10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 – Q

(Mark One)

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

For the quarterly period ended June 30, 2013

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

For the transition period from _______ to _______

Commission File Number: 000-54645

EASTERN RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	45-0582098
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

1610 Wynkoop Street, Suite 400, Denver, CO 80202

(Address of principal executive offices)

(303) 893-2334

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

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

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

There were 198,750,000 shares of the issuer’s common stock outstanding as of August 19, 2013.

EASTERN RESOURCES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2013

TABLE OF CONTENTS

		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosure	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
	SIGNATURES	25

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EASTERN RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	June 30,			December 31,
	2013			2012
Assets
Current assets
Cash and cash equivalents	$	30,123		$	113,505
Accounts receivable other		-			1,008
Inventory, net		886,977			886,977
Other current assets		11,664			-
Total current assets		928,764			1,001,490
Non-current assets
Buildings, equipment, and land, net		5,498,912			5,573,565
Mine development		5,102,217			5,102,217
Mining properties and mineral interests, net		16,460,922			16,440,879
Deposits for reclamation obligations		16,809,636			16,780,285
Total non-current assets		43,871,687			43,896,946
Total assets	$	44,800,451		$	44,898,436
Liabilities and Shareholders’ Deficit
Current liabilities
Accounts payable	$	1,438,330		$	1,425,073
Accrued liabilities		5,926,624			5,455,419
Accounts payable - related party		343,958			98,919
Promissory notes		1,225,537			705,737
Convertible bridge loans		1,800,000			1,900,000
Current portion of capital lease obligation		45,039			94,729
Series A 8% bonds		919,779			919,779
Refundable customer deposit, ore purchase agreement		12,680,000			10,760,000
Push-down redeemable obligation of Parent and its affiliate		5,950,000			5,950,000
Push-down interest of Parent and its affiliate		31,533,358			26,448,883
Push-down debt of Parent and its affiliate		21,579,848			21,579,848
Total current liabilities		83,442,473			75,338,387
Non-current liabilities
Warrant liability		63,331			204,874
Reclamation liability		25,612,062			24,640,321
Ore purchase derivative contract		7,371,275			16,701,404
Total non-current liabilities		33,046,668			41,546,599
Total liabilities		116,489,141			116,884,986
Series A 12% convertible redeemable preferred stock, $0.001 par value 10,000,000 shares authorized, issued, and outstanding at June 30, 2013 and December 31, 2012		13,656,708			13,656,708
Series A convertible redeemable preferred stock accrued dividend		8,900,000			5,300,000
Total convertible redeemable preferred stock		22,556,708			18,956,708
Commitments and contingencies
Shareholders’ deficit
Common stock $0.001 par value 300,000,000 authorized at June 30, 2013 and December 31, 2012, 198,550,000 were issued and outstanding at June 30, 2013 and December 31, 2012		198,550			198,550
Additional paid-in capital		5,440,153			3,357,564
Accumulated deficit		(99,884,101	)		(94,499,372	)
Total Shareholders' deficit		(94,245,398	)		(90,943,258	)
Total liabilities, convertible redeemable preferred stock and shareholders’ deficit	$	44,800,451		$	44,898,436

The accompanying notes are an integral part of these statements.

3

EASTERN RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

For the Three and Six Months Ended June 30, 2013 and 2012

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Metal sales	$	-		$	-		$	-		$	-
Operating expenses
General and administrative		1,703,226			2,579,357			3,514,089			3,010,833
Accretion expense		411,932			340,741			971,741			703,981
Mine care and maintenance		193,842			299,434			465,893			399,124
Depreciation and amortization		7,920			1,041			9,237			2,082
Total operating expenses		2,316,920			3,220,573			4,960,960			4,116,020
Loss from operations		(2,316,920	)		(3,220,573	)		(4,960,960	)		(4,116,020	)
Other (expense) income
Interest expense		(2,322,311	)		(825,963	)		(5,291,776	)		(4,690,590	)
Interest income		29,396			40,040			29,450			39,976
Change in fair value of warrant liability		11,705			-			141,543			-
Loss on ore purchase derivative		(2,034,196	)		-			(3,905,503	)		-
Change in fair value of derivative instrument contract		11,786,319			(127,841	)		13,235,632			(412,064	)
Standstill agreement expense		(1,000,000	)		-			(1,000,000	)		-
Other		(33,115	)		-			(33,115	)		10,521
Total other expense		6,437,798			(913,764	)		3,176,230			(5,052,157	)
Net income (loss)		4,120,878			(4,134,337	)		(1,784,729	)		(9,168,177	)
Preferred dividend		1,800,000			1,750,000			3,600,000			1,700,000
Net gain (loss) available to common shareholders	$	2,320,878		$	(5,884,337	)	$	(5,384,729	)	$	(10,868,177	)
Earnings per share:
Basic and diluted loss per share	$	0.01		$	(0.03	)	$	(0.03	)	$	(0.05	)
Weighted average number of common shares outstanding		198,550,000			198,550,000			198,550,000			198,550,000

The accompanying notes are an integral part of these statements.

4

EASTERN RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2013 and 2012 (Unaudited)

	2013			2012
Cash flows from operating activities
Net loss	$	(1,784,729	)	$	(9,168,177	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization		9,237			2,082
Accretion expense		971,741			703,981
Loss on ore purchase derivative		3,905,503			-
Change in fair value of derivative instrument		(13,235,632	)		412,064
Standstill agreement		1,000,000
Accretion on convertible bridge loans		-			364,822
Loss on disposal of equipment		33,115			-
Employee stock compensation		1,511,617			1,135,365
Stock options for services		570,972			-
Change in fair value of warrant liability		(141,543	)		306,568
Push-down redeemable obligation of Parent and its affiliate		-			-
Push-down interest of Parent and its affiliate		5,084,475			3,735,593
Changes in operating assets and liabilities
Accounts receivable other		1,008			(17,852	)
Inventory		-			24,195
Other current assets		(11,664	)		(47	)
Accounts payable		13,257			622,206
Accounts payable - related party		245,039			-
Accrued liabilities		471,205			1,283,659
Refundable customer deposit, ore purchase agreement		920,000			-
		1,348,330			8,572,636
Net cash used in operating activities		(436,399	)		(595,541	)
Cash flows from investing activities
Purchase of building and equipment		(3,449	)		45,539
Additions to mine development		-			(1,297,877	)
Additions to mining properties and mineral interests		(20,043	)		(30,065	)
Change in deposits for reclamation obligation		(29,351	)		33,513
Net cash used in investing activities		(52,843	)		(1,248,890	)
Cash flows from financing activities
Payments on series A 8% bonds		-			(480,000	)
Proceeds from sale of common stock		-			380,000
Proceeds from bridge loans		-			1,900,000
Payments on bridge loans		(100,000	)		-
Proceeds from promissory notes		519,800			10,000
Payments on capital lease obligations		(13,940	)		(176,420	)
Payments of distributions to stockholders		-			(100,000	)
Net cash provided by financing activities		405,860			1,533,580
Net (decrease) in cash and cash equivalents		(83,382	)		(310,851	)
Cash and cash equivalents - beginning of year		113,505			358,125
Cash and cash equivalents - end of year	$	30,123		$	47,274
Supplemental cash flow disclosures
Cash paid for interest	$	45,587		$	127,639
Non-cash financing and investing activities
Depreciation expense capitalized to mine development	$	-		$	78,678
Cancellation of capital lease	$	(35,750	)	$	-
Series A Convertible Redeemable Preferred stock dividend	$	3,600,000			-

The accompanying notes are an integral part of these statements.

5

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Basis of Presentation and Merger

These financial statements represent the consolidated financial statements of Eastern Resources, Inc., and its wholly owned subsidiaries, Elkhorn Goldfields, Inc. and Montana Tunnels, Inc. The term “ESRI” refers to Eastern Resources, Inc., before giving effect to the Merger (defined below), the term “MTMI” refers to Montana Tunnels Mining, Inc., a Delaware corporation, the term “EGI” refers to Elkhorn Goldfields, Inc., a Montana corporation, and the terms “Company,” “we,” “us,” and “our” refer to Eastern Resources, Inc., and its wholly-owned subsidiaries, including MTMI and EGI, after giving effect to the Merger.

On April 6, 2012, pursuant to an agreement and plan of merger of the same date, EGI and MTMI, formerly each a wholly-owned subsidiary of Elkhorn Goldfields LLC, a Delaware limited liability company (“EGLLC” or “Parent”), merged with and into ESRI (the “Merger”) and EGI and MTMI became our wholly owned subsidiaries.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial statements of the Company as of June 30, 2013. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the operating results for the full year. It is recommended that these consolidated financial statements be read in conjunction with the consolidated financial statements and related disclosures for the year ended December 31, 2012 filed with the Securities and Exchange Commission (“SEC”) on April 16, 2013.

Note 1 - Description of Business

EGI and MTMI (collectively, “Elkhorn”) were formed for the purpose of acquiring, holding, operating, selling, and otherwise dealing in assets of mining operations with gold and other metal reserves and exploration potential. Elkhorn’s objective is to operate mines and expand its interests through acquisition and exploration. Elkhorn has one mineral property that has completed the permitting process. That property has developed the 650-foot underground access tunnel to reach the top of the ore body and will finish the process of installing required infrastructure to allow access to the lower levels of ore once sufficient funding is received. In addition, a second property has completed the permitting, except for posting the required reclamation bonding. Lastly, Elkhorn has several mineralized targets in the exploration stage. The permitted or nearly permitted mines include Golden Dream Mine (formerly referred to as the Sourdough Mine) and Montana Tunnels Mine (“Montana Tunnels”), and the mineralized properties available to develop mine plans are East Butte, Gold Hill/Mount Heagan, and Carmody (collectively, the “Elkhorn Project”), and the expansion of the previously operated Diamond Hill Mine. All the mines and properties are located in Jefferson County, Montana, with the exception of the Diamond Hill Mine, which is in Broadwater County, Montana. Elkhorn maintains its principal executive office in Denver, Colorado.

On May 8, 2012, the Company declared a 2 to 1 forward stock split on our Common Stock outstanding in the form of a dividend, with a record date of May 17, 2012, with a payment date of June 8, 2012. We have reflected the effect of this forward stock split on a retroactive basis on all common stock share amounts disclosed throughout this report.

Note 2 - Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation policies are determined by the Chief Financial Officer and are approved by the Chief Executive Officer. Fair value measurements are discussed with the Company’s board of directors, as deemed appropriate. The Company has consistently applied the valuation techniques discussed below in all periods presented.

6

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The carrying amounts of financial instruments, including cash, accounts payable, and accrued liabilities, approximated fair value as of June 30, 2013 and December 31, 2012 because of the relatively short maturity of these instruments.

The Company applies the guidance to financial assets and liabilities measured at fair value on a recurring basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The following assets are measured at fair value on a recurring basis as of June 30, 2013:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(7,371,275	)	$	(7,371,275	)
Warrant liability	$	-	$	-	$	(63,331	)	$	(63,331	)

The following assets are measured at fair value on a recurring basis as of December 31, 2012:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(16,701,404	)	$	(16,701,404	)
Warrant liability	$	-	$	-	$	(204,874	)	$	(204,874	)

Ore Purchase Derivative Contract: Based on: (i) contract terms of the production of 41,481 ounces of gold; (ii) projected future gold prices garnered from GCJ2 Comb Commodity Futures as of June 30, 2013; and (iii) discount rate determined based on the observed weighted average cost capital of a group of publicly traded comparable companies using a discounted cash flow model. The model is most sensitive to the future price of gold and expected delivery of ore.

Warrant Liability: Based on: (i) stock price; (ii) volatility calculated on the average volatility of stock for three publicly traded companies determined to be in a similar industry and with the same market capitalization as the Company; and (iii) risk free rate for the expected term of the option is based on the United States Treasury yield curve in effect on June 30, 2013.

There were no changes to the valuation techniques used during the six months ended June 30, 2013 or the year ended December 31, 2012.

7

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The following table presents information about significant unobservable inputs to the Company’s Level 3 financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

Description	Fair Value		Valuation  Technique	Significant Unobservable  Inputs	Range of Inputs
Ore purchase derivative contract	$	7,371,275	Discounted cash flow model	Production commencement Production period discount rate	April 2014,    24 Months,   25%
Warrant liability	$	63,331	Black-Scholes Model	Volatility	Approximate risk free rate: 1.223%; Expected term: 4.5 years; Volatility: 61.19%

Future increases in the credit adjusted discount rate will result in a decline in the fair value of the ore derivative contracts.

Changes in the estimates of timing production of the ore further out into the future periods would cause a change in the value of the ore derivative liability.

Changes in the estimated future price of gold would cause a change in the value of the ore derivative contract.

Changes in the stock price, volatility, and the approximate risk-free rate would cause a change the value of the warrant liability.

The change in fair value of derivative instrument contract included in the statement of operations was 13,235,632 and ($412,064) for the six months ended June 30, 2013 and 2012, respectively.

The change in valuation of warrant liability was $141,543 and zero for the six months ended June 30, 2013 and 2012, respectively.

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2012:

	Embedded
	Derivative			Warrant Liability
Beginning balance – December 31, 2012	$	(16,701,404	)	$	(204,874	)
New contracts entered into		(3,905,503	)		-
Total gains or losses (realized/unrealized)
Included in earnings		13,235,632			141,543
Transfers in and/or out of Level 3
Ending balance – June 30, 2013	$	(7,371,275	)	$	(63,331	)

8

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The embedded derivative is summarized between related and non-related parties as follows:

Related party embedded derivative	$	6,534,884
Non-related party embedded derivative		836,391
Total embedded derivative	$	7,371,275

Note 3 - Management’s Plan

At June 30, 2013, the Company has not generated any revenues to fund operations. The continuation of the Company as a going concern is dependent upon the ability of the Company to meet financial requirements for mine development and raise additional capital, which will require the issuance of additional debt and/or equity securities. The Company is attempting to raise capital through gold streaming, whereby upfront cash payments are exchanged for a percentage of the future gold production by the Golden Dream Mine. All of the company’s mining projects have been placed in care and maintenance until the Company secures additional financing. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4–Accrued Liabilities

Accrued expenses consist of the following:

	June 30,		December 31,
	2013		2012
Property and mining taxes payable	$	3,363,021	$	3,228,136
Interest		1,782,287		1,450,872
Environmental remediation		377,500		380,000
Payroll and related expenses		398,871		358,411
Other		4,945		38,000
Total	$	5,926,624	$	5,455,419

Note 5 – Customer Deposits

During April, 2011 the Company entered into a Minerals Product Receivables Purchase Agreement (the “MPRPA”), with an affiliate of the Parent. In October, 2012, the MPRPA was amended to sell up to 50% of the first 160,000 ounces of gold produced from the Golden Dream Mine for up-front payments of $25,391,200. As of June 30, 2013, the Company has received $11,680,000 of up-front payments and is obligated to sell 50% of the first 41,481 ounces to the holders of the MPRPA. The following is a reconciliation of the up-front payment and ounces sold under the MPRPA as of June 30, 2013:

In addition, the company, as an inducement for the secured lenders from exercising their right of foreclosure through September 30, 2013, entered into an agreement extending $1,000,000 from the MPRPA

9

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

	Up-front  Payments		Ounces
December 31, 2011	$	10,000,000		33,360
Additions		760,000		2,303
Delivery		-		-
December 31, 2012		10,760,000		35,663
Additions		1,920,000		5,818
Delivery		-		-
June 30, 2013	$	12,680,000		41,481

MPRPA, as amended, requires the Company to pay all proceeds from 50% of the sales of gold in excess of the lesser of $500 per ounce or the latest COMEX spot gold price, if any, to the customers. Additionally, the customers may purchase 15% (prorated if the entire MPRPA is not fully subscribed) of the ounces produced by the mine after the mine has produced in excess of 250,000 aggregate ounces for a purchase price of the lesser of $600 per ounce or the latest COMEX spot gold price. The term of the MPRPA is through the closure of the Golden Dream Mine. Currently the Company estimates reserves at approximately 258,000 ounces of gold.

The MPRPA includes an embedded derivative, which is valued using a discounted cash flow model with the major inputs of: (i) a 25% discount rate, (ii) gold future pricing, (iii) measurement date with the receipt of payment, and (iv) and management’s forecast to produce 72,296 ounces by March 2016. During the six months ended June 30, 2013, the Company recognized $3,905,503 of loss on the ore purchase agreement to reflect the difference between fair value of the derivative contract liability and the agreement. The customer deposit will be reduced by the Company with the delivery of the gold. The fair value of the embedded derivative fluctuates with changes in the price of gold and expected delivery of ore.

The up-front payments of $12,680,000, at June 30, 2013, have been recognized as refundable customer deposits until the gold is sold. The refundable customer deposits are considered current due to the party’s making the payments having the right, upon written notice, at their option to demand repayment of the up-front cash deposit, without interest, for any shortfall in delivered ounces and the uncertainty of the commencement of ore production and the price of gold.

Note 6–Notes Payable

During July 2010, the Company entered into Series A 8% bonds for a total of $5,000,000, of which $1,235,500 was funded. The bonds matured during July 2012, with interest accruing at 8%. With the default, interest on the bonds accrues at 12%. The unpaid interest on the bonds shall be due and payable quarterly in arrears on the last day of each October, January, April, and July commencing in October 2010. The Company will make a bonus payment of $50,000 per bond upon maturity. The loans are currently in default and due on demand.

The holders each received five-year warrants to purchase 0.67 membership units of EGLLC per $50,000 bond at a purchase price of $37,500 per membership unit and on July 31, 2011 an additional five-year warrant to purchase 0.67 membership units of EGLLC per $50,000 bond at a purchase price of $37,500 per membership unit was issued. The warrants expire July 31, 2015. The warrants were valued using the Black-Scholes pricing model and expensed during 2010 and 2011.

	June 30,			December 31,
	2013			2012
Series A 8% bonds	$	919,779		$	919,779
Less current portion		(919,779	)		(919,779	)
	$	-		$	-

10

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Promissory Notes – Related Parties

During 2012 and 2013, the Company entered into a series of promissory notes with related parties for a total of $519,800 during 2013 and $577,260 during 2012. The notes mature on November 30, 2013 and accrue interest at a rate of 6%. The Company paid $371,523 on the notes during 2012.

	June 30,			December 31,
	2013			2012
Promissory Notes	$	725,537		$	205,737
Less current portion		(725,537	)		(205,737	)
	$	-		$	-

Promissory Notes

During 2012, the Company entered into a promissory note with an un-related party for a total of $500,000. The note originally matured on March 31, 2013 and accrued interest at a rate of 6%. In March 2013, this note was extended to May 31, 2013 and the interest rate was amended to 8%. As of June 30, 2013, this loan is in default.

	June 30,			December 31,
	2013			2012
Promissory Notes	$	500,000		$	500,000
Less current portion		(500,000	)		(500,000	)
	$	-		$	-

Related Party Convertible Bridge Loans

During February 2012, the Company entered into three convertible bridge loans with a related parties totaling $1,800,000 due in August 2012. The loans were unsecured and called for 12% annual interest on the outstanding unpaid principal. The bridge loans are considered in default and currently bear interest at the 14% default rate.

Unrelated Party Convertible Bridge Loans

During April 2012, the Company entered into a bridge loan with an unrelated party for $100,000, which was paid in full during March 2013.

	June 30,		December 31,
	2013		2012
Convertible bridge loans principal amount - related party	$	1,800,000	$	1,800,000
Convertible bridge loans principal amount - unrelated party		-		100,000
Net convertible bridge loans	$	1,800,000	$	1,900,000

11

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 7 - Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate

During May 2010, the Company entered into a pledge agreement with the Parent and an investor group.  Through the agreement the Company’s assets serve as collateral for multiple loans of the Parent to the investors group. The agreement states that all loans and redeemable interest are jointly and severally obligations of the Parent and the investor group may allocate payments at its discretion.   Although the Company is not a maker or guarantor on the loans, the loans have been “pushed down” to the Company in the accompanying consolidated financial statements in accordance with Statement of Accounting Bulletin No 54, as all assets have been pledged as collateral and repayment is dependent upon the cash flows from the Company’s operations.

$5,000,000 Series A Convertible notes were due in December 2007. During 2007, the notes were extended to December 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the convertible notes accrue interest at 18% per annum, compounded quarterly, and are due in April 2015. Interest only payments are to be made quarterly. At the election of the holder, principal amounts of the notes are convertible into $50,000 per membership unit of the Parent. The Company’s mining properties and equipment have been pledged as collateral to these notes. The balances of these notes were $5,791,701 at June 30, 2013 and December 31, 2012.

During 2007, an affiliate of the Parent entered into a loan for $8,050,000. The loan was due May 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the loans accrue interest at 18% per annum, compounded quarterly, and are due April 2015. At the election of the holder, the principal amount of the loan can be exchanged for $13,416,666 of Series A Bonds of the Parent. The Company’s mining properties and equipment have been pledged as collateral to this note. The balance of this note was $9,680,125 at June 30, 2013 and December 31, 2012.

During 2008, an affiliate of the Parent entered into a loan for $5,000,000. The loan was due January 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the loans accrue interest at 18% per annum, compounded quarterly, and are due April 2015. At the election of the holder, the principal amount of the loan can be exchanged for shares of an investment of the Parent at $1.00 per share, exchanged for the affiliate’s assets, or exchanged for bonds of an investment of the Parent at $1.00 principal for each $1.00 par amount of a bond. The Company’s mining properties and equipment have been pledged as collateral to this note. The balance of this note was $6,108,022 at June 30, 2013 and December 31, 2012.

Redeemable obligation of Parent and its affiliate.

An affiliate of the Parent offered redeemable options to certain debt holders (“Optionee”) to purchase membership units in an equity owner of the Parent. The affiliate as Optionor grants to each Optionee the option to put all or any portion of the membership units to the affiliate. The Company’s mining properties and equipment have been pledged as collateral to the redeemable interest. The balance of this redeemable option was $5,950,000 at June 30, 2013 and December 31, 2012.

The following is a summary of the loans as of the six months ended June 30, 2013 and year ended December 31, 2012:

	June 30,		December 31,
	2013		2012
Total push-down debt of Parent and its affiliate	$	21,579,848	$	21,579,848
Push-down redeemable obligation of Parent and its affiliate		5,950,000		5,950,000
Total push-down debt and redeemable obligation of Parent and its affiliate		27,529,848		27,529,848
Push-down interest of the Parent and its affiliate		31,533,358		26,448,883
Total combined push-down debt components	$	59,063,206	$	53,978,731

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EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

The Parent and its affiliate have not made the interest payments on the notes or redeemable obligation; thus, an event of default may be present. Because of the non-payment of interest, the Company has classified the debt and redeemable obligation as current.

Note 8 – Shareholders’ Deficit

Common Stock

As of June 30, 2013, the authorized share capital of the Company consisted of 300,000,000 shares of common stock with a par value of $0.001 per share. There were 198,550,000 shares of common stock issued and outstanding as of June 30, 2013.

