impact on fair value estimates.  In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes.  Changes in economic conditions may also dramatically affect the estimated fair values.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and due to related parties.

Basic and Diluted Loss Per Share

The Company computes income (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations.  Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.   As of December 31, 2011, there were 1,599,975 warrants outstanding to purchase shares of common stock. As of December 31, 2012, there were a total of 2,499,975 warrants outstanding and 4,000,000 stock options outstanding to purchase shares of common stock. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of loss per share.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ deficit over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

24

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 2 – Summary of Significant Accounting Policies (Continued)

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes.  Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases.  Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.  The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs.  Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”.  ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.  This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2012.

Note 3 – Recent Accounting Pronouncements

On February 5, 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, which requires entities to disclose the following additional information about items reclassified out of accumulated other comprehensive income (“AOCI”): (1) changes in AOCI balances by component, (2) significant items reclassified out of AOCI by component either on the face of the income statement or as a separate footnote to the financial statements. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company does not expect this ASU to have a material impact on the financial statements.

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

Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the Company’s present or future consolidated financial statements.

25

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 4 – Mineral Properties

As of December 31, 2012 and 2011, the Company has incurred $101,977 and $15,606,636 in mineral property costs which have been charged to operations.  A summary by property is as follows:

	Ziggurat		Poker Flats		Arbacoochee
	Property		Property		Gold Prospect		Total
Year Ended December 31, 2012
Impairment	$	–	$	–	$	–	$	–
Option payments		25,000		–		–		25,000
Property expenditures		–		56,560		–		56,560
Exploration costs		20,208		209		–		20,417
	$	45,208	$	56,769	$	–	$	101,977
Year Ended December 31, 2011
Impairment	$	–	$	–	$	–	$	–
Option payments		10,238,010		5,031,750		–		15,269,760
Property expenditures		–		36,560		–		36,560
Exploration costs		185,517		110,979		3,820		300,316
	$	10,423,527	$	5,179,289	$	3,820	$	15,606,636
From July 8, 2010 (Inception of Exploration Stage) to December 31, 2012
Impairment	$	–	$	–	$	104,027	$	104,027
Option payments		10,288,010		5,056,750		–		15,344,760
Property expenditures		–		93,120		–		93,120
Exploration costs		205,725		111,188		3,820		320,733
	$	10,493,735	$	5,261,058	$	107,847	$	15,862,640

Ziggurat Property

On December 27, 2010, the Company entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC” or the “Optionor”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in certain mining claims in Nye County, in the State of Nevada, known as the “Ziggurat” Property. Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· Issuance of 393,125 shares of common stock (issued at a fair value of $7,076,250) and 41,875 shares of common stock (issued at a fair value of $753,750) to Sphere and MMC, respectively on execution of the amended Option Agreement;

· Issuance of a warrant to purchase 193,100 shares (recorded at a fair value of $1,853,760) and a warrant to purchase 41,875 shares (recorded at a fair value of $402,000) to Sphere and MMC, respectively, with an exercise price of $20.00 per share until March 28, 2016;

26

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 4 – Mineral Properties (Continued)

Ziggurat Property (Continued)

· The Company has paid to MMC $25,000 upon executing the Option Agreement;

· The Company has paid to MMC $35,000 on May 27, 2011;

· The Company shall pay to MMC $25,000 on or before the second anniversary date of the Agreement ($5,000 paid and $20,000 accrued);

· The Company shall pay to MMC $25,000 on or before the third anniversary date of the Agreement;

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company;

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $1,000,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement;

· Sphere is required to issue certain shares of common stock to MMC;

· The Company granted a 2.5% Net Smelter Royalty (“NSR”) for any and all products that are produced from the Ziggurat mining claims to Sphere and a .5% NSR to MMC;

· If and when the Company elects to sell and convey all or a portion of its interest in the Ziggurat Property, the Company shall have the right to purchase up to 100% of the 2.5% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Ziggurat Property, under terms to be agreed upon by the Company and Sphere.

Further, the Company will pay $117,250 (See Note 6 – Secured Convertible Promissory Note) and $16,750 (not paid) to Sphere and MMC, respectively, of which 50% is to be paid within 60 days after the effective date of a S-1 to be filed with the SEC and the remainder after such date of the Company obtaining financing of $2,000,000. As of December 31, 2012, the Company has neither filed the S-1 nor obtained such financing.

Poker Flats Property

On December 22, 2010, the Company entered into an Option and Mining Claim Acquisition Agreement between MMC and Sphere. The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in certain mining claims located in the Carlin Mining District in Elko County Nevada, known as the “Poker Flats” Property.  Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· Issuance of 194,375 shares of common stock (issued and recorded at a fair value of $3,498,750) and 20,625 shares of common stock (issued and recorded at a fair value of $371,250) to Sphere and MMC, respectively on execution of the amended Option Agreement;

· Issuance of a warrant to purchase 94,375 shares (recorded at a fair value of $906,000) and a warrant to purchase 20,625 shares (recorded at a fair value of $198,000) of common stock to Sphere and MMC, respectively, with an exercise price of $20.00 per share until March 28, 2016;

· The Company has paid to MMC $25,000 upon executing the Option Agreement;

· Sphere is required to issue certain shares of common stock to MMC;

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company;

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $250,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement;

· Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% NSR for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC and a 2% NSR to Sphere;

27

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 4 – Mineral Properties (Continued)

Poker Flats Property (Continued)

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 75% and MMC shall have the right to purchase up to 25% of the 3% NSR on mineral production from the Poker Flats Property retained by the owner of the mining claims subject to the Poker Flats Option Agreement, for one million U.S. dollars (U.S. $1,000,000) per NSR percentage point;

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 100% of the 2% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Poker Flats Property, under terms to be agreed upon by the Company and Sphere.

On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the Poker Flats property located within the Carlin Mining District in Elko County, Nevada.

Under the terms of this Agreement, the Company agreed to pay Tomera a Production Royalty of 5% of NSR, as defined in the Agreement. In order to maintain this Agreement in effect, the Company shall pay to Tomera Advance Minimum Royalty (“AMR”) Payments. AMR payments are calculated based on the net mineral acres leased on an annual basis. The Company paid, at the execution of the Agreement, $30,800 for the first year of the lease based on the 1,760 net mineral acres leased at $17.50 per acre. Future AMR payments, on a per net mineral acre basis, are: $17.50 per acre on the first and second anniversaries of the Agreement, $21.00 per acre on the third and fourth anniversaries, $24.50 per acre on the fifth and sixth anniversaries, and $28.00 per acre on the seventh and any subsequent anniversaries. The Company paid $30,800 and $30,800 during the years ended December 31, 2012 and 2011, respectively. The term of the Agreement is for a period of ten years. The Company has the option to extend the initial term for an additional ten year period.

In connection with the Mining Lease and Agreement, the Company entered into a Surface Access and Use Agreement on April 1, 2011 with Kevin Tomera, a Nevada resident, which grants the Company general rights of ingress and egress over certain surface tracts and the right to use the surface tracts in conduct of its mineral exploration, development and mining activities. Additionally, Tomera has granted the Company an option to purchase portions of the surface tracts. Under the terms of the Surface Access and Use Agreement, the Company agrees to pay Kevin Tomera annual rental of $4.50 per acre for each acre of land included in the surface tracts. The Company paid $5,760 and $5,760 during the years ended December 31, 2012 and 2011, respectively. The term of the Agreement is for ten years.

Arbacoochee Gold Prospect

On October 22, 2010, the Company acquired all of the mineral rights in the Arbacoochee Gold Prospect located in northeastern Alabama. The acquisition includes all legal rights and equitable title to the mineral rights held by deed in the name of Alabama Mineral Properties, LLC (“AMP”).

The mineral rights were acquired for cash of $50,000 and 5,563,468 shares of the Company’s issued and outstanding common stock at a fair value of $54,027. The shares were a contribution from shareholders, resulting in a capital contribution (See Note 8 – Stockholders’ Deficit).

The Company also assumed an existing mineral royalty agreement which requires the payment of 6% NSR overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.

At December 31, 2010, the Company impaired the Arbacoochee Gold Prospect and $104,027 was charged to operations.

Note 5 – Borrowings from Third Party

On August 31, 2012, the Company entered into a Memorandum of Understanding (“MOU”) with Tamimi Investments and Mining Co. (“TIMCO”), a Cyprus corporation. Under the MOU, TIMCO was to subscribe to a $2,000,000 private placement of the Company’s common stock at $0.05 per share (40,000,000 shares). TIMCO was to receive warrants to purchase an additional 30,000,000 shares within two years from the date of closing at an exercise price of $0.10 per share. In connection with the subscription, TIMCO was to receive a facilitation fee consisting of 5% of the placement amount in cash, 2,500,000 common shares of the Company’s stock, and warrants to purchase an additional 2,500,000 shares at $0.10 per share. Upon the completion of due diligence, TIMCO decided to not complete the transaction.

28

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 5 – Borrowings from Third Party (Continued)

Also on August 31, 2012, as a condition of the MOU, the Company entered into a convertible secured loan with TIMCO and received $62,020. The loan is secured by, and convertible into, 1,240,400 shares of the Company’s common stock. The loan does not bear interest and was convertible at the end of the due diligence period. The loan was discounted by the value of its beneficial conversion feature of $62,019, which has been fully accreted as interest expense for the year ended December 31, 2012.

Effective December 31, 2012, the Company, Sphere and TIMCO entered into an agreement whereby the debt of $62,020 was assigned to Sphere. The Company agreed to issue 250,000 shares of its common stock to TIMCO for consideration of the assignment. On December 31, 2012, Sphere elected to convert the $62,020 for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion (See Note 8 – Stockholders’ deficit). The 250,000 shares to TIMCO have been accrued at December 31, 2012 at a market value of $0.05 per share for $12,500 and recorded as a finance fee.

Note 6 – Secured Convertible Promissory Note

On September 7, 2011, the Company issued a $375,000 Secured Convertible Promissory Note (the “Note”) to Sphere maturing on September 30, 2011. The Note was interest bearing at the rate of 8% per annum and payable upon maturity. The principal was comprised of the following:

· $200,000 cash payments made by Sphere to the Company;

· $57,750 due to Sphere pursuant to the Poker Flats Property (See Note 4 – Mineral Properties); and

· $117,250 due to Sphere pursuant to the Ziggurat Property (See Note 4 – Mineral Properties).

The Company granted a security interest in substantially all of the assets of the Company as collateral for the Note. The face amount of the Note plus accrued interest is convertible into common stock of the Company at $0.02 per share, at the option of the holder.

Additionally, the Company issued commitment shares of common stock totaling 1,250,000, equivalent to $2,500,000, and 1,250,000 warrants, equivalent to $1,750,000, at the closing date to obtain the loan. In accordance with ASC Topic 470-25 “Debt”, the Company utilized the market approach to value the debt instrument and allocated the net proceeds from the issuance of the Note based upon the pro rata portion of the fair value of the Note and the undiscounted value of the commitment shares and warrants, being $202,702 and $141,892, respectively.

The Company recognized the embedded beneficial conversion feature and the pro rata value of the commitment shares and warrants aggregated $374,999 and were accreted from the issuance date of the secured convertible promissory note through maturity. As of September 30, 2011, the maturity date of the Note, the entire beneficial conversion feature of $30,405, and discount accretion for the commitment shares and warrants, was recorded as interest expense.

On October 6, 2011, the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Note of $375,000 plus accrued interest of $4,055, the total balance was converted into 18,952,774 shares of common stock (See Note – 8 Stockholders’ Deficit).

Note 7 – Related Party Transactions

The Company issued Sphere 587,500 shares of the Company’s common stock and warrants to purchase an additional 287,475 shares to Sphere in connection with the option agreements on the Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties).  Additionally, cash payments to Sphere of $175,000 were due and recorded as part of the Note (See Note 6 – Secured Convertible Promissory Note). Mr. Malcolm Stevens, the Company’s Chief Executive Officer, Director and Chairman, is also the Executive Chairman and President of Sphere, a Canadian Corporation.

In November 2011, Sphere advanced $50,000 to the Company for working capital purposes. During the year ended December 31, 2012, Sphere advanced an additional $119,000 to the Company for working capital purposes and the Company repaid $17,360 to Sphere. The advances have no repayment date and do not bear interest. On December 27, 2012, Sphere elected to convert $142,640 of the balance due into 2,852,800 shares of the Company’s common stock valued at $0.05 per share, the market price on the date of conversion, leaving a balance owed to Sphere of $9,000 (See Note – 8 Stockholders’ Deficit).

See also Note 5 – Borrowings from Third Party and Note 6 – Secured Convertible Promissory Note.

29

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 7 – Related Party Transactions (Continued)

During the year ended December 31, 2011, the Company paid $6,772 to a family member of a Director and President of the Company for administrative services.

During the year ended December 31, 2012, the Company’s President and Director advanced $19,000 to the Company for working capital purposes. No payments on the amount owed have been made. The advance has no repayment date and does not bear interest.

Accounts payable at December 31, 2012 include $19,000 of amounts due to the Company’s Chief Financial Officer for services rendered. Accrued expenses at December 31, 2012 and 2011 include $51,000 and $133,500, respectively, of accrued compensation for officers.

These transactions are in the normal course of business and are recorded at the exchange amount, which is the consideration agreed to by the related parties.

Note 8 – Stockholders’ Deficit

The Company’s authorized number of common shares is 1,000,000,000 with a $0.001 par value.

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split which was distributed on August 5, 2009 to shareholders of record and has filed an amendment to its Articles of Incorporation in the State of Nevada. The par value of $0.001 remained the same.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split. The number of authorized shares and the par value of $0.001 remained the same.

Common Stock

On December 15, 2007, the Company issued 20,000,000 shares of its common stock at $0.0005 per share to a founder of the Company for services rendered aggregating $10,000 as stock based compensation.

On December 15, 2007, the Company issued 4,000,000 shares of its common stock at $0.0005 per share to a founder of the Company for services rendered aggregating $2,000 as stock based compensation.

On December 15, 2007, the Company issued 3,250,000 shares of its common stock for $32,500 cash or $0.01 per share.

On January 30, 2008, the Company issued 3,000,000 shares of its common stock for $15,000 cash or $0.005 per share.

On May 2, 2008, the Company issued 200,000 shares of its common stock for $2,000 cash or $0.01 per share.

On August 12, 2010, a shareholder of the Company contributed 19,792,500 shares of common stock to the Company’s treasury valued at $129,851 or $.0066 per share, based on the price paid by the shareholder to acquire the shares. The Company immediately retired and canceled these shares resulting in a loss of $110,058 which was recorded as a charge to deficit accumulated from prior operations.

On October 22, 2010, two shareholders of the Company utilized a combined 5,563,468 of their shares to acquire the Arbacoochee mineral rights located in Alabama resulting in a capital contribution of $54,027. The shares were valued at a weighted average price of $0.009711 per share See Note 4 – Mineral Properties).

In connection with executive employment contracts, the Company committed 800,000 shares of its common stock to the executives of the Company. The shares were contributed by a shareholder of the Company resulting from the change of control on May 21, 2010. The shares were valued at $0.0066, the price at the commitment date of October 22, 2010. The total value of the shares aggregated $5,248 and has been recorded as stock issued for services with a credit to additional paid-in-capital as a capital contribution.

30

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 8 – Stockholders’ Deficit (Continued)

Common Stock (Continued)

On December 15, 2010, the Company issued 17,500 shares of its common stock for $105,000 cash or $6.00 per share under a private placement agreement.

On December 20, 2010, the Company issued 2,717 shares of its common stock to a company controlled by a previous Vice President of the Company for $16,300 cash, or $6.00 per share, under a private placement agreement.

On December 26, 2010, the Company issued 10,000 shares of its common stock for $60,000 cash, or $6.00 per share, under a private placement agreement.

On January 25, 2011, the Company issued 41,667 shares of its stock for $500,000 cash, or $12.00 per share, under a private placement.  

On February 2, 2011, the Company entered into a Consulting Agreement and issued 50,000 shares of its common stock at the market value per share of $12.998 for a total of $649,900.

On March 28, 2011, the Company issued 62,500 shares of its common stock to MMC in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $1,125,000.

On March 28, 2011, the Company issued 587,500 shares of its common stock to Sphere in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $10,575,000.

On April 26, 2011, the Company issued 12,500 shares of its common stock for $150,000 cash, or $12.00 per share, under a private placement.

On September 7, 2011, the Company issued 1,250,000 shares of its common stock to Sphere in connection with the issuance of a $375,000 Note (See Note 6 – Secured Convertible Promissory Note).

On October 19, 2011, the Company issued 18,952,774 shares of its common stock for the conversion of the $379,055 Note with Sphere, including accrued interest, per the terms of the Promissory Note (See Note 6 – Secured Convertible Promissory Note).

On March 28, 2012, the Company has issued 50,000 shares of common stock to the Chief Financial Officer of the Company pursuant to an employment agreement. The fair value of these shares, totaling $25,000, was expensed and recorded in general and administrative expenses.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion.

On December 27, 2012, a vendor elected to convert $22,140 of accounts payable and accrued expenses due to them for 442,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion.

On December 27, 2012, Sphere elected to convert $142,640 of advances due to them for 2,852,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion (See Note 7 – Related Party Transactions).

Effective December 31, 2012, Sphere elected to convert $62,020 of debt assigned to them by TIMCO for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion (See Note 5 – Borrowings from Third Party and Note 7 – Related Party Transactions).

