Edgar Filing: GOLDSPRING INC

Unassociated Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

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

EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 000-32429

GOLDSPRING, INC.

(Exact name of registrant as specified in its charter)

Nevada		1081		65-0955118
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

P.O. Box 1118

Virginia City, NV 89440

(775) 847-5272

(Address, including zip code, and telephone number,

including area code, of registrant's principal executive offices)

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

Securities Registered pursuant to Section 12(g) of the Act: Common Stock, par value $.000666 per share

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

Yes ¨ No x

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

Yes ¨ No x

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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

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

Yes ¨ No x

The aggregate market value of the 2,685,360,839 shares of voting stock held by non-affiliates of the registrant based on the closing price on the Over the Counter Bulletin Board on June 30, 2008 was $80,500,000.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

	Shares Outstanding
Title of Class	March 20, 2009
Common Stock	3,477,847,312

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

PART I

ITEM 1	BUSINESS	3
ITEM 1A	RISK FACTORS	4
ITEM 2	PROPERTIES	10
ITEM 3	LEGAL PROCEEDINGS	36
ITEM 4	SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS	36

PART II

ITEM 5	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	36
ITEM 7	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	51
ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	52
ITEM 9A(T)	CONTROLS AND PROCEDURES	52
ITEM 9B	OTHER INFORMATION	53

PART III

ITEM 10	DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	53
ITEM 11	EXECUTIVE COMPENSATION	55
ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	57
ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	58
ITEM 14	PRINCIPAL ACCOUNTANT FEES AND SERVICES	58

PART IV

ITEM 15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	59

	SIGNATURES	60

Statement Regarding Forward-Looking Statements

The statements contained in this report on Form 10-K that are not purely historical are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements regarding our “expectations,” “anticipation,” “intentions,” “beliefs,” or “strategies” regarding the future. Forward looking statements also include statements regarding fluctuations in the price of gold or certain other commodities, (such as silver, copper, diesel fuel, and electricity); changes in national and local government legislation, taxation, controls, regulations and political or economic changes in the United States or other countries in which we may carry on business in the future; business opportunities that may be presented to or pursued by us; our ability to integrate acquisitions successfully; operating or technical difficulties in connection with exploration or mining activities; the speculative nature of gold exploration, including risks of diminishing quantities or grades of reserves; and contests over our title to properties. All forward-looking statements included in this report are based on information available to us as of the filing date of this report, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from the forward-looking statements. Among the factors that could cause actual results to differ materially are the factors discussed in Item 1A, “Description of Business - Risk Factors.”

PART I

Item 1. Business

Overview

GoldSpring Inc. (the Company) is a North American precious metals mining company, focused in Nevada, with land holdings in the Comstock Gold-Silver District of Nevada. The Company has located a deposit of mineralized material at the Hartford Complex and has secured several of the key mining permits required to develop the project. The Company is currently engaged in an aggressive exploration program to define the extent of the Hartford deposit, assess other key exploration targets on its large land package and push the project toward production. The high-grade nature of the bulk tonnage Hartford deposit and its favorable configuration has potentially positioned the Company to become a new gold-silver producer in the future.

In early 2007, we temporarily closed our mining operation. This shutdown allowed the Company to focus on the geology to gain a comprehensive understanding of the mineralization at the Hartford complex at our Comstock project. The company commenced a drilling program in December 2007 to further delineate the mineralized material and to determine the most effective process for mining operations. The goal has been to define and map the geology and to prepare geologic cross sections to be utilized in mine planning and as a result, to be able to build a new mine model using geostatistics and extensive drill hole data. There is also ongoing metallurgic testing to attempt to maximize recovery of the high grade fraction of the mineralized material and to determine optimum size to continue heap leaching.

The exploration and developmental drilling program commenced at the Comstock project in mid December 2007 and continued throughout 2008. The Company as of December 31, 2008 has drilled 130 holes at the Lucerne / Hartford Complex at its Comstock Project. The Company intends to continue the exploration drilling program throughout 2009; however, lack of adequate funding will impact the pace of the drilling program.

We are actively seeking financing to meet our working capital needs and fuel our growth. If we are unable to secure such financing, we may be unable to continue as a going concern.

The following table sets forth certain information regarding our current projects.

Name	Location	Type
Comstock Lode Gold and Silver Properties	Storey and Lyon County, Nevada	Gold and silver lode claims
Como	Lyon County, Nevada	Gold and silver lode claims
Gold Canyon	Lyon County, Nevada	Placer gold claims
Spring Valley	Lyon County, Nevada	Placer gold claims

Our Comstock Lode exploration project is located between Carson City and Virginia City, Nevada, about 30 miles southeast of Reno in an area known as American Flat. Our Gold Canyon and Spring Valley placer claims are located in Lyon County, Nevada, five miles south of our Plum property, in American Flat / Gold Hill, Nevada. Our Big Mike Copper property is located approximately two hours east of Reno near Winnemucca, Nevada.

Our Comstock exploration activities include open pit gold and silver test mining. As defined by SEC Industry Guide 7, we have not yet established any proven or probable reserves at this project. Therefore, all of our activities are considered test mining and exploratory in nature. Test mining at Plum commenced in the third quarter of 2004. We have not as yet explored or developed our Como claims. We also have not completed any exploratory activities on our Gold Canyon, Spring Valley, or Big Mike properties. We have not established reserves on any of these properties. Therefore, there can be no assurance that we will be able to produce sufficient gold to cover our investment and operating costs.

Employees

We approximately have 17 employees, including our managers, administrative staff, engineers, geologists, lab technicians, and process operators. We use consultants with specific skills to assist with various aspects of our operation, including project evaluation, due diligence, and acquisition initiatives.