On June 8, 2012 the Company declared a 2 for 1 forward stock split on the Company’s common stock outstanding in the form of a dividend with a Declaration Date of May 8, 2012 and a Record Date of May 17, 2012. The stock split entitled each common stock shareholder as of the Record Date to receive one additional share of common stock for each share owned. All share and per share amounts presented in the accompanying consolidated financial statements have been restated to reflect this change.

During May and June 2012, the Company completed a private placement for 150,000 and 230,000 units for $150,000 and $230,000, respectively.  Each unit consisted of one share of common stock and a warrant, representing the right to purchase one-half share of common stock, exercisable for a period of five (5) years from issuance, at an exercise price of $1.50 per whole share.  The shares of common stock contained in the units and underling the warrants carry mandatory registration rights. Subsequent to the private placement the investors with 65,000 units agreed to renounce all right, title and interest in and to the warrants contained in the private placement units.

The Company agreed to file the registration statement no later than ninety calendar days following the final closing of the private placement and use its best efforts to ensure that such registration statement is declared effective within one hundred fifty calendar days of filing with the SEC (the “Effectiveness Deadline”).

If the Company is late in filing the registration statement or if the registration statement is not declared effective by the Effectiveness Deadline, monetary penalties payable by the Company to each holder of registrable securities will commence to accrue and cumulate at a rate equal to 1.0% of the purchase price per share paid by such holder for the registrable securities for each full period of 30 days that (i) the Company is late in filing the registration statement or (ii) the registration statement is late in being declared effective by the SEC (which shall be pro-rated for any period less than 30 days); provided, however, that in no event shall the aggregate of any such penalties exceed 10% of the purchase price per share paid by such holder for the registrable securities. Notwithstanding the foregoing, no payments shall be owed with respect to any period during which all of the holder’s registrable securities may be sold by such holder under Rule 144 or pursuant to another exemption from registration. Moreover, no such payments shall be due and payable with respect to any registrable securities the Company is unable to register due to limits imposed by the SEC’s interpretation of Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).

The Company has agreed to maintain the effectiveness of the registration statement through the earlier of second anniversary of the date the registration statement is declared effective by the SEC or until Rule 144 of the Securities Act is available to the holders to allow them to sell all of their registrable securities thereunder. The holders of any registrable securities removed from the registration statement as a result of any Rule 415 or other comments from the SEC shall have “piggyback” registration rights for the shares of common stock or common stock underlying such warrants with respect to any registration statement filed by us following the effectiveness of the registration statement which would permit the inclusion of these shares. As of June 30, 2013, the Company has accrued a $38,000 for potential penalties related to the registration of the shares from the private stock sale.

13

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Convertible Redeemable Preferred Stock

The authorized share capital of the Company includes 10,000,000 shares of Series A Convertible Redeemable Preferred Stock (“Preferred Stock”), issued April 6, 2012 with a par value of $0.001 per share, all 10,000,000 shares were outstanding at June 30, 2013. The holder of the Preferred Stock is entitled to receive, out of funds legally available the cumulative non-compounding preferential dividends at the rate of 12% of the stated value of $6.00 per share per year. No dividends may be declared or paid on the shares of common stock or any other capital stock of the Company so long as any shares of the Preferred Stock remain outstanding. As of June 30, 2013, no dividends have been declared on the Preferred Stock. However, the Company has accrued dividends in arrears totaling $8,900,000 to the benefit of the Preferred Stock shareholders. The Preferred Stock has been designated to pay off the push down obligation which has been collateralized by assets of the Company. As money is distributed to the holder of the Preferred Stock either as a dividend or in redemption, it must be used to pay the interest and principle on the push down obligations that are reflected in the accompanying financial statements. The holders of the Preferred Stock have the option to redeem the Preferred Stock six months from the date of issuance or the date that the Company produces 25,000 ounces of gold, at any time prior to the third anniversary of issuance out of legally available funds. Under Delaware law, the board of directors has the discretion to determine, in good faith, whether there are sufficient legally available funds to make redemption. A surplus alone does not constitute legally available funds; the board of directors must determine if the funds available are sufficient to cover the redemption without making the Company insolvent. The contingency related to redemption has not been met because the redemption of the Preferred Stock would result in the insolvency of the Company. The Preferred Stock has been recorded as a deemed distribution at its estimated fair value of $13,656,708 based upon the discounted cash flows to be received by stock holders as follows:

Initial redemption value of preferred stock	$	60,000,000
Less:  “push down” debt plus accrued interest equal  to be paid from the proceeds of the preferred stock		(46,343,292	)
Net excess cash flow attributable to the preferred  stock at the date of acquisition	$	13,656,708

Stock Option Plan

The Company's stockholders approved the 2012 Equity Incentive Plan (the “2012 Plan") on April 5, 2012 pursuant to which a total of 20,000,000 shares of common stock have been reserved for issuance to eligible employees, consultants, and directors of the Company. The 2012 Plan provides for awards of non-statutory stock options, incentive stock options, stock appreciation rights, performance share awards, and restrictive stock awards within the meaning of Section 422 of the IRC, as amended and stock purchase rights to purchase shares of the Company's common stock.

The 2012 Plan is administered by the Board of Directors, which has the authority to select the individuals to whom awards will be granted and to determine whether and to what extent stock options and stock purchase rights are to be granted, the number of shares of common stock to be covered by each award, the vesting schedule of stock options, and all other terms and conditions of each award. Stock options have a maximum term of ten years. It is the Company's practice to grant options to employees with exercise prices equal to or greater than the estimated fair market value of its common stock. The 2012 Plan shall terminate within ten years.

The fair value of each award is estimated on the date of grant and recognized as expense over the service period which is generally the vesting period. Stock option values are estimated using the Black Scholes option valuation model, which requires the input of subjective assumptions, including the expected term of the option award, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management judgment. During the six months ended June 30, 2013 the Company recorded stock based compensation expense of $1,511,617, associated with stock options. As of June 30, 2013, the Company has estimated $5,345,851 of future compensation costs related to the unvested portions of outstanding stock options which is expected to be recognized over the next three years.

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EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Stock based compensation related to common stock issued to a third party vendor, during 2012, in exchange for services was valued at $1,801,054, with no forfeiture rate, the stock options vest over one year. During the six months ended June 30, 2013, the Company recorded $570,972, in consulting expense. As of June 30, 2013, the Company has estimated no future expense related to the unvested portions of outstanding stock options.

Stock option activity for the year ended December 31, 2012 and the six months ended June 30, 2013 was as follows:

				Weighted
	Stock			Average
	Options			Exercise Price
Outstanding - December 31, 2011		-		$	-
Granted		12,920,000			0.96
Forfeited/canceled		(260,000	)		1.00
Exercised		-			-
Outstanding - December 31, 2012		12,660,000			0.96
Granted		30,000			1.00
Forfeited/canceled		(50,000	)		1.00
Exercised		-			-
Outstanding – June 30, 2013		12,640,000		$	0.96

The following table presents the composition of options outstanding and exercisable:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number		Price*		Life*		Number		Price*
$	0.75		2,000,000	$	0.75		8.82		2,000,000	$	0.75
$	1.00		10,610,000		1.00		8.77				-
$	1.00		30,000		1.00		9.84		-		-
Total – June 30, 2013			12,640,000	$	0.96		8.82		2,000,000	$	0.75

*Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

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

	2013	2012
Approximate risk-free rate	0.97%	0.89% - 1.42%
Average expected term	6.5 years	5.5 - 6.5 years
Dividend yield	-%	-%
Volatility	80.13%	91.33% - 92.33%
Estimated fair value of total options granted	$0.22	$0.86 - $0.90

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EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Note 9 - Related Party Transactions

A related party has funded $10,920,000 of the MPRPA which entitles them to 36,148 of the 41,481 ounces of gold to be sold in accordance to the MPRPA.

Upon the closing of the Merger, the Company entered into a management services agreement with Black Diamond Financial Group, LLC to provide certain management, financial and accounting services for $15,000 per month plus $200 per hour for each additional hour of service in excess of 125 hours to the Company. The management services agreement has an initial term of three years and may be extended thereafter for successive one-year terms. Management fee expense was $90,000 for the six months ended June 30, 2013 and is included in general and administrative expenses

During February 2012, the Company entered into convertible bridge loans with related parties totaling $1,800,000 due in August 2012. Because of the non-payment under the terms of the bridge loans, the bridge loans are considered in default and accruing interest at the default interest rate of 14%. (Note 6)

During 2013 and 2012, the Company entered into a series of promissory notes with related parties for $519,800 and $577,260, respectively. The notes mature on November 30, 2013 and accrue interest at a rate of 6%. During 2012, promissory notes totaling $371,523 were paid. (Note 6)

Note 10 - Commitments and Contingencies

Environmental Matters

The Company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the public health and environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.

Estimated future reclamation costs are based principally on legal and regulatory requirements. At June 30, 2013 and December 31, 2012, $25,612,062 and $24,640,321, respectively, was accrued for reclamation costs relating to currently producing mineral properties in accordance with asset retirement obligation guidance.

On May 24, 2010, the Environmental Protection Agency (“EPA”) issued an action memorandum which documented the determination that soil removal was necessary to mitigate threats posed by elevated levels of lead and arsenic in the soil located on property in close proximity to MTMI.  The work of clean-up conducted by the EPA of the site commenced in June 2010 and was completed by August of the same year.  On August 26, 2010, the Company and the EPA entered into an access and compensation agreement which detailed the responsibilities of both the EPA and the Company with respect to the clean-up and disposal of contaminated soils from the Site.  On October 26, 2011 the EPA proposed a settlement of $377,500.  On November 04, 2011, the Company agreed to the EPA proposed amount of $377,500 but added a stipulation that the amount be payable over time depending upon the status of the Company’s operations.  The $377,500 settlement will be paid in 35 monthly installments of $2,500 and a final balloon payment of $292,500.

Property Taxes

The Company is not current with its 2012, 2011, 2010 and 2009 property and mining taxes. The total amount past due as of June 30, 2013 and December 31, 2012 is $3,363,021 and $3,228,136, respectively. The Company is in the process of assessing the implications of the unpaid property taxes.

On June 11, 2013, the Company entered into a Tax Payment Agreement with Jefferson County, Montana. The agreement outlined a quarterly payment schedule beginning on June 15, 2013. The payment schedule estimates a three year payoff of delinquent property and mining taxes.

16

EASTERN RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

Payroll Taxes

The Company is not current with its 2012 and 2013 payroll taxes. The total amount past due as of June 30, 2013 is approximately $111,000. The Company is in the process of assessing the implications of the unpaid payroll taxes.

Standstill Agreement

A standstill agreement with the secured lenders of the push-down debt and redemption obligation of the Parent and its affiliate (Note 7) was executed in May 2013. The standstill agreement prevents the lenders from exercising foreclosure rights against the Company through September 30, 2013. In consideration of the standstill agreement, the Company extended $1,000,000 of the MPRPA (Note 5) to the lender entitling them to 3,030 ounces.

Note 11 – Subsequent Events

During July 2013, the Company completed the closing on 200,000 units at $0.50 per unit for an aggregate of $200,000 in a private placement of up to 3,000,000 units.  Each unit consisted of one share of common stock and a warrant, representing the right to purchase one share of common stock, exercisable for a period of five (5) years from issuance, at an exercise price of $0.75 per share.  The shares of common stock contained in the units and underling the warrants carry mandatory registration rights.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statement Regarding Forward-Looking Information

This report contains forward-looking statements. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

As used in this Current Report, unless otherwise stated or the context clearly indicates otherwise, the term “ESRI” refers to Eastern Resources, Inc., before giving effect to the Merger (defined below), the term “MTMI” refers to Montana Tunnels Mining, Inc., a Delaware corporation, the term “EGI” refers to Elkhorn Goldfields, Inc., a Montana corporation, and the terms “Company,” “we,” “us,” and “our” refer to Eastern Resources, Inc., and its wholly-owned subsidiaries, including MTMI and EGI, after giving effect to the Merger.

Background, General Overview and Recent Developments

Merger with MTMI and EGI

On April 6, 2012, (i) MTMI Acquisition Corp., a Delaware corporation formed on February 27, 2012 and a wholly-owned subsidiary of ESRI (“MTMI Acquisition Sub”), merged with and into MTMI, a wholly-owned subsidiary of Elkhorn Goldfields LLC, a Delaware limited liability company (“EGLLC”), with MTMI as the surviving corporation and (ii) EGI Acquisition Corp., a Montana corporation formed on February 27, 2012 and a wholly-owned subsidiary of ESRI (“EGI Acquisition Sub”), merged with and into EGI, a wholly-owned subsidiary of EGLLC, with EGI as the surviving corporation (collectively, the “Merger”). As a result of the Merger, MTMI and EGI became our wholly-owned subsidiaries. In conjunction with and concurrent upon the closing of the Merger, we split off our legacy film making business, Buzz Kill, Inc.

As the result of the Merger, which was accounted for as a reverse acquisition, a discussion of the past financial results of ESRI is not pertinent, and the historical financial results of MTMI and EGI, the accounting acquirers, prior to the Merger are considered the historical financial results of the Company.

The following discussion highlights our plan of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. The following discussion and analysis are based on MTMI’s and EGI’s financial statements, which we have prepared in accordance with U.S. generally, accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.

The following discussion and analysis provides information which management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The discussion should be read in conjunction with our financial statements and related notes and the other financial information included elsewhere in this Quarterly Report.

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General Overview

Elkhorn Goldfields, Inc. and Montana Tunnels Mining, Inc. (referred to together as “Elkhorn”) were formed for the purpose of acquiring, holding, operating, selling, and otherwise dealing in assets of mining operations with gold and other metal reserves and exploration potential. Elkhorn’s objective is to operate mines and expand its interests through acquisition and exploration. Elkhorn has one mineral property, the Golden Dream Mine, which has completed the permitting process, and, upon obtaining sufficient capital, will continue the process of installing required infrastructure. The Golden Dream Mine has developed the 650 foot underground access ramp to reach the upper levels of the ore body. A second Elkhorn property, the Montana Tunnels Mine, has completed permitting except for posting a required reclamation bond. In addition, Elkhorn has several mineralized targets which are in the exploration stage. The mineralized targets are the East Butte, Gold Hill/Mount Heagan, Carmody, and the expansion of the previously operated Diamond Hill Mine. All the mines and properties are located in Jefferson County, Montana with the exception of the Diamond Hill Mine which is in Broadwater County, Montana. Elkhorn maintains its principal executive office in Denver, Colorado.

Expansion of Minerals Product Receivables Purchase Agreement

On August 17, 2012, the Company entered into a letter of intent with Black Diamond Financial Group, LLC (“Black Diamond”).  Pursuant to this letter agreement, the ounces of gold payable under the existing Minerals Product Receivables Purchase Agreement (the "MPRPA") between the Company and Black Diamond will be increased by 37,640 ounces, from 33,360 ounces to a total of 71,000 ounces.  The gold payable rate under the MPRPA will be reduced from 80% to 50% with a production cost paid to the Company of $500 per ounce on delivery.  The tail, which is due after the Golden Dream Mine has produced an initial 250,000 ounces, will be increased from 6.5% to 15% at a production cost of $600 per ounce paid to the Company at delivery.  The Company will realize up to $12,500,000 from the forward sale of the full 37,640 ounces which proceeds received to date have been recognized as refundable customer deposits until the gold is sold.

Funds from the successful sale of these additional ounces of gold will be used to continue the development of the Company's Golden Dream Mine.  The Company has completed approximately 650 feet of underground development, has complete surface infrastructure, and most recently installed a water treatment system giving it the capability to fully develop the Golden Dream Mine.

Black Diamond did not complete the financing detailed in the letter of intent described above. The Company subsequently modified the MPRPA to an Amended and Restated MPRPA based on the terms stated in the letter of intent. The Amended and Restated MPRPA will allow the Company to realize up to $15,391,200 in additional proceeds from the forward sale 46,640 ounces of gold, which proceeds received to date have been recognized as refundable customer deposits until the gold is sold. The MPRPA, as amended and restated, will allow for a total of 80,000 ounces of gold to be sold and 50% of the production from the Golden Dream Mine will be allocated toward the MPRPA at a production cost paid to the Company of $500 per ounce on delivery. The tail, which is due after the Golden Dream Mine has produced an initial 250,000 ounces, will be 15% at a production cost of $600 per ounce paid to the Company at delivery. The amounts above will be prorated if the Amended and Restated MPRPA is not fully subscribed.

On September 28, 2012, an investor subscribed for $660,000 of gold output under the Amended and Restated MPRPA. The $660,000 payment has been recognized as a refundable customer deposit until the gold is sold. Pursuant to this agreement, the ounces of gold payable under the existing MPRPA will be increased by 2,000 ounces, from 33,360 ounces to a total of 35,360 ounces. The gold payable rate under the MPRPA will be reduced from 80% to 50% with a production cost paid to the company of $500 per ounce upon delivery.

On October 30, 2012, an investor subscribed for $100,000 of gold output under the Amended and Restated MPRPA.  Pursuant to this agreement, the ounces of gold payable under the existing MPRPA, which was last expanded on September 28, 2012, will be increased by an additional 303 ounces, from 35,360 ounces to a total of 35,663 ounces.

19

In March, 2013, a related party investor subscribed for $920,000 of gold output under the Amended and Restated MPRPA.  Pursuant to this agreement, the ounces of gold payable under the existing MPRPA, which was last expanded on February 28, 2013, will be increased by an additional 2,788 ounces, from 35,663 ounces to a total of 38,451 ounces.

In May 2013 (rather than in February as previously reported), we executed a standstill agreement with certain secured lenders of EGLLC.  The standstill agreement prevents the lenders from exercising foreclosure rights against us through September 30, 2013.  In consideration of the standstill agreement, we extended $1,000,000 of the MPRPA to these secured lenders entitling them to 3,030 ounces of gold under the MPRPA.

The Company has tested for impairment with gold prices at $1,100 and production costs at $625 per ounce and determined no impairment deemed necessary.

Results from Operations

Three and six months ended June 30, 2013 as compared with the three and six months ended June 30, 2012.

Revenue from the Sale of Gold

Elkhorn had no revenues from the sale of gold from the Golden Dream or the Montana Tunnels Mines in 2013 or 2012.

Operating Expenses

General and administrative expense for the three and six months ended June 30, 2013 was $1,703,226 and $3,514,089, respectively, as compared to $2,579,357 and $3,010,833 for the three and six months ended June 30, 2012, respectively. In June, 2012, development of the Golden Dream Mine commenced which resulted in the capitalization of payroll and related costs. General and administrative expenses increased in 2013 due to an increase in professional fees and compensation expense related to the employee stock option plan and stock options related to a corporate advisory agreement.

Accretion expense for the three and six months ended June 30, 2013 was $411,932 and $971,740, respectively, as compared to $340,741 and $703,981 for the three and six months ended June 30, 2012, respectively. Management re-evaluates annually the timing of the deferred site closure and reclamation costs related to the Montana Tunnels Mine mill and mine sites. Management anticipates that reclamation of the Montana Tunnels Mine and mill will be completed in 2026, an extension of several years from previous estimates, and of the EGI Golden Dream Mine, in 2019. The estimate extension is due to management’s pursuing financing to commence development of the Montana Tunnels Mine M-Pit, which would extend the mine life by nine years. The total cost of reclamation is consistent with previous estimates; however, by extending the timeline, the related accretion expense has been increased. Estimated future costs are discounted to their present value using a 6% discount rate for EGI and a 7.5% discount rate for MTMI. During the three months ended March 31, 2013, the Company adjusted the discount rate on EGI from 12% to 6%.

Mine care and maintenance for the three and six months ended June 30, 2013 was $193,842 and $465,893, respectively, as compared to $299,434 and $399,124 for the three and six months ended June 30, 2012, respectively. The increase in mine care and maintenance was due to certain expenses that were capitalized as part of the development of the Golden Dream Mine in 2012 and which are not being capitalized in 2013 due to the Golden Dream Mine development having been put in care and maintenance starting in the second quarter of 2012.

Depreciation expense for the three and six months ended June 30, 2013 was $7,920 and $9,237, respectively, as compared to $1,041 and $2,082 for the three and six months ended June 30, 2012, respectively. With the exception of buildings, depreciation is calculated on the units of production basis over the remaining proven and probable reserves. Depreciation on buildings is calculated on a straight-line basis. Montana Tunnels Mine ceased mining during 2008 after completion of the L-Pit and completed milling of stockpiled ore during April 2009, following which the mine was placed on care and maintenance. Capitalized depreciation expense related to the development of the Golden Dream Mine for the three and six months ended June 30, 2013 was zero, compared to $39,546 and $78,678 for the three and six months ended June 30, 2012, respectively.

Total operating expenses for the three and six months ended June 30, 2013 was $2,316,920 and $4,960,959, respectively, as compared to $3,220,573 and $4,116,020 for the three and six months ended June 30, 2012, respectively.

20

Other Income and Expense

Interest expense for the three and six months ended June 30, 2013 was $2,322,311 and $5,291,776, respectively, as compared to $825,963 and $4,690,590 for the three and six months ended June 30, 2012, respectively.

Interest income for the three and six months ended June 30, 2013 was $29,396 and $29,450, respectively, as compared to $40,040 and $39,976 for the three and six months ended June 30, 2012, respectively. Interest income is earned from restricted cash held directly by a surety in the form of certificates of deposit related to reclamation obligations. Interest income earned throughout the year is remitted to the Company in the fourth quarter of each calendar year.

Loss on ore purchase derivatives for the three and six months ended June 30, 2013 was $2,034,196 and $3,905,504, respectively, as compared to zero for the three and six months ended June 30, 2012. This loss relates to the MPRPA embedded derivative fair value based on the price of gold at the MPRPA agreement date and the contract price of gold in the agreement in addition to the estimated production timing.

The change in fair value of the embedded derivative for the three and six months ended June 30, 2013 was $11,786,319 and $13,235,632, respectively, as compared to ($127,841) and ($412,064) for the three and six months ended June 30, 2012, respectively. The gain relates to the change in projected future gold prices garnered from GCJ2 combined commodity futures of the MPRPA for the three and six months ended June 30, 2013 and June 30, 2012, respectively, to reflect the loss in the change in fair value of the derivative instrument.

Gain on valuation of warrant liability for the three and six months ended June 30, 2013 was $11,705 and $141,543, respectively, as compared to zero for the three and six months ended June 30, 2012. This gain relates to the recognition of a change in fair value on the warrants issued in 2012 in connection with the private placement; the change in value is due to the decrease in stock price.

Going Concern

Our significant debt obligations and cumulative losses create substantial doubt about our ability to continue as a going concern. This means that there is substantial doubt that the Company can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for development and operations. We believe that the either the consummation of a private placement or completed forward sale of gold under the expanded MPRPA will provide this additional capital. This capital would put the Company in a position that would enable the Golden Dream Mine to begin extracting and selling minerals. We believe that revenues so generated from the Golden Dream Mine would generate cash flow sufficient for operations of the Golden Dream Mine, care and maintenance of the Montana Tunnels Mine and other general and administrative expenses and payment of debt obligations. We have not generated revenues since the Montana Tunnels Mine discontinued mining in 2008 and there is no assurance we will ever reach that point. Additionally, there can be no assurance we will be successful in raising additional debt or equity financing or further expand the MPRPA, to fund our operations on terms agreeable to us. Failure to reach our capital targets could adversely affect our ability to continue in operation.