31

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 8 – Stockholders’ Deficit (Continued)

Warrants

The following table summarizes warrant transactions for the year ended December 31, 2012 and 2011:

					Weighted
			Weighted		average
			average		remaining		Aggregate
	Number		exercise		contracted		intrinsic
	of warrants		price		term (years)		value
Outstanding at December 31, 2010		–	$	–
Granted		1,599,975	$	5.94
Outstanding at December 31, 2011		1,599,975	$	5.94		4.59	$	–
Granted		900,000	$	0.10
Outstanding at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Exercisable at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Weighted Average Grant Date Fair Value			$	2.09

On March 28, 2011, the Company issued warrants to purchase 349,975 shares of the Company’s common stock in connection with the option agreements for the Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). These warrants have contractual lives of five years and were valued at a grant date fair value of $9.60 per warrant, or $3,359,760, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$18.00
Contractual term	5 years
Expected volatility	87.6%
Risk free interest rate	0.81%
Dividend yield	0

The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

32

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 8 – Stockholders’ Deficit (Continued)

Warrants (Continued)

On September 7, 2011, the Company issued warrants to purchase 1,250,000 shares of the Company’s common stock to Sphere as a financing fee related to the Note (See Note 6 – Secured Convertible Promissory Note). These warrants have contractual lives of five years and were valued at a grant date fair value of $1.40 per warrant, or $1,750,000, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$2.00
Contractual term	5 years
Expected volatility	84.7%
Risk free interest rate	0.92%
Dividend yield	0

The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

On March 1, 2012, the Company issued warrants to purchase 750,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10.  These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $108,473, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.50
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.43%
Dividend yield	0

The fair value of these warrants, including the incremental increase resulting from the amended terms, was expensed and recorded in general and administrative expenses. The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

On March 8, 2012, the Company issued warrants to purchase 150,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10. These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $21,695, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.51
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.44%
Dividend yield	0

The fair value of these warrants, including the incremental increase resulting from the amended terms, was expensed and recorded in general and administrative expenses. The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

33

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 8 – Stockholders’ Deficit (Continued)

2012 Equity Plan

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “2012 Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the 2012 Plan to the Company’s directors, officers, consultants and other service providers.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  

The Company has granted stock options to employees. The following summarizes option activity under the 2012 Plan for the year ended December 31, 2012:

				Common		Weighted
	Shares			Stock		average
	available for			Options		exercise
	grant			Outstanding		price
Shares issued at plan inception		4,750,000			–	$	–
Options granted		(4,000,000	)		4,000,000		0.10
Options exercised		–			–		–
Options cancelled or expired		–			–		–
Balance at December 31, 2012		750,000			4,000,000	$	0.10

The following table summarizes information with respect to stock options outstanding and exercisable by employees under the 2012 Plan at December 31, 2012:

Options outstanding

Options vested and exercisable

Weighted

average

Weighted

Weighted

remaining

average

Aggregate

average

Aggregate

Exercise

Number

contractual

exercise

intrinsic

Number

exercise

intrinsic

price

outstanding

life (years)

price

value

vested

price

value

$0.10

4,000,000

9.99

$

0.10

$

–

4,000,000

$

0.10

$–

During the year ended December 31, 2012, the Company issued 4,000,000 options to employees with a grant date fair value of $0.02. As the options were fully vested upon their grant, the entire fair value of $80,000 has been recognized as stock option expense for the year ended December 31, 2012.

The Company estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is expensed upon vesting of the awards. The fair value of employee stock options was estimated using the following assumptions:

Stock Price	$0.05
Expected term	5.0 years
Expected volatility	77.5%
Risk-free interest rate	0.72%
Dividend yield	0

Note 9 – Settlement of Debt

On February 10, 2012, two parties, a consultant and a former employee of the Company, released the Company of remaining contractual amounts due to them totaling $75,000 which were recorded in accrued liabilities at December 31, 2011.

34

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 10 – Income Taxes

No provision for income tax was made for the period from September 6, 2007 (Inception) to December 31, 2012 as the Company had cumulative operating losses.  For the years ended December 31, 2012 and 2011, the Company incurred net losses for tax purposes of approximately $588,000 and $13,809,000, respectively.  

The income tax expense (benefit) differs from the amount computed by applying the United States Statutory corporate income tax rate as follows:

	Year Ended December 31,
	2012		2011
Expected income tax (benefit) at 34% statutory rate	-34.0	%	-34.0	%
Permanent tax differences	8.4	%	7.0	%
Timing differences	3.3	%	0.0	%
Change in valuation allowance	22.3	%	27.0	%
Actual tax expense	0.0	%	0.0	%

Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The components of the net deferred income tax assets are approximately as follows:

		December 31,			December 31,
		2012			2011
Deferred income tax assets:
Net operating loss carry forwards	$	4,992,770		$	4,862,830
Mineral properties		(31,770	)		(32,970	)
Stock option expense		(27,200	)		–
Valuation allowance		(4,933,800	)		(4,829,860	)
Net deferred income tax assets	$	–		$	–

The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more likely than not to be realized from future operations. The Company has established a full valuation allowance on its net deferred tax assets because of a lack of sufficient positive evidence to support its realization. The valuation allowance increased by $202,610 and $4,766,080 for the years ended December 30, 2012 and 2011, respectively.

No provision for income taxes has been provided in these financial statements due to the net loss for the years ended December 31, 2012 and 2011. At December 31, 2012, the Company has net operating loss carry forwards of approximately $14,685,000, which expire commencing 2030. The potential tax benefit of these losses may be limited due to certain change in ownership provisions under Section 382 of the Internal Revenue Code (“IRS”) and similar state provisions.

IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss and tax credit carry forwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2012, but believes the provisions will not limit the availability of losses to offset future income.

35

SPARTAN GOLD LTD.
(An Exploration Stage Company)

Notes to Consolidated Financial Statements
December 31, 2012

Note 11 – Commitments and Contingencies

See Note 4 – Mineral Properties.

On March 6, 2012, the Company entered into a new 12 month lease agreement for its corporate offices in Scottsdale, Arizona. The lease was effective March 1, 2012, called for monthly base rent payments of $2,700, and included an option to extend the lease for an additional 12 months at the same base rent. As of September 1, 2012, the Company was released from any further lease obligations by the landlord and moved its corporate office. The new office is leased from a company owned by its Chief Financial Officer for $1,000 per month on a month-to-month basis.

Note 12 – Subsequent Events

Subsequent to December 31, 2012, the Company repaid $6,000 of advances from the President of the Company.

The Company has evaluated subsequent events through the date the financial statements were issued and filed with SEC. The Company has determined that there are no other events that warrant disclosure or recognition in the financial statements.

36

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

None

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to chief executive and chief financial officers to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of such date.

Management’s Annual Report on Internal Control over Financial Reporting

The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this Annual Report on Form 10-K. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The management of the Company is also responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as 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. Our internal control over financial reporting includes those policies and procedures that:

· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

With the participation of the Chief Executive Officer and Chief Financial Officer, our management evaluated the effectiveness of the Company's internal control over financial reporting as of December 31, 2012 based upon the framework in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management has concluded that, as of December 31, 2012, the Company had material weaknesses in its internal control over financial reporting. Specifically, management identified the following material weaknesses at December 31, 2012:

37

1.	Lack of oversight by independent directors in the establishment and monitoring of required internal controls and procedures;
2.	Lack of functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
3.	Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
4.	Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

As a result of the material weaknesses described above, management has concluded that, as of December 31, 2012, we did not maintain effective internal control over financial reporting, involving the preparation and reporting of our financial statements presented in conformity with GAAP.

To remediate our internal control weaknesses, management intends to implement the following measures:

· The Company will add sufficient number of independent directors to the board and appoint an audit committee.

· The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.

· Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

The additional hiring is contingent upon The Company’s efforts to obtain additional funding through equity or debt for its continued exploration activities and corporate expenses. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

We understand that remediation of material weaknesses and deficiencies in internal controls is a continuing work in progress due to the issuance of new standards and promulgations. However, remediation of any known deficiency is among our highest priorities. Our management will periodically assess the progress and sufficiency of our ongoing initiatives and make adjustments as and when necessary.

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 rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

We are providing below the information that would be included in a Form 10 if we were to file a Form 10.

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements.” You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this report.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed under “Risk Factors” and elsewhere in this report, including, without limitation, in conjunction with the forward-looking statements included in this report. All forward-looking information in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements.

38

BUSINESS

Overview

Spartan Gold Ltd. (the "Company", “Spartan”, “we”, “us” or “our”) is a U.S. based junior gold exploration company with gold exploration and development activities centered in both the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. Spartan’s Poker Flats gold prospect is located within the Carlin-Rain region, and the Ziggurat gold prospect is located within the Round Mountain-Northumberland Mining District.

Each of these regions is endowed with major gold deposits operated by many of the world leaders in the mining industry. Major mining projects in the Carlin Trend are currently operated by Newmont Mining Corporation (trading on the NYSE) to the north and west of the Poker Flats prospects.  Additionally, some of the major mining projects in the Round Mountain-Northumberland districts are currently operated by Barrick Gold Corporation / Kinross Gold Corporation (NYSE) and also Newmont Mining Corporation which exist in close proximity to the Ziggurat prospect.  The Company also has mining interests in the northeast region of Alabama in the historical Arbacoochee Mining District.  The Company is currently pursuing opportunities for several acquisition targets around the world and focusing on operational plans for current projects.  The directors, management and advisers of Spartan Gold have over 90 years of combined experience in the exploration and development of global mining projects.

Spartan's commitment to asset growth and increased shareholder value will be sustained by the development of highly prospective projects, accelerated exploration activities and the acquisition of viable resources. Spartan has selected an international board of directors experienced in undertaking exploration, development and funding of numerous energy and minerals projects around the world.

Company History

Spartan Gold Ltd. was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. with the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors. On September 24, 2009, the Company changed its name to Algoil, Inc. The central concept of Algoil, Inc. was making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil.

On May 21, 2010, the Company experienced a change in control. Magic Grace Ltd. (“Magic Grace”) acquired the majority of the issued and outstanding common stock of Algoil, Inc. in accordance with a stock purchase agreement by and between Andriy Kovalenko and Magic Grace. On the closing date, May 21, 2010, pursuant to the terms of the Stock Purchase Agreement, Magic Grace purchased from Mr. Kovalenko 14,290,000 (pre-split) shares of Company’s outstanding common stock for $187,500. In accordance with the agreement, all related party obligations were settled. Also on May 21, 2010, Real Challenge Group, Ltd. (“Real Challenge”) acquired 935,000 (pre-split) free-trading shares of the Company’s outstanding common stock in accordance with a stock purchase agreement by and between Andriy Kovalenko, as a duly authorized representative of the selling shareholders, and Real Challenge for $187,500. As a result of the change in control, the Company abandoned its original plan of developing and operating biodiesel facilities.

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd. The Company has adopted its new strategic plan of gold exploration, development and mining.

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock. Subsequently, on August 12, 2010, Magic Grace contributed to the treasury, and the Company retired, 9,896,250 common shares of stock (395,850,000 as adjusted for the stock split). The effect of the stock split and retirement of shares increased the number of shares of common stock outstanding from 15,225,000 to 213,150,000 as of August 12, 2010.

On October 19, 2011, the Company issued 18,952,774 shares of its common stock to Sphere Resources, Inc. (“Sphere”) in conversion of a Secured Convertible Promissory Note totaling $379,055 (including accrued interest of $4,055). As a result of the share issuance, Sphere became the majority shareholder of the Company.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock. The effect of the reverse stock split decreased the number of shares of common stock outstanding from 632,892,868 to 31,644,658 as of November 9, 2011.

Our Strategy

We are currently focused on mineral exploration and development activities in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. We have options for the mineral concession rights at two projects in this region: Poker Flats and Ziggurat, both of which are located near existing operations of large mining corporations and have available mining and transportation infrastructures. Our strategy is to advance each of these projects to the drilling stage as aggressively as prudent financing will allow and to determine the presence of gold, silver or other precious mineral resources. If we are successful in doing so, we believe we can attract the attention of the existing mining companies already operating in the area or new mining companies to either enter into development agreements with us or to acquire the projects from us outright.

Additionally, we are currently identifying other acquisition opportunities.

39

Mineral Properties

Currently, we have completed two Option and Mining Claim Agreements to the mineral rights on two properties in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada and own the mineral rights to one property in the northeast region of Alabama. A description of each property is summarized below:

Poker Flats Property

On December 22, 2010, we entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC” or the “Optionor”) and Sphere Resources, Inc. (“Sphere”). The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in 64 lode mining claims located in the Carlin Mining District in Elko County Nevada, known as the “Poker Flats” Property. Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company,

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $250,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement,

· The Company has paid to Optionor $25,000 upon executing the Option Agreement,

· Sphere has issued to Optionor 350,000 shares of Sphere Resources, Inc. common stock,

· Sphere will issue to Optionor an additional 150,000 shares of Sphere Resources, Inc. common stock when the Company obtains a 75% in the mineral rights,

· Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% Net Smelter Return (“NSR”) production royalty for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC and a 2% NSR to Sphere,

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 75% and MMC shall have the right to purchase up to 25% of the 3% NSR on mineral production from the Poker Flats Property retained by the owner of the mining claims subject to the Poker Flats Option Agreement, for one million U.S. dollars (U.S. $1,000,000) per NSR percentage point,

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 100% of the 2% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Poker Flats Property, under terms to be agreed upon by the Company and Sphere.

On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the Poker Flats property. Under the terms of the Agreement, Tomera grants, lets and leases exclusively to Spartan Gold the property, together will all ores and minerals of every kind, except geothermal resources, coal and oil and gas and other hydrocarbons, water and sand and gravel, in, or under the property, with the exclusive right to prospect and explore for, mine by any method now known or hereafter discovered, process, mill, prepare for market, store, sell, and dispose of the same; and together with all such rights-of-way and easements to the extent owned by Tomera, if any, through, over, on or appertaining to the property. The property initially contains 1,760 net mineral acres and may be modified to increase or decrease over time at the option of the Company.

Poker Flats is located approximately 20 miles south-southwest of Elko, Nevada in the Carlin-Rain Trend.  Poker Flats began with 500 acres in the Carlin region which is home to some of the world's leaders in the mining industry.  Neighboring mining projects north and south of Poker Flats include Newmont Mining Corporation, Gold Standard Ventures Corporation, and Premier Gold Mines Limited.  The Company expanded Poker Flats to 3,600 acres in 2011, which was reduced to 3,040 acres in October, 2012, and now holds an option for 75% majority ownership of this project.  The geological mapping process is under way and an updated NI 43-101 report was completed on November 22, 2011.  The new claim blocks and private mineral rights now included in the Poker Flats project are surrounded by Newmont Mining Corporation's Emigrant project on the northern border and several other productive projects including Newmont's Rain-Tess and Emigrant Mines, Premier Gold Mines Limited's Saddle gold prospect and Gold Standard Ventures Corporations' Railroad gold project.  The Company’s team has completed geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  

Additional geophysical, drilling and geological work is planned at Poker Flats under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Pinon and Railroad, and as the mineralization appears similar to those at Newmont's Emigrant and Rain Mines and at the Railroad deposit, additional exploration expenditures are justified for the Poker Flats property.

The exploration goal at the Poker Flats prospect is to identify a 500,000 to 1,000,000 ounce open-pit gold mining resource. A major mining project is currently being developed by Newmont Mining Corporation immediately north of the Poker Flats prospects.

40

Ziggurat Property

On December 27, 2010, we entered into an Option and Mining Claim Acquisition Agreement between MMC (the “Optionor”) and Sphere.  The agreement was amended on March 28 2011.  The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in 227 lode mining claims in Nye County, in the State of Nevada, known as the “Ziggurat” Property. Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company,

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $1,000,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement,

· The Company has paid to Optionor $25,000 upon executing the Option Agreement,

· The Company has paid to Optionor $35,000 in 2011,

· The Company shall pay to Optionor $25,000 on or before the second anniversary date of the Agreement ($5,000 paid as of December 31, 2012),

· The Company shall pay to Optionor $25,000 on or before the third anniversary date of the Agreement,

· Sphere has issued to Optionor 550,000 shares of Sphere Resources, Inc. common stock,

· Sphere will issue to Optionor an additional 250,000 shares of Sphere Resources, Inc. common stock when the Company obtains a 75% in the mineral rights,

· The Company granted a 2.5% NSR for any and all products that are produced from the Ziggurat mining claims to Sphere and a .5% NSR to MMC,

· If and when the Company elects to sell and convey all or a portion of its interest in the Ziggurat Property, the Company shall have the right to purchase up to 100% of the 2.5% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Ziggurat Property, under terms to be agreed upon by the Company and Sphere.

The Ziggurat property is located approximately 22 kilometers north of Kinross Gold Corporation and Barrick Gold Corporation’s Round Mountain and Gold Hill gold mines in Nye County, Nevada.  The Ziggurat property began with 1,140 acres in the prolific Round Mountain-Northumberland Trend. The neighboring Northumberland mining project is located eight kilometers to the northeast of Ziggurat, and is owned by mining industry world leader Newmont Mining Corporation.  The Company previously expanded Ziggurat to 6,860 acres in 2011, which was reduced to 4,540 acres in September 2012, and now holds an option for 75% majority ownership of this project.  Previous geophysical and geological interpretations indicate that the Ziggurat property has favorable characteristics for Carlin-style gold mineralization.  Since the property is situated in close proximity to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditures. Spartan's team has completed geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  

Additional geophysical, drilling and geological work is planned under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditure.

The exploration goal at the Ziggurat Property is to identify a multi-million ounce open-pit gold mining resource. Major mining projects are currently operated by Barrick Gold Corporation and Newmont Mining Corporation which exist both south and north of the Ziggurat Property, respectively.

Arbacoochee Gold Prospect

On October 22, 2010, we acquired the mineral rights to a Gold Prospect which is a tract of approximately 320 acres located in close proximity to the historic Arbacoochee Gold Mining District. This Prospect contains potentially minable placer located in Cleburne County, Alabama, 9 miles southeast of the city of Heflin. The property is located adjacent to the historic Gold Hill and is the central drain point for that hill. Most of the area’s historic gold production came from placer deposits near Gold Hill and Clear Creek. This property has not been worked in over 120 years. The recent price of gold has made the previously dormant properties a viable target to explore and bring online.

The Company assumed an existing mineral royalty agreement which requires the payment of 6% NSR overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.

Competition

In the United States, there are numerous mining and exploration companies, both big and small. All of these mining companies are seeking properties of merit and funds. We will have to compete against such companies to acquire the funds to develop our mineral claims.

Employees

As of December 31, 2012, the Company has five employees.

41

Patents and Trademarks

None.

RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this offering that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

There is substantial doubt about the Company’s ability to continue as a going concern.

Our auditor's report on our 2012 consolidated financial statements expresses an opinion that substantial doubt exists as to whether we can continue as an ongoing concern. Because obtaining investment capital in not certain, or that our officers and directors may be unable or unwilling to loan or advance any additional capital to the Company, we may not have the funds necessary to continue our operations. See "December 31, 2012 Audited Financial Statements."

We have a limited operating history and are still in the exploration stage.

We have only entered the field of precious metals exploration and mining within the past eighteen months, making it difficult to judge our prospects. As an exploration stage company, we face all the risks inherent in a new business, including the expenses, difficulties, complications and delays frequently encountered in connection with commencing new operations, including capital requirements and management’s potential underestimation of initial and ongoing costs. We face the risk that we may not be able to effectively implement our business plan. If we are not effective in addressing these risks, we may not develop a viable business or may not operate profitably. As a start-up company, we expect to incur significant operating losses for the near future, and there can be no assurance that we will be able to generate significant revenues or that any revenues generated will be sufficient for us to become profitable or thereafter maintain profitability.

If our strategy is unsuccessful, we will not be profitable and our stockholders could lose their investment.

There is no guarantee that our strategy for obtaining or developing our assets will be successful or that if successfully developed, will result in the Company becoming profitable. If our strategy is unsuccessful, we may fail to meet our objectives and not realize the revenues or profits from the business we pursue that may cause the value of the Company to decrease, thereby potentially causing our stockholders to lose their investment.

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.

It is more difficult for our shareholders to sell their shares because we are not, and may never be, eligible for NASDAQ or any national stock exchange.

We are not presently, nor is it likely that for the foreseeable future we will be, eligible for inclusion in NASDAQ or for listing on any United States national stock exchange.  To be eligible to be included in NASDAQ, a company is required to have not less than $4,000,000 in net tangible assets, a public float with a market value of not less than $5,000,000, and a minimum bid price of $4.00 per share. At the present time, we are unable to state when, if ever, we will meet the NASDAQ application standards.  Unless we are able to increase our net worth and market valuation substantially, either through the accumulation of surplus out of earned income or successful capital raising financing activities, we will never be able to meet the eligibility requirements of NASDAQ.  As a result, it will more difficult for holders of our common stock to resell their shares to third parties or otherwise, which could have a material adverse effect on the liquidity and market price of our common stock.

Although the our Common Stock is currently traded on the OTC Bulletin Board, there is no assurance any public market for our Common Stock will continue. There is also no assurance as to the depth or liquidity of any such market or the prices at which holders may be able to sell the Shares. An investment in these Shares may be totally illiquid and investors may not be able to liquidate their investment readily or at all when they need or desire to sell.

42

We will need significant additional capital, which we may be unable to obtain.

The Company’s capital requirements in connection with its development activities and transition to commercial operations have been and will continue to be significant. The funds raised in future Offerings may not be sufficient to develop commercial operations, and we will require additional funds to continue acquisition, development and testing, and to commercialize our physical assets. There can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all. Any future financing that may occur could be at a price that significantly dilutes the shareholders of the Company at that time.

Volatility of stock prices

In the event a public market continues for our Common Stock, market prices will be influenced by many factors, and will be subject to significant fluctuation in response to variations in operating results of the Company and other factors such as investor perceptions of the Company, supply and demand, interest rates, general economic conditions and those specific to the industry, developments with regard to the Company's activities, future financial condition and management.

We may not be able to effectively control and manage our growth, which would negatively impact our operations.

If the Company’s business and markets grow and develop, it will be necessary for us to finance and manage expansion in an orderly fashion. We may face challenges in managing and expanding our business and in integrating any acquired businesses with our own. Such eventualities will increase demands on our existing management, workforce and facilities. Failure to satisfy increased demands could interrupt or adversely affect our operations and cause administrative inefficiencies.

We may be unable to successfully execute any of our identified business opportunities or other business opportunities that we determine to pursue.

We currently have a limited operational infrastructure. In order to pursue business opportunities, we will need to build our infrastructure and operational capabilities. Our ability to do any of these successfully could be affected by any one or more of the following factors, among others, our ability to:

· raise substantial additional capital to fund the implementation of our business plan;

· execute our business strategy;

· manage the expansion of our operations and any acquisitions we may make, which could result in increased costs, high employee turnover or damage to customer relationships;

· attract and retain qualified personnel;

· manage our third-party relationships effectively; and

· Accurately predict and respond to the rapid technological changes in our industry and the evolving demands of the markets we serve.

The Company’s failure to adequately address any one or more of the above factors could have a significant impact on its ability to implement its business plan and its ability to pursue other opportunities that arise.

Competition

In the United States, there are numerous mining and exploration companies, both big and small. All of these mining companies are seeking properties of merit and funds. We will have to compete against such companies to acquire the funds to develop our mineral claims. The availability of funds for exploration is sometimes limited, and we may find it difficult to compete with larger and more well-known companies for capital. Even though we have the right to the minerals on our claims, there is no guarantee we will be able to raise sufficient funds in the future to maintain our mineral claims in good standing. Therefore, if the Company does not have sufficient funds for exploration, its claims might lapse and be staked by other mining interests. We might be forced to seek a joint venture partner to assist in the exploration of our mineral claims. In this case, there is the possibility that we might not be able to pay our proportionate share of the exploration costs and might be diluted to an insignificant carried interest. Even when a commercial viable ore body is discovered, there is no guarantee competition in refining the ore will not exist. Other companies may have long-term contracts with refining companies, thereby inhibiting our ability to process our ore and eventually market it. The exploration business is highly competitive and highly fragmented, dominated by both large and small mining companies. Success will largely depend on the Company’s ability to attract talent from the mining field and its ability to fund its operations. There is no assurance that our mineral expansion plans will be realized.

Limited liability of Directors and Officers.

The Company has adopted provisions to its Articles of Incorporation and Bylaws which limit the liability of its Officers and Directors, and provide for indemnification by the Company of its Officers and Directors to the full extent permitted by Nevada corporate law, which generally provides that its officers and directors shall have no personal liability to the Company or its stockholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or any transaction from which a director derives an improper personal benefit. Such provisions substantially limit the shareholder's ability to hold officers and directors liable for breaches of fiduciary duty, and may require the Company to indemnify its officers and directors.

43

Our operations are subject to various government regulations.

The research, development, distribution, marketing and selling of our products is subject to regulation by governmental regulatory authorities. Failure to comply with regulatory requirements could subject the Company to regulatory or judicial enforcement actions, including, but not limited to, seizures, injunctions, civil penalties, criminal prosecution, refusals to approve new exploration and development and suspensions and withdrawals of existing approvals.

We must comply with various government and environmental regulations. We also must comply with assurances guarding endangered, threatened or candidate fish, wildlife, plants or habitat. Should we be unable to effectively comply with these regulations, the results of the Company’s operations could be adversely affected.

Government Regulations

We are committed to complying with, and, to our knowledge, are in compliance, with all governmental and environmental regulations. Permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. We cannot predict the extent to which future legislation and regulation could cause additional expense, capital expenditures, restrictions, and delays in the exploration of our properties.

Our activities are not only subject to extensive federal, state, and local regulations controlling the mining of, and exploration for, mineral properties, but also the possible effects of such activities upon the environment. Future legislation and regulations could cause additional expense, capital expenditures, restrictions, and delays in the exploration of our properties, the extent of which cannot be predicted. Permits may also be required from a variety of regulatory authorities for many aspects of mine operation and reclamation. In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards, existing laws, and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We are not presently aware of any specific material environmental constraint affecting its properties that would preclude the economic development or operation of any specific property. It is reasonable to expect that compliance with environmental regulations will increase our costs. Such compliance may include feasibility studies on the surface impact of our proposed exploration operations; costs associated with minimizing surface impact; water treatment and protection; reclamation activities, including rehabilitation of various sites; on-going efforts at alleviating the mining impact on wildlife; and permits or bonds as may be required to ensure the Company’s compliance with applicable regulations. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide not to proceed with exploration on any of its mineral properties. We are prepared to engage professionals, if necessary, to ensure regulatory compliance, but in the near term we expect the activities to require minimal regulatory oversight.

If the Company decides to operate internationally, there are risks which could adversely affect operating results.

Currently, we have no projects, projections or foreign interest involving international operations.  However, the Company may in the future, given the opportunity, decide to pursue projects, business, or otherwise conduct operations internationally.  Doing business in foreign countries does subject the Company to additional risks, any of which may adversely impact future operating results, including:

· international political, economic and legal conditions;

· our ability to comply with foreign regulations and/or laws affecting operations and projects;

· difficulties in attracting and retaining staff and business partners to operate internationally;

· language and cultural barriers;

· seasonal reductions in business activities and operations in the countries where our international projects are located;

· integration of foreign operations;

· potential adverse tax consequences; and

· potential foreign currency fluctuations.

Factors beyond the control of the Company.

Projects for the acquisition and development of the Company’s products are subject to many factors, which are outside our control. These factors include general economic conditions in North America and worldwide (such as recession, inflation, unemployment, and interest rates), proximities to utilities and transportation, shortages of labor and materials and skilled craftsmen and price of materials and competitive products and the regulation by federal and state governmental authorities.

Lack of diversification

Because of the limited financial resources that the Company has, we do not currently intend to diversify our operations. Our inability to diversify our activities into more than one area will subject the Company to economic fluctuations and therefore increase the risks associated with the Company’s operations.

44

If we borrow money using the Company’s assets as collateral, our shareholders could lose all of their investment, if the collateral was to be foreclosed.

We may borrow money secured by the Company’s assets as collateral. The terms of the loan and the payments required to be made under the loan documents may reduce the return that the Company may otherwise generate. Should we fail to satisfy the terms of any loan, the Company assets pledged to secure such loan may be at risk to foreclosure or other similar process to satisfy the amount borrowed for the loan.

Future changes in financial accounting standards and other applicable regulations by various governmental regulatory agencies may cause lower than expected operating results and affect our reported results of operations.

Changes in accounting standards and their application may have a significant effect on our reported results on a going forward basis and may also affect the recording and disclosure of previously reported transactions. New standards have occurred and will continue to occur in the future. For example, in December 2004, the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 “Compensation, Stock Compensation” (“Topic No. 718”) became effective which requires us to expense stock options at fair value effective January 1, 2006. Under Topic No. 718, the recognition of compensation expense for the fair value of stock options reduces our reported net income and net income per share subsequent to implementation; however, this accounting change will not have any impact on the cash flows of our business. Under the prior rules, expensing of the fair value of the stock options was not required.  For the year ended December 31, 2012, 4,000,000 options were granted resulting in compensation expense of $80,000. Any future issuances of stock options will cause additional compensation expense to be recognized. 

The Sarbanes-Oxley Act of 2002 and various new rules subsequently implemented by the Securities and Exchange Commission (“SEC”) and the NASDAQ National Market have imposed additional reporting and corporate governance practices on public companies.

In addition, if we do not adequately continue to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in the future, we may not be able to accurately report our financial results or prevent error or fraud, which may result in sanctions or investigation by regulatory authorities, such as the SEC. Any such action could harm our business, financial results or investors’ confidence in our company, and could cause our stock price to fall.

DESCRIPTION OF PROPERTY

The Company’s principal offices are located at 122 Fourth Avenue, Suite 103, Indialantic, FL 32903. This office space is used by the Company’s executive management team and is approximately 275 square feet. The office space is leased for approximately $1,000 per month on a month-to-month basis.   The Company believes that the current facilities are suitable for its current needs.

FINANCIAL INFORMATION

You should read the following discussion of our results of operations and financial condition with the audited financial statements and related notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and that involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this report. Actual results may differ materially from those contained in any forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Statements.”

Results of Operations

Year ended December 31, 2012 compared to the year ended December 31, 2011 and For the Period July 8, 2010 (Inception of Exploration Stage) to December 31, 2012

Revenues

The Company had no revenue for the period from July 8, 2010 (inception of exploration stage) to December 31, 2012 as we are still in the exploration stage.

Operating and Other Expenses

For the year ended December 31, 2012 our total operating expenses were $805,526 compared to $16,995,059 for the year ended December 31, 2011 resulting in a decrease of $16,189,533.  The decrease is attributable to option payments (primarily stock based compensation in the amount of $15,059,760) on mineral properties of $15,269,760 for the year ended December 31, 2011 compared to option payments of $25,000 for the year ended December 31, 2012, mineral property expenditures of $56,560 and mineral exploration costs of $20,417 for the year ended December 31, 2012 compared to mineral property expenditures of $36,560 and mineral exploration costs of $300,316 for the year ended December 31, 2011. General and administrative expenses decreased $684,874 due primarily to decreases consulting, legal and professional fees of $195,458; stock based compensation of $414,733; costs and fees associated with being a publicly-traded company of $24,407; and general office, travel and overhead expense of $26,500.

45

We incurred $62,019 of interest expense for the year ended December 31, 2012, consisting of the accretion of loan discounts, compared to $379,054 of interest expense for the year ended December 31, 2011, primarily consisting of the accretion of discounts of common stock and warrants issued in connection with a promissory note totaling $374,999. For the year ended December 31, 2012, a gain on the settlement of debt was realized in the amount of $75,000. As a result, net loss was $792,545 for the year ended December 31, 2012 compared to $17,374,113 for the year ended December 31, 2011.

For the period from July 8, 2010 (inception of exploration stage) to December 31, 2012, total expenses and net loss were $18,454,740, composed of general and administrative expenses of $2,226,027, mineral exploration costs of $320,733, mineral property expenditures of $93,120, mineral property option payments of $15,344,760, impairment of mineral property costs of 104,027, gain on the settlement of debt of $75,000 and interest expense of $441,073.

Liquidity and Capital Resources

Overview

For the years ended December 31, 2012 and 2011, we funded our operations through loans from shareholders and officers and third parties, while for the year ended December 31, 2011 we also funded our limited operations through financing activities consisting of private placements of equity securities with outside investors and issuance of a secured convertible note payable to a related party. Our principal use of funds during the year ended December 31, 2012 has been for mineral exploration, ongoing acquisition of mineral property rights and general corporate expenses.

Liquidity and Capital Resources during the year ended December 31, 2012 compared to the year ended December 31, 2011

As of December 31, 2012, we had cash of $11,137 and deficit in working capital of $278,455.  The Company generated a negative cash flow from operations of $156,387 for the year ended December 31, 2012 compared to negative cash flow from operations of $910,881 for the year ended December 31, 2011. The negative cash flow from operating activities for the year ended December 31, 2012 is primarily attributable to the Company's net loss from operations of $792,545, offset by noncash mineral property expenditures of $20,000, noncash stock based compensation of $470,307, stock issuable for finance fees of $12,500, depreciation of $2,029, accretion of discount to loan payable for beneficial conversion feature of $62,019, and net cash from changes in operating assets and liabilities of $144,303, offset by a gain on the settlement of debt of $75,000.  Cash used in operations for the year ended December 31, 2011 is primarily attributable to the Company's net loss from operations of $17,374,113, offset by noncash mineral property expenditures (primarily stock based compensation in the amount of $15,059,760) of $15,234,760, noncash stock compensation of $649,900, depreciation of $1,776, accretion of discount to note payable for stock and warrants issued and beneficial conversion feature of $374,999, interest accrued on note payable of $4,055, and net cash from changes in operating assets and liabilities of $197,742.

Cash used in investing activities is attributable the purchase of equipment of $6,089 during the year ended December 31, 2011 compared to $0 for the year ended December 31, 2012.

During the year ended December 31, 2012, the Company raised $62,020 from loans from third parties and $118,000 from advances from related parties. The Company made payments of $17,360 on the advances from third parties during the year ended December 31, 2012. During the year ended December 31, 2011, the Company raised $650,000 by issuing common stock to outside investors, received $200,000 in proceeds from the issuance of a note payable to a related party, and received $50,000 in advances from a related party

We will require additional financing during the current fiscal year according to our planned exploration activities. We plan to spend approximately $1,500,000 in the next twelve months to carry out exploration and administration activities on our Nevada mineral properties. We presently do not have sufficient financing to enable us to complete these activities and will require additional financing to perform future exploration work on all of our mineral properties. Our actual expenditures on these activities will depend on the amount of funds we have available as a result of our financing efforts. There is no assurance that we will be able to raise the necessary financing.

In January, 2011, we entered into a $5,000,000 financing commitment agreement with Geneva Switzerland based Knightstown Business Ltd (“Knightstown”).  On January 25, 2011, the Company received the first tranche of $500,000 from Knightstown under the agreement and issued 41,667 shares of its stock at $12.00 per share in the private placement. A second investment of $150,000 was received on April 26, 2011 and the Company issued 12,500 shares of its stock at $12.00 per share in the private placement.  Knightstown had committed to additional funding of $4,500,000 over the following six month period from the date of the agreement.  As of the date of this report, the commitment period has expired with no additional investments made by Knightstown and the agreement has not been renewed.

In February, 2011, we entered into an investment banking agreement with Century Pacific Securities, Inc. (“Century Pacific”).  Under terms of the agreement, Century Pacific will represent the Company in a best-efforts capacity in a $10,000,000 Private Placement into Public Equity (PIPE) transaction.  If completed, the private placement will be for an offering of equity securities in the form of Spartan Gold’s common stock.  Century Pacific is a licensed broker-dealer and a member of FINRA (Financial Industry Regulatory Authority).  As of the date of this report, the term period has expired with no additional investments generated by Century Pacific and the agreement has not been renewed.

On September 7, 2011, the company issued a $375,000 Secured Convertible Promissory Note (“Promissory Note”) to Sphere Resources Inc. (“Sphere”) for $200,000 of cash proceeds and conversion of the $175,000 due in connection with the March 28, 2011 Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 for its Poker Flats and Ziggurat properties. The Promissory Note was secured by all of the assets and property of the Company, was interest bearing at 8 per annum, due on or before September 30, 2011, and was convertible into shares of common stock of the Company at a conversion price of $0.02 per share.

46

Additionally, on September 7, 2011, the Company issued 1,250,000 shares of its common stock and warrants to purchase an additional 1,250,000 shares at $2.00 to Sphere in connection with the issuance of the $375,000 Promissory Note.

As of September 30, 2011, the Company had not repaid the Promissory Note and was in default. On October 6, 2011 the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Promissory Note of $375,000 plus accrued interest of $4,055, it agreed to convert the total amount owed of $379,055 into 18,952,774 shares of its common stock, per the terms of the Promissory Note, on October 19, 2011.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion. Additionally on December 27, 2012, a vendor elected to convert $22,140 of accounts payable and accrued expenses due to them for 442,800 shares of the Company’s common stock at a conversion rate of $0.05 per share.

On December 27, 2012, Sphere elected to convert $142,640 of advances due to them for 2,852,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion. Effective December 31, 2012, Sphere entered into an agreement with the Company’s third party lender whereby the debt of $62,020 owed by Spartan was assigned to Sphere. On December 31, 2012, Sphere elected to convert the $62,020 for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share.

Going Concern

Our independent auditors included an explanatory paragraph in their report on the accompanying consolidated financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/ or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. The Company has conducted private placements of its common stock, which have generated funds to satisfy the initial cash requirements of its planned Nevada exploration ventures. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

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

Inflation

The effect of inflation on our operating results has not been significant.