Liquidity and Capital Resources

Overview

We have funded our operations and mine development primarily through issuances of debt and equity securities. However, to reach full production of the Golden Dream Mine and begin the “M” pit production at the Montana Tunnels Mine, we plan to raise up to $200 million in additional capital in 2013. We believe that raising the additional capital will allow the Golden Dream Mine to reach a productive status during the third quarter of 2014 and for the Montana Tunnels Mine to be at or near commercial production sometime during the third quarter of 2015.

We expect to invest $8.5 million of capital to enable the recommencement of development of the Golden Dream Mine focusing on development of the primary access ramp into the main ore body during the early months of 2014. We expect to invest $140 million in capital and pre-production development to bring the “M” Pit expansion at the Montana Tunnels Mine into commercial production.

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These projections are based on certain assumptions including, but not limited to, our success in raising the required capital in our planned private placements. There can be no assurance that we will be successful in our capital raising efforts. Failure to reach our capital targets could adversely affect our ability to achieve our target projections.

Cash

At June 30, 2013, the Company had cash of $30,123, compared to cash of $113,505 at December 31, 2012.

Discussion of changes in cash flows for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012.

Cash used in operating activities was $436,399 for the six months ended June 30, 2013 as compared to cash used in operating activities of $595,541 for the six months ended June 30, 2012. The cash used in operating activities for the six months ended June 30, 2013 was attributable to net loss of $1,784,729, non-cash charges of ($290,515) and net increases in operating assets and liabilities of $1,638,845. The cash used in operating activities for the six months ended June 30, 2012 was attributable to net loss of $9,168,177, non-cash charges of $6,660,475 and net increases in operating assets and liabilities of $1,912,161. The impact of changes in operating assets and liabilities may change in future periods, depending on the timing of each period end in relation to items such as internal payroll and billing cycles, payments from customers, payments to vendors, and interest payments. Non-cash activity consisted primarily of debt discount amortization, accretion expense, losses on and changes in fair value of the ore purchase derivative, stock based compensation, and interest on the push-down debt of EGLLC.

Cash used in investing activities was $52,843 for the six months ended June 30, 2013 as compared to cash used in investing activities of $1,248,890 for the six months ended June 30, 2012. Cash used in investing activities for the six months ended June 30, 2013 and 2012 was used to develop the Golden Dream Mine, purchase mining equipment and fund additional bonding requirements related to the Golden Dream Mine.

Cash provided by financing activities was $405,860 for the six months ended June 30, 2013 as compared to cash provided by financing activities of $1,533,580 for the six months ended June 30, 2012. Cash provided by financing activities for the six months ended June 30, 2013 included proceeds from the issuance of debt of $519,800, payments on debt of $100,000, and payments on capital lease obligations of $13,940. Cash provided by financing activities for the six months ended June 30, 2012 included proceeds from the issuance of debt of $1,910,000, proceeds from the sale of common stock of $380,000, payments on debt of $480,000, payments on capital lease obligations of $176,420, and distributions to shareholders of $100,000.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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 Exchange Act of 1934 (the “Exchange Act”) is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

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Under the supervision and with the participation of our senior management, including our Chief Executive Officer and our Chief Financial Officer, we performed an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of June 30, 2013, our disclosure controls and procedures were not effective to provide reasonable assurance that material information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. Management’s Report on Internal Control over Financial Reporting in our Annual Report on Form 10-K for the year ended December 31, 2012, discloses the material weaknesses of the Company.

The Company does not have controls in place to insure that legal agreements are read and assessed to determine that the appropriate financial statement ramifications and disclosures are presented in the Company’s financial statements and notes thereto.

Changes in Internal Control over Financial Reporting

There were no changes in ESRI’s internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of June 30, 2013, ESRI was not a party to nor was it aware of any existing, pending or threatened lawsuits or other legal actions involving it.

ITEM 1A. RISK FACTORS

For a discussion of the risk factors impacting our business, we refer you to our Annual Report on Form 10-K filed with the SEC on April 16, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During July 2013, we completed the closing on 200,000 units at $0.50 per unit for an aggregate of $200,000 in a private placement of up to 3,000,000 units.  Each unit consisted of one share of our common stock and a warrant, representing the right to purchase one share of our common stock, exercisable for a period of five (5) years from issuance, at an exercise price of $0.75 per share.  The shares of common stock contained in the units and underling the warrants carry mandatory registration rights.

The transaction described above was exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D as promulgated thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the fiscal quarter ended June 30, 2013, the Company reported no lost time accidents.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS.

The following exhibits are included as part of this report:

Exhibit No.		Description
4.1		Form of July 2013 Unit Private Placement Offering Warrant
10.1	*	Inter-Creditor and Standstill Agreement dated as of May 13, 2013
10.2		Form of July 2013 Unit Private Placement Offering Subscription Agreement
31.1	*	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2	*	Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS	*	XBRL Instance Document***
101.SCH	*	XBRL Schema Document***
101.CAL	*	XBRL Calculation Linkbase Document***
101.DEF	*	XBRL Definition Linkbase Document***
101.LAB	*	XBRL Label Linkbase Document***
101.PRE	*	XBRL Presentation Linkbase Document***

* Filed herewith.

** This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

*** This XBRL exhibit is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 19, 2013
	EASTERN RESOURCES, INC.
	By:	/s/Patrick W. M. Imeson
	Patrick W. M Imeson, Principal Executive
	Officer

By:	/s/Eric Altman
Eric Altman, Principal Financial Officer

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EX-4.1

Warrant Certificate No. _____

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

Effective Date:  __________ __, 2013 Void After:  __________ __, 2018

EASTERN RESOURCES, INC.

WARRANT TO PURCHASE COMMON STOCK

Eastern Resources, Inc., a Delaware corporation (the “Company”), for value received on __________ __, 2013 (the “Effective Date”), hereby issues to [____________________] (the “Holder”) this Warrant (the “Warrant”) to purchase an aggregate of [_______________] whole shares (each such share as from time to time adjusted as hereinafter provided being a “Warrant Share” and all such shares being the “Warrant Shares”) of the Company’s Common Stock (as defined below), at the Exercise Price (as defined below), as adjusted from time to time as provided herein, on or before __________ __, 2018 (the “Expiration Date”), all subject to the following terms and conditions. Unless otherwise defined in this Warrant, terms appearing in initial capitalized form shall have the meanings ascribed to them in that certain Subscription Agreement between the Company and the purchaser signatory thereto pursuant to which this Warrant was issued (the “Agreement”). This Warrant is one of a series of warrants of like tenor that have been issued in connection with the Company’s private placement offering of units (the “Offering”), solely to accredited investors and/or non-U.S. investors, in accordance with, and subject to, the terms and conditions described in the Subscription Agreement.

As used in this Warrant, (i) “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York, New York, are authorized or required by law or executive order to close; (ii) “Common Stock” means the common stock of the Company, par value $0.001 per share, including any securities issued or issuable with respect thereto or into which or for which such shares may be exchanged for, or converted into, pursuant to any stock dividend, stock split, stock combination, recapitalization, reclassification, reorganization or other similar event; (iii) “Exercise Price” means $0.75 per whole share of Common Stock, subject to adjustment as provided herein; (iv) “Trading Day” means any day on which the Common Stock is traded on the primary national or regional stock exchange on which the Common Stock is listed, or if not so listed, the OTC Bulletin Board, if quoted thereon, is open for the transaction of business; and (v) “Affiliate” means any person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a person, as such terms are used and construed in Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

1. DURATION AND EXERCISE OF WARRANTS

(a)          Exercise Period. The Holder may exercise this Warrant in whole or in part on any Business Day on or before 5:00 P.M., Eastern Time, on the Expiration Date, at which time this Warrant shall become void and of no value.

(b)          Exercise Procedures.

(i)          While this Warrant remains outstanding and exercisable in accordance with Section 1(a), in addition to the manner set forth in Section 1(b)(ii) below, the Holder may exercise this Warrant in whole or in part at any time and from time to time by:

(A)         delivery to the Company of a duly completed and executed copy of the Notice of Exercise attached as Exhibit A (the “Notice of Exercise”);

(B)         surrender of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder; and

(C)         payment of the then-applicable Exercise Price per share multiplied by the number of Warrant Shares being purchased upon exercise of the Warrant (such amount, the “Aggregate Exercise Price”) made in the form of cash, or by certified check, wire transfer, bank draft or money order payable in lawful money of the United States of America or in the form of a Cashless Exercise to the extent permitted in Section 1(b)(ii) below.

(ii)         In addition to the provisions of Section 1(b)(i) above, if any time after the first anniversary of the date of issuance of this Warrant, a registration statement covering the resale of the Warrant Shares by the Holder is not effective with the Securities and Exchange Commission, the Holder may, in its sole discretion, exercise all or any part of the Warrant in a “cashless” or “net-issue” exercise (a “Cashless Exercise”) by delivering to the Company (1) the Notice of Exercise and (2) the original Warrant, pursuant to which the Holder shall surrender the right to receive upon exercise of this Warrant, a number of Warrant Shares having a value (as determined below) equal to the Aggregate Exercise Price, in which case, the number of Warrant Shares to be issued to the Holder upon such exercise shall be calculated using the following formula:

X	=	Y * (A - B)
		A

2

with:	X =	the number of Warrant Shares to be issued to the Holder
	Y =	the number of Warrant Shares with respect to which the Warrant is being exercised
	A =	the fair market value per share of Common Stock on the date of exercise of this Warrant
	B =	the then-current Exercise Price of the Warrant

Solely for the purposes of this paragraph, “fair market value” per share of Common Stock shall mean (A) the average of the closing sales prices, as quoted on the primary national or regional stock exchange on which the Common Stock is listed, or, if not listed, the OTC Bulletin Board or any tier of the OTC Markets if quoted thereon, on the twenty (20) trading days immediately preceding the date on which the Notice of Exercise is deemed to have been sent to the Company, or (B) if the Common Stock is not publicly traded as set forth above, as reasonably and in good faith determined by the Board of Directors of the Company as of the date which the Notice of Exercise is deemed to have been sent to the Company.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for such shares shall be deemed to have commenced, on the date this Warrant was originally issued.

(iii)        Upon the exercise of this Warrant in compliance with the provisions of this Section 1(b), and except as limited pursuant to Section 1(b)(iv) or 1(d), the Company shall promptly issue and cause to be delivered to the Holder a certificate for the Warrant Shares purchased by the Holder. Each exercise of this Warrant shall be effective immediately prior to the close of business on the date (the “Date of Exercise”) that the conditions set forth in Section 1(b) have been satisfied, as the case may be. On or before the third Business Day following the date on which the Company has received each of this original Warrant, the Notice of Exercise and the Aggregate Exercise Price (or this original Warrant and a notice of a Cashless Exercise in accordance with Section 1(b)(ii)) (the “Exercise Delivery Documents”), the Company shall transmit an acknowledgment of receipt of the Exercise Delivery Documents to the Company’s transfer agent (the “Transfer Agent”). On or before the fifth Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Notice of Exercise, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares.

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(iv)        Notwithstanding the foregoing provisions of this Section 1(b), the Holder may not exercise this Warrant if and to the extent that such exercise would require the Company to issue a number of shares of Common Stock in excess of its authorized but unissued shares of Common Stock, less all amounts of Common Stock that have been reserved for issue upon the conversion of all outstanding securities convertible into shares of Common Stock and the exercise of all outstanding options, warrants and other rights exercisable for shares of Common Stock. If the Company does not have the requisite number of authorized but unissued shares of Common Stock to permit the Holder to exercise this Warrant, then the Company shall use commercially reasonable efforts to obtain the necessary stockholder consent to increase the authorized number of shares of Common Stock to permit such Holder to exercise this Warrant pursuant to Section 1(b)(i).

(v)         If the Company shall fail for any reason or for no reason to issue to the Holder, within five (5) Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, and if on or after such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within five (5) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing bid price on the date of exercise.

(c)          Partial Exercise. This Warrant shall be exercisable, either in its entirety or, from time to time, for part only of the number of Warrant Shares referenced by this Warrant; provided, that any such partial exercise must be for an integral number of Warrant Shares. If this Warrant is exercised in part, the Company shall issue, at its expense, a new Warrant, in substantially the form of this Warrant, referencing such reduced number of Warrant Shares that remain subject to this Warrant.

(d)          Limitations on Exercises. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the Holder hereof to the extent (but only to the extent) that such exercise would cause the Holder or any of its affiliates which is not, prior to such exercise, already a beneficial owner of greater than 4.99% (the “Maximum Percentage”) of the Company’s outstanding Common Stock to beneficially own in excess of the Maximum Percentage thereof; provided, however, that the Holder may waive this Section 1(d) and/or increase the Maximum Percentage to an amount not to exceed 9.99% upon at least sixty-one (61) days prior written notice to the Company. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.

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(e)          Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 15.

2. ISSUANCE OF WARRANT SHARES

(a)          The Company covenants that all Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized, fully paid and non-assessable, and (ii) free from all liens, charges and security interests, with the exception of claims arising through the acts or omissions of any Holder and except as arising from applicable Federal and state securities laws.

(b)          The Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

(c)          The Company will not, by amendment of its articles of incorporation, by-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all action necessary or appropriate in order to protect the rights of the Holder to exercise this Warrant, or against impairment of such rights.

3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT SHARES

(a)          The Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3(a); provided, that notwithstanding the provisions of this Section 3, the Company shall not be required to make any adjustment if and to the extent that such adjustment would require the Company to issue a number of shares of Common Stock in excess of its authorized but unissued shares of Common Stock, less all amounts of Common Stock that have been reserved for issue upon the conversion of all outstanding securities convertible into shares of Common Stock and the exercise of all outstanding options, warrants and other rights exercisable for shares of Common Stock. If the Company does not have the requisite number of authorized but unissued shares of Common Stock to make any adjustment, the Company shall use its commercially reasonable efforts to obtain the necessary stockholder consent to increase the authorized number of shares of Common Stock to make such an adjustment pursuant to this Section 3(a).

5

(i)          Subdivision or Combination of Stock. In case the Company shall at any time subdivide (whether by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased, and conversely, in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(i).

(ii)         Dividends in Stock, Property, Reclassification. If at any time, or from time to time, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefore:

(A)         any shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

(B)         additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 3(a)(i) above),

then and in each such case, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately, and the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to above) that such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(ii).

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(iii)        Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or other assets or property (an “Organic Change”), then lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable assuming the full exercise of the rights represented by this Warrant. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. To the extent necessary to effect the foregoing provisions, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase.If there is an Organic Change, then the Company shall cause to be mailed to the Holder at its last address as it shall appear on the books and records of the Company, at least 10 calendar days before the effective date of the Organic Change, a notice stating the date on which such Organic Change is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares for securities, cash, or other property delivered upon such Organic Change; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the 10-day period commencing on the date of such notice to the effective date of the event triggering such notice. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.

(b)          Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 3, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall promptly furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; and (ii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

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(c)          Certain Events. If any event occurs as to which the other provisions of this Section 3 are not strictly applicable but the lack of any adjustment would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of such provisions, or if strictly applicable would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of such provisions, then the Company's Board of Directors will, in good faith and subject to applicable law, make an appropriate adjustment to protect the rights of the Holder; provided, that no such adjustment pursuant to this Section 3(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 3.

(d)          Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time prior to the Expiration Date issue Additional Shares of Common Stock, as defined below, without consideration or for a consideration per share less than the Exercise Price in effect immediately prior to such issue, then the Exercise Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Exercise Price by a fraction, (A) the numerator of which shall be (1) the number of shares of Common Stock outstanding immediately prior to such issue plus (2) the number of shares of Common Stock which the aggregate consideration received or to be received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Exercise Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common Stock so issued; provided that, (i) for the purpose of this Section 3(d), all shares of Common Stock issuable upon conversion or exchange of convertible securities outstanding immediately prior to such issue shall be deemed to be outstanding, and (ii) the number of shares of Common Stock deemed issuable upon conversion or exchange of such outstanding convertible securities shall be determined without giving effect to any adjustments to the conversion or exchange price or conversion or exchange rate of such convertible securities resulting from the issuance of Additional Shares of Common Stock that is the subject of this calculation. For purposes of this Warrant, “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company after the Effective Date (including without limitation any shares of Common Stock issuable upon conversion or exchange of any convertible securities or upon exercise of any option or warrant, on an as-converted basis), other than: (i) shares of Common Stock issued or issuable upon conversion or exchange of any convertible securities, or exercise of any options outstanding on the Effective Date; (ii) shares of Common Stock issued or issuable upon conversion of the warrants issued in connection with the Offering; (iii) shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Sections 3(a)(i) through 3(a)(iii) above; (iv) shares of Common Stock issued or issuable pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement; or (v) shares of Common Stock issued or issuable to officers, directors and employees of, or consultants to, the Company pursuant to stock grants, option plans, purchase plans or other employee stock incentive programs or arrangements approved by the Board of Directors, or upon exercise of options or warrants granted to such parties pursuant to any such plan or arrangement. The provisions of this Section 3(d) shall not operate to increase the Exercise Price.

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Whenever the Exercise Price is adjusted pursuant to this Section 3(d), the number of shares of Common Stock issuable upon exercise of this Warrant shall be inversely proportionally adjusted such that the aggregate Exercise Price of this Warrant remains equal immediately before and after any such adjustment.

4. TRANSFERS AND EXCHANGES OF WARRANT AND WARRANT SHARES

(a)          Registration of Transfers and Exchanges. Subject to Section 4(c), upon the Holder’s surrender of this Warrant, with a duly executed copy of the Form of Assignment attached as Exhibit B, to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder, the Company shall register the transfer of all or any portion of this Warrant. Upon such registration of transfer, the Company shall issue a new Warrant, in substantially the form of this Warrant, evidencing the acquisition rights transferred to the transferee and a new Warrant, in similar form, evidencing the remaining acquisition rights not transferred, to the Holder requesting the transfer.

(b)          Warrant Exchangeable for Different Denominations. The Holder may exchange this Warrant for a new Warrant or Warrants, in substantially the form of this Warrant, evidencing in the aggregate the right to purchase the number of Warrant Shares, which may then be purchased hereunder, each of such new Warrants to be dated the date of such exchange and to represent the right to purchase such number of Warrant Shares as shall be designated by the Holder. The Holder shall surrender this Warrant with duly executed instructions regarding such re-certification of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder.

(c)          Restrictions on Transfers. This Warrant may not be transferred at any time without (i) registration under the Securities Act or (ii) an exemption from such registration and a written opinion of legal counsel addressed to the Company that the proposed transfer of the Warrant may be effected without registration under the Securities Act, which opinion will be in form and from counsel reasonably satisfactory to the Company.

(d)          Permitted Transfers and Assignments. Notwithstanding any provision to the contrary in this Section 4, the Holder may transfer, with or without consideration, this Warrant or any of the Warrant Shares (or a portion thereof) to the Holder’s Affiliates (as such term is defined under Rule 144 of the Securities Act) without obtaining the opinion from counsel that may be required by Section 4(c)(ii), provided, that the Holder delivers to the Company and its counsel certification, documentation, and other assurances reasonably required by the Company’s counsel to enable the Company’s counsel to render an opinion to the Company’s Transfer Agent that such transfer does not violate applicable securities laws.

5. MUTILATED OR MISSING WARRANT CERTIFICATE

If this Warrant is mutilated, lost, stolen or destroyed, upon request by the Holder, the Company will, at its expense, issue, in exchange for and upon cancellation of the mutilated Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form of this Warrant, representing the right to acquire the equivalent number of Warrant Shares; provided, that, as a prerequisite to the issuance of a substitute Warrant, the Company may require satisfactory evidence of loss, theft or destruction as well as an indemnity from the Holder of a lost, stolen or destroyed Warrant.

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6. PAYMENT OF TAXES

The Company will pay all transfer and stock issuance taxes attributable to the preparation, issuance and delivery of this Warrant and the Warrant Shares (and replacement Warrants) including, without limitation, all documentary and stamp taxes; provided, however, that the Company shall not be required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of certificates for Warrant Shares or other securities in respect of the Warrant Shares to any person or entity other than to the Holder.

7. FRACTIONAL WARRANT SHARES

No fractional Warrant Shares shall be issued upon exercise of this Warrant. Upon the full exercise of this Warrant, the Company, in lieu of issuing any fractional Warrant Share, shall round up the number of Warrant Shares issuable to nearest whole share.

8. NO STOCK RIGHTS AND LEGEND

No holder of this Warrant, as such, shall be entitled to vote or be deemed the holder of any other securities of the Company that may at any time be issuable on the exercise hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, the rights of a stockholder of the Company or the right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting stockholders (except as provided herein), or to receive dividends or subscription rights or otherwise (except as provide herein).

Each certificate for Warrant Shares initially issued upon the exercise of this Warrant, and each certificate for Warrant Shares issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.”

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9. REGISTRATION RIGHTS

The Warrant Shares shall be entitled to those registration rights set forth in that certain registration rights agreement entered into between the Company and the Holder in connection with the private placement offering pursuant to which this Warrant has been issued.

10. NOTICES

All notices, consents, waivers, and other communications under this Warrant must be in writing and will be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment; (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, if to the registered Holder hereof; or (d) seven days after the placement of the notice into the mails (first class postage prepaid), to the Holder at the address, facsimile number, or e-mail address furnished by the registered Holder to the Company in accordance with the Subscription Agreement by and between the Company and the Holder or, if the registered Holder is not the original purchaser of this Warrant, then as provided in the Form of Assignment delivered to the Company pursuant to Section 4(a) in connection with the assignment of this Warrant to such Holder, or if to the Company, to it at 1311 Herr Lane, Suite 205, Louisville, KY 40222, Attn: John S. Henderson IV, Chief Executive Officer (or to such other address, facsimile number, or e-mail address as the Holder or the Company as a party may designate by notice the other party in accordance with this Section 10) with a copy to Gottbetter & Partners, 488 Madison Avenue, New York, New York 10022, Attention: Adam S. Gottbetter.

11. SEVERABILITY

If a court of competent jurisdiction holds any provision of this Warrant invalid or unenforceable, the other provisions of this Warrant will remain in full force and effect. Any provision of this Warrant held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

12. BINDING EFFECT

This Warrant shall be binding upon and inure to the sole and exclusive benefit of the Company, its successors and assigns, and the registered Holder or Holders from time to time of this Warrant and the Warrant Shares.

13. SURVIVAL OF RIGHTS AND DUTIES

This Warrant shall terminate and be of no further force and effect on the earlier of 5:00 P.M., Eastern Time, on the Expiration Date or the date on which this Warrant has been exercised in full.

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14. GOVERNING LAW

This Warrant will be governed by and construed under the laws of the State of New York without regard to conflicts of laws principles that would require the application of any other law.