Critical Accounting Policies and Estimates

Our principal accounting policies are described in Note 2 of the audited financial statements included elsewhere in this report. The preparation of the financial statements in accordance with Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make significant judgments and estimates. Some accounting policies have a significant impact on amounts reported in these financial statements. Our financial position and results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. The preparation of interim financial statements involves the use of certain estimates that are consistent with those used in the preparation of our annual financial statements. Significant accounting policies, including areas of critical management judgments and estimates, include the following:

Mineral Property Costs

The Company has been in the exploration stage since July 8, 2010 and has not yet realized revenues from its planned operations.  It is primarily engaged in the acquisition, exploration, and development of mining properties for gold and other precious metals.  In accordance with the Securities and Exchange Commission Industry Guide 7, mineral property acquisition costs are capitalized and mineral property option payments and exploration costs are expensed to operations as incurred.

47

When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, the costs then incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the Plan to the Company’s directors, officers, consultants and other service providers. The Plan was approved by a majority of stockholders of the Company on April 13, 2012.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  As of the date of this report options to purchase 4,000,000 shares of common stock have been granted to the Company’s officers.

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

Financial Statements

Please refer to the Audited Consolidated Financial Statements found in Item 8 of this Annual Report on Form 10-K.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table summarizes certain information regarding the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of outstanding Common Stock as of March 22, 2013 by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each of our directors, (iii) each of our named executive officers (as defined in Item 403(a) of Regulation S-K under the Securities Act), and (iv) all executive officers and directors as a group. Except as indicated in the footnotes below, the security and stockholders listed below possess sole voting and investment power with respect to their shares.

48

			Amount and
			Nature of
	Title of Stock		Beneficial		Percent of
Name of Beneficial Owner (3)	Class		Owner (1)		Class (2)
Malcolm Stevens (4) (6)		Common Stock		23,731,769		53.54	%
William H. Whitmore, Jr. (4)		Common Stock		2,640,000		6.13	%
Mihailo Gavrilovic (4)		Common Stock		2,230,000		5.20	%
John S. Wittler (4)		Common Stock		2,050,000		4.78	%
Marshall Auerback (4)		Common Stock		1,030,000		2.41	%
Sphere Resources, Inc. (5)		Common Stock		21,176,483		48.54	%
All Directors and Officers as a Group		Common Stock		31,681,769		66.53	%

(1)	"Beneficial Owner" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares, underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days.
(2)	For each shareholder, the calculation of percentage of beneficial ownership is based upon 42,085,944 shares of Common Stock outstanding as of March 22, 2012, and shares of Common Stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The percentage ownership of any shareholder is determined by assuming that the shareholder has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights.
(3)	Unless otherwise indicated, the address of each person listed is c/o Spartan Gold Ltd., 122 Fourth Avenue, Suite 103, Indialantic, FL 32903
(4)	Indicates Director and Officer.
(5)	Shares include warrants to purchase 1,537,475 shares of the Company’s common stock. The address of Sphere Resources, Inc. is 204 Black St., #300, Whitehorse, BC, Canada
(6)	Shares include 1,855,286 shares directly owned by Mr. Stevens and 19,639,008 shares beneficially owned by Sphere Resources, Inc.  Mr. Stevens is the Executive Chairman and President of Sphere Resources and has voting and dispositive power of the shares.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information with respect to persons who are serving as directors and officers of the Company.  Each director holds office until the next annual meeting of shareholders or until his successor has been elected and qualified.

				Held
				Position
Name	Age		Positions	Since
Malcolm Stevens		62	Director, Chief Executive Officer and Chairman		12/2/2010
William H. Whitmore, Jr.		53	Director and President		12/2/2010
Mihailo Gavrilovic		53	Director and Chief Operating Officer		12/2/2010
John S. Wittler		54	Director, Chief Financial Officer and Secretary		1/3/2012
Marshall Auerback		53	Director, Executive Director		4/16/2012

Biography of Directors and Officers

Mr. Malcolm Stevens was appointed as Chairman of the Board of Directors and Chief Executive Officer of the Company on December 2, 2010. Malcolm began his career as a Chartered Accountant with Price Waterhouse in Perth, Western Australia in 1972 after completing a Bachelor of Commerce at Curtain University. Since then Malcolm has worked in a number of International Investment Banks which led to the establishment of his own licensed Investment Dealer, CanAustra Investments Ltd. in Sydney Australia in 1988. The resource sector has been the main focus of business activity from the work on the project financing of Woodside’s North West Shelf Gas Project to being a major participant in the development of the modern loan financings in Australia and Canada in the Eighties and Nineties.

49

In 1996 Malcolm headed up the establishment of private equity fund internationally and in Australia in 2000. These funds were focused primarily on venture capital mainly for the resource sector. Malcolm has been Chairman of a number of private and public companies and today is Executive Chairman and President of the private equity group CanAustra Holdings Ltd, Sphere Resources, Inc. in Canada and Executive Chairman of AAP Carbon Ltd in Hong Kong.

Mr. William H. Whitmore, Jr. was appointed as Director, President and Interim Chief Financial Officer of the Company on December 2, 2010. Mr. Whitmore resigned as Interim Chief Financial Officer on January 3, 2012. Mr. Whitmore has held various high-level executive management positions with a strong operations background. Prior to joining Spartan Gold, Mr. Whitmore was Managing Director of Envisionte, LLC, a Global Business Development Enterprise engaged in consulting for private and public entities around the world.  While in this position, Mr. Whitmore managed all aspects of administration and was the representative contact for investment groups that funded projects and numerous other business models under his supervision.  While consulting for clients, he has engaged in many executive team development projects and draws on a wide and diverse list of contacts around the globe to achieve the creation of solid and competent management teams.

Mr. Mihailo “Mick” Gavrilovic was appointed as Director and Chief Operating Officer of the Company on December 2, 2010. Mr. Gavrilovic has an extensive background in the development and operations of international mining and energy projects. He has significant experience at a senior level in surface and underground gold and nickel mining projects, and has been involved in the construction of a number of mineral processing plants and vertical mine shafts. During his early engineering career, he held a variety of senior maintenance, project development and operations roles encompassing all facets of operating large mineral processing facilities, together with the provision of ancillary services and utilities to remote areas. Mr. Gavrilovic also has significant experience in developing and commercializing new technologies in the natural gas engine field, mining and construction demolition industry, and has advised a number of companies in their efforts to commercialize leading edge renewable energy technologies.

Mr. John S. Wittler was appointed as Director and Chief Financial Officer of the Company on January 3, 2012. Mr. Wittler was previously appointed Secretary of the Company on September 27, 2011. Mr. Wittler has an extensive financial based background. Prior to joining Spartan Gold, Mr. Wittler served as Managing Director of his own consulting practice where he provides financial and accounting consulting services to both private and public companies and has served as CFO of Alternative Construction Technologies, Inc. and Organa Technologies Group, Inc. Mr. Wittler has had extensive involvement in capital raises, business integrations, SEC registration and regulatory filings, involvement with Board of Directors, mergers and acquisitions, internal controls and risk management, accounting systems design and implementations, and financial analysis and planning.  John began his career with Ernst & Young in Indianapolis, Indiana and is a former Director and Chairman of the Audit Committee of eLayaway, Inc. (ELAY.OB). Mr. Wittler is a CPA (inactive), has a bachelor’s of science degree in accounting from Ball State University, and is currently a member of the American Institute of CPAs and the Florida Institute of CPAs.

Mr. Marshall Auerback was appointed as Director and Executive Director on April 16, 2012. Mr. Auerback has over 30 years’ experience in the investment management business. He is serving as a global portfolio strategist for Pinetree Capital, a Canadian-based fund management group specializing in the natural resource sector. He also serves as a director for Sphere Resources, Inc., is an economic consultant to PIMCO, the world’s largest bond fund management group, and a Research Fellow for the Economists for Peace and Security. Mr. Auerback graduated magna cum laude in English & Philosophy from Canada’s Queen’s University in 1981 and received a law degree from Corpus Christi College, Oxford University in 1983. The Company entered into an employment agreement with Mr. Auerback. The agreement expires on December 31, 2012 and is renewable annually on January 1, for an additional one year term unless the Company or Executive delivers written notice to the other party at least 60 days preceding the expiration of the initial term or any one-year extension. The employment agreement provides for initial annual compensation of $36,000 per year. Upon the Company raising $2 million in capital funding, the annual salary will increase to $75,000. Upon the Company raising $5 million in capital funding, the annual salary will increase to $100,000.

Our directors are elected at the annual meeting of the shareholders, with vacancies filled by the Board of Directors, and serve until their successors are elected and qualified, or their earlier resignation or removal. Officers are appointed by the board of directors and serve at the discretion of the board of directors or until their earlier resignation or removal.  Any action required can be taken at any annual or special meeting of stockholders of the corporation which may be taken without a meeting, without prior notice and without a vote, if consent of consents in writing setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principle place of business, or an officer or agent of the corporation having custody of the book in which the proceedings of meetings are recorded.

Indemnification of Directors and Officers

Nevada Corporation Law allows for the indemnification of officers, directors, and any corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities, including reimbursement for expenses, incurred arising under the 1933 Act. The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent authorized or permitted by law and such right to indemnification will continue as to a person who has ceased to be a director or officer of the Company and will inure to the benefit of his or her heirs, executors and Consultants; provided, however, that, except for proceedings to enforce rights to indemnification, the Company will not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred will include the right to be paid by the Company the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition.

50

The Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company similar to those conferred to directors and officers of the Company. The rights to indemnification and to the advancement of expenses are subject to the requirements of the 1940 Act to the extent applicable.

Furthermore, the Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another company against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law.

Committees of the Board of Directors

None.

Code of Ethics

We do not currently have a Code of Ethics because we have limited business operations and only three officers/directors on the Board. We believe a code of ethics would have limited utility at this stage. We intend to adopt such code of ethics that would cover our business as soon as possible.

EXECUTIVE COMPENSATION

Our directors do not receive any stated salary for their services as directors or members of committees of the board of directors, but by resolution of the board, a fixed fee may be allowed for attendance at each meeting. Directors may also serve the company in other capacities as an officer, agent or otherwise, and may receive compensation for their services in such other capacity. Directors of the Company who are also employees of the Company will not receive additional compensation for their services as directors. Reasonable travel expenses are reimbursed.

The following table sets forth all of the compensation awarded to, earned by or paid to (i) each individual serving as our principal executive officer and principal financial officer during our last completed fiscal year; and (ii) each other individual that served as an executive officer at the conclusion of the fiscal year ended December 31, 2012 (collectively, the Named Executives).

							Stock		All Other
Name and Principal Position	Year		Salary		Bonus		Awards		Compensation		Total
			$		$		$		$		$
Malcolm Stevens (1) Chief Executive Officer, Chairman of the Board of Directors		2012		46,500		–		–		–		46,500
		2011		72,000		–		–		–		72,000
William H. Whitmore, Jr. (2) President and Director		2012		72,000		–		–		–		72,000
		2011		72,000		–		–		–		72,000
Mihailo Gavrilovic (3) Chief Operating Officer and Director		2012		60,000		–		–		–		60,000
		2011		60,000		–		–		–		60,000
John S. Wittler (4) Chief Financial Officer, Secretary and Director		2012		60,000		–		25,000		–		85,000
		2011		–		–		–		–		–
Marshall Auerback (5) Executive Director and Director		2012		25,500		–		–		–		25,500
		2011		–		–		–		–		–

(1)	Mr. Malcolm Stevens was appointed Chief Executive Officer and Chairman of the Board of Directors on December 2, 2010.
(2)	Mr. William H. Whitmore, Jr. was appointed President and Interim Chief Financial Officer and Director on December 2, 2010.  Mr. Whitmore resigned as Interim Chief Financial Officer on January 3, 2012.
(3)	Mr. Mihailo Gavrilovic was appointed Chief Operating Officer and Director on December 2, 2010.
(4)	Mr. John S. Wittler was appointed Chief Financial Officer and Director on January 3, 2012 and as Secretary on September 27, 2011. Prior to his appointment in 2012, Mr. Wittler served as a consultant to the Company and was paid $60,310 in consulting fees in 2011.
(5)	Mr. Marshall Auerback was appointed Executive Director and Director on April 16, 2012.

51

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

On March 28, 2011, the Company issued Sphere Resources, Inc. (“Sphere”) 587,500 shares of the Company’s common stock and warrants to purchase an additional 287,475 shares to Sphere in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 and amended on March 28, 2011 for its Poker Flats and Ziggurat properties.  Additionally, cash payments to Sphere of $175,000 were due. Mr. Malcolm Stevens, the Company’s Chief Executive Officer, Director and Chairman, is also the Executive Chairman and President of Sphere Resources, Inc., a Canadian Corporation.

On September 7, 2011, the company issued a $375,000 Secured Convertible Promissory Note (“Promissory Note”) to Sphere for $200,000 of cash proceeds and conversion of the $175,000 due in connection with the March 28, 2011 Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 for its Poker Flats and Ziggurat properties. The Promissory Note is secured by all of the assets and property of the Company, bears interest at 8 per annum, is due on or before September 30, 2011, and is convertible into shares of common stock of the Company at a conversion price of $0.001 per share.

On September 7, 2011, the Company issued 1,250,000 shares of its common stock and warrants to purchase an additional 1,250,000 shares at $2.00 to Sphere in connection to the issuance of the Promissory Note. As of September 30, 2011, the Company had not repaid the Promissory Note and is in default. On October 6, 2011 the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Promissory Note of $375,000 plus accrued interest of $4,055, it agreed to convert the total amount owed of $379,055 into 18,952,774 shares of its common stock, per the terms of the Promissory Note, on October 19, 2011. As a result of the conversion, Sphere became the majority shareholder of the Company.

In November 2011, Sphere advanced $50,000 to the Company for working capital purposes. During the year ended December 31, 2012, Sphere advanced an additional $119,000 to the Company for working capital purposes and the Company repaid $17,360 to Sphere. The advances have no repayment date and do not bear interest. On December 27, 2012, Sphere elected to convert $$142,640 of the balance due them into 2,852,800 shares of the Company’s common stock valued at $0.05 per share, the market price on the date of conversion, leaving a balance owed to Sphere of $9,000.

During the year ended December 31, 2012, The Company’s President and Director advanced $19,000 to the Company for working capital purposes. No payments on the amount owed have been made. The advance has no repayment date and does not bear interest. In February 2012, $6000 of the balance owed was paid to the President.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion.

Family Relationships

There are no family relationships among our officers, directors, or persons nominated for such positions.

LEGAL PROCEEDINGS

We are not aware of any material pending legal proceedings to which we are a party or of which our property is the subject. We also know of no proceedings to which any of our directors, officers or affiliates, or any registered or beneficial holders of more than 5% of any class of our securities, or any associate of any such director, officer, affiliate or security holder are an adverse party or have a material interest adverse to us

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

We have one class of securities, Common Voting Equity Shares ("Common Stock"). Our common stock is currently traded on the Over the Counter Bulletin Board (“OTCBB”) under the symbol "SPAG.QB". As of December 31, 2012, the Company’s common stock was held by 220 shareholders of record, which does not include shares that are held in street or nominee name.

OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.

The Company’s shares commenced trading on or about October 19, 2010. The closing share prices presented below represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commission to the dealer and have been adjusted for the one-for-twenty reverse stock split which occurred on November 9, 2011. The following chart is indicative of the fluctuations in the stock prices:

52

	For the Year Ended				For the Year Ended
	December 31, 2012				December 31, 2011
	High		Low		High		Low
First Quarter	$	1.80	$	0.20	$	20.00	$	9.94
Second Quarter	$	0.93	$	0.15	$	18.00	$	2.00
Third Quarter	$	0.16	$	0.06	$	3.20	$	1.60
Fourth Quarter	$	0.40	$	0.03	$	2.38	$	1.00

Our authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.001per share. The holders of our common stock:

· have equal ratable rights to dividends from funds legally available if and when declared by our board of directors;

· are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;

· do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and

· are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our securities.

The Company’s transfer agent is Empire Stock Transfer, Henderson, Nevada.

Dividend Distributions

We have not historically and do not intend to distribute dividends to stockholders in the foreseeable future.

Securities authorized for issuance under equity compensation plans

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the Plan to the Company’s directors, officers, consultants and other service providers. The Plan was approved by a majority of stockholders of the Company on April 13, 2012.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  As of the date of this report options to purchase 4,000,000 shares of common stock have been granted to the Company’s officers.

Penny Stock

Our common stock is considered to be a "penny stock" under the rules the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:

· contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading;

· contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

· contains a toll-free telephone number for inquiries on disciplinary actions;

· defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

· contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:

· bid and offer quotations for the penny stock;

· the compensation of the broker-dealer and its salesperson in the transaction;

· the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and

· monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules that require that prior to a transaction in a penny stock not otherwise exempt from those 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 acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement.

53

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

Related Stockholder Matters

None.

Equity Compensation Plans

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the Plan to the Company’s directors, officers, consultants and other service providers.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  As of the date of this report, there are 4,000,000 options to purchase the Company’s stock outstanding.

RECENT SALES OF UNREGISTERED SECURITIES

On December 15, 2010 the Company issued 17,500 shares of its common stock for $105,000 cash or $6.00 per share under a private placement agreement.

On December 20, 2010 the Company issued 2,717 shares of its common stock to a company controlled by a previous Vice President of the Company for $16,300 cash, or $6.00 per share, under a private placement agreement.

On December 26, 2010 the Company issued 10,000 shares of its common stock for $60,000 cash, or $6.00 per share, under a private placement agreement.

On January 25, 2011, the Company issued 41,667 shares of its stock for $500,000 cash, or $12.00 per share, under a private placement.  

On February 2, 2011, the Company entered into a Consulting Agreement and issued 50,000 shares of its common stock at the market value per share of $12.998 for a total of $649,900.

On March 28, 2011, the Company issued 62,500 shares of its common stock to Mexivada Mining Company (“MMC”) in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $1,125,000.

On March 28, 2011, the Company issued 587,500 shares of its common stock to Sphere resources, Inc. in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat. The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $10,575,000.

On April 26, 2011, the Company issued 12,500 shares of its common stock for $150,000 cash, or $12.00 per share, under a private placement.

On September 7, 2011, the Company issued 1,250,000 shares of its common stock to Sphere in connection with the issuance of a $375,000 Note.

On October 19, 2011, the Company issued 18,952,774 shares of its common stock for the conversion of the $379,055 Note with Sphere, including accrued interest, per the terms of the Promissory Note.

On March 28, 2012, the Company has issued 50,000 shares of common stock to the Chief Financial Officer of the Company pursuant to an employment agreement. The fair value of these shares totaled $25,000.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion.

On December 27, 2012, a vendor elected to convert $22,140 of accounts payable and accrued expenses due to them for 442,800 shares of the Company’s common stock at a conversion rate of $0.05 per share.

On December 27, 2012, Sphere elected to convert $142,640 of advances due to them for 2,852,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion.

Effective December 31, 2012, Sphere elected to convert $62,020 of debt assigned to them by third party lender for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion.

54

DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED

General

The following description of our capital stock is a summary of the material terms and is subject to and qualified in its entirety by our Articles of Incorporation, our Bylaws and Nevada Law. Our authorized capital stock consists of 1,000,000,000 shares consisting of Common Stock.

Common Stock

Our Articles of Incorporation authorize the issuance of 1,000,000,000 shares of common stock, par value $0.001 per share. Each holder of common stock is entitled to one vote for each share held on all matters properly submitted to the stockholders for their vote.

Holders of outstanding shares of common stock are entitled to such dividends as may be declared from time to time by the board of directors out of legally available funds and, in the event of liquidation, dissolution or winding up of the our affairs. Holders of outstanding shares of common stock have no preemptive, conversion or redemptive rights. To the extent that additional shares of our common stock are issued, the relative interests of then existing stockholders may be diluted.

As of March 22, 2013, there were 42,085,944 shares of our common stock issued and outstanding, held by 220 shareholders of record.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Nevada Corporation Law allows for the indemnification of officers, directors, and any corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities, including reimbursement for expenses, incurred arising under the 1933 Act. The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent authorized or permitted by law and such right to indemnification will continue as to a person who has ceased to be a director or officer of the Company and will inure to the benefit of his or her heirs, executors and Consultants; provided, however, that, except for proceedings to enforce rights to indemnification, the Company will not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred will include the right to be paid by the Company the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition.

The Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company similar to those conferred to directors and officers of the Company. The rights to indemnification and to the advancement of expenses are subject to the requirements of the 1940 Act to the extent applicable.

Furthermore, the Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another company against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law.

CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On February 2, 2012, the Company dismissed Meyler & Company LLC and engaged Dale Matheson Carr-Hilton Labonte LLP as its independent registered public accounting firm as of and for the year ended December 31, 2011. The change in independent registered public accounting firm is not the result of any disagreement with Meyler & Company LLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

Prior to its engagement as our independent auditors, Dale Matheson Carr-Hilton Labonte LLP, had not been consulted by us either with respect to the application of accounting principles to a specific transaction or the type of audit opinion that might be rendered our financial statements or on any other matter that was the subject of any prior disagreement between us and our previous certifying accountants.

FINANCIAL STATEMENTS AND EXHIBITS

Audited Consolidated Financial Statements for the years ended December 31, 2012 and 2011 are included in Item 8 of this Annual Report on Form 10-K.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following table sets forth information with respect to persons who are serving as directors and officers of the Company.  Each director holds office until the next annual meeting of shareholders or until his successor has been elected and qualified.

55

			Held
			Position
Name	Age	Positions	Since
Malcolm Stevens	62	Director, Chief Executive Officer and Chairman	12/2/2010
William H. Whitmore, Jr.	53	Director and President	12/2/2010
Mihailo Gavrilovic	53	Director and Chief Operating Officer	12/2/2010
John S. Wittler	54	Director, Chief Financial Officer and Secretary	1/3/2012
Marshall Auerback	53	Director, Executive Director	4/16/2012

Biography of Directors and Officers

Mr. Malcolm Stevens was appointed as Chairman of the Board of Directors and Chief Executive Officer of the Company on December 2, 2010. Malcolm began his career as a Chartered Accountant with Price Waterhouse in Perth, Western Australia in 1972 after completing a Bachelor of Commerce at Curtain University. Since then Malcolm has worked in a number of International Investment Banks which led to the establishment of his own licensed Investment Dealer, CanAustra Investments Ltd. in Sydney Australia in 1988. The resource sector has been the main focus of business activity from the work on the project financing of Woodside’s North West Shelf Gas Project to being a major participant in the development of the modern loan financings in Australia and Canada in the Eighties and Nineties.

In 1996 Malcolm headed up the establishment of private equity fund internationally and in Australia in 2000. These funds were focused primarily on venture capital mainly for the resource sector. Malcolm has been Chairman of a number of private and public companies and today is Executive Chairman and President of the private equity group CanAustra Holdings Ltd, Sphere Resources, Inc. in Canada and Executive Chairman of AAP Carbon Ltd in Hong Kong.

Mr. William H. Whitmore, Jr. was appointed as Director, President and Interim Chief Financial Officer of the Company on December 2, 2010. Mr. Whitmore resigned as Interim Chief Financial Officer on January 3, 2012. Mr. Whitmore has held various high-level executive management positions with a strong operations background. Prior to joining Spartan Gold, Mr. Whitmore was Managing Director of Envisionte, LLC, a Global Business Development Enterprise engaged in consulting for private and public entities around the world.  While in this position, Mr. Whitmore managed all aspects of administration and was the representative contact for investment groups that funded projects and numerous other business models under his supervision.  While consulting for clients, he has engaged in many executive team development projects and draws on a wide and diverse list of contacts around the globe to achieve the creation of solid and competent management teams.

Mr. Mihailo “Mick” Gavrilovic was appointed as Director and Chief Operating Officer of the Company on December 2, 2010. Mr. Gavrilovic has an extensive background in the development and operations of international mining and energy projects. He has significant experience at a senior level in surface and underground gold and nickel mining projects, and has been involved in the construction of a number of mineral processing plants and vertical mine shafts. During his early engineering career, he held a variety of senior maintenance, project development and operations roles encompassing all facets of operating large mineral processing facilities, together with the provision of ancillary services and utilities to remote areas. Mr. Gavrilovic also has significant experience in developing and commercializing new technologies in the natural gas engine field, mining and construction demolition industry, and has advised a number of companies in their efforts to commercialize leading edge renewable energy technologies.

Mr. John S. Wittler was appointed as Director and Chief Financial Officer of the Company on January 3, 2012. Mr. Wittler was previously appointed Secretary of the Company on September 27, 2011. Mr. Wittler has an extensive financial based background. Prior to joining Spartan Gold, Mr. Wittler served as Managing Director of his own consulting practice where he provides financial and accounting consulting services to both private and public companies and has served as CFO of Alternative Construction Technologies, Inc. and Organa Technologies Group, Inc. Mr. Wittler has had extensive involvement in capital raises, business integrations, SEC registration and regulatory filings, involvement with Board of Directors, mergers and acquisitions, internal controls and risk management, accounting systems design and implementations, and financial analysis and planning.  John began his career with Ernst & Young in Indianapolis, Indiana and is a former Director and Chairman of the Audit Committee of eLayaway, Inc. (ELAY.OB). Mr. Wittler is a CPA (inactive), has a bachelor’s of science degree in accounting from Ball State University, and is currently a member of the American Institute of CPAs and the Florida Institute of CPAs.

56

Mr. Marshall Auerback was appointed as Director and Executive Director on April 16, 2012. Mr. Auerback has over 30 years’ experience in the investment management business. He is serving as a global portfolio strategist for Pinetree Capital, a Canadian-based fund management group specializing in the natural resource sector. He also serves as a director for Sphere Resources, Inc., is an economic consultant to PIMCO, the world’s largest bond fund management group, and a Research Fellow for the Economists for Peace and Security. Mr. Auerback graduated magna cum laude in English & Philosophy from Canada’s Queen’s University in 1981 and received a law degree from Corpus Christi College, Oxford University in 1983. The Company entered into an employment agreement with Mr. Auerback. The agreement expires on December 31, 2012 and is renewable annually on January 1, for an additional one year term unless the Company or Executive delivers written notice to the other party at least 60 days preceding the expiration of the initial term or any one-year extension. The employment agreement provides for initial annual compensation of $36,000 per year. Upon the Company raising $2 million in capital funding, the annual salary will increase to $75,000. Upon the Company raising $5 million in capital funding, the annual salary will increase to $100,000.

Our directors are elected at the annual meeting of the shareholders, with vacancies filled by the Board of Directors, and serve until their successors are elected and qualified, or their earlier resignation or removal. Officers are appointed by the board of directors and serve at the discretion of the board of directors or until their earlier resignation or removal.  Any action required can be taken at any annual or special meeting of stockholders of the corporation which may be taken without a meeting, without prior notice and without a vote, if consent of consents in writing setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principle place of business, or an officer or agent of the corporation having custody of the book in which the proceedings of meetings are recorded.

Indemnification of Directors and Officers

Nevada Corporation Law allows for the indemnification of officers, directors, and any corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities, including reimbursement for expenses, incurred arising under the 1933 Act. The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent authorized or permitted by law and such right to indemnification will continue as to a person who has ceased to be a director or officer of the Company and will inure to the benefit of his or her heirs, executors and Consultants; provided, however, that, except for proceedings to enforce rights to indemnification, the Company will not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred will include the right to be paid by the Company the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition.

The Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company similar to those conferred to directors and officers of the Company. The rights to indemnification and to the advancement of expenses are subject to the requirements of the 1940 Act to the extent applicable.

Furthermore, the Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another company against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law.

Committees of the Board of Directors

None.

Auditors

Our principal independent accountant is Dale Matheson Carr-Hilton Labonte LLP.

Code of Ethics

We do not currently have a Code of Ethics because we have limited business operations and only three officers/directors on the Board. We believe a code of ethics would have limited utility at this stage. We intend to adopt such code of ethics that would cover our business as soon as possible.

Item 11. Executive Compensation.

Our directors do not receive any stated salary for their services as directors or members of committees of the board of directors, but by resolution of the board, a fixed fee may be allowed for attendance at each meeting. Directors may also serve the company in other capacities as an officer, agent or otherwise, and may receive compensation for their services in such other capacity. Directors of the Company who are also employees of the Company will not receive additional compensation for their services as directors. Reasonable travel expenses are reimbursed.

57

The following table sets forth all of the compensation awarded to, earned by or paid to (i) each individual serving as our principal executive officer and principal financial officer during our last completed fiscal year; and (ii) each other individual that served as an executive officer at the conclusion of the fiscal year ended December 31, 2012 (collectively, the Named Executives).

							Stock		All Other
Name and Principal Position	Year		Salary		Bonus		Awards		Compensation		Total
				$		$		$		$		$
Malcolm Stevens (1) Chief Executive Officer, Chairman of the Board of Directors		2012		46,500		–		–		–		46,500
		2011		72,000		–		–		–		72,000
William H. Whitmore, Jr. (2) President and Director		2012		72,000		–		–		–		72,000
		2011		72,000		–		–		–		72,000
Mihailo Gavrilovic (3) Chief Operating Officer and Director		2012		60,000		–		–		–		60,000
		2011		60,000		–		–		–		60,000
John S. Wittler (4) Chief Financial Officer, Secretary and Director		2012		60,000		–		25,000		–		85,000
		2011		–		–		–		–		–
Marshall Auerback (5) Executive Director and Director		2012		25,500		–		–		–		25,500
		2011		–		–		–		–		–

(1)	Mr. Malcolm Stevens was appointed Chief Executive Officer and Chairman of the Board of Directors on December 2, 2010.
(2)	Mr. William H. Whitmore, Jr. was appointed President and Interim Chief Financial Officer and Director on December 2, 2010.  Mr. Whitmore resigned as Interim Chief Financial Officer on January 3, 2012.
(3)	Mr. Mihailo Gavrilovic was appointed Chief Operating Officer and Director on December 2, 2010.
(4)	Mr. John S. Wittler was appointed Chief Financial Officer and Director on January 3, 2012 and as Secretary on September 27, 2011. Prior to his appointment in 2012, Mr. Wittler served as a consultant to the Company and was paid $60,310 in consulting fees in 2011.
(5)	Mr. Marshall Auerback was appointed Executive Director and Director on April 16, 2012.

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

The following table summarizes certain information regarding the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of outstanding Common Stock as of March 22, 2013 by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each of our directors, (iii) each of our named executive officers (as defined in Item 403(a) of Regulation S-K under the Securities Act), and (iv) all executive officers and directors as a group. Except as indicated in the footnotes below, the security and stockholders listed below possess sole voting and investment power with respect to their shares.

Name of Beneficial Owner (3)	Title of Stock Class	Amount and Nature of Beneficial Owner (1)		Percent of Class (2)
Malcolm Stevens (4) (6)	Common Stock		23,731,769		53.54	%
William H. Whitmore, Jr. (4)	Common Stock		2,640,000		6.13	%
Mihailo Gavrilovic (4)	Common Stock		2,230,000		5.20	%
John S. Wittler (4)	Common Stock		2,050,000		4.78	%
Marshall Auerback (4)	Common Stock		1,030,000		2.41	%
Sphere Resources, Inc. (5)	Common Stock		21,176,483		48.54	%
All Directors and Officers as a Group	Common Stock		31,681,769		66.53	%

58

(1)	"Beneficial Owner" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares, underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days.
(2)	For each shareholder, the calculation of percentage of beneficial ownership is based upon 42,085,944 shares of Common Stock outstanding as of March 22, 2012, and shares of Common Stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The percentage ownership of any shareholder is determined by assuming that the shareholder has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights.
(3)	Unless otherwise indicated, the address of each person listed is c/o Spartan Gold Ltd., 122 Fourth Avenue, Suite 103, Indialantic, FL 32903
(4)	Indicates Director and Officer.
(5)	Shares include warrants to purchase 1,537,475 shares of the Company’s common stock. The address of Sphere Resources, Inc. is 204 Black St., #300, Whitehorse, BC, Canada
(6)	Shares include 1,855,286 shares directly owned by Mr. Stevens and 19,639,008 shares beneficially owned by Sphere Resources, Inc.  Mr. Stevens is the Executive Chairman and President of Sphere Resources and has voting and dispositive power of the shares.

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

On March 28, 2011, the Company issued Sphere Resources, Inc. (“Sphere”) 587,500 shares of the Company’s common stock and warrants to purchase an additional 287,475 shares to Sphere in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 and amended on March 28, 2011 for its Poker Flats and Ziggurat properties.  Additionally, cash payments to Sphere of $175,000 were due. Mr. Malcolm Stevens, the Company’s Chief Executive Officer, Director and Chairman, is also the Executive Chairman and President of Sphere Resources, Inc., a Canadian Corporation.

On September 7, 2011, the Company issued a $375,000 Secured Convertible Promissory Note (“Promissory Note”) to Sphere for $200,000 of cash proceeds and conversion of the $175,000 due in connection with the March 28, 2011 Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 for its Poker Flats and Ziggurat properties. The Promissory Note is secured by all of the assets and property of the Company, bears interest at 8 per annum, is due on or before September 30, 2011, and is convertible into shares of common stock of the Company at a conversion price of $0.001 per share.

On September 7, 2011, the Company issued 1,250,000 shares of its common stock and warrants to purchase an additional 1,250,000 shares at $2.00 to Sphere in connection to the issuance of the Promissory Note. As of September 30, 2011, the Company had not repaid the Promissory Note and is in default. On October 6, 2011 the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Promissory Note of $375,000 plus accrued interest of $4,055, it agreed to convert the total amount owed of $379,055 into 18,952,774 shares of its common stock, per the terms of the Promissory Note, on October 19, 2011. As a result of the conversion, Sphere became the majority shareholder of the Company.

In November 2011, Sphere advanced $50,000 to the Company for working capital purposes. During the year ended December 31, 2012, Sphere advanced an additional $119,000 to the Company for working capital purposes and the Company repaid $17,360 to Sphere. The advances have no repayment date and do not bear interest. On December 27, 2012, Sphere elected to convert $142,640 of the balance due them into 2,852,800 shares of the Company’s common stock valued at $0.05 per share, the market price on the date of conversion, leaving a balance owed to Sphere of $9,000.

During the year ended December 31, 2012, The Company’s President and Director advanced $19,000 to the Company for working capital purposes. No payments on the amount owed have been made. The advance has no repayment date and does not bear interest. In February 2012, $6,000 of the balance owed was paid to the President.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion.

Item 14. Principal Accounting Fees and Services.

Audit Fees

On February 2, 2012, the Company dismissed Meyler & Company LLC and engaged Dale Matheson Carr-Hilton Labonte LLP as its independent registered public accounting firm as of and for the year ended December 31, 2011. The change in independent registered public accounting firm is not the result of any disagreement with Meyler & Company LLC.

59

The aggregate fees billed by Dale Matheson Carr-Hilton Labonte LLP for the audit of the Company’s annual financial statements were $15,000 and $25,000 for the years ended December 31, 2012 and 2011, respectively. The aggregate fees billed by Dale Matheson Carr-Hilton Labonte LLP for review of the Company's financial statements included in its quarterly reports on Form 10-Q were $13,000 during the year ended December 31, 2012. The aggregate fees billed by Meyler & Company LLC for review of the Company's financial statements included in its quarterly reports on Form 10-Q were $20,000 during the year ended December 31, 2011.

Audit-Related Fees

For the years ended December 31, 2012 and 2011, our principal accountants did not render any audit-related services.

Tax Fees

The aggregate fees billed by Dale Matheson Carr-Hilton Labonte LLP for the preparation of the Company’s tax returns were $3,700 for the year ended December 31, 2011. For the year ended December 31, 2012, our principal accountants did not render any services for tax compliance, tax advice, and tax planning work.

All Other Fees

For the years ended December 31, 2012 and 2011, our principal accountants did not render any other services.

Prior to engaging its accountants to perform a particular service, our board of directors obtains an estimate for the service to be performed. All of the services described above were approved by the board of directors in accordance with its procedures.