15. DISPUTE RESOLUTION

In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within five (5) Business Days of receipt of the Notice of Exercise giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, at its sole discretion, within five (5) Business Days, submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder, or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be final, binding and conclusive upon the parties thereto, absent demonstrable error.

16. NOTICES OF RECORD DATE

Upon (a) any establishment by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other right, or (b) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company’s voting stock (whether newly issued, or from treasury, or previously issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at least ten (10) Business Days, or such longer period as may be required by law, prior to the record date specified therein, a notice specifying (i) the date established as the record date for the purpose of such dividend, distribution, option or right and a description of such dividend, option or right, (ii) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, transfer, consolation, merger, dissolution, liquidation or winding up.

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17. RESERVATION OF SHARES

The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock for issuance upon the exercise of this Warrant, free from pre-emptive rights, such number of shares of Common Stock for which this Warrant shall from time to time be exercisable. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. Without limiting the generality of the foregoing, the Company covenants that it will use commercially reasonable efforts to take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and use commercially reasonable efforts to obtain all such authorizations, exemptions or consents, including but not limited to consents from the Company’s stockholders or Board of Directors or any public regulatory body, as may be necessary to enable the Company to perform its obligations under this Warrant.

18. HEADINGS

The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

19. AMENDMENT AND WAIVERS

Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of a majority of the Warrant Shares issuable upon exercise of the Warrants.

20. NO THIRD PARTY RIGHTS

This Warrant is not intended, and will not be construed, to create any rights in any parties other than the Company and the Holder, and no person or entity may assert any rights as third-party beneficiary hereunder.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date first set forth above.

EASTERN RESOURCES, INC.

By:

Name:  Patrick W. M. Imeson

Title:  Chief Executive Officer

EXHIBIT A

NOTICE OF EXERCISE

(To be executed by the Holder of Warrant if such Holder desires to exercise Warrant)

To: EASTERN RESOURCES, INC.:

The undersigned hereby irrevocably elects to exercise this Warrant with respect to the purchase of ____________________ whole shares of Eastern Resources, Inc. common stock issuable upon exercise of the Warrant and delivery of:

(1) $__________ (in cash as provided for in the foregoing Warrant) and any applicable taxes payable by the undersigned pursuant to such Warrant; and/or

(2) A portion of the Warrant exercisable to purchase __________ shares of Common Stock (pursuant to a Cashless Exercise in accordance with Section 1(b)(ii) of the Warrant) (check here if the undersigned desires to deliver an unspecified number of shares equal to the number sufficient to effect a Cashless Exercise [ ]).

The undersigned requests that certificates for such shares be issued in the name of:

(Please print name, address and social security or federal employer identification number (if applicable))*

If the shares issuable upon this exercise of the Warrant are not all of the Warrant Shares which the Holder is entitled to acquire upon the exercise of the Warrant, the undersigned requests that a new Warrant evidencing the rights not so exercised be issued in the name of and delivered to:

(Please print name, address and social security or federal employer identification number (if applicable))*

Name of Holder (print):

(Signature):

(By :)

(Title :)

Dated:

* If Warrant Shares are to be issued in any name other than that of the registered Holder of the Warrant, then the Holder must include an opinion of counsel, reasonably satisfactory to the Company, to the effect that such issuance complies with all applicable securities laws.

EXHIBIT B

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, ___________________________________ hereby sells, assigns and transfers to each assignee set forth below all of the rights of the undersigned under the Warrant (as defined in and evidenced by the attached Warrant) to acquire the number of Warrant Shares set opposite the name of such assignee below and in and to the foregoing Warrant with respect to said acquisition rights and the shares issuable upon exercise of the Warrant:

Name of Assignee
(and social security or federal employer
identification number (if applicable)) Address Number of Shares

If the total of the Warrant Shares are not all of the Warrant Shares evidenced by the foregoing Warrant, the undersigned requests that a new Warrant evidencing the right to acquire the Warrant Shares not so assigned be issued in the name of and delivered to the undersigned.

Name of Holder (print):

Signature:

By:

Title:

Dated:

EX-10.1

INTER-CREDITOR AND STANDSTILL AGREEMENT

THIS INTER-CREDITOR AND STANDSTILL AGREEMENT (“Agreement”) is made and effective as of May 13, 2013 (“Effective Date”) by and among (i) Gordon Snyder, as administrative agent (“Administrative Agent”) for the owners of certain secured promissory notes, convertible notes and redeemable options to certain debt holders (individually and together, the “Secured Creditors”); (ii) Black Diamond Holdings LLC (“BDH”) (iii) additional purchasers as provided by the Elkhorn Streaming Contract (“Additional Purchaser” together with BDH, collectively referred to herein as the "Purchasers") of approximately $25,000,000 of mineral product receivables pursuant to the Amended and Restated Mineral Product Receivables Purchase Agreement dated October 18, 2012 (the "Elkhorn Streaming Contract") which rights and obligations are secured by a specified quantity of gold to be developed from specified mineral deposits owned by Elkhorn Goldfields, Inc. (the “Company”), a wholly owned subsidiary of Eastern Resources, Inc. (the “Parent Company”); (iv) the Company; (v) Elkhorn Goldfields, LLC (“EGLLC”); (vi) Montana Tunnels Mining, Inc. (“MTMI”) and (vii) the Parent Company.

RECITALS

WHEREAS, the Secured Creditors own certain promissory notes issued on various dates and in various amounts (the “Notes”) and redeemable options (“Options”, together with Notes, collectively referred to herein as “Secured Instruments”) secured in part by two (2) instruments: (i) Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture Filing executed and delivered by Elkhorn Goldfields, Inc., in favor of Administrative Agent for the benefit of the Secured Creditors, recorded on May 29, 2009 in the official records of Jefferson County, Montana as documents numbered 233612 (mortgage) and 233614 (First Priority UCC filing) (the “Elkhorn Mine Mortgage,”) and (ii) Mortgage, Security Agreement, Assignment of Leases and Rents, and Fixture Filing in favor of Administrative Agent executed and delivered by MTMI, as mortgagor for the benefit of the Secured Creditors, recorded on May 29, 2009 in the official records of Jefferson County, Montana as documents numbered 236384 (mortgage) and 236385 (UCC filing) (the “Montana Tunnels Mortgages,” together with the Elkhorn Mine Mortgages, the “Mortgages”). The Mortgages and their associated fixture filings constitute first liens on the mining properties located in Jefferson County, Montana, commonly known as “The Elkhorn Mine” and “The Montana Tunnels Mine” (together, the “Property”).

WHEREAS, the Secured Creditors hold (i) Notes in the aggregate principal amount of approximately U.S. $21,579,848 which are secured by all of the assets of the Parent Company; and (ii) Options in the aggregate principal amount of U.S. $5,950,000 which are secured by the assets of the Parent Company (separately and together, the "Existing Indebtedness").

WHEREAS, the Secured Creditors represent the sole secured creditors of the Parent Company and the Company, except for BDH under the Original Elkhorn Streaming Contract (defined below).

WHEREAS, the Company entered into that certain Mineral Product Receivables Purchase Agreement, dated April 15, 2011 (“Original Elkhorn Streaming Contract”), with EGLLC and BDH for aggregate capital contributions totaling U.S. $10,000,000.

WHEREAS, the Company seeks to raise an additional amount of capital though the Elkhorn Streaming Contract, expected to be no less than U.S. $10,000,000.00 and as much as U.S. $15,391,200.00 (such final amount of up to U.S. $25,391,200.00 being the “Contributed Capital”), for the further development of the Golden Dream Mine and, as required to execute the Elkhorn Streaming Contract, also including the refurbishment and maintenance of the Diamond Hill Mill, and other related expenditures expressly stipulated in the Use of Proceeds, included in Exhibit B, and pursuant to the Elkhorn Streaming Agreement, such obligations to be secured by up to 80,000 ounces of Payable Au on terms and conditions as described in the Elkhorn Streaming Contract, attached as Exhibit A;

WHEREAS, it is potentially in the best interests of the Company and the Secured Creditors to raise the Contributed Capital pursuant to the Elkhorn Streaming Contract, the Secured Creditors and the Purchasers desire, upon mutually agreeable terms and conditions, to enter into an Agreement to achieve an understanding and arrangement whereby the Purchasers are assured that the Property will not be foreclosed upon in a manner that would impede or impair the Company’s ability to undertake its obligations under the Elkhorn Streaming Contract;

WHEREAS, the Purchasers and the Secured Creditors desire to memorialize certain agreements with each other concerning their respective rights, duties and obligations to one another, subject to the rights, duties, obligations and interests granted under their respective creditor agreements, including any associated security agreement, and/or any mineral resource purchase agreement, between and among the the Purchasers and the Secured Creditors and the Parent and/or the Company (together, the “Agreements”).

NOW, THEREFORE, in consideration of the mutual covenants herein, their respective performances, rights, duties, obligations and interests pertaining to the Agreements, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree:

1. Standstill

1.1 Secured Creditor hereby confirms and acknowledges that, to the best of Secured Creditors’ knowledge, as of the date of this Agreement there exist no current or past default or defaults by EGLLC, the Company, MTMI, the Parent Company or MFPI Partners, LLC (“MFPI”) under the Credit Documents and Loans (as such terms are defined in that certain Loan Reinstatement Agreement dated March 28, 2012, as amended, by and between the Secured Creditors, EGLLC, and MFPI referred to herein as the “Loan Reinstatement Agreement”) or the Loan Reinstatement Agreement on or prior to the Effective Date.

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1.2. Upon any Event of Default occurring on or prior to September 30, 2013 (as “Event of Default” is defined under any security agreement or the Loan Reinstatement Agreement or Elkhorn Streaming Contract), the Secured Creditors agree to standstill and not exercise any foreclosure rights against EGLLC, the Company, MTMI, the Parent Company, MFPI Partners, LLC or the Property which would materially adversely affect: (i) the Company ordinary-course business operations (ii) reasonably functional milling capacity or ordinary-course operations of MTMI, or (iii) the Company’s ability by the employment of reasonable efforts and diligence to produce payable ounces of gold under the Elkhorn Streaming Contract until such time as all of the obligations of the Company under the Elkhorn Streaming Contract have been fully satisfied (collectively referred to as “Company Obligations”) (the “Standstill Period”) regardless of whether acts or omissions or conditions which would constitute an Event of Default by EGLLC, the Company, MTMI, the Parent Company, MFPI Partners, LLC or any party with respect to the Property shall actually have occurred during the Standstill Period. Notwithstanding the foregoing provisions, upon the occurrence of an Event of Default at any time following the execution and delivery of this Agreement by EGLLC, the Secured Creditors do not waive and hereby reserve, as against EGLLC, the Company, MTMI, the Parent Company, MFPI Partners, LLC or any party with respect to the Property, the full rights to declare and withdraw declarations of default, to collect (without resort to legal process) and receive sums due Secured Creditors under any of the provisions of the Loan Reinstatement Agreement or any of the documents incorporated therein by reference, and to foreclosure on the assets of EGLLC, to the fullest extent not inconsistent with the foregoing provisions. Pursuant to this Section 1.2 and during the Standstill Period, the Secured Creditor agrees not to commence any action or proceeding concerning the Existing Indebtedness or its security interest in the Property, without providing at least thirty (30) business days’ written notice to the EGLLC, the Company, the Parent Company and the Purchasers and providing the opportunity to cure within thirty (30) business days from receipt of such notice.

1.3 After the Standstill Period, Administrative Agent further agrees that no action shall be taken which would have the effect of materially impeding or impairing the satisfaction of the terms and conditions of the Elkhorn Streaming Contract or the Company Obligations (the “Post-Standstill Period”). Upon an Event of Default, Administrative Agent further agrees that no collection or enforcement action involving legal process shall be taken related to the Property, on behalf of the Secured Creditors, until such reasonable time as the Purchasers have exclusively determined that they are not able or not willing to raise sufficient capital through a future gold streaming agreement (“FGSA”) to cure any Event of Default and has provided written notice to the Secured Creditors of such determination. Any FGSA will (i) be subordinated to the Elkhorn Streaming Agreement; (ii) will have net proceeds after issuance expenses of not less than U.S$1,000,000.00 and not more than U.S. $5,000,000.00; and (iii) will have a use of proceeds strictly limited to (a) enabling the cure of a violation of an Event of Default and (b) bringing the Golden Dream Mine to operational readiness. Notwithstanding the above, the Parent Company may cure Event of Default by making a further equity investment in the Company provided that such cure is effectuated within the timing parameters set forth in Section 1 of this Agreement to cure such Event of Default. Pursuant to this Section 1.3, the Administrative Agent agrees not to commence any action or proceeding involving legal process on behalf of the Secured Creditors, concerning the Existing Indebtedness or its security interest in the Property without providing at least thirty (30) business days’ written notice to the EGLLC, the Company, the Parent Company and the Purchasers and providing the opportunity to cure within thirty (30) business days from receipt of such notice.

2. Indemnification by Secured Creditors. The Secured Creditors shall indemnify, defend, and hold harmless the Purchasers against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities damages, recoveries, and deficiencies, including interest, penalties, and reasonable professional and attorneys' fees, including those arising from settlement negotiations, that the Purchasers shall incur or suffer, which arise, result from, or relate to a breach of, or failure by Secured Creditors to perform under this Agreement.

3. Indemnification by Purchasers. The Purchasers shall indemnify, defend, and hold harmless Secured Creditors against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and reasonable professional and attorneys' fees, including those arising from settlement negotiations, that Secured Creditors shall incur or suffer, which arise, result from, or relate to a breach of, or failure by Purchasers to perform under this Agreement.

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4. Acknowledgements

4.1 The Secured Creditors agrees and consents to the Company raising up to an aggregate total of U.S. $25,391,200.00 (including all sums raised under the Original Streaming Contract) pursuant to the Elkhorn Streaming Contract.

4.2 The Parent Company and the Company agree, warrant and represent that the Secured Creditors represent the sole secured creditors of the Parent Company and the Company, except for BDH under the Original Elkhorn Streaming Contract.

4.3 The Parent Company and the Company acknowledge the existence of this Agreement and covenant that they will not take any action which has the effect of frustrating the intention of this Agreement.

5. New Investment

5.1 In the Event of Default, as set forth in the immediate preceding section, the Secured Creditors shall have the right but not the obligation to contribute and participate to an amount equal to 50% of any FGSA on the same terms and conditions as other participants in the FGSA.

6. Foreclosure

6.1 In the event that there is an Event of Default after the Standstill Period, and such violation has not been cured under the terms and conditions of the applicable agreement (including the cure period set forth in Section 1.2 and Section 1.3 of this Agreement), Administrative Agent shall have the right to foreclose on the Company's assets including the Golden Dream Mine so long as the Company is not performing all of its Company Obligations. Pursuant to this Section 6, the Administrative Agent agrees not to commence any action or proceeding involving legal process on behalf of the Secured Creditors, concerning the Existing Indebtedness or its security interest in the Property without providing at least thirty (30) business days’ written notice to the EGLLC, the Company, the Parent Company and the Purchasers and providing the opportunity to cure with an additional thirty (30) business days from receipt of such notice. Upon the Administrative Agent exercising its rights to foreclose on the Company’s assets, including the Golden Dream Mine, the Elkhorn Streaming Contract shall be binding upon and inure to the benefit of the Purchasers and their respective heirs, personal representatives, transferees, successors and permitted assigns.

7. Miscellaneous.

7.1 Assignment. The rights and obligations of the Secured Creditors and/or the Purchasers under this Agreement may be assigned to or assumed by a transferee of the respective obligations, as applicable.

7.2 Binding Effect. This Agreement shall be binding on, and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, and successors.

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7.3 Parties in Interest. Except as expressly provided in this Agreement, nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the parties to it and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third persons any right to subrogation or action against any party to this Agreement.

7.4 Entire Agreement. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties.

7.5 Amendment. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all the parties.

7.6 Waiver. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

7.7 Notices. Notices given under this Agreement shall be delivered in writing to: Secured Creditors: Barrie Cowan, 595 Laidley Street, San Francisco, California  94131 and New Purchasers: Eric Altman, 1610 Wynkoop Street, STE 400, Denver, CO 80202.

7.8 Governing Law and Venue. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Colorado, and any action or proceeding, including arbitration, brought by any party in which this Agreement is a subject, shall be brought in Denver County, Colorado.

7.9 Effect of Headings. The headings of the Sections of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

7.10 Invalidity. Any provision of this Agreement which is invalid, void, or illegal, shall not affect impair, or invalidate any other provision of this Agreement, and such other provisions of this Agreement shall remain in full force and effect.

7.11 Counterparts. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. In lieu of the original documents, a facsimile transmission or copy of the original documents shall be as effective and enforceable as the original.

7.12 Number and Gender. When required by the context of this Agreement, each number (singular and plural) shall include all numbers, and each gender shall include all genders.

7.13 Further Assurances. Each party to this Agreement agrees to execute further instruments as may be necessary or desirable to carry out this Agreement, provided the party requesting such further action shall bear all related costs and expenses.

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7.14 Professional Fees and Costs. If any legal or equitable action, arbitration, or other proceeding, whether on the merits or on motion, are brought or undertaken, or an attorney retained, to enforce this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, then the successful or prevailing party or parties in such undertaking (or the party that would prevail if an action were brought) shall be entitled to recover reasonable attorney's fees and other professional fees and other costs incurred in such action, proceeding, or discussions, in addition to any other relief to which such party may be entitled. The parties intend this provision to be given the most liberal construction possible and to apply to any circumstances in which such party reasonably incurs expenses.

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IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of the day and year first written above.

ADMINISTRATIVE AGENT

	/s/Gordon Snyder
By:
	Gordon Snyder on behalf of the Secured Creditors

BLACK DIAMOND HOLDINGS LLC

BLACK DIAMOND FINANCIAL GROUP, LLC, its manager

/s/ Patrick W. M. Imeson

By: Patrick W. M. Imeson

Title: Manager

MFPI PARTNERS, LLC,

By:	/s/ Patrick W. M. Imeson
Patrick Imeson, Manager

ELKHORN GOLDFIELDS, LLC

By: /s/Robert Trenaman

ELKHORN GOLDFIELDS, INC.

By: /s/Robert Trenaman

MONTANA TUNNELS MINING, INC.

By: /s/Robert Trenaman

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EASTERN RESOURCES, INC.

By: /s/ Patrick W. M. Imeson

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EX-10.2

EASTERN RESOURCES, INC.

1610 Wynkoop Street, Suite 400,

Denver, CO 80202

SUBSCRIPTION AGREEMENT

Ladies and Gentlemen:

1.          Subscription.  The undersigned (the “Purchaser”), intending to be legally bound, hereby irrevocably agrees to purchase the number of units of securities (the “Units”) of Eastern Resources, Inc., a Delaware corporation (the “Company”), set forth on the signature page hereof at a purchase price of $0.50 per Unit, subject to the terms and conditions of this Subscription Agreement and on the basis of the representations, warranties, covenants and agreements contained herein. Each Unit consists of (i) one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) a warrant, substantially in the form of Exhibit A hereto (the “Investor Warrant”), representing the right to purchase one share of Common Stock, exercisable for a period of five (5) years from issuance, at an exercise price of $0.75 per whole share. All dollar amounts reflected in this Subscription Agreement represent US dollars.

2.          Offering.  This subscription is being submitted to you in accordance with and subject to the terms and conditions described in this Subscription Agreement, as amended or supplemented from time to time, including all attachments, schedules and exhibits hereto, relating to the offering (the “Offering”) by the Company of up to 3,000,000 Units ($1,500,000) (the Maximum Offering Amount”).

3.          Transaction Documents/Payment.  The Purchaser will send directly a check payable to, or will immediately make a wire transfer payment to, Eastern Resources, Inc. in the full amount of the purchase price of the Units being subscribed for. Mailing and wire transfer instructions are set forth on page 15 under the heading “To subscribe for Units in the private placement offering of Eastern Resources, Inc.” Such funds will be available immediately to the Company or will be held for the Purchaser’s benefit, and will be returned promptly, without interest or offset if this Subscription Agreement is not accepted by the Company or the Offering is terminated pursuant to its terms by the Company prior to the first Closing (as defined in Section 4). Simultaneously with a check for, or wire transfer of, the full purchase price, the Purchaser is delivering a completed and executed Omnibus Signature Page to this Subscription Agreement and the Registration Rights Agreement (page 16 hereto), the Anti-Money Laundering Information Form following the Omnibus Signature Page (Appendix A hereto) and the Accredited Investor Certification (Appendix B hereto) and Investor profile (Appendix C hereto) following the Omnibus Signature Page (collectively, the “Transaction Documents”). The form of Registration Rights Agreement is in the form of Exhibit B hereto.

4.          Deposit of Funds.  All payments made as provided in Section 3 hereof shall be sent directly to the Company and credited with the Company until the earliest to occur of (a) a closing of the Offering (the “Closing”), (b) the rejection of such subscription, or (c) the termination of the Offering by the Company. The Company will continue to offer and sell the Units and conduct closings for the sale of Units until the termination of the Offering. The Units will be offered until the earlier of the time that all Units offering in the Offering are sold or until December 31, 2013, which date may be extended by the Company in writing (“Termination Date”).

5.          Acceptance of Subscription.  The Purchaser understands and agrees that the Company, in its sole and absolute discretion, reserves the right to accept or reject this or any other subscription for Units, in whole or in part, notwithstanding prior receipt by the Purchaser of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company shall execute and deliver to the Purchaser an executed copy of this Subscription Agreement. If this subscription is rejected in whole or the Offering is terminated, all funds received from the Purchaser will be returned without interest or offset, and this Subscription Agreement shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for the rejected portion of this subscription will be returned without interest or offset, and this Subscription Agreement will continue in full force and effect to the extent this subscription was accepted.

6.          Placement Agent.  The Company may determine to utilize the services of one or more placement agents (the “Placement Agent”) in this Offering. The Placement Agents would be paid a cash commission of ten percent (10%) of funds raised from the sale of the Units to persons introduced by the Placement Agent and a warrant commission of five percent (5%) of the number of Units sold in this offering, a portion of which commissions may be re-allocated to licensed sub-agents. These warrants will have a term of five years and will be exercisable for the purchase of one share of the Issuer’s common stock at a price of $0.50 per share

7.          Representations and Warranties.  The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:

(a)          None of the Units, the shares of Common Stock underlying the Units, the Investor Warrants or the shares of Common Stock issuable upon exercise of the Investor Warrants (the “Investor Warrant Shares”) offered pursuant to this Subscription Agreement are registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Purchaser understands that the offering and sale of the Units is intended to be exempt from registration under the Securities Act, by virtue of Section 4(2) thereof and the provisions of Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”) each as promulgated by the Securities and Exchange Commission (the “SEC”) thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Subscription Agreement;

(b)          Prior to the execution of this Subscription Agreement, the Purchaser and the Purchaser’s attorney, accountant, purchaser representative and/or tax adviser, if any (collectively, the “Advisers”), have received this Agreement and all other documents requested by the Purchaser, have carefully reviewed them and understand the information contained therein;

(c)          Neither the SEC nor any state securities commission or other regulatory authority has approved the Units, the shares of Common Stock, the Investor Warrants or the Investor Warrant Shares or passed upon or endorsed the merits of the Offering;

(d)          All documents, records, and books pertaining to the investment in the Units have been made available for inspection by such Purchaser and its Advisers, if any;

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(e)          The Purchaser and its Advisers, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the offering of the Units and the business, financial condition and results of operations of the Company, and all such questions have been answered to the full satisfaction of the Purchaser and its Advisers, if any;

(f)          In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or information (oral or written) other than as stated herein;

(g)          The Purchaser is unaware of, is in no way relying on, and did not become aware of the Offering of the Units through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet (including, without limitation, internet “blogs,” bulletin boards, discussion groups and social networking sites) in connection with the Offering and sale of the Units and is not subscribing for the Units and did not become aware of the Offering through or as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser in connection with investments in securities generally;

(h)          The Purchaser has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Subscription Agreement or the transactions contemplated hereby (other than commissions to be paid by the Company to the Placement Agent, if any, and other participating broker-dealers, if any);

(i)          The Purchaser, together with its Advisers, if any, has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with the Offering to evaluate the merits and risks of an investment in the Units and the Company and to make an informed investment decision with respect thereto;

(j)          The Purchaser is not relying on the Company, the Placement Agent, if any, or any of their respective employees or agents with respect to the legal, tax, economic and related considerations of an investment in the Units, and the Purchaser has relied on the advice of, or has consulted with, only its own Advisers;

(k)          The Purchaser is acquiring the Units solely for such Purchaser’s own account for investment purposes only and not with a view to or intent of resale or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any person to sell or transfer all or any part of the Units, the shares of Common Stock, the Investor Warrants or the Investor Warrant Shares and the Purchaser has no plans to enter into any such agreement or arrangement;

(l)          The Purchaser must bear the substantial economic risks of the investment in the Units indefinitely because none of the securities included in the Units may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available (including, without limitation, under Regulation S). Legends to the following effect shall be placed on the securities included in the Units to the effect that they have not been registered under the Securities Act or applicable state securities laws:

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THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH (I) REGULATION S UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, (II) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, OR (III) UNDER AN EFFECTIVE REGISTRATION STATEMENT, AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT. RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE SATISFACTORY TO THE COMPANY.

Appropriate notations will be made in the Company’s stock books to the effect that the securities included in the Units have not been registered under the Securities Act or applicable state securities laws. Stop transfer instructions will be placed with the transfer agent of the Units. The Company has agreed that purchasers of the Units will have, with respect to the shares of Common Stock included in the Units, the registration rights described in the Registration Rights Agreement. Notwithstanding such registration rights, there can be no assurance that there will be any market for resale of the Common Stock, nor can there be any assurance that such securities will be freely transferable at any time in the foreseeable future;

(m)          The Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and has no need for liquidity of its investment in the Units for an indefinite period of time;

(n)          The Purchaser is aware that an investment in the Units is high risk, involving a number of very significant risks and has carefully read and considered the matters set forth in the Company’s SEC filings, and, in particular, acknowledges that the Company has a limited operating history, has had operating losses since inception, and is engaged in a highly competitive business;

(o)          The Purchaser either

i. meets the requirements of at least one of the suitability standards for an “accredited investor” as that term is defined in Regulation D and as set forth on the Accredited Investor Certification contained herein; or

ii. is not a “U.S. Person” as defined in Regulation S; and specifically the Purchaser is not (all Purchasers who are not a U.S. Person must INITIAL this appropriate section of the Appendix B, Accredited Investor Certification, to confirm their careful review and understanding of this Section 7(o)(ii)):

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A. a natural person resident in the United States of America, including its territories and possessions (“United States”);

B. a partnership or corporation organized or incorporated under the laws of the United States;

C. an estate of which any executor or administrator is a U.S. Person;

D. a trust of which any trustee is a U.S. Person;

E. an agency or branch of a foreign entity located in the United States;

F. a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;

G. a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and

H. a partnership or corporation: (I) organized or incorporated under the laws of any foreign jurisdiction; and (II) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

And, in addition:

I. the Purchaser was not offered the Units in the United States;

J. at the time the buy-order for the Units was originated, the Purchaser was outside the United States; and

K. the Purchaser is purchasing the Units for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the Units has not been pre-arranged with a purchaser in the United States.

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(p)          The Purchaser (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Units, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the securities constituting the Units, the execution and delivery of this Subscription Agreement has been duly authorized by all necessary action, this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Subscription Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Purchaser is executing this Subscription Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company, and represents that this Subscription Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;

(q)          The Purchaser and the Advisers, if any, have had the opportunity to obtain any additional information, to the extent the Company has such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained herein and in all documents received or reviewed in connection with the purchase of the Units and have had the opportunity to have representatives of the Company provide them with such additional information regarding the terms and conditions of this particular investment and the financial condition, results of operations, business of the Company deemed relevant by the Purchaser or the Advisers, if any, including the annual reports, quarterly reports, current reports, registration statements and other information filed by the Company with the SEC (see www.sec.gov), and all such requested information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, has been provided to the full satisfaction of the Purchaser and the Advisers, if any;

(r)          Any information which the Purchaser has heretofore furnished or is furnishing herewith to the Company or the Placement Agent, if any, is complete and accurate and may be relied upon by the Company and the Placement Agent, if any, in determining the availability of an exemption from registration under federal and state securities laws in connection with the offering of the Units as described herein. The Purchaser further represents and warrants that it will notify and supply corrective information to the Company and the Placement Agent, if any, immediately upon the occurrence of any change therein occurring prior to the Company’s issuance of the securities contained in the Units;

(s)          The Purchaser has significant prior investment experience, including investment in non-listed and non-registered securities. The Purchaser is knowledgeable about investment considerations in development-stage companies with limited operating histories. The Purchaser has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s net worth and financial circumstances and the purchase of the Units will not cause such commitment to become excessive. The investment is a suitable one for the Purchaser;

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(t)          The Purchaser is satisfied that the Purchaser has received adequate information with respect to all matters which it or the Advisers, if any, consider material to its decision to make this investment;

(u)          The Purchaser acknowledges that any estimates or forward-looking statements or projections included herein or in any other materials that might have been provided to the Purchaser by the Company were prepared by the Company in good faith but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Company and should not be relied upon;

(v)         No oral or written representations have been made, or oral or written information furnished, to the Purchaser or the Advisers, if any, in connection with the Offering which are in any way inconsistent with the information contained herein;

(w)          Within five (5) days after receipt of a request from the Company or the Placement Agent, if any, the Purchaser will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company or the Placement Agent is subject;

(x)          The Purchaser’s substantive relationship with the Placement Agent, if any, through which the Purchaser is subscribing for Units predates the Placement Agent’s contact with the Purchaser regarding an investment in the Units;

(y)          THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. RELIANCE ON AN EXEMPTION FROM REGISTRATION WILL REQUIRE THE HOLDER TO PROVIDE THE COMPANY WITH AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE SATISFACTORY TO THE COMPANY. THE SECURITIES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL;

(z)          In making an investment decision investors must rely on their own examination of the Company and the terms of the Offering, including the merits and risks involved. The Purchaser should be aware that it will be required to bear the financial risks of this investment for an indefinite period of time;

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(aa)         (For ERISA plans only)   The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Purchaser fiduciary or Plan (a) is responsible for the decision to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Purchaser fiduciary or Plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates;

(bb)         The Purchaser should check the Office of Foreign Assets Control (“OFAC”) website at <http://www.treas.gov/ofac> before making the following representations. The Purchaser represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals¹ or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists;

(cc)         To the best of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom the Purchaser is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph. The Purchaser agrees to promptly notify the Company and the Placement Agent, if any, should the Purchaser become aware of any change in the information set forth in these representations. The Purchaser understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Purchaser, either by prohibiting additional subscriptions from the Purchaser, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and the Placement Agent may also be required to report such action and to disclose the Purchaser’s identity to OFAC. The Purchaser further acknowledges that the Company may, by written notice to the Purchaser, suspend the redemption rights, if any, of the Purchaser if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company and the Placement Agent or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs;

(dd)         To the best of the Purchaser’s knowledge, none of: (1) the Purchaser; (2) any person controlling or controlled by the Purchaser; (3) if the Purchaser is a privately-held entity, any person having a beneficial interest in the Purchaser; or (4) any person for whom the Purchaser is acting as agent or nominee in connection with this investment is a senior foreign political figure², or any immediate family³ member or close associate⁴ of a senior foreign political figure, as such terms are defined in the footnotes below; and

¹ These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.

² A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.

³ “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.

⁴ A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

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(ee)         If the Purchaser is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Purchaser receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Purchaser represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.

(ff)         The Purchaser acknowledges that Adam S. Gottbetter is the owner of Gottbetter Capital Group, Inc., Gottbetter & Partners, LLP and Gottbetter Capital Markets, LLC.  Gottbetter Capital Group, Inc. owns shares of the Company.  Gottbetter & Partners, LLP represents the Company for which it receives legal fees in accordance with an executed retainer agreement.  Gottbetter Capital Markets, LLC may serve as a Placement Agent for this Offering for which it may receive placement agent fees in accordance with a placement agency agreement with the Company.

(gg)        The Purchaser acknowledges that the Company is a former “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to Rule 144(i), securities issued by a current or former shell company (that is, the securities included in the Units) that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer a shell company; and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive legends on certificates for the securities included in the Units cannot be removed except in connection with an actual sale meeting the foregoing requirements or pursuant to an effective registration statement.

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(hh)       The Purchaser acknowledges that the net proceeds from the Offering will be used by the Company as general working capital.

8.          Representations and Warranties of the Company.  The Company hereby represents and warrants to the Subscriber the following:

(a)          Organization and Qualification.  The Company is a corporation duly organized and validly existing under the laws of the State of Delaware. The Company has all requisite power and authority to carry on its business as currently conducted. The Company is duly qualified to transact business in each jurisdiction in which the failure to be so qualified would reasonably be expected to have a material adverse effect.

(b)          Authorization.  As of the Closing, all action on the part of the Company, its board of directors, officers and existing stockholders necessary for the authorization, execution and delivery of this Agreement, and the performance of all obligations of the Company hereunder shall have been taken, and this Agreement, assuming due execution by the parties hereto, will constitute valid and legally binding obligations of the Company, enforceable in accordance with its terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.

(c)          Valid Issuance of the Common Stock.  The shares of Common Stock, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, shall be duly and validly issued and will be free of restrictions on transfer directly or indirectly created by the Company other than restrictions on transfer under this Agreement and under applicable federal and state securities laws.

(d)          Governmental Consents.  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the offer, sale or issuance of Shares, except for the following: (i) the filing of such notices as may be required under the Securities Act and (ii) the compliance with any applicable state securities laws, which compliance will have occurred within the appropriate time periods therefor.

(e)          Litigation.  There are no actions, suits, proceedings or investigations pending or, to the best of the Company’s knowledge, threatened before any court, administrative agency or other governmental body against the Company which question the validity of this Agreement or the right of the Company to enter into this Agreement, or to consummate the transaction contemplated hereby. The Company is not a party or subject to, and none of its assets is bound by, the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

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(f)          Compliance with Other Instruments.  The Company is not in violation or default of any provision of its Articles of Incorporation, as in effect immediately prior to the Closing. The Company is not in violation or default of any provision of any material instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order or obligation to which it is a party or by which it or any of its properties or assets are bound. To the best of its knowledge, the Company is not in violation or default of any provision of any federal, state or local statute, rule or governmental regulation. The execution, delivery and performance of and compliance with this Agreement and the issuance of the Shares, will not result in any such violation, be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision, require any consent or waiver under any such provision (other than any consents or waivers that have been obtained), or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company pursuant to any such provision.

(g)          Certain Registration Matters.  Assuming the accuracy of the Subscriber’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and issuance of the Shares by the Company to the Subscriber hereunder.

(h)          No General Solicitation.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising (within the meaning of Regulation D).

19.         Indemnification.  The Purchaser agrees to indemnify and hold harmless the Company, the Placement Agent, if any, and their respective officers, directors, employees, agents, control persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of any actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Purchaser of any covenant or agreement made by the Purchaser herein or in any other document delivered in connection with this Subscription Agreement.

10.         Irrevocability; Binding Effect.  The Purchaser hereby acknowledges and agrees that the subscription hereunder is irrevocable by the Purchaser, except as required by applicable law, and that this Subscription Agreement shall survive the death or disability of the Purchaser and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder shall be joint and several and the agreements, representations, warranties, and acknowledgments herein shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives, and permitted assigns.

11.         Modification.  This Subscription Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought.

12.         Notices.  Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given (a) if to the Company, at 1610 Wynkoop Street, Suite 400, Denver, CO 80202, Attn: Patrick W. M. Imeson, CEO, with a copy to Gottbetter & Partners, LLP, 488 Madison Avenue, 12^th Floor, New York, New York 10022, Attn: Paul C. Levites , Esq., or (b) if to the Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 11), ,. Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof.

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13.         Assignability.  This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser and the transfer or assignment of the shares of Common Stock or the Investor Warrants shall be made only in accordance with all applicable laws.

14.         Applicable Law.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles thereof relating to the conflict of laws.

15.         Arbitration/Mediation. The parties agree to submit all controversies to arbitration in accordance with the provisions set forth below and understand that:

THE PARTIES HERETO AGREE TO SUBMIT ALL CONTROVERSIES TO the exclusive jurisdiction of finra ARBITRATION IN ACCORDANCE WITH THE PROVISIONS SET FORTH BELOW AND UNDERSTAND THAT (A) ARBITRATION IS FINAL AND BINDING ON THE PARTIES, (B) THE PARTIES ARE WAIVING THEIR RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL, (C) PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT FROM COURT PROCEEDINGS, (D) THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING AND ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULES BY ARBITRATORS IS STRICTLY LIMITED, (E) THE PANEL OF FINRA ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY, AND (F) ALL CONTROVERSIES WHICH MAY ARISE BETWEEN THE PARTIES CONCERNING THIS AGREEMENT SHALL BE DETERMINED BY ARBITRATION PURSUANT TO THE RULES THEN PERTAINING TO FINRA. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEw york. JUDGMENT ON ANY AWARD OF ANY SUCH ARBITRATION MAY BE ENTERED IN THE SUPREME COURT OF THE STATE OF NEW YORK OR IN ANY OTHER COURT HAVING JURISDICTION OVER THE PERSON OR PERSONS AGAINST WHOM SUCH AWARD IS RENDERED. THE PARTIES AGREE THAT THE DETERMINATION OF THE ARBITRATORS SHALL BE BINDING AND CONCLUSIVE UPON THEM. THE PREVAILING PARTY, AS DETERMINED BY SUCH ARBITRATORS, IN A LEGAL PROCEEDING SHALL BE ENTITLED TO COLLECT ANY COSTS, DISBURSEMENTS AND REASONABLE ATTORNEY’S FEES FROM THE OTHER PARTY. PRIOR TO FILING AN ARBITRATION, THE PARTIES HEREBY AGREE THAT THEY WILL ATTEMPT TO RESOLVE THEIR DIFFERENCES FIRST BY SUBMITTING THE MATTER FOR RESOLUTION TO A MEDIATOR, ACCEPTABLE TO ALL PARTIES, AND WHOSE EXPENSES WILL BE BORNE EQUALLY BY ALL PARTIES. THE MEDIATION WILL BE HELD IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, ON AN EXPEDITED BASIS. IF THE PARTIES CANNOT SUCCESSFULLY RESOLVE THEIR DIFFERENCES THROUGH MEDIATION, THE MATTER WILL BE RESOLVED BY ARBITRATION. THE ARBITRATION SHALL TAKE PLACE IN THE COUNTY OF NEW YORK, THE STATE OF NEW YORK, ON AN EXPEDITED BASIS.

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16.         Blue Sky Qualification.  The purchase of Units under this Subscription Agreement is expressly conditioned upon the exemption from qualification of the offer and sale of the Units from applicable federal and state securities laws. The Company shall not be required to qualify this transaction under the securities laws of any jurisdiction and, should qualification be necessary, the Company shall be released from any and all obligations to maintain its offer, and may rescind any sale contracted, in the jurisdiction.

17.         Use of Pronouns.  All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

18.         Confidentiality.  The Purchaser acknowledges and agrees that any information or data the Purchaser has acquired from or about the Company or may acquire in the future, not otherwise properly in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Subscription Agreement, or use to the detriment of the Company or for the benefit of any other person, or misuse in any way, any confidential information of the Company, including any scientific, technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated by the Company as confidential or proprietary, including, but not limited to, internal personnel and financial information of the Company or its affiliates, the manner and methods of conducting the business of the Company or its affiliates and confidential information obtained by or given to the Company about or belonging to third parties. The Purchaser understands that the Company may rely on his agreement of confidentiality to comply with the exemptive provisions of Regulation FD under the Securities Act as set forth in Rule 100(a)(b)(2)(ii) of Regulation FD. In addition, the Purchaser acknowledges that such Purchaser is aware that the United States securities laws generally prohibit any person who is in possession of material nonpublic information about a public company such as the Company from purchasing or selling securities of such company.

19.         Miscellaneous.

(a)          This Subscription Agreement, together with the attached exhibits, constitutes the entire agreement between the Purchaser and the Company with respect to the Offering and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.

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(b)          The representations and warranties of the Company and the Purchaser made in this Subscription Agreement shall survive the execution and delivery hereof and delivery of the Units.

(c)          Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

(d)          This Subscription Agreement may be executed in one or more original or facsimile counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

(e)          Each provision of this Subscription Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining portions of this Subscription Agreement.

(f)          Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Subscription Agreement as set forth in the text.

(g)          The Purchaser understands and acknowledges that there may be multiple closings for the Offering.

(h)          The Purchaser hereby agrees to furnish the Company such other information as the Company may request prior to the Closing with respect to its subscription hereunder.

20.         Omnibus Signature Page.  This Subscription Agreement is intended to be read and construed in conjunction with the Registration Rights Agreement pertaining to the issuance by the Company of the Units to subscribers pursuant to this Agreement. Accordingly, pursuant to the terms and conditions of this Subscription Agreement and such related agreements it is hereby agreed that the execution by the Purchaser of this Subscription Agreement, in the place set forth herein, shall constitute agreement to be bound by the terms and conditions hereof and the terms and conditions of the Registration Rights Agreement, with the same effect as if each of such separate but related agreements were separately signed.

21.         Public Disclosure. Neither the Purchaser nor any officer, manager, director, member, partner, stockholder, employee, affiliate, affiliated person or entity of the Purchaser shall make or issue any press releases or otherwise make any public statements or make any disclosures to any third person or entity with respect to the transactions contemplated herein and will not make or issue any press releases or otherwise make any public statements of any nature whatsoever with respect to the Company without the Company’s express prior approval. The Company has the right to withhold such approval in its sole discretion.

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To subscribe for Units in the private placement offering of Eastern Resources, Inc.:

1. Date and Fill in the number of Units being purchased and Complete and Sign the Omnibus Signature Page of the Subscription Agreement.

2. Complete and return the Anti-Money Laundering Information Form.

3. Initial the Accredited Investor Certification page attached to this letter.

4. Complete and return the Investor Profile.

5. Fax or email all forms and then send all signed original documents to:

Eastern Resources, Inc.

1610 Wynkoop Street, Suite 400,

Denver, Colorado 80202

Attention: Eric Altman

With a copy to:

Gottbetter & Partners, LLP

488 Madison Avenue, 12^th Floor

New York, NY  10022

Facsimile Number:  212.400.6901

Telephone Number:  212.400.6900

Attention:  Elizabeth Q. Aviles

Email:  eqa@gottbetter.com

6. If you are paying the Purchase Price by check, a check for the exact dollar amount of the Purchase Price for the number of Units you are offering to purchase should be made payable to the order of Eastern Resources, Inc.” and should be sent to Eastern Resources, Inc., 1610 Wynkoop Street, Suite 400, Denver, Colorado 80202, Attention: Eric Altman.

7. If you are paying the Purchase Price by wire transfer, you should send a wire transfer for the exact dollar amount of the Purchase Price of the number of Units you are offering to purchase according to the following instructions:

Bank Name:	COBIZ Bank
	821 7th Street
	Denver, CO
ABA Routing Number:	102003206
Account Name:	Eastern Resources, Inc.
Account Number:	3447960
Reference:	Eastern Resources, Inc. PPO; [insert Purchaser’s name]
Company Contact:	Eric Altman

15

EASTERN RESOURCES, INC.

OMNIBUS SIGNATURE PAGE TO THE

SUBSCRIPTION AGREEMENT

 AND REGISTRATION RIGHTS AGREEMENT

Subscriber hereby elects to subscribe under the Subscription Agreement for a total of __________ Units at a price of $0.50 per Unit (NOTE: to be completed by subscriber) and executes the Subscription Agreement and, hereby, the Registration Rights Agreement.

Date (NOTE: To be completed by subscriber):                                                                    

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

Print Name(s)	Social Security Number(s)
Signature(s) of Subscriber(s)	Signature
Date	Address

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY OR TRUST:

Name of Partnership, Corporation, Limited Liability Company or Trust	Federal Taxpayer Identification Number
By:
Name:  Title:	State of Organization
Date	Address
EASTERN RESOURCES, INC. a Delaware corporation
By:
Authorized Officer

16

ANTI MONEY LAUNDERING REQUIREMENTS

The USA PATRIOT Act

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. Since April 24, 2002 all brokerage firms have been required to have new, comprehensive anti-money laundering programs.

To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.

What is money laundering?

Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

How big is the problem and why is it important?

The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion a year.

What are we required to do to eliminate money laundering?

Under rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with such laws. As part of our required program, we may ask you to provide various identification documents or other information. Until you provide the information or documents we need, we may not be able to effect any transactions for you.

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Appendix A

ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance with the AML provision of the USA PATRIOT ACT.

 (Please fill out and return with requested documentation.)

INVESTOR NAME:

LEGAL ADDRESS:

SSN# or TAX ID#

OF INVESTOR:

FOR INVESTORS WHO ARE INDIVIDUALS:

YEARLY INCOME:   AGE:  

NET WORTH (excluding value of primary residence):  

OCCUPATION:  

ADDRESS OF EMPLOYER:

INVESTMENT OBJECTIVE(S):  

IDENTIFICATION & DOCUMENTATION AND SOURCE OF FUNDS:

1. Please submit a copy of a non-expired identification for the authorized signatory(ies) on the investment documents, showing name, date of birth, address and signature. The address shown on the identification document MUST match the Investor’s address shown on the Omnibus Signature Page.

Current Driver’s License	or	Valid Passport	or	Identity Card
	(Circle one or more)

2. If the Investor is a corporation, limited liability company, trust or other type of entity, please submit the following requisite documents: (i) Articles of Incorporation, By-Laws, Certificate of Formation, Operating Agreement, Trust or other similar documents for the type of entity; and (ii) Corporate Resolution or power of attorney or other similar document granting authority to signatory(ies) and designating that they are permitted to make the proposed investment.