60

PART IV

Item 15.  Exhibits, Financial Statement Schedules

Financial Statements

See Item 8. Financial Statements and Supplementary Data

Exhibits

Exhibit 3.1	Articles of Incorporation (1)
Exhibit 3.2	Bylaws (1)
Exhibit 3.3	Certificate of Amendment to Articles of Incorporation for Change of Company’s Name (2)
Exhibit 3.4	Certificate of Amendment to Articles of Incorporation for Increase in Authorized Common Shares (2)
Exhibit 3.5	Certificate of Amendment to Articles of Incorporation for Forty-to-One Forward Stock Split (2)
Exhibit 10.1	Asset Purchase Agreement between Spartan Gold Ltd. And Alabama Mineral Properties LLC (3)
Exhibit 10.2	Option and Mining Claim Acquisition Agreement between Spartan Gold Ltd. and Mexivada Mining Corporation (4)
Exhibit 10.3	Option and Mining Claim Acquisition Agreement between Spartan Gold Ltd. and Mexivada Mining Corporation (5)
Exhibit 10.4	Amendment to Option and Mining Claim Acquisition Agreement (Ziggurat) between Spartan Gold Ltd., Mexivada Mining Corporation, and Sphere Resources, Inc. (6)
Exhibit 10.5	Amendment to Option and Mining Claim Acquisition Agreement (Poker Flats) between Spartan Gold Ltd., Mexivada Mining Corporation, and Sphere Resources, Inc. (6)
Exhibit 10.6	Mining Lease and Agreement between Spartan Gold Ltd. And K & K Tomera Lands, LLC (6)
Exhibit 10.7	Agreement for Grant of NSR Production Royalty between Spartan Gold Ltd., Sphere Resources, Inc. and Mexivada Mining Corporation. (7)
Exhibit 10.8	Spartan Gold Ltd. 2012 Equity Incentive Plan (8)
Exhibit 10.9	Employment Agreement between Spartan Gold Ltd. and Malcolm Stevens (8)
Exhibit 10.10	Employment Agreement between Spartan Gold Ltd. and William H. Whitmore, Jr. (8)
Exhibit 10.11	Employment Agreement between Spartan Gold Ltd. and John S. Wittler (8)
Exhibit 10.12	Employment Agreement between Spartan Gold Ltd. and Mihailo Gavrilovic (8)
Exhibit 10.13	Employment Agreement between Spartan Gold Ltd. and Marshall Auerback (9)
Exhibit 31.1	Rule 13a-14(a) Certification by the Principal Executive Officer (10)
Exhibit 31.2	Rule 13a-14(a) Certification by the Principal Financial Officer (10)
Exhibit 32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (10)
Exhibit 32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (10)

Exhibit 101.INS	XBRL Instance Document (10)
Exhibit 101.SCH	XBRL Schema Document (10)
Exhibit 101.CAL	XBRL Calculation Linkbase Document (10)
Exhibit 101.DEF	XBRL Definition Linkbase Document (10)
Exhibit 101.LAB	XBRL Label Linkbase Document (10)
Exhibit 101.PRE	XBRL Presentation Linkbase Document (10)

(1)	Incorporated by reference from Registrant’s Form S-1 filed with the Securities and Exchange Commission on March 4, 2008.
(2)	Incorporated by reference from Company’s Form 10-Q filed with the Securities and Exchange Commission on August 23, 2010.
(3)	Incorporated by reference from Company’s Form 10-Q filed with the Securities and Exchange Commission on November 22, 2010.
(4)	Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on December 28, 2010.
(5)	Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on December 28, 2010.
(6)	Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on April 11, 2011.
(7)	Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on January 10, 2012.
(8)	Incorporated by reference from Company’s Form 10-K filed with the Securities and Exchange Commission on April 12, 2012.
(9)	Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on April 24, 2012.
(10)	Filed herewith.

61

SIGNATURES

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

/s/ Malcolm Stevens	April 15, 2013
Malcolm Stevens, Principal Executive Officer	Date

/s/ John S. Wittler	April 15, 20132
John S. Wittler, Principal Financial Officer	Date

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

/s/ Malcolm Stevens	April 15, 2013
Malcolm Stevens, Director	Date
/s/ William H. Whitmore, Jr.	April 15, 2013
William H. Whitmore, Jr., Director	Date
/s/ Mihailo Gavrilovic	April 15, 2013
Mihailo Gavrilovic, Director	Date
/s/ John S. Wittler	April 15, 2013
John S. Wittler, Director	Date
/s/ Marshall Auerback	April 15, 2013
Marshall Auerback, Director	Date

62

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Malcolm Stevens, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Spartan Gold Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:  April 15, 2013
/s/  Malcolm Stevens
Malcolm Stevens Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John S. Wittler, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Spartan Gold Ltd.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:  April 15, 2013
/s/ John S. Wittler
John S. Wittler Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Annual Report on Form 10-K for the period ending December 31, 2012 (the “Report”) of Spartan Gold Ltd. (the “Company”), the undersigned hereby certifies in his capacities as Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

Date: April 15, 2013

/s/ Malcolm Stevens

Malcolm Stevens

Principal Executive Officer

The foregoing certification is furnished as an exhibit to the Report and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION OF

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Annual Report on Form 10-K for the period ending December 31, 2012 (the “Report”) of Spartan Gold Ltd. (the “Company”), the undersigned hereby certifies in his capacities as Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

Date: April 15, 2013

/s/ John S. Wittler

John S. Wittler

Principal Financial Officer

The foregoing certification is furnished as an exhibit to the Report and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

8. Stockholders Deficit (Details1) (USD $)	12 Months Ended
	Dec. 31, 2012
Stock price	$ 0.05
Contractual/Expected term	5 years
Expected volatility	77.50%
Risk free interest rate	0.72%
Dividend yield	0.00%
WarrantMember
Stock price	$ 18.00
Contractual/Expected term	5 years
Expected volatility	87.60%
Risk free interest rate	0.81%
Dividend yield	0.00%
Warrant1Member
Stock price	$ 2.00
Contractual/Expected term	5 years
Expected volatility	84.70%
Risk free interest rate	0.92%
Dividend yield	0.00%
Warrant 2 Member
Stock price	$ 0.50
Contractual/Expected term	2 years 6 months
Expected volatility	77.70%
Risk free interest rate	0.43%
Dividend yield	0.00%
Warrant 3 Member
Stock price	$ 0.51
Contractual/Expected term	2 years 6 months
Expected volatility	77.70%
Risk free interest rate	0.44%
Dividend yield	0.00%

XML

3. Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 3 - Recent Accounting Pronouncements

On February 5, 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, which requires entities to disclose the following additional information about items reclassified out of accumulated other comprehensive income (“AOCI”): (1) changes in AOCI balances by component, (2) significant items reclassified out of AOCI by component either on the face of the income statement or as a separate footnote to the financial statements. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company does not expect this ASU to have a material impact on the financial statements.

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

Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the Company’s present or future consolidated financial statements.

XML

10. Income Taxes (Details)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Taxes Details
Expected income tax (benefit) at 34% statutory rate	(34.00%)	(34.00%)
Permanent tax differences	8.40%	7.00%
Timing differences	3.30%	0.00%
Change in valuation allowance	22.30%	27.00%
Actual tax expense	0.00%	0.00%

XML

8. Stockholders Deficit (Details 4) (USD $)	12 Months Ended
	Dec. 31, 2012
Stockholders Deficit Details 4
Stock price	$ 0.05
Contractual term	5 years
Expected volatility	77.50%
Risk free interest rate	0.72%
Dividend yield	0.00%

XML

10. Income Tax (Details 1) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Income Tax Details 1
Net operating loss carry forwards	$ 4,992,770	$ 4,862,830
Mineral properties	(31,770)	(32,970)
Stock option expense	(27,000)
Valuation allowance	(4,933,800)	(4,829,860)
Net deferred income tax assets

XML

2. Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 2 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations and the inputs used in calculating stock-based compensation and transactions. Actual results could differ from those estimates and would impact future results of operations and cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of Spartan Gold Ltd. and its wholly-owned subsidiary, Andhra Blue Limited.  All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2012 and 2011, respectively, the Company had no cash equivalents.

Mineral Property Costs

The Company has been in the exploration stage since July 8, 2010 and has not yet realized revenues from its planned operations.  It is primarily engaged in the acquisition, exploration, and development of mining properties for gold and other precious metals.  In accordance with the SEC Industry Guide 7, mineral property acquisition costs are capitalized and mineral property option payments and exploration costs are expensed to operations as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, the costs then incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Fair Value of Financial Instruments

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - fair value measurements are those derived from inputs other than quoted prices included within 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 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial instruments classified as Level 1 - quoted prices in active markets include cash.

Financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments.  Changes in such judgments could have a material impact on fair value estimates.  In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes.  Changes in economic conditions may also dramatically affect the estimated fair values.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and due to related parties.

Basic and Diluted Loss Per Share

The Company computes income (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations.  Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2011, there were 1,599,975 warrants outstanding to purchase shares of common stock. As of December 31, 2012, there were a total of 2,499,975 warrants outstanding and 4,000,000 stock options outstanding to purchase shares of common stock. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of loss per share.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ deficit over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes.  Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases.  Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.  The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs.  Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.  This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2012.

XML

Consolidated Balance Sheets (USD $)	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash	$ 11,137	$ 4,864
Prepaid expenses		4,163
Total current assets	11,137	9,027
Property and equipment, net	2,284	4,313
Total assets	13,421	13,340
Current liabilities:
Accounts payable (Note 7)	187,379	54,235
Accrued expenses (Note 7)	74,213	221,981
Due to related parties (Note 7)	28,000	50,000
Total current liabilities	289,592	326,216
Common stock $.001 par value 1,000,000,000 shares authorized, 42,085,944 and 31,644,658 shares issued and outstanding, at December 31, 2012 and 2011, respectively	42,086	31,645
Common stock issuable, 250,000 and nil shares issuable at December 31, 2012 and 2011, respectively	12,500
Additional paid-in capital	18,332,114	17,525,805
Deficit accumulated from prior operations	(208,131)	(208,131)
Deficit accumulated during the exploration stage	(18,454,740)	(17,662,195)
Total stockholders' deficit	(276,171)	(312,876)
Total liabilities and stockholders' deficit	$ 13,421	$ 13,340

XML

Consolidated Statements of Cash Flows (USD $)	12 Months Ended		30 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Consolidated Statements Of Cash Flows
Net loss	$ (792,545)	$ (17,374,113)	$ (18,454,740)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation	2,029	1,776	3,805
Stock-based compensation	470,307	649,900	1,125,455
Stock issuable for finance fees	12,500		12,500
Accretion of discount on secured convertible promissory note for commitment shares and warrants		344,594	344,594
Accretion of beneficial conversion feature on secured convertible promissory notes and loans	62,019	30,405	92,424
Interest accrued on secured convertible promissory note		4,055	4,055
Non-cash mineral property expenditures	20,000	15,234,760	15,254,760
Impairment of mineral rights			104,027
Gain on settlement of debt	(75,000)		(75,000)
Changes in operating assets and liabilities:
Prepaid expenses	4,163	(4,163)
Accounts payable	74,899	29,524	124,164
Accrued expenses	65,241	172,381	287,222
Net cash used in operating activities	(156,387)	(910,881)	(1,176,734)
Cash flows used in investing activities:
Purchase of property and equipment		(6,089)	(6,089)
Acquisition of mineral rights			(50,000)
Net cash used in investing activities		(6,089)	(56,089)
Cash flows from financing activities:
Advances from third parties	62,020		62,020
Advances from related parties	118,000	50,000	168,000
Payments to related parties	(17,360)		(17,360)
Proceeds from issuance of note payable, related parties		200,000	200,000
Proceeds from sale of common stock		650,000	831,300
Net cash provided by financing activities	162,660	900,000	1,243,960
Net increase (decrease) in cash	6,273	(16,970)	11,137
Cash at beginning of year	4,864	21,834
Cash at end of year	11,137	4,864	11,137
Cash paid for interest
Cash paid for taxes
Non-cash investing and financing activities:
Benefical conversion feature on secured loan	(62,019)		(62,019)
Additional paid in capital	62,019		62,019
Conversion of accrued compensation to common stock:
Accrued compensation	(79,764)		(79,764)
Common stock	1,595		1,595
Additional paid in capital	78,169		78,169
Conversion of amounts due to related parties to common stock:
Amounts due to related parties	(204,660)		(204,660)
Common stock	4,093		4,093
Additional paid in capital	200,567		200,567
Conversion of secured convertible promissory note and accrued interest to common stock
Secured convertible promissory note		(379,055)	(379,055)
Common stock		18,953	18,953
Additional paid in capital		360,102	360,102
Conversion of related party payable to capital			19,603
Additional paid in capital			(19,603)
Value of mineral rights contributed to the Company			(54,027)
Additional paid in capital			54,027
Contribution of 19,792,500 shares of common stock to treasury by principal shareholder:			(129,851)
Additional paid in capital			129,851
Common stock			(19,793)
Treasury stock			129,851
Deficit accumulated from prior operations			$ (110,058)

XML

10. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes Tables

Income tax expense (benefit

The income tax expense (benefit) differs from the amount computed by applying the United States Statutory corporate income tax rate as follows:

	Year Ended December 31,
	2012		2011
Expected income tax (benefit) at 34% statutory rate	-34.0	%	-34.0	%
Permanent tax differences	8.4	%	7.0	%
Timing differences	3.3	%	0.0	%
Change in valuation allowance	22.3	%	27.0	%
Actual tax expense	0.0	%	0.0	%

Components of the net deferred income tax assets

The components of the net deferred income tax assets are approximately as follows:

		December 31,			December 31,
		2012			2011
Deferred income tax assets:
Net operating loss carry forwards	$	4,992,770		$	4,862,830
Mineral properties		(31,770	)		(32,970	)
Stock option expense		(27,200	)		–
Valuation allowance		(4,933,800	)		(4,829,860	)
Net deferred income tax assets	$	–		$	–

XML

8. Stockholders Deficit (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Number of warrants
Number of shares outstanding
Number of shares outstanding	4,000,000
Weighted average exercise price
Weighted average exercise price
Granted	$ 0.10
Weighted average exercise price	$ 0.10
Weighted average remaining contracted term
Outstanding	9 years 10 months 24 days
Average intrinsic value
Outstanding
WarrantMember
Number of warrants
Number of shares outstanding	1,599,975
Granted	900,000	1,599,975
Number of shares outstanding	2,499,975	1,599,975
Exercisable	2,499,975
Weighted average exercise price
Weighted average exercise price	$ 5.94
Granted	$ 0.1	$ 5.94
Weighted average exercise price	$ 3.84	$ 5.94
Exercisable	$ 3.84
Weighted Average Grant Date Fair Value	$ 2.09
Weighted average remaining contracted term
Outstanding	3 years 9 months 27 days	4 years 7 months 2 days
Exercisable	3 years 9 months 27 days
Average intrinsic value
Outstanding
Exercisable

XML

1. Nature of Business, Presentation, and Going Concern

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 1 - Nature of Business, Presentation, and Going Concern

Organization

Spartan Gold Ltd., (“Spartan” or the “Company”), was incorporated in Nevada on September 6, 2007.

On May 21, 2010, the Company experienced a change in control and the Company abandoned its original plan of developing and operating biodiesel facilities to concentrate on gold exploration and mining.

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd.  The Company now operates as a U.S. based junior gold exploration and mining company.  The Company is engaged in exploration activities on its properties to ascertain the feasibility of commencing production.

Stock Splits

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock.

All common share and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented prior to November 9, 2011. The total number of authorized common shares and the par value thereof was not changed by the stock splits.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”). 

Exploration Stage Company

As of July 8, 2010, the Company became an “exploration stage company” as defined in the SEC Industry Guide 7, and is subject to compliance with ASC Topic 915 “Development Stage Entities”. For the period from September 6, 2007 (Inception) to July 8, 2010, the Company was a “development stage company” in accordance with ASC Topic 915. Deficits accumulated prior to becoming an “exploration stage company” have been separately presented in the accompanying consolidated balance sheets and statements of stockholders’ equity (deficit). To date, the Company's planned principal operations have not fully commenced.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $792,545 and $17,374,113 for the years ended December 31, 2012 and 2011, respectively, and has incurred cumulative losses since inception of its exploration stage of $18,454,740. The Company has a stockholders’ deficit of $276,171 at December 31, 2012.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate revenues, its ability to continue to raise investment capital, and implement its business plan.  No assurance can be given that the Company will be successful in these efforts.

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Consolidated Balance Sheets Parenthetical
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	42,085,944	31,644,658
Common stock shares outstanding	42,085,944	31,644,658
Common stock issuable, shares	250,000

XML

11. Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 11 - Commitments and Contingencies

See Note 4 – Mineral Properties.

On March 6, 2012, the Company entered into a new 12 month lease agreement for its corporate offices in Scottsdale, Arizona. The lease was effective March 1, 2012, called for monthly base rent payments of $2,700, and included an option to extend the lease for an additional 12 months at the same base rent. As of September 1, 2012, the Company was released from any further lease obligations by the landlord and moved its corporate office. The new office is leased from a company owned by its Chief Financial Officer for $1,000 per month on a month-to-month basis.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 31, 2013	Jun. 30, 2012
Document And Entity Information
Entity Registrant Name	SPARTAN GOLD LTD.
Entity Central Index Key	0001426530
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 2,100,660
Entity Common Stock, Shares Outstanding		42,085,944
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

XML

12. Subsequent Events

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 12 - Subsequent Events

Subsequent to December 31, 2012, the Company repaid $6,000 of advances from the President of the Company.

The Company has evaluated subsequent events through the date the financial statements were issued and filed with SEC. The Company has determined that there are no other events that warrant disclosure or recognition in the financial statements.

XML

Consolidated Statements of Operations (USD $)	12 Months Ended		30 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Operating expenses:
General and administrative (Notes 7 and 8)	$ 703,549	$ 1,388,423	$ 2,226,027
Mineral property impairment (Note 4)			104,027
Mineral property option payments (Note 4)	25,000	15,269,760	15,344,760
Mineral property expenditures (Note 4)	56,560	36,560	93,120
Mineral property exploration costs (Note 4)	20,417	300,316	320,733
Total operating expenses	805,526	16,995,059	18,088,667
Other income (expense):
Gain on settlement of debt (Note 9)	75,000		75,000
Interest expense (Notes 5 and 6)	(62,019)	(379,054)	(441,073)
Net loss	$ (792,545)	$ (17,374,113)	$ (18,454,740)
Net loss per share - Basic and diluted	$ (0.02)	$ (1.13)
Weighted average number of shares outstanding during the period - Basic and diluted	31,782,782	15,361,636

XML

6. Secured Convertible Promissory Note

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 6 - Secured Convertible Promissory Note

On September 7, 2011, the Company issued a $375,000 Secured Convertible Promissory Note (the “Note”) to Sphere maturing on September 30, 2011. The Note was interest bearing at the rate of 8% per annum and payable upon maturity. The principal was comprised of the following:

· $200,000 cash payments made by Sphere to the Company;

· $57,750 due to Sphere pursuant to the Poker Flats Property (See Note 4 – Mineral Properties); and

· $117,250 due to Sphere pursuant to the Ziggurat Property (See Note 4 – Mineral Properties).

The Company granted a security interest in substantially all of the assets of the Company as collateral for the Note. The face amount of the Note plus accrued interest is convertible into common stock of the Company at $0.02 per share, at the option of the holder.

Additionally, the Company issued commitment shares of common stock totaling 1,250,000, equivalent to $2,500,000, and 1,250,000 warrants, equivalent to $1,750,000, at the closing date to obtain the loan. In accordance with ASC Topic 470-25 “Debt”, the Company utilized the market approach to value the debt instrument and allocated the net proceeds from the issuance of the Note based upon the pro rata portion of the fair value of the Note and the undiscounted value of the commitment shares and warrants, being $202,702 and $141,892, respectively.