3. Please advise where the funds were derived from to make the proposed investment:

Investments	Savings	Proceeds of Sale	Other ____________
(Circle one or more)

Signature:  

Print Name:  

Title (if applicable):  

Date:  

Appendix B 

EASTERN RESOURCES, INC. 

ACCREDITED INVESTOR CERTIFICATION

	For Individual Investors Only (all Individual Investors must INITIAL where appropriate):
Initial	I have a net worth of at least $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. (For purposes of calculating your net worth under this paragraph, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability.)
Initial	I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.
Initial	I am a director or executive officer of the Company.
	For Non-Individual Investors (all Non-Individual Investors must INITIAL where appropriate):
Initial	The investor certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet at least one of the criteria for Individual Investors set forth above.
Initial	The investor certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
Initial	The investor certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
Initial	The investor certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of the Subscription Agreement.
Initial	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for Individual Investors.
Initial	The investor certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
Initial	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
Initial	The investor certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
Initial	The investor certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in the Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.

Initial	The investor certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
Initial	The investor certifies that it is an insurance company as defined in §2(13) of the Securities Act, or a registered investment company.

For Non-U.S. Person Investors

(all Investors who are not a U.S. Person must INITIAL this section):

Initial _______ The investor is not a “U.S. Person” as defined in Regulation S; and specifically the investor is not:

A. a natural person resident in the United States of America, including its territories and possessions (“United States”);

B. a partnership or corporation organized or incorporated under the laws of the United States;

C. an estate of which any executor or administrator is a U.S. Person;

D. a trust of which any trustee is a U.S. Person;

E. an agency or branch of a foreign entity located in the United States;

F. a non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person;

G. a discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; or

H. a partnership or corporation: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

And, in addition:

I. the investor was not offered the securities in the United States;

J. at the time the buy-order for the securities was originated, the investor was outside the United States; and

K. the investor is purchasing the securities for its own account and not on behalf of any U.S. Person (as defined in Regulation S) and a sale of the securities has not been pre-arranged with a purchaser in the United States.

Appendix C

EASTERN RESOURCES, INC.

Investor Profile

 (Must be completed by Investor)

Section A - Personal Investor Information

Investor Name(s):
Individual executing Profile or Trustee:
Social Security Numbers / Federal I.D. Number:
Date of Birth:					Marital Status:
Joint Party Date of Birth:					Investment Experience (Years):
Annual Income:					Liquid Net Worth:
Net Worth*:
Tax Bracket:		15% or below				25% - 27.5%				Over 27.5%
Home Street Address:
Home City, State & Zip Code:
Home Phone:				Home Fax:				Home Email:
Employer:
Employer Street Address:
Employer City, State & Zip Code:
Bus. Phone:			Bus. Fax:				Bus. Email:
Type of Business:
(PLACEMENT AGENT) Account Executive / Outside Broker/Dealer:
*  For purposes of calculating your net worth in this form, (a) your primary residence shall not be included as an asset; (b) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence at the time of your purchase of the securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of your purchase of the securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of your primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by your primary residence in excess of the estimated fair market value of your primary residence at the time of your purchase of the securities shall be included as a liability. If you are a United States citizen, please list the number and jurisdiction of issuance of any other government-issued document evidencing residence and bearing a photograph or similar safeguard (such as a driver’s license or passport), and provide a photocopy of each of the documents you have listed.
If you are NOT a United States citizen, for each jurisdiction of which you are a citizen or in which you work or reside, please list (i) your passport number and country of issuance or (ii) alien identification card number AND (iii) number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard, and provide a photocopy of each of these documents you have listed.  These photocopies must be certified by a lawyer as to authenticity.
Section B – Certificate Delivery Instructions
	Please deliver certificate to the Employer Address listed in Section A.
	Please deliver certificate to the Home Address listed in Section A.
	Please deliver certificate to the following address:
Section C – Form of Payment – Check or Wire Transfer
	Check payable to Eastern Resources, Inc.
	Wire funds from my outside account according to the “How to subscribe for Units” Page.
	The funds for this investment are rolled over, tax deferred from __________ within the allowed 60 day window.
Please check if you are a FINRA member or affiliate of a FINRA member firm: ____
Investor Signature									Date

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Patrick W. M. Imeson, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2013 of Eastern Resources, Inc.

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 quarterly 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 small business issuer as of, and for, the period presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me 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 my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.

Date: August 19, 2013

 /s/ Patrick W. M. Imeson

Patrick W. M. Imeson, Chief Executive Officer

(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Eric Altman, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2013 of Eastern Resources, Inc.;

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 quarterly 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 small business issuer as of, and for, the period presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me 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 my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting.

Date: August 19, 2013

/s/ Eric Altman

Eric Altman, Chief Financial Officer

(principal financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE AND 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 the Annual Report of Eastern Resources, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick W. M. Imeson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of August 19, 2013.

/s/ Patrick W. M. Imeson

Patrick W. M. Imeson, Chief Executive Officer

(principal executive officer)

A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement, has been provided to Loreto Resources Corporation, and will be retained by Loreto Resources Corporation, and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF EXECUTIVE AND 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 the Annual Report of Eastern Resources, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric Altman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

IN WITNESS WHEREOF, the undersigned has executed this certification as of August 19, 2013.

/s/ Eric Altman

Eric Altman, Chief Financial Officer

(principal financial officer)

A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement, has been provided to Loreto Resources Corporation, and will be retained by Loreto Resources Corporation, and furnished to the Securities and Exchange Commission or its staff upon request.

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 11 - Subsequent Events

During July 2013, the Company completed the closing on 200,000 units at $0.50 per unit for an aggregate of $200,000 in a private placement of up to 3,000,000 units.  Each unit consisted of one share of common stock and a warrant, representing the right to purchase one share of common stock, exercisable for a period of five (5) years from issuance, at an exercise price of $0.75 per share.  The shares of common stock contained in the units and underling the warrants carry mandatory registration rights.

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CONSOLIDATED STATEMENT OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
CONSOLIDATED STATEMENT OF OPERATIONS [Abstract]
Metal sales
Operating expenses
General and administrative	1,703,226	2,579,357	3,514,089	3,010,833
Accretion expense	411,932	340,741	971,741	703,981
Mine care and maintenance	193,842	299,434	465,893	399,124
Depreciation and amortization	7,920	1,041	9,237	2,082
Total operating expenses	2,316,920	3,220,573	4,960,960	4,116,020
Loss from operations	(2,316,920)	(3,220,573)	(4,960,960)	(4,116,020)
Other (expense) income
Interest expense	(2,322,311)	(825,963)	(5,291,776)	(4,690,590)
Interest income	29,396	40,040	29,450	39,976
Change in fair value of warrant liability	11,705		141,543
Loss on ore purchase derivative	(2,034,196)		(3,905,503)
Change in fair value of derivative instrument contract	11,786,319	(127,841)	13,235,632	(412,064)
Standstill agreement expense	(1,000,000)		(1,000,000)
Other	(33,115)		(33,115)	10,521
Total other expense	6,437,798	(913,764)	3,176,231	(5,052,157)
Net income (loss)	4,120,878	(4,134,337)	(1,784,729)	(9,168,177)
Preferred dividend	1,800,000	1,750,000	3,600,000	1,700,000
Net gain (loss) available to common shareholders	$ 2,320,878	$ (5,884,337)	$ (5,384,729)	$ (10,868,177)
Earnings per share:
Basic and diluted loss per share	$ 0.01	$ (0.03)	$ (0.03)	$ (0.05)
Weighted average number of common shares outstanding	198,550,000	198,550,000	198,550,000	198,550,000

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Accrued Liabilities

6 Months Ended

Jun. 30, 2013

Accrued Liabilities [Abstract]

Accrued Liabilities

Note 4-Accrued Liabilities

Accrued expenses consist of the following:

	June 30,		December 31,
	2013		2012
Property and mining taxes payable	$	3,363,021	$	3,228,136
Interest		1,782,287		1,450,872
Environmental remediation		377,500		380,000
Payroll and related expenses		398,871		358,411
Other		4,945		38,000
Total	$	5,926,624	$	5,455,419

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Shareholders' Deficit (Tables)

6 Months Ended

Jun. 30, 2013

Shareholders' Deficit [Abstract]

Schedule of Convertible Redeemable Preferred Stock

The Preferred Stock has been recorded as a deemed distribution at its estimated fair value of $13,656,708 based upon the discounted cash flows to be received by stock holders as follows:

Initial redemption value of preferred stock	$	60,000,000
Less:  "push down" debt plus accrued interest equal  to be paid from the proceeds of the preferred stock		(46,343,292	)
Net excess cash flow attributable to the preferred  stock at the date of acquisition	$	13,656,708

Schedule of Stock Option Activity

Stock option activity for the year ended December 31, 2012 and the six months ended June 30, 2013 was as follows:

				Weighted
	Stock			Average
	Options			Exercise Price
Outstanding - December 31, 2011		-		$	-
Granted		12,920,000			0.96
Forfeited/canceled		(260,000	)		1.00
Exercised		-			-
Outstanding - December 31, 2012		12,660,000			0.96
Granted		30,000			1.00
Forfeited/canceled		(50,000	)		1.00
Exercised		-			-
Outstanding - June 30, 2013		12,640,000		$	0.96

Schedule of Stock Options Outstanding and Exercisable

The following table presents the composition of options outstanding and exercisable:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number		Price*		Life*		Number		Price*
$	0.75		2,000,000	$	0.75		8.82		2,000,000	$	0.75
$	1.00		10,610,000		1.00		8.77				-
$	1.00		30,000		1.00		9.84		-		-
Total - June 30, 2013			12,640,000	$	0.96		8.82		2,000,000	$	0.75

*Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

Schedule of Weighted Average Assumptions Used to Value Stock-based Awards

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

	2013	2012
Approximate risk-free rate	0.97%	0.89% - 1.42%
Average expected term	6.5 years	5.5 - 6.5 years
Dividend yield	-%	-%
Volatility	80.13%	91.33% - 92.33%
Estimated fair value of total options granted	$0.22	$0.86 - $0.90

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation policies are determined by the Chief Financial Officer and are approved by the Chief Executive Officer. Fair value measurements are discussed with the Company's board of directors, as deemed appropriate. The Company has consistently applied the valuation techniques discussed below in all periods presented.

The carrying amounts of financial instruments, including cash, accounts payable, and accrued liabilities, approximated fair value as of June 30, 2013 and December 31, 2012 because of the relatively short maturity of these instruments.

The Company applies the guidance to financial assets and liabilities measured at fair value on a recurring basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The following assets are measured at fair value on a recurring basis as of June 30, 2013:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(7,371,275	)	$	(7,371,275	)
Warrant liability	$	-	$	-	$	(63,331	)	$	(63,331	)

The following assets are measured at fair value on a recurring basis as of December 31, 2012:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(16,701,404	)	$	(16,701,404	)
Warrant liability	$	-	$	-	$	(204,874	)	$	(204,874	)

Ore Purchase Derivative Contract: Based on: (i) contract terms of the production of 41,481 ounces of gold; (ii) projected future gold prices garnered from GCJ2 Comb Commodity Futures as of June 30, 2013; and (iii) discount rate determined based on the observed weighted average cost capital of a group of publicly traded comparable companies using a discounted cash flow model. The model is most sensitive to the future price of gold and expected delivery of ore.

Warrant Liability: Based on: (i) stock price; (ii) volatility calculated on the average volatility of stock for three publicly traded companies determined to be in a similar industry and with the same market capitalization as the Company; and (iii) risk free rate for the expected term of the option is based on the United States Treasury yield curve in effect on June 30, 2013.

There were no changes to the valuation techniques used during the six months ended June 30, 2013 or the year ended December 31, 2012.

The following table presents information about significant unobservable inputs to the Company's Level 3 financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

Description	Fair Value		Valuation  Technique	Significant Unobservable  Inputs	Range of Inputs
Ore purchase derivative contract	$	7,371,275	Discounted cash flow model	Production commencement Production period discount rate	April 2014,    24 Months,   25%
Warrant liability	$	63,331	Black-Scholes Model	Volatility	Approximate risk free rate: 1.223%; Expected term: 4.5 years; Volatility: 61.19%

Future increases in the credit adjusted discount rate will result in a decline in the fair value of the ore derivative contracts.

Changes in the estimates of timing production of the ore further out into the future periods would cause a change in the value of the ore derivative liability.

Changes in the estimated future price of gold would cause a change in the value of the ore derivative contract.

Changes in the stock price, volatility, and the approximate risk-free rate would cause a change the value of the warrant liability.

The change in fair value of derivative instrument contract included in the statement of operations was 13,235,632 and ($412,064) for the six months ended June 30, 2013 and 2012, respectively.

The change in valuation of warrant liability was $141,543 and zero for the six months ended June 30, 2013 and 2012, respectively.

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2012:

	Embedded
	Derivative			Warrant Liability
Beginning balance - December 31, 2012	$	(16,701,404	)	$	(204,874	)
New contracts entered into		(3,905,503	)		-
Total gains or losses (realized/unrealized)
Included in earnings		13,235,632			141,543
Transfers in and/or out of Level 3
Ending balance - June 30, 2013	$	(7,371,275	)	$	(63,331	)

The embedded derivative is summarized between related and non-related parties as follows:

Related party embedded derivative	$	6,534,884
Non-related party embedded derivative		836,391
Total embedded derivative	$	7,371,275

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Commitments and Contingencies (Details) (USD $)	6 Months Ended
	Jun. 30, 2013 ozt	Dec. 31, 2012
Commitments and Contingencies [Abstract]
Reclamation liability	$ 25,612,062	$ 24,640,321
Settlement amount with EPA	377,500
Monthly payment amount to EPA	2,500
Balloon payment amount to EPA	292,500
Property taxes, total amount past due	3,363,021	3,228,136
Payroll taxes past due	111,000
Standstill agreement amount	$ 1,000,000
Standstill agreement, amount of gold covered	3,030

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Notes Payable (Schedule of Convertible Bridge Loans) (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Convertible bridge loans principal amount	$ 1,800,000	$ 1,900,000
Related Party Loans [Member]
Debt Instrument [Line Items]
Convertible bridge loans principal amount	1,800,000	1,800,000
Unrelated Party Loans [Member]
Debt Instrument [Line Items]
Convertible bridge loans principal amount		$ 100,000

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Summary of Significant Accounting Policies (Schedule of Assets Measured at Fair Value) (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ore purchase derivative contract	$ (7,371,275)	$ (16,701,404)
Warrant liability	(63,331)	(204,874)
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ore purchase derivative contract
Warrant liability
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ore purchase derivative contract
Warrant liability
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ore purchase derivative contract	(7,371,275)	(16,701,404)
Warrant liability	$ (63,331)	$ (204,874)

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Summary of Significant Accounting Policies (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013 ozt	Jun. 30, 2012	Jun. 30, 2013 ozt	Jun. 30, 2012
Fair Value of Financial Instruments
Total net gains (losses) included in the statement of operations			$ 13,235,632	$ (412,064)
Number of ounces of gold	41,481		41,481
Change in fair value of warrant liability	$ (11,705)		$ (141,543)

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Shareholders' Deficit (Schedule of Assumptions Used to Value Options) (Details) (Stock Options [Member], USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Approximate risk-free rate	0.97%
Approximate risk-free rate, minimum		0.89%
Approximate risk-free rate, maximum		1.42%
Average expected term	6 years 6 months
Dividend yield	0.00%	0.00%
Volatility	80.13%
Volatility, minimum		91.33%
Volatility, maximum		92.33%
Estimated fair value of total options granted	$ 0.22
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average expected term		5 years 6 months
Estimated fair value of total options granted		$ 0.86
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average expected term		6 years 6 months
Estimated fair value of total options granted		$ 0.90

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Notes Payable (Series A 8% Bonds) (Details) (USD $)	1 Months Ended	6 Months Ended
	Jul. 31, 2010	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, principal amount		$ 1,800,000	$ 1,900,000
Warrants Issued to Bond Holders [Member]
Debt Instrument [Line Items]
Warrant issued period		5 years
Warrant issued expiration date		Jul. 31, 2015
Warrant issued, membership units to be purchased per $50,000 bond		0.67
Warrant issued, purchase price per membership unit		$ 37,500
Series A 8% Bonds [Member]
Debt Instrument [Line Items]
Long-term debt		919,779	919,779
Less current portion		(919,779)	(919,779)
Long-term debt, excluding current installments
Debt, principal amount		5,000,000
Debt, funded amount	1,235,500
Debt, maturity date		Jul. 31, 2012
Debt, interest rate		8.00%
Expected bonus payment per bond upon maturity		$ 50,000
Series A 8% Bonds [Member] | Upon Event of Default [Member]
Debt Instrument [Line Items]
Debt, interest rate		12.00%

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Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate (Schedule of Loans) (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Push-down redeemable obligation of Parent and its affiliate	$ 5,950,000	$ 5,950,000
Total push-down debt and redeemable obligation of Parent and its affiliate	27,529,848	27,529,848
Push-down interest of the Parent and its affiliate	31,533,358	26,448,883
Total combined push-down debt components	59,063,206	53,978,731
Push Down Debt [Member]
Debt Instrument [Line Items]
Push-down debt of the Parent and its affiliate	$ 21,579,848	$ 21,579,848

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Subsequent Events (Details) (USD $)	1 Months Ended
	Jun. 30, 2012	May 31, 2012	Jul. 31, 2013 Subsequent Event [Member] Private Placement [Member]
Subsequent Event [Line Items]
Private placement, units sold	230,000	150,000	200,000
Private placement, price per unit			$ 0.50
Private placement, value of units sold	$ 230,000	$ 150,000	$ 200,000
Private placement, units authorized			3,000,000
Share of common stock in each unit	1	1	1
Number of shares called by each warrant			1
Warrant, exercisable period			5 years
Warrant exercise price per share			$ 0.75

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Accrued Liabilities (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Accrued Liabilities [Abstract]
Property and mining taxes payable	$ 3,363,021	$ 3,228,136
Interest	1,782,287	1,450,872
Environmental remediation	377,500	380,000
Payroll and related expenses	398,871	358,411
Other	4,945	38,000
Total	$ 5,926,624	$ 5,455,419

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Shareholders' Deficit (Stock Option Plan) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013 2012 Equity Incentive Plan [Member]	Dec. 31, 2012 Options Granted for Third Party Services [Member]	Jun. 30, 2013 Options Granted for Third Party Services [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity Incentive Plan, shares of common stock reserved for issuance	20,000,000
Stock option, vesting period		1 year
Stock option, term	10 years
Stock based compensation expense	$ 1,551,617
Future compensation costs related to the unvested portions of outstanding stock options	5,345,851
Stock based compensation related to common stock issued to a third party vendor		1,801,054
Future expense related to the unvested portions of outstanding non-employee stock options			570,972
Future compensation costs related to unvested portions of outstanding stock options
Unrecognized compensation cost related to non-vested options, recognition period	3 years

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Description of Business (Details)	0 Months Ended
	May 08, 2012
Description of Business [Abstract]
Common stock forward split	2

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Basis of Presentation and Merger

6 Months Ended

Jun. 30, 2013

Basis of Presentation and Merger [Abstract]

Basis of Presentation and Merger

Basis of Presentation and Merger

These financial statements represent the consolidated financial statements of Eastern Resources, Inc., and its wholly owned subsidiaries, Elkhorn Goldfields, Inc. and Montana Tunnels, Inc. The term "ESRI" refers to Eastern Resources, Inc., before giving effect to the Merger (defined below), the term "MTMI" refers to Montana Tunnels Mining, Inc., a Delaware corporation, the term "EGI" refers to Elkhorn Goldfields, Inc., a Montana corporation, and the terms "Company," "we," "us," and "our" refer to Eastern Resources, Inc., and its wholly-owned subsidiaries, including MTMI and EGI, after giving effect to the Merger.

On April 6, 2012, pursuant to an agreement and plan of merger of the same date, EGI and MTMI, formerly each a wholly-owned subsidiary of Elkhorn Goldfields LLC, a Delaware limited liability company ("EGLLC" or "Parent"), merged with and into ESRI (the "Merger") and EGI and MTMI became our wholly owned subsidiaries.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial statements of the Company as of June 30, 2013. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the operating results for the full year. It is recommended that these consolidated financial statements be read in conjunction with the consolidated financial statements and related disclosures for the year ended December 31, 2012 filed with the Securities and Exchange Commission ("SEC") on April 16, 2013.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

Fair Value of Financial Instruments

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation policies are determined by the Chief Financial Officer and are approved by the Chief Executive Officer. Fair value measurements are discussed with the Company's board of directors, as deemed appropriate. The Company has consistently applied the valuation techniques discussed below in all periods presented.

The carrying amounts of financial instruments, including cash, accounts payable, and accrued liabilities, approximated fair value as of June 30, 2013 and December 31, 2012 because of the relatively short maturity of these instruments.

The Company applies the guidance to financial assets and liabilities measured at fair value on a recurring basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The following assets are measured at fair value on a recurring basis as of June 30, 2013:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(7,371,275	)	$	(7,371,275	)
Warrant liability	$	-	$	-	$	(63,331	)	$	(63,331	)

The following assets are measured at fair value on a recurring basis as of December 31, 2012:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(16,701,404	)	$	(16,701,404	)
Warrant liability	$	-	$	-	$	(204,874	)	$	(204,874	)

Ore Purchase Derivative Contract: Based on: (i) contract terms of the production of 41,481 ounces of gold; (ii) projected future gold prices garnered from GCJ2 Comb Commodity Futures as of June 30, 2013; and (iii) discount rate determined based on the observed weighted average cost capital of a group of publicly traded comparable companies using a discounted cash flow model. The model is most sensitive to the future price of gold and expected delivery of ore.

Warrant Liability: Based on: (i) stock price; (ii) volatility calculated on the average volatility of stock for three publicly traded companies determined to be in a similar industry and with the same market capitalization as the Company; and (iii) risk free rate for the expected term of the option is based on the United States Treasury yield curve in effect on June 30, 2013.

There were no changes to the valuation techniques used during the six months ended June 30, 2013 or the year ended December 31, 2012.

The following table presents information about significant unobservable inputs to the Company's Level 3 financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

Description	Fair Value		Valuation  Technique	Significant Unobservable  Inputs	Range of Inputs
Ore purchase derivative contract	$	7,371,275	Discounted cash flow model	Production commencement Production period discount rate	April 2014,    24 Months,   25%
Warrant liability	$	63,331	Black-Scholes Model	Volatility	Approximate risk free rate: 1.223%; Expected term: 4.5 years; Volatility: 61.19%

Future increases in the credit adjusted discount rate will result in a decline in the fair value of the ore derivative contracts.

Changes in the estimates of timing production of the ore further out into the future periods would cause a change in the value of the ore derivative liability.

Changes in the estimated future price of gold would cause a change in the value of the ore derivative contract.

Changes in the stock price, volatility, and the approximate risk-free rate would cause a change the value of the warrant liability.

The change in fair value of derivative instrument contract included in the statement of operations was 13,235,632 and ($412,064) for the six months ended June 30, 2013 and 2012, respectively.