The Company recognized the embedded beneficial conversion feature and the pro rata value of the commitment shares and warrants aggregated $374,999 and were accreted from the issuance date of the secured convertible promissory note through maturity. As of September 30, 2011, the maturity date of the Note, the entire beneficial conversion feature of $30,405, and discount accretion for the commitment shares and warrants, was recorded as interest expense.

On October 6, 2011, the Company received a demand letter from Sphere demanding payment of the principal and interest due by October 20, 2011. As the Company was unable to pay the Note of $375,000 plus accrued interest of $4,055, the total balance was converted into 18,952,774 shares of common stock (See Note – 8 Stockholders’ Deficit).

XML

5. Borrowings from Third Party

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 5 - Borrowings from Third Party

On August 31, 2012, the Company entered into a Memorandum of Understanding (“MOU”) with Tamimi Investments and Mining Co. (“TIMCO”), a Cyprus corporation. Under the MOU, TIMCO was to subscribe to a $2,000,000 private placement of the Company’s common stock at $0.05 per share (40,000,000 shares). TIMCO was to receive warrants to purchase an additional 30,000,000 shares within two years from the date of closing at an exercise price of $0.10 per share. In connection with the subscription, TIMCO was to receive a facilitation fee consisting of 5% of the placement amount in cash, 2,500,000 common shares of the Company’s stock, and warrants to purchase an additional 2,500,000 shares at $0.10 per share. Upon the completion of due diligence, TIMCO decided to not complete the transaction.

Also on August 31, 2012, as a condition of the MOU, the Company entered into a convertible secured loan with TIMCO and received $62,020. The loan is secured by, and convertible into, 1,240,400 shares of the Company’s common stock. The loan does not bear interest and was convertible at the end of the due diligence period. The loan was discounted by the value of its beneficial conversion feature of $62,019, which has been fully accreted as interest expense for the year ended December 31, 2012.

Effective December 31, 2012, the Company, Sphere and TIMCO entered into an agreement whereby the debt of $62,020 was assigned to Sphere. The Company agreed to issue 250,000 shares of its common stock to TIMCO for consideration of the assignment. On December 31, 2012, Sphere elected to convert the $62,020 for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share, the market rate at the date of conversion (See Note 8 – Stockholders’ deficit). The 250,000 shares to TIMCO have been accrued at December 31, 2012 at a market value of $0.05 per share for $12,500 and recorded as a finance fee.

XML

4. Mineral Properties (Details) (USD $)	12 Months Ended		30 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Impairment			$ 104,027
Option payments	25,000	15,269,760	15,344,760
Property expenditures	56,560	36,560	93,120
Exploration costs	20,417	300,316	320,733
Mineral Properties costs	101,977	15,606,636	15,862,640
Ziggurat Property
Impairment
Option payments	25,000	10,238,010	10,288,010
Property expenditures
Exploration costs	20,208	185,517	205,725
Mineral Properties costs	45,208	10,423,527	10,493,735
Poker Flats Property
Impairment
Option payments		5,031,750	5,056,750
Property expenditures	56,560	36,560	93,120
Exploration costs	209	110,979	111,188
Mineral Properties costs	56,769	5,179,289	5,261,058
Arbacoochee Gold Prospect
Impairment			104,027
Option payments
Property expenditures
Exploration costs		3,820	3,820
Mineral Properties costs		$ 3,820	$ 107,847

XML

1. Nature of Business, Presentation, and Going Concern (Policies)

12 Months Ended

Dec. 31, 2012

Nature Of Business Presentation And Going Concern Policies

Organization

Spartan Gold Ltd., (“Spartan” or the “Company”), was incorporated in Nevada on September 6, 2007.

On May 21, 2010, the Company experienced a change in control and the Company abandoned its original plan of developing and operating biodiesel facilities to concentrate on gold exploration and mining.

On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd.  The Company now operates as a U.S. based junior gold exploration and mining company.  The Company is engaged in exploration activities on its properties to ascertain the feasibility of commencing production.

Stock Splits

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split of all outstanding shares of common stock.

All common share and per common share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented prior to November 9, 2011. The total number of authorized common shares and the par value thereof was not changed by the stock splits.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”). 

Exploration Stage Company

As of July 8, 2010, the Company became an “exploration stage company” as defined in the SEC Industry Guide 7, and is subject to compliance with ASC Topic 915 “Development Stage Entities”. For the period from September 6, 2007 (Inception) to July 8, 2010, the Company was a “development stage company” in accordance with ASC Topic 915. Deficits accumulated prior to becoming an “exploration stage company” have been separately presented in the accompanying consolidated balance sheets and statements of stockholders’ equity (deficit). To date, the Company's planned principal operations have not fully commenced.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of $792,545 and $17,374,113 for the years ended December 31, 2012 and 2011, respectively, and has incurred cumulative losses since inception of its exploration stage of $18,454,740. The Company has a stockholders’ deficit of $276,171 at December 31, 2012.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate revenues, its ability to continue to raise investment capital, and implement its business plan.  No assurance can be given that the Company will be successful in these efforts.

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations and the inputs used in calculating stock-based compensation and transactions. Actual results could differ from those estimates and would impact future results of operations and cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of Spartan Gold Ltd. and its wholly-owned subsidiary, Andhra Blue Limited.  All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2012 and 2011, respectively, the Company had no cash equivalents.

Mineral Property Costs

The Company has been in the exploration stage since July 8, 2010 and has not yet realized revenues from its planned operations.  It is primarily engaged in the acquisition, exploration, and development of mining properties for gold and other precious metals.  In accordance with the SEC Industry Guide 7, mineral property acquisition costs are capitalized and mineral property option payments and exploration costs are expensed to operations as incurred.

When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, the costs then incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Fair Value of Financial Instruments

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - fair value measurements are those derived from inputs other than quoted prices included within 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 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial instruments classified as Level 1 - quoted prices in active markets include cash.

Financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments.  Changes in such judgments could have a material impact on fair value estimates.  In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes.  Changes in economic conditions may also dramatically affect the estimated fair values.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and due to related parties.

Basic and Diluted Loss Per Share

The Company computes income (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations.  Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.   As of December 31, 2011, there were 1,599,975 warrants outstanding to purchase shares of common stock. As of December 31, 2012, there were a total of 2,499,975 warrants outstanding and 4,000,000 stock options outstanding to purchase shares of common stock. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of loss per share.

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ equity (deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes.  Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases.  Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.  The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs.  Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”.  ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.  This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2012.

Recent Accounting Pronouncements

On February 5, 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, which requires entities to disclose the following additional information about items reclassified out of accumulated other comprehensive income (“AOCI”): (1) changes in AOCI balances by component, (2) significant items reclassified out of AOCI by component either on the face of the income statement or as a separate footnote to the financial statements. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company does not expect this ASU to have a material impact on the financial statements.

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

Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the Company’s present or future consolidated financial statements.

XML

9. Settlement of Debt

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 9 - Settlement of Debt

On February 10, 2012, two parties, a consultant and a former employee of the Company, released the Company of remaining contractual amounts due to them totaling $75,000 which were recorded in accrued liabilities at December 31, 2011.

XML

7. Related Party Transactions

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 7 - Related Party Transactions

The Company issued Sphere 587,500 shares of the Company’s common stock and warrants to purchase an additional 287,475 shares to Sphere in connection with the option agreements on the Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties).  Additionally, cash payments to Sphere of $175,000 were due and recorded as part of the Note (See Note 6 – Secured Convertible Promissory Note). Mr. Malcolm Stevens, the Company’s Chief Executive Officer, Director and Chairman, is also the Executive Chairman and President of Sphere, a Canadian Corporation.

In November 2011, Sphere advanced $50,000 to the Company for working capital purposes. During the year ended December 31, 2012, Sphere advanced an additional $119,000 to the Company for working capital purposes and the Company repaid $17,360 to Sphere. The advances have no repayment date and do not bear interest. On December 27, 2012, Sphere elected to convert $142,640 of the balance due into 2,852,800 shares of the Company’s common stock valued at $0.05 per share, the market price on the date of conversion, leaving a balance owed to Sphere of $9,000 (See Note – 8 Stockholders’ Deficit).

See also Note 5 – Borrowings from Third Party and Note 6 – Secured Convertible Promissory Note.

During the year ended December 31, 2011, the Company paid $6,772 to a family member of a Director and President of the Company for administrative services.

During the year ended December 31, 2012, the Company’s President and Director advanced $19,000 to the Company for working capital purposes. No payments on the amount owed have been made. The advance has no repayment date and does not bear interest.

Accounts payable at December 31, 2012 include $19,000 of amounts due to the Company’s Chief Financial Officer for services rendered. Accrued expenses at December 31, 2012 and 2011 include $51,000 and $133,500, respectively, of accrued compensation for officers.

These transactions are in the normal course of business and are recorded at the exchange amount, which is the consideration agreed to by the related parties.

XML

8. Stockholders Deficit

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 8 - Stockholders' Deficit

The Company’s authorized number of common shares is 1,000,000,000 with a $0.001 par value.

On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split which was distributed on August 5, 2009 to shareholders of record and has filed an amendment to its Articles of Incorporation in the State of Nevada. The par value of $0.001 remained the same.

On November 9, 2011, the Company's Board of Directors declared a one-for-twenty reverse stock split. The number of authorized shares and the par value of $0.001 remained the same.

Common Stock

On December 15, 2007, the Company issued 20,000,000 shares of its common stock at $0.0005 per share to a founder of the Company for services rendered aggregating $10,000 as stock based compensation.

On December 15, 2007, the Company issued 4,000,000 shares of its common stock at $0.0005 per share to a founder of the Company for services rendered aggregating $2,000 as stock based compensation.

On December 15, 2007, the Company issued 3,250,000 shares of its common stock for $32,500 cash or $0.01 per share.

On January 30, 2008, the Company issued 3,000,000 shares of its common stock for $15,000 cash or $0.005 per share.

On May 2, 2008, the Company issued 200,000 shares of its common stock for $2,000 cash or $0.01 per share.

On August 12, 2010, a shareholder of the Company contributed 19,792,500 shares of common stock to the Company’s treasury valued at $129,851 or $.0066 per share, based on the price paid by the shareholder to acquire the shares. The Company immediately retired and canceled these shares resulting in a loss of $110,058 which was recorded as a charge to deficit accumulated from prior operations.

On October 22, 2010, two shareholders of the Company utilized a combined 5,563,468 of their shares to acquire the Arbacoochee mineral rights located in Alabama resulting in a capital contribution of $54,027. The shares were valued at a weighted average price of $0.009711 per share See Note 4 – Mineral Properties).

In connection with executive employment contracts, the Company committed 800,000 shares of its common stock to the executives of the Company. The shares were contributed by a shareholder of the Company resulting from the change of control on May 21, 2010. The shares were valued at $0.0066, the price at the commitment date of October 22, 2010. The total value of the shares aggregated $5,248 and has been recorded as stock issued for services with a credit to additional paid-in-capital as a capital contribution.

On December 15, 2010, the Company issued 17,500 shares of its common stock for $105,000 cash or $6.00 per share under a private placement agreement.

On December 20, 2010, the Company issued 2,717 shares of its common stock to a company controlled by a previous Vice President of the Company for $16,300 cash, or $6.00 per share, under a private placement agreement.

On December 26, 2010, the Company issued 10,000 shares of its common stock for $60,000 cash, or $6.00 per share, under a private placement agreement.

On January 25, 2011, the Company issued 41,667 shares of its stock for $500,000 cash, or $12.00 per share, under a private placement.  

On February 2, 2011, the Company entered into a Consulting Agreement and issued 50,000 shares of its common stock at the market value per share of $12.998 for a total of $649,900.

On March 28, 2011, the Company issued 62,500 shares of its common stock to MMC in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $1,125,000.

On March 28, 2011, the Company issued 587,500 shares of its common stock to Sphere in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). The shares were valued at the market price of the shares on March 28, 2011 of $18.00 for a total of $10,575,000.

On April 26, 2011, the Company issued 12,500 shares of its common stock for $150,000 cash, or $12.00 per share, under a private placement.

On September 7, 2011, the Company issued 1,250,000 shares of its common stock to Sphere in connection with the issuance of a $375,000 Note (See Note 6 – Secured Convertible Promissory Note).

On October 19, 2011, the Company issued 18,952,774 shares of its common stock for the conversion of the $379,055 Note with Sphere, including accrued interest, per the terms of the Promissory Note (See Note 6 – Secured Convertible Promissory Note).

On March 28, 2012, the Company has issued 50,000 shares of common stock to the Chief Financial Officer of the Company pursuant to an employment agreement. The fair value of these shares, totaling $25,000, was expensed and recorded in general and administrative expenses.

On December 27, 2012, the Company’s officers elected to convert a total of $292,764 of accrued salaries owed to them for 5,855,286 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion.

On December 27, 2012, a vendor elected to convert $22,140 of accounts payable and accrued expenses due to them for 442,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion.

On December 27, 2012, Sphere elected to convert $142,640 of advances due to them for 2,852,800 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion (See Note 7 – Related Party Transactions).

Effective December 31, 2012, Sphere elected to convert $62,020 of debt assigned to them by TIMCO for 1,240,400 shares of the Company’s common stock at a conversion rate of $0.05 per share, the fair value at the date of conversion (See Note 5 – Borrowings from Third Party and Note 7 – Related Party Transactions).

Warrants

The following table summarizes warrant transactions for the year ended December 31, 2012 and 2011:

					Weighted
			Weighted		average
			average		remaining		Aggregate
	Number		exercise		contracted		intrinsic
	of warrants		price		term (years)		value
Outstanding at December 31, 2010		–	$	–
Granted		1,599,975	$	5.94
Outstanding at December 31, 2011		1,599,975	$	5.94		4.59	$	–
Granted		900,000	$	0.10
Outstanding at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Exercisable at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Weighted Average Grant Date Fair Value			$	2.09

On March 28, 2011, the Company issued warrants to purchase 349,975 shares of the Company’s common stock in connection with the option agreements for the Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). These warrants have contractual lives of five years and were valued at a grant date fair value of $9.60 per warrant, or $3,359,760, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$18.00
Contractual term	5 years
Expected volatility	87.6%
Risk free interest rate	0.81%
Dividend yield	0

The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

On September 7, 2011, the Company issued warrants to purchase 1,250,000 shares of the Company’s common stock to Sphere as a financing fee related to the Note (See Note 6 – Secured Convertible Promissory Note). These warrants have contractual lives of five years and were valued at a grant date fair value of $1.40 per warrant, or $1,750,000, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$2.00
Contractual term	5 years
Expected volatility	84.7%
Risk free interest rate	0.92%
Dividend yield	0

The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

On March 1, 2012, the Company issued warrants to purchase 750,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10. These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $108,473, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.50
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.43%
Dividend yield	0

The fair value of these warrants, including the incremental increase resulting from the amended terms, was expensed and recorded in general and administrative expenses. The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

On March 8, 2012, the Company issued warrants to purchase 150,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10. These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $21,695, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.51
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.44%
Dividend yield	0

The fair value of these warrants, including the incremental increase resulting from the amended terms, was expensed and recorded in general and administrative expenses. The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility.

2012 Equity Plan

On March 28, 2012, the Company’s Board of Directors approved and adopted the Spartan Gold Ltd. 2012 Equity Incentive Plan (the “2012 Plan”) and reserved 4,750,000 shares of the Company’s common stock for issuance under the 2012 Plan to the Company’s directors, officers, consultants and other service providers.  The Plan allows for two types of grants: 1) options and 2) stock awards and stock purchase offers.  

The Company has granted stock options to employees. The following summarizes option activity under the 2012 Plan for the year ended December 31, 2012:

				Common		Weighted
	Shares			Stock		average
	available for			Options		exercise
	grant			Outstanding		price
Shares issued at plan inception		4,750,000			–	$	–
Options granted		(4,000,000	)		4,000,000		0.10
Options exercised		–			–		–
Options cancelled or expired		–			–		–
Balance at December 31, 2012		750,000			4,000,000	$	0.10

The following table summarizes information with respect to stock options outstanding and exercisable by employees under the 2012 Plan at December 31, 2012:

Options outstanding

Options vested and exercisable

Weighted

average

Weighted

Weighted

remaining

average

Aggregate

average

Aggregate

Exercise

Number

contractual

exercise

intrinsic

Number

exercise

intrinsic

price

outstanding

life (years)

price

value

vested

price

value

$0.10

4,000,000

9.99

$

0.10

$

–

4,000,000

$

0.10

$–

During the year ended December 31, 2012, the Company issued 4,000,000 options to employees with a grant date fair value of $0.02. As the options were fully vested upon their grant, the entire fair value of $80,000 has been recognized as stock option expense for the year ended December 31, 2012.

The Company estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is expensed upon vesting of the awards. The fair value of employee stock options was estimated using the following assumptions:

Stock Price	$0.05
Expected term	5.0 years
Expected volatility	77.5%
Risk-free interest rate	0.72%
Dividend yield	0

XML

10. Income Taxes

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 10 - Income Taxes

No provision for income tax was made for the period from September 6, 2007 (Inception) to December 31, 2012 as the Company had cumulative operating losses.  For the years ended December 31, 2012 and 2011, the Company incurred net losses for tax purposes of approximately $588,000 and $13,809,000, respectively.  

The income tax expense (benefit) differs from the amount computed by applying the United States Statutory corporate income tax rate as follows:

	Year Ended December 31,
	2012		2011
Expected income tax (benefit) at 34% statutory rate	-34.0	%	-34.0	%
Permanent tax differences	8.4	%	7.0	%
Timing differences	3.3	%	0.0	%
Change in valuation allowance	22.3	%	27.0	%
Actual tax expense	0.0	%	0.0	%

Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The components of the net deferred income tax assets are approximately as follows:

		December 31,			December 31,
		2012			2011
Deferred income tax assets:
Net operating loss carry forwards	$	4,992,770		$	4,862,830
Mineral properties		(31,770	)		(32,970	)
Stock option expense		(27,200	)		–
Valuation allowance		(4,933,800	)		(4,829,860	)
Net deferred income tax assets	$	–		$	–

The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more likely than not to be realized from future operations. The Company has established a full valuation allowance on its net deferred tax assets because of a lack of sufficient positive evidence to support its realization. The valuation allowance increased by $202,610 and $4,766,080 for the years ended December 30, 2012 and 2011, respectively.

No provision for income taxes has been provided in these financial statements due to the net loss for the years ended December 31, 2012 and 2011. At December 31, 2012, the Company has net operating loss carry forwards of approximately $14,685,000, which expire commencing 2030. The potential tax benefit of these losses may be limited due to certain change in ownership provisions under Section 382 of the Internal Revenue Code (“IRS”) and similar state provisions.

IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss and tax credit carry forwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2012, but believes the provisions will not limit the availability of losses to offset future income.

XML

8. Stockholders' Deficit (Tables)

12 Months Ended

Dec. 31, 2012

Stockholders Deficit Tables

Warrant Activity

The following table summarizes warrant transactions for the year ended December 31, 2012 and 2011:

					Weighted
			Weighted		average
			average		remaining		Aggregate
	Number		exercise		contracted		intrinsic
	of warrants		price		term (years)		value
Outstanding at December 31, 2010		–	$	–
Granted		1,599,975	$	5.94
Outstanding at December 31, 2011		1,599,975	$	5.94		4.59	$	–
Granted		900,000	$	0.10
Outstanding at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Exercisable at December 31, 2012		2,499,975	$	3.84		3.80	$	–
Weighted Average Grant Date Fair Value			$	2.09

Assumptions of warrants

On March 28, 2011, the Company issued warrants to purchase 349,975 shares of the Company’s common stock in connection with the option agreements for the Poker Flats and Ziggurat properties (See Note 4 – Mineral Properties). These warrants have contractual lives of five years and were valued at a grant date fair value of $9.60 per warrant, or $3,359,760, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$18.00
Contractual term	5 years
Expected volatility	87.6%
Risk free interest rate	0.81%
Dividend yield	0

On September 7, 2011, the Company issued warrants to purchase 1,250,000 shares of the Company’s common stock to Sphere as a financing fee related to the Note (See Note 6 – Secured Convertible Promissory Note). These warrants have contractual lives of five years and were valued at a grant date fair value of $1.40 per warrant, or $1,750,000, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$2.00
Contractual term	5 years
Expected volatility	84.7%
Risk free interest rate	0.92%
Dividend yield	0

On March 1, 2012, the Company issued warrants to purchase 750,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10.  These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $108,473, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.50
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.43%
Dividend yield	0

On March 8, 2012, the Company issued warrants to purchase 150,000 shares of the Company’s common stock to a consultant as a retainer for services. On December 28, 2012 the term of the warrants was changed from three years to five and the exercise price was changed from $1.40 to $0.10. These warrants have contractual lives of five years and were valued at a grant date fair value of $0.14 per warrant, or $21,695, using the Black-Scholes Option Pricing Model with the following assumptions:

Stock price	$0.51
Expected term	2.5 years
Expected volatility	77.7%
Risk free interest rate	0.44%
Dividend yield	0

Stock option Activity

The Company has granted stock options to employees. The following summarizes option activity under the 2012 Plan for the year ended December 31, 2012:

				Common		Weighted
	Shares			Stock		average
	available for			Options		exercise
	grant			Outstanding		price
Shares issued at plan inception		4,750,000			–	$	–
Options granted		(4,000,000	)		4,000,000		0.10
Options exercised		–			–		–
Options cancelled or expired		–			–		–
Balance at December 31, 2012		750,000			4,000,000	$	0.10

Stock options outstanding and exercisable

The following table summarizes information with respect to stock options outstanding and exercisable by employees under the 2012 Plan at December 31, 2012:

Options outstanding

Options vested and exercisable

Weighted

average

Weighted

Weighted

remaining

average

Aggregate

average

Aggregate

Exercise

Number

contractual

exercise

intrinsic

Number

exercise

intrinsic

price

outstanding

life (years)

price

value

vested

price

value

$0.10

4,000,000

9.99

$

0.10

$

–

4,000,000

$

0.10

$–

Fair Value assumption stock option activity

The Company estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair value of employee stock options is expensed upon vesting of the awards. The fair value of employee stock options was estimated using the following assumptions:

Stock Price	$0.05
Expected term	5.0 years
Expected volatility	77.5%
Risk-free interest rate	0.72%
Dividend yield	0

XML

8. Stockholders Deficit (Details2) (USD $)	12 Months Ended
	Dec. 31, 2012
Shares Available for grants
Shares issued at plan inception	4,750,000
Options granted	(4,000,000)
Options exercised
Options cancelled or expired
Shares issued at plan inception Ending Balance	750,000
Common Stock Option Outstanding
Number of shares outstanding
Options granted	4,000,000
Options exercised
Options cancelled or expired
Number of shares outstanding	4,000,000
Weighted average exercise price
Weighted average exercise price
Options granted	$ 0.10
Options exercised
Options cancelled or expired
Weighted average exercise price	$ 0.10

XML

Consolidated Statement of Shareholders Equity (Deficit) (USD $)	Common Stock	Common Stock Issuable	Additional Paid-In Capital	Deficit Accumulated From Prior Operations	Deficit Accumulated During The Exploration Stage	Total
Beginning Balance, Amount at Sep. 05, 2007
Beginning Balance, Shares at Sep. 05, 2007
Common stock issued to founders at $.0005 per share, Shares	24,000,000
Common stock issued to founders at $.0005 per share, Amount	24,000			(12,000)		12,000
Common stock issued for cash at $0.01 per share, Shares	3,250,000
Common stock issued for cash at $0.01 per share, Amount	3,250		29,250			32,500
Net Loss				(24,400)		(24,400)
Ending Balance, Amount at Dec. 31, 2007	27,250		29,250	(36,400)		20,100
Ending Balance, Shares at Dec. 31, 2007	27,250,000
Common stock issued for cash at $0.005 per share under a private placement, Shares	3,000,000
Common stock issued for cash at $0.005 per share under a private placement, Amount	3,000		12,000			15,000
Common stock issued for cash at $0.01 per share under a private placement, Shares	200,000
Common stock issued for cash at $0.01 per share under a private placement, Amount	200		1,800			2,000
Net Loss				(36,538)		(36,538)
Ending Balance, Amount at Dec. 31, 2008	30,450		43,050	(72,938)		562
Ending Balance, Shares at Dec. 31, 2008	30,450,000
Net Loss				(13,375)		(13,375)
Ending Balance, Amount at Dec. 31, 2009	30,450		43,050	(86,313)		(12,813)
Beginning Balance, Shares at Dec. 31, 2009	30,450,000
Contribution of related party loan			19,603			19,603
Contribution of shares to treasury by principal shareholder, retired and cancelled, Shares	(19,792,500)
Contribution of shares to treasury by principal shareholder, retired and cancelled, Amount	(19,793)		129,851	(110,058)
Contribution of shares by shareholders to purchase Arbacoochee mineral rights at $0.009711 per share			54,027			54,027
Shares awarded - executive employment agreements contributed by principal shareholder at $0.00656 per share			5,248			5,248
Common stock issued for cash at $6.00 per share under a private placement, Shares	30,217
Common stock issued for cash at $6.00 per share under a private placement, Amount	30		181,270			181,300
Net Loss				(11,760)	(288,082)	(299,842)
Ending Balance, Amount at Dec. 31, 2010	10,687		433,049	(208,131)	(288,082)	(52,477)
Ending Balance, Shares at Dec. 31, 2010	10,687,717
Common stock issued for cash at $12.00 per share under a private placement, Shares	54,167
Common stock issued for cash at $12.00 per share under a private placement, Amount	55		649,945			650,000
Shares issued to consultant for services at $13.00 per share, Shares	50,000
Shares issued to consultant for services at $13.00 per share, Amount	50		649,850			649,900
Common stock issued under option agreement to acquire mineral rights at $18.00 per share, Shares	650,000
Common stock issued under option agreement to acquire mineral rights at $18.00 per share, Amount	650		11,699,350			11,700,000
Common stock issued in connection with secured convertible promissory note, Shares	1,250,000
Common stock issued in connection with secured convertible promissory note, Amount	1,250		201,452			202,702
Warrants to purchase 1,250,000 shares of common stock issued in connection with secured convertible promissory note			141,892			141,892
Beneficial conversion feature of secured convertible promissory note			30,405			30,405
Warrants to purchase 349,975 shares of common stock issued under option agreements to acquire mineral rights			3,359,760			3,359,760
Conversion of secured convertible promissory note to common stock, Shares	18,952,774
Conversion of secured convertible promissory note to common stock, Amount	18,953		360,102			379,055
Net Loss					(17,374,113)	(17,374,113)
Ending Balance, Amount at Dec. 31, 2011	31,645		17,525,805	(208,131)	(17,662,195)	(312,876)
Ending Balance, Shares at Dec. 31, 2011	31,644,658
Shares awarded under executive employment agreement, Share	50,000
Shares awarded under executive employment agreement, Amount	50		24,950			25,000
Warrants to purchase 900,000 shares of common stock issued to consultants for services to be rendered			130,167			130,167
Common stock issued in lieu of cash compensation, Share	5,855,286
Common stock issued in lieu of cash compensation, Amount	5,855		286,909			292,764
Common stock issued for services, Share	442,800
Common stock issued for services, Amount	443		21,697			22,140
Compensation expense of stock options issued to employees			80,000			80,000
Common stock issued in conversion of amounts due to related party, Share	4,093,200
Common stock issued in conversion of amounts due to related party, Amount	4,093		200,567			204,660
Beneficial conversion feature of secured loan payable			62,019			62,019
Common stock issuable for finance fees		12,500				12,500
Common stock issuable for finance fees, shares		250,000
Net Loss					(792,545)	(792,545)
Ending Balance, Amount at Dec. 31, 2012	$ 42,086	$ 12,500	$ 18,332,114	$ (208,131)	$ (18,442,240)	$ (276,171)
Ending Balance, Shares at Dec. 31, 2012	42,085,944	250,000

XML

4. Mineral Properties

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

NOTE 4 - Mineral Properties

As of December 31, 2012 and 2011, the Company has incurred $101,977 and $15,606,636 in mineral property costs which have been charged to operations.  A summary by property is as follows:

	Ziggurat		Poker Flats		Arbacoochee
	Property		Property		Gold Prospect		Total
Year Ended December 31, 2012
Impairment	$	–	$	–	$	–	$	–
Option payments		25,000		–		–		25,000
Property expenditures		–		56,560		–		56,560
Exploration costs		20,208		209		–		20,417
	$	45,208	$	56,769	$	–	$	101,977
Year Ended December 31, 2011
Impairment	$	–	$	–	$	–	$	–
Option payments		10,238,010		5,031,750		–		15,269,760
Property expenditures		–		36,560		–		36,560
Exploration costs		185,517		110,979		3,820		300,316
	$	10,423,527	$	5,179,289	$	3,820	$	15,606,636
From July 8, 2010 (Inception of Exploration Stage) to December 31, 2012
Impairment	$	–	$	–	$	104,027	$	104,027
Option payments		10,288,010		5,056,750		–		15,344,760
Property expenditures		–		93,120		–		93,120
Exploration costs		205,725		111,188		3,820		320,733
	$	10,493,735	$	5,261,058	$	107,847	$	15,862,640

Ziggurat Property

On December 27, 2010, the Company entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC” or the “Optionor”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in certain mining claims in Nye County, in the State of Nevada, known as the “Ziggurat” Property. Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· Issuance of 393,125 shares of common stock (issued at a fair value of $7,076,250) and 41,875 shares of common stock (issued at a fair value of $753,750) to Sphere and MMC, respectively on execution of the amended Option Agreement;

· Issuance of a warrant to purchase 193,100 shares (recorded at a fair value of $1,853,760) and a warrant to purchase 41,875 shares (recorded at a fair value of $402,000) to Sphere and MMC, respectively, with an exercise price of $20.00 per share until March 28, 2016;

· The Company has paid to MMC $25,000 upon executing the Option Agreement;

· The Company has paid to MMC $35,000 on May 27, 2011;

· The Company shall pay to MMC $25,000 on or before the second anniversary date of the Agreement ($5,000 paid and $20,000 accrued);

· The Company shall pay to MMC $25,000 on or before the third anniversary date of the Agreement;

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company;

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $1,000,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement;

· Sphere is required to issue certain shares of common stock to MMC;

· The Company granted a 2.5% Net Smelter Royalty (“NSR”) for any and all products that are produced from the Ziggurat mining claims to Sphere and a .5% NSR to MMC;

· If and when the Company elects to sell and convey all or a portion of its interest in the Ziggurat Property, the Company shall have the right to purchase up to 100% of the 2.5% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Ziggurat Property, under terms to be agreed upon by the Company and Sphere.

Further, the Company will pay $117,250 (See Note 6 – Secured Convertible Promissory Note) and $16,750 (not paid) to Sphere and MMC, respectively, of which 50% is to be paid within 60 days after the effective date of a S-1 to be filed with the SEC and the remainder after such date of the Company obtaining financing of $2,000,000. As of December 31, 2012, the Company has neither filed the S-1 nor obtained such financing.

Poker Flats Property

On December 22, 2010, the Company entered into an Option and Mining Claim Acquisition Agreement between MMC and Sphere. The agreement was amended on March 28, 2011 (the “First Amendment”) and further amended on December 22, 2011 (the “Second Amendment”).

MMC is the owner of a 100% interest in certain mining claims located in the Carlin Mining District in Elko County Nevada, known as the “Poker Flats” Property.  Resulting from the Agreement and First and Second Amendments, the Company has the following rights and obligations:

· Issuance of 194,375 shares of common stock (issued and recorded at a fair value of $3,498,750) and 20,625 shares of common stock (issued and recorded at a fair value of $371,250) to Sphere and MMC, respectively on execution of the amended Option Agreement;

· Issuance of a warrant to purchase 94,375 shares (recorded at a fair value of $906,000) and a warrant to purchase 20,625 shares (recorded at a fair value of $198,000) of common stock to Sphere and MMC, respectively, with an exercise price of $20.00 per share until March 28, 2016;

· The Company has paid to MMC $25,000 upon executing the Option Agreement;

· Sphere is required to issue certain shares of common stock to MMC;

· An initial 51% interest in the property will be earned upon incurring exploration expenditures of $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company;

· An additional 24% interest in the property will be earned upon incurring additional exploration expenditures of $250,000 and completing and delivering to the Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement;

· Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% NSR for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC and a 2% NSR to Sphere;

Poker Flats Property (Continued)

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 75% and MMC shall have the right to purchase up to 25% of the 3% NSR on mineral production from the Poker Flats Property retained by the owner of the mining claims subject to the Poker Flats Option Agreement, for one million U.S. dollars (U.S. $1,000,000) per NSR percentage point;

· If and when the Company elects to sell and convey all or a portion of its interest in the Poker Flats Property, the Company shall have the right to purchase up to 100% of the 2% NSR granted, conveyed and assigned by the Company to Sphere on its share of production from the Poker Flats Property, under terms to be agreed upon by the Company and Sphere.

On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the Poker Flats property located within the Carlin Mining District in Elko County, Nevada.

Under the terms of this Agreement, the Company agreed to pay Tomera a Production Royalty of 5% of NSR, as defined in the Agreement. In order to maintain this Agreement in effect, the Company shall pay to Tomera Advance Minimum Royalty (“AMR”) Payments. AMR payments are calculated based on the net mineral acres leased on an annual basis. The Company paid, at the execution of the Agreement, $30,800 for the first year of the lease based on the 1,760 net mineral acres leased at $17.50 per acre. Future AMR payments, on a per net mineral acre basis, are: $17.50 per acre on the first and second anniversaries of the Agreement, $21.00 per acre on the third and fourth anniversaries, $24.50 per acre on the fifth and sixth anniversaries, and $28.00 per acre on the seventh and any subsequent anniversaries. The Company paid $30,800 and $30,800 during the years ended December 31, 2012 and 2011, respectively. The term of the Agreement is for a period of ten years. The Company has the option to extend the initial term for an additional ten year period.

In connection with the Mining Lease and Agreement, the Company entered into a Surface Access and Use Agreement on April 1, 2011 with Kevin Tomera, a Nevada resident, which grants the Company general rights of ingress and egress over certain surface tracts and the right to use the surface tracts in conduct of its mineral exploration, development and mining activities. Additionally, Tomera has granted the Company an option to purchase portions of the surface tracts. Under the terms of the Surface Access and Use Agreement, the Company agrees to pay Kevin Tomera annual rental of $4.50 per acre for each acre of land included in the surface tracts. The Company paid $5,760 and $5,760 during the years ended December 31, 2012 and 2011, respectively. The term of the Agreement is for ten years.

Arbacoochee Gold Prospect

On October 22, 2010, the Company acquired all of the mineral rights in the Arbacoochee Gold Prospect located in northeastern Alabama. The acquisition includes all legal rights and equitable title to the mineral rights held by deed in the name of Alabama Mineral Properties, LLC (“AMP”).

The mineral rights were acquired for cash of $50,000 and 5,563,468 shares of the Company’s issued and outstanding common stock at a fair value of $54,027. The shares were a contribution from shareholders, resulting in a capital contribution (See Note 8 – Stockholders’ Deficit).

The Company also assumed an existing mineral royalty agreement which requires the payment of 6% NSR overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.

At December 31, 2010, the Company impaired the Arbacoochee Gold Prospect and $104,027 was charged to operations.

XML

8. Stockholders Deficit (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Options outstanding
Exercise price	0.10
Number of shares outstanding	4,000,000
Weighted average remaining contractual life (Years)	9 years 10 months 24 days
Weighted average exercise price	$ 0.10
Aggregate intrinsic value
Options vested and exercisable
Number vested	4,000,000
Weighted average exercise price	$ 0.1
Aggregate intrinsic value

XML

4. Mineral Properties (Tables)

12 Months Ended

Dec. 31, 2012

Mineral Properties Tables

Mineral Properties

As of December 31, 2012 and 2011, the Company has incurred $101,977 and $15,606,636 in mineral property costs which have been charged to operations.  A summary by property is as follows:

	Ziggurat		Poker Flats		Arbacoochee
	Property		Property		Gold Prospect		Total
Year Ended December 31, 2012
Impairment	$	–	$	–	$	–	$	–
Option payments		25,000		–		–		25,000
Property expenditures		–		56,560		–		56,560
Exploration costs		20,208		209		–		20,417
	$	45,208	$	56,769	$	–	$	101,977
Year Ended December 31, 2011
Impairment	$	–	$	–	$	–	$	–
Option payments		10,238,010		5,031,750		–		15,269,760
Property expenditures		–		36,560		–		36,560
Exploration costs		185,517		110,979		3,820		300,316
	$	10,423,527	$	5,179,289	$	3,820	$	15,606,636
From July 8, 2010 (Inception of Exploration Stage) to December 31, 2012
Impairment	$	–	$	–	$	104,027	$	104,027
Option payments		10,288,010		5,056,750		–		15,344,760
Property expenditures		–		93,120		–		93,120
Exploration costs		205,725		111,188		3,820		320,733
	$	10,493,735	$	5,261,058	$	107,847	$	15,862,640