The change in valuation of warrant liability was $141,543 and zero for the six months ended June 30, 2013 and 2012, respectively.

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2012:

	Embedded
	Derivative			Warrant Liability
Beginning balance - December 31, 2012	$	(16,701,404	)	$	(204,874	)
New contracts entered into		(3,905,503	)		-
Total gains or losses (realized/unrealized)
Included in earnings		13,235,632			141,543
Transfers in and/or out of Level 3
Ending balance - June 30, 2013	$	(7,371,275	)	$	(63,331	)

The embedded derivative is summarized between related and non-related parties as follows:

Related party embedded derivative	$	6,534,884
Non-related party embedded derivative		836,391
Total embedded derivative	$	7,371,275

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Customer Deposits

6 Months Ended

Jun. 30, 2013

Customer Deposits [Abstract]

Customer Deposits

Note 5 - Customer Deposits

During April, 2011 the Company entered into a Minerals Product Receivables Purchase Agreement (the "MPRPA"), with an affiliate of the Parent. In October, 2012, the MPRPA was amended to sell up to 50% of the first 160,000 ounces of gold produced from the Golden Dream Mine for up-front payments of $25,391,200. As of June 30, 2013, the Company has received $11,680,000 of up-front payments and is obligated to sell 50% of the first 41,481 ounces to the holders of the MPRPA. The following is a reconciliation of the up-front payment and ounces sold under the MPRPA as of June 30, 2013:

In addition, the company, as an inducement for the secured lenders from exercising their right of foreclosure through September 30, 2013, entered into an agreement extending $1,000,000 from the MPRPA

	Up-front  Payments		Ounces
December 31, 2011	$	10,000,000		33,360
Additions		760,000		2,303
Delivery		-		-
December 31, 2012		10,760,000		35,663
Additions		1,920,000		5,818
Delivery		-		-
June 30, 2013	$	12,680,000		41,481

MPRPA, as amended, requires the Company to pay all proceeds from 50% of the sales of gold in excess of the lesser of $500 per ounce or the latest COMEX spot gold price, if any, to the customers. Additionally, the customers may purchase 15% (prorated if the entire MPRPA is not fully subscribed) of the ounces produced by the mine after the mine has produced in excess of 250,000 aggregate ounces for a purchase price of the lesser of $600 per ounce or the latest COMEX spot gold price. The term of the MPRPA is through the closure of the Golden Dream Mine. Currently the Company estimates reserves at approximately 258,000 ounces of gold.

The MPRPA includes an embedded derivative, which is valued using a discounted cash flow model with the major inputs of: (i) a 25% discount rate, (ii) gold future pricing, (iii) measurement date with the receipt of payment, and (iv) and management's forecast to produce 72,296 ounces by March 2016. During the six months ended June 30, 2013, the Company recognized $3,905,503 of loss on the ore purchase agreement to reflect the difference between fair value of the derivative contract liability and the agreement. The customer deposit will be reduced by the Company with the delivery of the gold. The fair value of the embedded derivative fluctuates with changes in the price of gold and expected delivery of ore.

The up-front payments of $12,680,000, at June 30, 2013, have been recognized as refundable customer deposits until the gold is sold. The refundable customer deposits are considered current due to the party's making the payments having the right, upon written notice, at their option to demand repayment of the up-front cash deposit, without interest, for any shortfall in delivered ounces and the uncertainty of the commencement of ore production and the price of gold.

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Management's Plan

6 Months Ended

Jun. 30, 2013

Management's Plan [Abstract]

Management's Plan

Note 3 - Management's Plan

At June 30, 2013, the Company has not generated any revenues to fund operations. The continuation of the Company as a going concern is dependent upon the ability of the Company to meet financial requirements for mine development and raise additional capital, which will require the issuance of additional debt and/or equity securities. The Company is attempting to raise capital through gold streaming, whereby upfront cash payments are exchanged for a percentage of the future gold production by the Golden Dream Mine. All of the company's mining projects have been placed in care and maintenance until the Company secures additional financing. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Shareholders' Deficit (Common Stock) (Details) (USD $)	0 Months Ended	1 Months Ended
	May 08, 2012	Jun. 30, 2012	May 31, 2012	Jun. 30, 2013	Dec. 31, 2012
Shareholders' Deficit [Abstract]
Common Stock, shares authorized				300,000,000	300,000,000
Common Stock, par value per share				$ 0.001	$ 0.001
Common Stock, shares issued				198,550,000	198,550,000
Common Stock, shares outstanding				198,550,000	198,550,000
Common stock forward split	2
Private placement, units sold		230,000	150,000
Private placement, value of units sold		$ 230,000	$ 150,000
Share of common stock in each unit		1	1
Number of units which have renounced rights				65,000
Class of Stock [Line Items]
Registration statement filing, accrued potential penalties				$ 38,000
Warrants Issued in Private Placement [Member]
Class of Warrant or Right [Line Items]
Each warrant right to purchase share of common stock		0.5	0.5
Warrant issued period		5 years	5 years
Warrant exercise price per share		$ 1.50	$ 1.50
Maximum [Member]
Class of Stock [Line Items]
Private placement, registration statement filing period following final closing		90 days	90 days
Private placement, registration statement filing effective period		150 days	150 days
Registration statement filing, Penalties accrue and cumulate rate for each full period of 30 days		10.00%	10.00%

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Summary of Significant Accounting Policies (Schedule of Valuation Techniques and Related Unobservable Inputs) (Details) (USD $)

6 Months Ended

Jun. 30, 2013

Dec. 31, 2012

Fair Value Inputs, Liabilities, Quantitative Information [Line Items]

Derivative liability

$ 7,371,275

$ 16,701,404

Discount rate

25.00%

Ore Purchase Derivative Contract [Member]

Fair Value Inputs, Liabilities, Quantitative Information [Line Items]

Derivative liability

7,371,275

Valuation Technique

Discounted cash flow model

Significant Unobservable Inputs

Production commencement Production period discount rate

Maturity date

Apr. 30, 2014

Discount rate

25.00%

Warrant [Member]

Fair Value Inputs, Liabilities, Quantitative Information [Line Items]

Derivative liability

$ 63,331

Valuation Technique

Black-Scholes Model

Significant Unobservable Inputs

Volatility

Volatility

61.19%

Approximate risk free rate

1.223%

Expected term

4 years 6 months

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Customer Deposits (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 ozt	Jun. 30, 2012	Dec. 31, 2012
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Ounces of gold produce			160,000
Refundable customer deposit, ore purchase agreement	$ 12,680,000		$ 12,680,000		$ 10,760,000
Standstill agreement	1,000,000		1,000,000
Gold discount rate			25.00%
Loss on related party ore purchase derivative			(3,905,503)
Affiliated Entity [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Ounces of gold produce			36,148
Refundable customer deposit, ore purchase agreement	10,920,000		10,920,000
Scenario, Forecast [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Ounces of gold produce			72,296
Estimated gold reserves	258,000		258,000
With Respect to 50% of the first 160,000 Ounces Sold [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Percentage of ounces of gold production agreed to be sold			50.00%
Ounces of gold produce			41,481
Proceeds per ounce in excess of which company is required to pay to related party			500
Amount of gold covered in agreement	41,481		41,481
Refundable customer deposit, ore purchase agreement	11,680,000		11,680,000
With Respect to Each Ounce of Gold Over 250,000 Ounces [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Percentage of ounces of gold production agreed to be sold			15.00%
Ounces of gold produce			250,000
Proceeds per ounce in excess of which company is required to pay to related party			$ 600

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Notes Payable (Convertible Bridge Loans) (Narrative) (Details) (USD $)									6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Related Party Loans [Member]	Dec. 31, 2012 Related Party Loans [Member]	Jun. 30, 2013 Unrelated Party Loans [Member]	Dec. 31, 2012 Unrelated Party Loans [Member]	Jun. 30, 2013 Bridge Loan [Member]	Dec. 31, 2012 Bridge Loan [Member]	Jun. 30, 2013 Bridge Loan [Member] Related Party Loans [Member]	Dec. 31, 2012 Bridge Loan [Member] Related Party Loans [Member]	Jun. 30, 2013 Bridge Loan [Member] Related Party Loans [Member] Upon Event of Default [Member]	Jun. 30, 2013 Bridge Loan [Member] Unrelated Party Loans [Member]	Dec. 31, 2012 Bridge Loan [Member] Unrelated Party Loans [Member]	Apr. 30, 2012 Bridge Loan [Member] Unrelated Party Loans [Member]
Short-term Debt [Line Items]
Number of unsecured bridge loans									3
Debt, principal amount	$ 1,800,000	$ 1,900,000	$ 1,800,000	$ 1,800,000		$ 100,000			$ 1,800,000	$ 1,800,000			$ 100,000	$ 100,000
Convertible bridge loans	$ 1,800,000	$ 1,900,000					$ 1,800,000	$ 1,900,000
Debt, interest rate									12.00%		14.00%			12.00%
Debt, maturity date									Aug. 31, 2012

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Shareholders' Deficit (Schedule of Stock Options Outstanding and Exercisable) (Details) (Employee Stock Option [Member], USD $)	6 Months Ended
	Jun. 30, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number	12,640,000
Price	$ 0.96	[1]
Life	8 years 9 months 26 days
Number	2,000,000
Price	$ 0.75	[1]
$ 0.75 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices	$ 0.75
Number	2,000,000
Price	$ 0.75	[1]
Life	8 years 9 months 26 days	[1]
Number	2,000,000
Price	$ 0.75	[1]
$ 1.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices	$ 1.00
Number	10,610,000
Price	$ 1.00	[1]
Life	8 years 9 months 7 days	[1]
Number
Price
$ 1.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices	$ 1.00
Number	30,000
Price	$ 1.00	[1]
Life	9 years 10 months 2 days	[1]
Number
Price

[1] *Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS [Abstract]
Series A Convertible Redeemable Preferred stock, par value per share	$ 0.001	$ 0.001
Series A Convertible Redeemable Preferred stock, shares authorized	10,000,000	10,000,000
Series A Convertible Redeemable Preferred stock, shares issued	10,000,000	10,000,000
Series A Convertible Redeemable Preferred stock, shares outstanding	10,000,000	10,000,000
Common Stock, par value per share	$ 0.001	$ 0.001
Common Stock, shares authorized	300,000,000	300,000,000
Common Stock, shares issued	198,550,000	198,550,000
Common Stock, shares outstanding	198,550,000	198,550,000

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Shareholders' Deficit

6 Months Ended

Jun. 30, 2013

Shareholders' Deficit [Abstract]

Shareholders' Deficit

Note 8 - Shareholders' Deficit

Common Stock

As of June 30, 2013, the authorized share capital of the Company consisted of 300,000,000 shares of common stock with a par value of $0.001 per share. There were 198,550,000 shares of common stock issued and outstanding as of June 30, 2013.

On June 8, 2012 the Company declared a 2 for 1 forward stock split on the Company's common stock outstanding in the form of a dividend with a Declaration Date of May 8, 2012 and a Record Date of May 17, 2012. The stock split entitled each common stock shareholder as of the Record Date to receive one additional share of common stock for each share owned. All share and per share amounts presented in the accompanying consolidated financial statements have been restated to reflect this change.

During May and June 2012, the Company completed a private placement for 150,000 and 230,000 units for $150,000 and $230,000, respectively.  Each unit consisted of one share of common stock and a warrant, representing the right to purchase one-half share of common stock, exercisable for a period of five (5) years from issuance, at an exercise price of $1.50 per whole share.  The shares of common stock contained in the units and underling the warrants carry mandatory registration rights. Subsequent to the private placement the investors with 65,000 units agreed to renounce all right, title and interest in and to the warrants contained in the private placement units.

The Company agreed to file the registration statement no later than ninety calendar days following the final closing of the private placement and use its best efforts to ensure that such registration statement is declared effective within one hundred fifty calendar days of filing with the SEC (the "Effectiveness Deadline").

If the Company is late in filing the registration statement or if the registration statement is not declared effective by the Effectiveness Deadline, monetary penalties payable by the Company to each holder of registrable securities will commence to accrue and cumulate at a rate equal to 1.0% of the purchase price per share paid by such holder for the registrable securities for each full period of 30 days that (i) the Company is late in filing the registration statement or (ii) the registration statement is late in being declared effective by the SEC (which shall be pro-rated for any period less than 30 days); provided, however, that in no event shall the aggregate of any such penalties exceed 10% of the purchase price per share paid by such holder for the registrable securities. Notwithstanding the foregoing, no payments shall be owed with respect to any period during which all of the holder's registrable securities may be sold by such holder under Rule 144 or pursuant to another exemption from registration. Moreover, no such payments shall be due and payable with respect to any registrable securities the Company is unable to register due to limits imposed by the SEC's interpretation of Rule 415 under the Securities Act of 1933, as amended (the "Securities Act").

The Company has agreed to maintain the effectiveness of the registration statement through the earlier of second anniversary of the date the registration statement is declared effective by the SEC or until Rule 144 of the Securities Act is available to the holders to allow them to sell all of their registrable securities thereunder. The holders of any registrable securities removed from the registration statement as a result of any Rule 415 or other comments from the SEC shall have "piggyback" registration rights for the shares of common stock or common stock underlying such warrants with respect to any registration statement filed by us following the effectiveness of the registration statement which would permit the inclusion of these shares. As of June 30, 2013, the Company has accrued a $38,000 for potential penalties related to the registration of the shares from the private stock sale.

Convertible Redeemable Preferred Stock

The authorized share capital of the Company includes 10,000,000 shares of Series A Convertible Redeemable Preferred Stock ("Preferred Stock"), issued April 6, 2012 with a par value of $0.001 per share, all 10,000,000 shares were outstanding at June 30, 2013. The holder of the Preferred Stock is entitled to receive, out of funds legally available the cumulative non-compounding preferential dividends at the rate of 12% of the stated value of $6.00 per share per year. No dividends may be declared or paid on the shares of common stock or any other capital stock of the Company so long as any shares of the Preferred Stock remain outstanding. As of June 30, 2013, no dividends have been declared on the Preferred Stock. However, the Company has accrued dividends in arrears totaling $8,900,000 to the benefit of the Preferred Stock shareholders. The Preferred Stock has been designated to pay off the push down obligation which has been collateralized by assets of the Company. As money is distributed to the holder of the Preferred Stock either as a dividend or in redemption, it must be used to pay the interest and principle on the push down obligations that are reflected in the accompanying financial statements. The holders of the Preferred Stock have the option to redeem the Preferred Stock six months from the date of issuance or the date that the Company produces 25,000 ounces of gold, at any time prior to the third anniversary of issuance out of legally available funds. Under Delaware law, the board of directors has the discretion to determine, in good faith, whether there are sufficient legally available funds to make redemption. A surplus alone does not constitute legally available funds; the board of directors must determine if the funds available are sufficient to cover the redemption without making the Company insolvent. The contingency related to redemption has not been met because the redemption of the Preferred Stock would result in the insolvency of the Company. The Preferred Stock has been recorded as a deemed distribution at its estimated fair value of $13,656,708 based upon the discounted cash flows to be received by stock holders as follows:

Initial redemption value of preferred stock	$	60,000,000
Less:  "push down" debt plus accrued interest equal  to be paid from the proceeds of the preferred stock		(46,343,292	)
Net excess cash flow attributable to the preferred  stock at the date of acquisition	$	13,656,708

Stock Option Plan

The Company's stockholders approved the 2012 Equity Incentive Plan (the "2012 Plan") on April 5, 2012 pursuant to which a total of 20,000,000 shares of common stock have been reserved for issuance to eligible employees, consultants, and directors of the Company. The 2012 Plan provides for awards of non-statutory stock options, incentive stock options, stock appreciation rights, performance share awards, and restrictive stock awards within the meaning of Section 422 of the IRC, as amended and stock purchase rights to purchase shares of the Company's common stock.

The 2012 Plan is administered by the Board of Directors, which has the authority to select the individuals to whom awards will be granted and to determine whether and to what extent stock options and stock purchase rights are to be granted, the number of shares of common stock to be covered by each award, the vesting schedule of stock options, and all other terms and conditions of each award. Stock options have a maximum term of ten years. It is the Company's practice to grant options to employees with exercise prices equal to or greater than the estimated fair market value of its common stock. The 2012 Plan shall terminate within ten years.

The fair value of each award is estimated on the date of grant and recognized as expense over the service period which is generally the vesting period. Stock option values are estimated using the Black Scholes option valuation model, which requires the input of subjective assumptions, including the expected term of the option award, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management judgment. During the six months ended June 30, 2013 the Company recorded stock based compensation expense of $1,511,617, associated with stock options. As of June 30, 2013, the Company has estimated $5,345,851 of future compensation costs related to the unvested portions of outstanding stock options which is expected to be recognized over the next three years.

Stock based compensation related to common stock issued to a third party vendor, during 2012, in exchange for services was valued at $1,801,054, with no forfeiture rate, the stock options vest over one year. During the six months ended June 30, 2013, the Company recorded $570,972, in consulting expense. As of June 30, 2013, the Company has estimated no future expense related to the unvested portions of outstanding stock options.

Stock option activity for the year ended December 31, 2012 and the six months ended June 30, 2013 was as follows:

				Weighted
	Stock			Average
	Options			Exercise Price
Outstanding - December 31, 2011		-		$	-
Granted		12,920,000			0.96
Forfeited/canceled		(260,000	)		1.00
Exercised		-			-
Outstanding - December 31, 2012		12,660,000			0.96
Granted		30,000			1.00
Forfeited/canceled		(50,000	)		1.00
Exercised		-			-
Outstanding - June 30, 2013		12,640,000		$	0.96

The following table presents the composition of options outstanding and exercisable:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number		Price*		Life*		Number		Price*
$	0.75		2,000,000	$	0.75		8.82		2,000,000	$	0.75
$	1.00		10,610,000		1.00		8.77				-
$	1.00		30,000		1.00		9.84		-		-
Total - June 30, 2013			12,640,000	$	0.96		8.82		2,000,000	$	0.75

*Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

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

	2013	2012
Approximate risk-free rate	0.97%	0.89% - 1.42%
Average expected term	6.5 years	5.5 - 6.5 years
Dividend yield	-%	-%
Volatility	80.13%	91.33% - 92.33%
Estimated fair value of total options granted	$0.22	$0.86 - $0.90

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities
Net loss	$ (1,784,729)	$ (9,168,177)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization	9,237	2,082
Accretion expense	971,741	703,981
Loss on ore purchase derivative	3,905,503
Change in fair value of derivative instrument	(13,235,632)	412,064
Standstill agreement	1,000,000
Accretion on convertible bridge loans		364,822
Loss on disposal of equipment	33,115
Employee stock compensation	1,511,617	1,135,365
Stock options for services	570,972
Change in fair value of warrant liability	(141,543)	306,568
Push-down redeemable obligation of Parent and its affiliate
Push-down interest of Parent and its affiliate	5,084,475	3,735,593
Changes in operating assets and liabilities
Accounts receivable other	1,008	(17,852)
Inventory		24,195
Other current assets	(11,664)	(47)
Accounts payable	13,257	622,206
Accounts payable-related party	245,039
Accrued liabilities	471,205	1,283,659
Refundable customer deposit, ore purchase agreement	920,000
Adjustments to reconcile net loss to net cash (used in) provided by operating activities	1,348,330	8,572,636
Net cash used in operating activities	(436,399)	(595,541)
Cash flows from investing activities
Purchase of building and equipment	(3,449)	45,539
Additions to mine development		(1,297,877)
Additions to mining properties and mineral interests	(20,043)	(30,065)
Change in deposits for reclamation obligation	(29,351)	33,513
Net cash used in investing activities	(52,843)	(1,248,890)
Cash flows from financing activities
Payments on series A 8% bonds		(480,000)
Proceeds from sale of common stock		380,000
Proceeds from bridge loans		1,900,000
Payments on bridge loans	(100,000)
Proceeds from promissory notes	519,800	10,000
Payments on capital lease obligations	(13,940)	(176,420)
Payments of distributions to stockholders		(100,000)
Net cash provided by financing activities	405,860	1,533,580
Net (decrease) in cash and cash equivalents	(83,382)	(310,851)
Cash and cash equivalents - beginning of year	113,505	358,125
Cash and cash equivalents - end of year	30,123	47,274
Supplemental cash flow disclosures
Cash paid for interest	45,587	127,639
Non-cash financing and investing activities
Depreciation expense capitalized to mine development		78,678
Cancellation of capital lease	(35,750)
Series A Convertible Redeemable Preferred stock dividend	$ 3,600,000

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 30,123	$ 113,505
Accounts receivable other		1,008
Inventory, net	886,977	886,977
Other current assets	11,664
Total current assets	928,764	1,001,490
Non-current assets
Buildings, equipment, and land, net	5,498,912	5,573,565
Mine development	5,102,217	5,102,217
Mining properties and mineral interests, net	16,460,922	16,440,879
Deposits for reclamation obligations	16,809,636	16,780,285
Total non-current assets	43,871,687	43,896,946
Total assets	44,800,451	44,898,436
Current liabilities
Accounts payable	1,438,330	1,425,073
Accrued liabilities	5,926,624	5,455,419
Accounts payable - related party	343,958	98,919
Promissory notes	1,225,537	705,737
Convertible bridge loans	1,800,000	1,900,000
Current portion of capital lease obligation	45,039	94,729
Series A 8% bonds	919,779	919,779
Refundable customer deposit, ore purchase agreement	12,680,000	10,760,000
Push-down redeemable obligation of Parent and its affiliate	5,950,000	5,950,000
Push-down interest of Parent and its affiliate	31,533,358	26,448,883
Push-down debt of Parent and its affiliate	21,579,848	21,579,848
Total current liabilities	83,442,473	75,338,387
Non-current liabilities
Warrant liability	63,331	204,874
Reclamation liability	25,612,062	24,640,321
Ore purchase derivative contract	7,371,275	16,701,404
Total non-current liabilities	33,046,668	41,546,599
Total liabilities	116,489,141	116,884,986
Series A 12% convertible redeemable preferred stock, $0.001 par value 10,000,000 shares authorized, issued, and outstanding at June 30, 2013 and December 31, 2012	13,656,708	13,656,708
Series A convertible redeemable preferred stock accrued dividend	8,900,000	5,300,000
Total convertible redeemable preferred stock	22,556,708	18,956,708
Commitments and contingencies
Shareholders' deficit
Common stock $0.001 par value 300,000,000 authorized at June 30, 2013 and December 31, 2012, 198,550,000 were issued and outstanding at June 30, 2013 and December 31, 2012	198,550	198,550
Additional paid-in capital	5,440,153	3,357,564
Accumulated deficit	(99,884,101)	(94,499,372)
Total Shareholders' deficit	(94,245,398)	(90,943,258)
Total liabilities, convertible redeemable preferred stock and shareholders' deficit	$ 44,800,451	$ 44,898,436

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Summary of Significant Accounting Policies (Schedule of Changes in Level 3 Financial Instruments) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Embedded Derivative [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance - December 31, 2012	$ (16,701,404)
New contracts entered into	(3,905,503)
Total gains or losses (realized/unrealized Included in earnings	13,235,632
Transfers in and/or out of Level 3
Ending balance - June 30, 2013	(7,371,275)
Warrant [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance - December 31, 2012	(204,874)
New contracts entered into
Total gains or losses (realized/unrealized Included in earnings	141,543
Transfers in and/or out of Level 3
Ending balance - June 30, 2013	$ (63,331)

XML

Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate (Tables) (Push Down Debt Obligation [Member])

6 Months Ended

Jun. 30, 2013

Push Down Debt Obligation [Member]

Debt Instrument [Line Items]

Schedule of Debt Instruments

The following is a summary of the loans as of the six months ended June 30, 2013 and year ended December 31, 2012:

	June 30,		December 31,
	2013		2012
Total push-down debt of Parent and its affiliate	$	21,579,848	$	21,579,848
Push-down redeemable obligation of Parent and its affiliate		5,950,000		5,950,000
Total push-down debt and redeemable obligation of Parent and its affiliate		27,529,848		27,529,848
Push-down interest of the Parent and its affiliate		31,533,358		26,448,883
Total combined push-down debt components	$	59,063,206	$	53,978,731

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Shareholders' Deficit (Schedule of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Employee Stock Option [Member]
Number of Shares
Outstanding - beginning balance	12,660,000
Granted	30,000	12,920,000
Forfeited/canceled	(50,000)	(260,000)
Exercised
Outstanding - ending balance	12,640,000	12,660,000
Weighted Average Exercise Price
Outstanding - beginning balance	$ 0.96
Granted	$ 1.00	$ 0.96
Forfeited/canceled	$ 1.00	$ 1.00
Exercised
Outstanding - ending balance	$ 0.96	$ 0.96

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Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate (Narrative) (Details) (USD $)					6 Months Ended	12 Months Ended		6 Months Ended	12 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Push Down Debt [Member]	Dec. 31, 2012 Push Down Debt [Member]	Jun. 30, 2013 Series A Convertible Notes [Member] Push Down Debt [Member]	Dec. 31, 2007 Series A Convertible Notes [Member] Push Down Debt [Member]	Dec. 31, 2012 Series A Convertible Notes [Member] Push Down Debt [Member]	Jun. 30, 2013 Loan One [Member] Push Down Debt [Member]	Dec. 31, 2007 Loan One [Member] Push Down Debt [Member]	Dec. 31, 2012 Loan One [Member] Push Down Debt [Member]	Jun. 30, 2013 Loan Two [Member] Push Down Debt [Member]	Dec. 31, 2008 Loan Two [Member] Push Down Debt [Member]	Dec. 31, 2012 Loan Two [Member] Push Down Debt [Member]
Debt Instrument [Line Items]
Debt, principal amount	$ 1,800,000	$ 1,900,000			$ 5,000,000			$ 8,050,000			$ 5,000,000
Debt, maturity date					Apr. 30, 2015	Dec. 31, 2009		Apr. 30, 2015	May 31, 2009		Apr. 30, 2015	Jan. 31, 2009
Debt, interest rate					18.00%			18.00%			18.00%
Debt, value of Series A Bonds principal amount of loan can be exchanged					50,000			13,416,666
Debt exchange, per share											$ 1.00
Notes balance			21,579,848	21,579,848	5,791,701		5,791,701	9,680,125		9,680,125	6,108,022		6,108,022
Push-down redeemable obligation of Parent and its affiliate	$ 5,950,000	$ 5,950,000

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Notes Payable (Promissory Notes - Related Parties) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, principal amount	$ 1,800,000	$ 1,900,000
Promissory Notes - Related Parties [Member]
Debt Instrument [Line Items]
Promissory Notes	725,537	205,737
Less current portion	(725,537)	(205,737)
Promissory notes - related parties, noncurrent
Loan proceeds from related parties	519,800	577,260
Debt, maturity date	Nov. 30, 2013
Interest rate on note	6.00%
Repayments of promissory notes - related parties	$ 371,523

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Notes Payable (Promissory Notes) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt, principal amount	$ 1,800,000	$ 1,900,000
Promissory Notes [Member]
Debt Instrument [Line Items]
Long-term debt	500,000	500,000
Less current portion	(500,000)	(500,000)
Long-term debt, excluding current installments
Debt, principal amount	$ 500,000
Debt, maturity date	May 31, 2013	Mar. 31, 2013
Debt, interest rate	8.00%	6.00%

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Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate

6 Months Ended

Jun. 30, 2013

Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate [Abstract]

Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate

Note 7 - Push-Down Debt, Interest, and Redemption Obligation of Parent and Its Affiliate

During May 2010, the Company entered into a pledge agreement with the Parent and an investor group.  Through the agreement the Company's assets serve as collateral for multiple loans of the Parent to the investors group. The agreement states that all loans and redeemable interest are jointly and severally obligations of the Parent and the investor group may allocate payments at its discretion.   Although the Company is not a maker or guarantor on the loans, the loans have been "pushed down" to the Company in the accompanying consolidated financial statements in accordance with Statement of Accounting Bulletin No 54, as all assets have been pledged as collateral and repayment is dependent upon the cash flows from the Company's operations.

$5,000,000 Series A Convertible notes were due in December 2007. During 2007, the notes were extended to December 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the convertible notes accrue interest at 18% per annum, compounded quarterly, and are due in April 2015. Interest only payments are to be made quarterly. At the election of the holder, principal amounts of the notes are convertible into $50,000 per membership unit of the Parent. The Company's mining properties and equipment have been pledged as collateral to these notes. The balances of these notes were $5,791,701 at June 30, 2013 and December 31, 2012.

During 2007, an affiliate of the Parent entered into a loan for $8,050,000. The loan was due May 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the loans accrue interest at 18% per annum, compounded quarterly, and are due April 2015. At the election of the holder, the principal amount of the loan can be exchanged for $13,416,666 of Series A Bonds of the Parent. The Company's mining properties and equipment have been pledged as collateral to this note. The balance of this note was $9,680,125 at June 30, 2013 and December 31, 2012.

During 2008, an affiliate of the Parent entered into a loan for $5,000,000. The loan was due January 2009. During May 2009, the accrued and unpaid interest was included in the revised notes. Included in the revision, the loans accrue interest at 18% per annum, compounded quarterly, and are due April 2015. At the election of the holder, the principal amount of the loan can be exchanged for shares of an investment of the Parent at $1.00 per share, exchanged for the affiliate's assets, or exchanged for bonds of an investment of the Parent at $1.00 principal for each $1.00 par amount of a bond. The Company's mining properties and equipment have been pledged as collateral to this note. The balance of this note was $6,108,022 at June 30, 2013 and December 31, 2012.

Redeemable obligation of Parent and its affiliate.

An affiliate of the Parent offered redeemable options to certain debt holders ("Optionee") to purchase membership units in an equity owner of the Parent. The affiliate as Optionor grants to each Optionee the option to put all or any portion of the membership units to the affiliate. The Company's mining properties and equipment have been pledged as collateral to the redeemable interest. The balance of this redeemable option was $5,950,000 at June 30, 2013 and December 31, 2012.

The following is a summary of the loans as of the six months ended June 30, 2013 and year ended December 31, 2012:

	June 30,		December 31,
	2013		2012
Total push-down debt of Parent and its affiliate	$	21,579,848	$	21,579,848
Push-down redeemable obligation of Parent and its affiliate		5,950,000		5,950,000
Total push-down debt and redeemable obligation of Parent and its affiliate		27,529,848		27,529,848
Push-down interest of the Parent and its affiliate		31,533,358		26,448,883
Total combined push-down debt components	$	59,063,206	$	53,978,731

The Parent and its affiliate have not made the interest payments on the notes or redeemable obligation; thus, an event of default may be present. Because of the non-payment of interest, the Company has classified the debt and redeemable obligation as current.

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Summary of Significant Accounting Policies (Schedule of Embedded Derivatives) (Details) (USD $)	Jun. 30, 2013
Derivative [Line Items]
Embedded derivative	$ 7,371,275
Related Party Derivative [Member]
Derivative [Line Items]
Embedded derivative	6,534,884
Unrelated Party Derivative [Member]
Derivative [Line Items]
Embedded derivative	$ 836,391

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Shareholders' Deficit (Convertible Redeemable Preferred Stock) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013 ozt	Dec. 31, 2012
Shareholders' Deficit [Abstract]
Series A Convertible Redeemable Preferred stock, shares authorized	10,000,000	10,000,000
Series A Convertible Redeemable Preferred stock, par value per share	$ 0.001	$ 0.001
Series A Convertible Redeemable Preferred stock, shares outstanding	10,000,000	10,000,000
Convertible Redeemable Preferred stock, preferential dividends	12.00%
Convertible Redeemable Preferred stock, stated value per share per annum	$ 6.00
Convertible Redeemable Preferred stock, accrued dividends in arrears	$ 8,900,000
Convertible Redeemable Preferred stock, fair value	13,656,708
Quantity of gold required for redemption	25,000
Initial redemption value of preferred stock	60,000,000
Less: "push down" debt plus accrued interest equal to be paid from the proceeds of the preferred stock	(46,343,292)
Total convertible redeemable preferred stock net of push down obligations of parent	$ 13,656,708

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10 - Commitments and Contingencies

Environmental Matters

The Company's mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the public health and environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.

Estimated future reclamation costs are based principally on legal and regulatory requirements. At June 30, 2013 and December 31, 2012, $25,612,062 and $24,640,321, respectively, was accrued for reclamation costs relating to currently producing mineral properties in accordance with asset retirement obligation guidance.

On May 24, 2010, the Environmental Protection Agency ("EPA") issued an action memorandum which documented the determination that soil removal was necessary to mitigate threats posed by elevated levels of lead and arsenic in the soil located on property in close proximity to MTMI.  The work of clean-up conducted by the EPA of the site commenced in June 2010 and was completed by August of the same year.  On August 26, 2010, the Company and the EPA entered into an access and compensation agreement which detailed the responsibilities of both the EPA and the Company with respect to the clean-up and disposal of contaminated soils from the Site.  On October 26, 2011 the EPA proposed a settlement of $377,500.  On November 04, 2011, the Company agreed to the EPA proposed amount of $377,500 but added a stipulation that the amount be payable over time depending upon the status of the Company's operations.  The $377,500 settlement will be paid in 35 monthly installments of $2,500 and a final balloon payment of $292,500.

Property Taxes

The Company is not current with its 2012, 2011, 2010 and 2009 property and mining taxes. The total amount past due as of June 30, 2013 and December 31, 2012 is $3,363,021 and $3,228,136, respectively. The Company is in the process of assessing the implications of the unpaid property taxes.

On June 11, 2013, the Company entered into a Tax Payment Agreement with Jefferson County, Montana. The agreement outlined a quarterly payment schedule beginning on June 15, 2013. The payment schedule estimates a three year payoff of delinquent property and mining taxes.

Payroll Taxes

The Company is not current with its 2012 and 2013 payroll taxes. The total amount past due as of June 30, 2013 is approximately $111,000. The Company is in the process of assessing the implications of the unpaid payroll taxes.

Standstill Agreement

A standstill agreement with the secured lenders of the push-down debt and redemption obligation of the Parent and its affiliate (Note 7) was executed in May 2013. The standstill agreement prevents the lenders from exercising foreclosure rights against the Company through September 30, 2013. In consideration of the standstill agreement, the Company extended $1,000,000 of the MPRPA (Note 5) to the lender entitling them to 3,030 ounces.

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Notes Payable

6 Months Ended

Jun. 30, 2013

Notes Payable [Abstract]

Notes Payable

Note 6-Notes Payable

During July 2010, the Company entered into Series A 8% bonds for a total of $5,000,000, of which $1,235,500 was funded. The bonds matured during July 2012, with interest accruing at 8%. With the default, interest on the bonds accrues at 12%. The unpaid interest on the bonds shall be due and payable quarterly in arrears on the last day of each October, January, April, and July commencing in October 2010. The Company will make a bonus payment of $50,000 per bond upon maturity. The loans are currently in default and due on demand.

The holders each received five-year warrants to purchase 0.67 membership units of EGLLC per $50,000 bond at a purchase price of $37,500 per membership unit and on July 31, 2011 an additional five-year warrant to purchase 0.67 membership units of EGLLC per $50,000 bond at a purchase price of $37,500 per membership unit was issued. The warrants expire July 31, 2015. The warrants were valued using the Black-Scholes pricing model and expensed during 2010 and 2011.

	June 30,			December 31,
	2013			2012
Series A 8% bonds	$	919,779		$	919,779
Less current portion		(919,779	)		(919,779	)
	$	-		$	-

Promissory Notes - Related Parties

During 2012 and 2013, the Company entered into a series of promissory notes with related parties for a total of $519,800 during 2013 and $577,260 during 2012. The notes mature on November 30, 2013 and accrue interest at a rate of 6%. The Company paid $371,523 on the notes during 2012.

	June 30,			December 31,
	2013			2012
Promissory Notes	$	725,537		$	205,737
Less current portion		(725,537	)		(205,737	)
	$	-		$	-

Promissory Notes

During 2012, the Company entered into a promissory note with an un-related party for a total of $500,000. The note originally matured on March 31, 2013 and accrued interest at a rate of 6%. In March 2013, this note was extended to May 31, 2013 and the interest rate was amended to 8%. As of June 30, 2013, this loan is in default.

	June 30,			December 31,
	2013			2012
Promissory Notes	$	500,000		$	500,000
Less current portion		(500,000	)		(500,000	)
	$	-		$	-

Related Party Convertible Bridge Loans

During February 2012, the Company entered into three convertible bridge loans with a related parties totaling $1,800,000 due in August 2012. The loans were unsecured and called for 12% annual interest on the outstanding unpaid principal. The bridge loans are considered in default and currently bear interest at the 14% default rate.

Unrelated Party Convertible Bridge Loans

During April 2012, the Company entered into a bridge loan with an unrelated party for $100,000, which was paid in full during March 2013.

	June 30,		December 31,
	2013		2012
Convertible bridge loans principal amount - related party	$	1,800,000	$	1,800,000
Convertible bridge loans principal amount - unrelated party		-		100,000
Net convertible bridge loans	$	1,800,000	$	1,900,000

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Description of Business

6 Months Ended

Jun. 30, 2013

Description of Business [Abstract]

Description of Business

Note 1 - Description of Business

EGI and MTMI (collectively, "Elkhorn") were formed for the purpose of acquiring, holding, operating, selling, and otherwise dealing in assets of mining operations with gold and other metal reserves and exploration potential. Elkhorn's objective is to operate mines and expand its interests through acquisition and exploration. Elkhorn has one mineral property that has completed the permitting process. That property has developed the 650-foot underground access tunnel to reach the top of the ore body and will finish the process of installing required infrastructure to allow access to the lower levels of ore once sufficient funding is received. In addition, a second property has completed the permitting, except for posting the required reclamation bonding. Lastly, Elkhorn has several mineralized targets in the exploration stage. The permitted or nearly permitted mines include Golden Dream Mine (formerly referred to as the Sourdough Mine) and Montana Tunnels Mine ("Montana Tunnels"), and the mineralized properties available to develop mine plans are East Butte, Gold Hill/Mount Heagan, and Carmody (collectively, the "Elkhorn Project"), and the expansion of the previously operated Diamond Hill Mine. All the mines and properties are located in Jefferson County, Montana, with the exception of the Diamond Hill Mine, which is in Broadwater County, Montana. Elkhorn maintains its principal executive office in Denver, Colorado.

On May 8, 2012, the Company declared a 2 to 1 forward stock split on our Common Stock outstanding in the form of a dividend, with a record date of May 17, 2012, with a payment date of June 8, 2012. We have reflected the effect of this forward stock split on a retroactive basis on all common stock share amounts disclosed throughout this report.

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Related Party Transactions (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Ounces of gold produce	160,000
Refundable customer deposit, ore purchase agreement	$ 12,680,000	$ 10,760,000
Debt, principal amount	1,800,000	1,900,000
Accounts payable	1,438,330	1,425,073
Related Party Loans [Member]
Related Party Transaction [Line Items]
Debt, principal amount	1,800,000	1,800,000
Promissory Notes - Related Parties [Member]
Related Party Transaction [Line Items]
Promissory notes - related parties	725,537	205,737
Loan proceeds from related parties	519,800	577,260
Debt, maturity date	Nov. 30, 2013
Interest rate on note	6.00%
Repayments of promissory notes - related parties	371,523
Bridge Loan [Member] | Related Party Loans [Member]
Related Party Transaction [Line Items]
Debt, maturity date	Aug. 31, 2012
Debt, principal amount	1,800,000	1,800,000
Debt, interest rate	12.00%
Bridge Loan [Member] | Related Party Loans [Member] | Upon Event of Default [Member]
Related Party Transaction [Line Items]
Debt, interest rate	14.00%
With Respect to 50% of the first 160,000 Ounces Sold [Member]
Related Party Transaction [Line Items]
Percentage of ounces of gold production agreed to be sold	50.00%
Ounces of gold produce	41,481
Refundable customer deposit, ore purchase agreement	11,680,000
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Ounces of gold produce	36,148
Refundable customer deposit, ore purchase agreement	10,920,000
Affiliated Entity [Member] | Hourly Payment [Member]
Related Party Transaction [Line Items]
Management services agreement, payment	200
Affiliated Entity [Member] | Monthly Payment [Member]
Related Party Transaction [Line Items]
Management services agreement, payment	15,000
Black Diamond [Member]
Related Party Transaction [Line Items]
Management services agreement, initial term	3 years
Management services agreement, extended term	1 year
Minimum number of hours	125 hours
Management fee expense	$ 90,000

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Customer Deposits (Schedule of Deposits) (Details) (Up-front Payment Arrangement [Member], USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013 ozt	Dec. 31, 2012 ozt
Up-front Payment Arrangement [Member]
Movement in Customer Refundable Fees [Roll Forward]
Beginning balance	$ 10,760,000	$ 10,000,000
Additions	1,920,000	760,000
Delivery
Ending balance	$ 12,680,000	$ 10,760,000
Movement In Customer Refundable Fees Underlying Committed [Roll Forward]
Beginning balance	35,663	33,360
Additions	5,818	2,303
Delivery
Ending balance	41,481	35,663

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Schedule of Assets Measured at Fair Value

The following assets are measured at fair value on a recurring basis as of June 30, 2013:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(7,371,275	)	$	(7,371,275	)
Warrant liability	$	-	$	-	$	(63,331	)	$	(63,331	)

The following assets are measured at fair value on a recurring basis as of December 31, 2012:

Description	Level 1		Level 2		Level 3			Total
Ore purchase derivative contract	$	-	$	-	$	(16,701,404	)	$	(16,701,404	)
Warrant liability	$	-	$	-	$	(204,874	)	$	(204,874	)

Schedule of Information about Significant Unobservable Inputs

The following table presents information about significant unobservable inputs to the Company's Level 3 financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2013:

Description	Fair Value		Valuation  Technique	Significant Unobservable  Inputs	Range of Inputs
Ore purchase derivative contract	$	7,371,275	Discounted cash flow model	Production commencement Production period discount rate	April 2014,    24 Months,   25%
Warrant liability	$	63,331	Black-Scholes Model	Volatility	Approximate risk free rate: 1.223%; Expected term: 4.5 years; Volatility: 61.19%

Reconciliation of Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2012:

	Embedded
	Derivative			Warrant Liability
Beginning balance - December 31, 2012	$	(16,701,404	)	$	(204,874	)
New contracts entered into		(3,905,503	)		-
Total gains or losses (realized/unrealized)
Included in earnings		13,235,632			141,543
Transfers in and/or out of Level 3
Ending balance - June 30, 2013	$	(7,371,275	)	$	(63,331	)

Schedule of Embedded Derivative

The embedded derivative is summarized between related and non-related parties as follows:

Related party embedded derivative	$	6,534,884
Non-related party embedded derivative		836,391
Total embedded derivative	$	7,371,275

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Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 9 - Related Party Transactions

A related party has funded $10,920,000 of the MPRPA which entitles them to 36,148 of the 41,481 ounces of gold to be sold in accordance to the MPRPA.

Upon the closing of the Merger, the Company entered into a management services agreement with Black Diamond Financial Group, LLC to provide certain management, financial and accounting services for $15,000 per month plus $200 per hour for each additional hour of service in excess of 125 hours to the Company. The management services agreement has an initial term of three years and may be extended thereafter for successive one-year terms. Management fee expense was $90,000 for the six months ended June 30, 2013 and is included in general and administrative expenses

During February 2012, the Company entered into convertible bridge loans with related parties totaling $1,800,000 due in August 2012. Because of the non-payment under the terms of the bridge loans, the bridge loans are considered in default and accruing interest at the default interest rate of 14%. (Note 6)

During 2013 and 2012, the Company entered into a series of promissory notes with related parties for $519,800 and $577,260, respectively. The notes mature on November 30, 2013 and accrue interest at a rate of 6%. During 2012, promissory notes totaling $371,523 were paid. (Note 6)

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Notes Payable (Tables)

6 Months Ended

Jun. 30, 2013

Debt Instrument [Line Items]

Schedule of Convertible Bridge Loans

	June 30,		December 31,
	2013		2012
Convertible bridge loans principal amount - related party	$	1,800,000	$	1,800,000
Convertible bridge loans principal amount - unrelated party		-		100,000
Net convertible bridge loans	$	1,800,000	$	1,900,000

Series A 8% Bonds [Member]

Debt Instrument [Line Items]

Schedule of Debt Instruments

	June 30,			December 31,
	2013			2012
Series A 8% bonds	$	919,779		$	919,779
Less current portion		(919,779	)		(919,779	)
	$	-		$	-

Related Party Notes [Member]

Debt Instrument [Line Items]

Schedule of Debt Instruments

	June 30,			December 31,
	2013			2012
Promissory Notes	$	725,537		$	205,737
Less current portion		(725,537	)		(205,737	)
	$	-		$	-

Other Notes [Member]

Debt Instrument [Line Items]

Schedule of Debt Instruments

	June 30,			December 31,
	2013			2012
Promissory Notes	$	500,000		$	500,000
Less current portion		(500,000	)		(500,000	)
	$	-		$	-

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

Accrued expenses consist of the following:

	June 30,		December 31,
	2013		2012
Property and mining taxes payable	$	3,363,021	$	3,228,136
Interest		1,782,287		1,450,872
Environmental remediation		377,500		380,000
Payroll and related expenses		398,871		358,411
Other		4,945		38,000
Total	$	5,926,624	$	5,455,419

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 19, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Entity Registrant Name	Eastern Resources, Inc.
Entity Central Index Key	0001429373
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		198,750,000

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Customer Deposits (Tables)

6 Months Ended

Jun. 30, 2013

Customer Deposits [Abstract]

Schedule of Customer Deposits

	Up-front  Payments		Ounces
December 31, 2011	$	10,000,000		33,360
Additions		760,000		2,303
Delivery		-		-
December 31, 2012		10,760,000		35,663
Additions		1,920,000		5,818
Delivery		-		-
June 30, 2013	$	12,680,000		41,481