Principal Markets

We plan to sell our production on world markets at prices established by market forces. These prices are not within our control.

Government Regulation

Mining operations and exploration activities are subject to various national, state, and local laws and regulations in the United States, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances, and other matters. We have obtained or have pending applications for those licenses, permits, and other authorizations currently required to conduct our exploration and other programs. We believe that we are in compliance in all material respects with applicable mining, health, safety, and environmental statutes and regulations.

Reclamation

We are generally required to mitigate long-term environmental impacts by stabilizing, contouring, resloping, and revegetating various portions of a site after mining and mineral processing operations are completed. These reclamation efforts are conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies.

The Nevada Revised Statutes and regulations promulgated there under by the Nevada State Environmental Commission and the Nevada Division of Environmental Protection, Bureau of Mining and Reclamation require a surety bond to be posted for mining projects to assure we will leave the site safe, stable and capable of providing for a productive post-mining land use. Pursuant to the approved Reclamation Plan for our Comstock project, we posted a surety bond in the amount of $1,106,882, of which $776,768 was in the form of a cash deposit and the balance was secured from a surety agent.

Competition

We compete with other mineral exploration and mining companies in connection with the acquisition of gold and other mineral properties. There may be competition for gold acquisition opportunities, some of which may involve other companies having substantially greater financial resources than we do.

Financing Events

In 2008, we financed operations through issuance of promissory notes and sales of our common stock, all in private placement transactions, which provided us with $5,520,000 in funding.

Item 1A. Risk Factors

An investment in our common stock involves risk. You should carefully consider the following risk factors, in addition to those discussed elsewhere in this report, in evaluating our company, its business, and prospects. The following risks could cause our business, financial condition, and operating results to be materially and adversely affected.

We have limited resources and our inability to obtain additional financing could negatively affect our growth and success.

We have incurred substantial losses since our inception, and we are currently experiencing a cash flow deficiency from operations. Our current cash flow and capital resources are limited, and we may require additional funds to pursue our business. We may not be able to secure further financing in the future. If we are not able to obtain additional financing on reasonable terms, we may not be able to execute our business strategy, conduct our operations at the level desired, or even to continue business.

We have received a qualified report from our independent auditors

Our independent auditors report on our financial statements indicates that our recurring losses from operations and working capital deficit raise substantial doubt about our ability to continue as a going concern

Inability to raise sufficient funds to increase growth

Our recent financings have only provided capital to continue existing operations but not to continue significant exploration and growth. Without the ability to attract sufficient amounts of capital at any one time, it is unlikely that we can achieve profitability in the foreseeable future.

We have invested capital in high-risk mineral projects where we have not conducted sufficient exploration and engineering studies.

We have invested capital in various mineral properties and projects in Nevada where we may not have conducted sufficient exploration and engineering studies to minimize the risk of project failure to the extent that is typical in the mining industry. Our mineral projects involve high risks because we have not invested substantial sums in the characterization of mineralized material, geologic analysis, metallurgical testing, mine planning, and economic analysis to the same extent that other mining companies might deem reasonable. Standard industry practice calls for a mining company to prepare a formal mine plan and mining schedule and have these documents reviewed by a third party specialist. We do not have a formal mine plan that has been reviewed by a third party specialist. Because we have not established proven or probable reserves, there can be no assurance that we will be able to produce sufficient gold to recover our investment and operating costs.

We will not be successful unless we recover precious metals and sell them for a profit.

Our success depends on our ability to recover precious metals, process them, and successfully sell them for more than the cost of production. The success of this process depends on the market prices of metals in relation to our costs of production. We may not always be able to generate a profit on the sale of gold or other minerals because we can only maintain a level of control over our costs and have no ability to control the market prices. The total cash costs of production at any location are frequently subject to great variation from year to year as a result of a number of factors, such as the changing composition of the mineralized material , metallurgy, and exploration activities in response to the physical shape and location of the deposit. In addition costs are affected by the price of commodities, such as fuel and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in production costs or a decrease in the price of gold or other minerals could adversely affect our ability to earn a profit on the sale of gold or other minerals.

We do not have proven or probable reserves, and there is no assurance that the quantities of precious metals we produce will be sufficient to recover our investment and operating costs.

Our success depends on our ability to produce sufficient quantities of precious metals to recover our investment and operating costs. We do not have proven or probable reserves. There can be no assurance that our exploration activities will result in the discovery of sufficient quantities of mineralized material to lead to a commercially successful operation.

The cost of our exploration and acquisition activities is substantial, and there is no assurance that the quantities of minerals we discover or acquire will justify commercial operations or replace reserves established in the future.

Mineral exploration, particularly for gold and other precious metals, is highly speculative in nature, involves many risks, and frequently is nonproductive. There can be no assurance that our exploration and acquisition activities will be commercially successful. Once gold mineralization is discovered, it may take a number of years from the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to acquire existing gold properties, to establish ore reserves through drilling and analysis, to develop metallurgical processes to extract metal from the mineralized material, and in the case of new properties, to develop the processing facilities and infrastructure at any site chosen for mineral exploration. There can be no assurance that any mineralized material that may be discovered or acquired in the future will be in sufficient quantities or of adequate grade to justify commercial operations or that the funds required for mineral production operation can be obtained on a timely or reasonable basis. Mineral exploration companies must continually replace mineralized material depleted by production. As a result, there can be no assurance that we will be successful in replacing any mineralized material acquired or established in the future.

The price of gold fluctuates on a regular basis and a downturn in price could negatively impact our operations and cash flow.

Our operations are significantly affected by changes in the market price of gold. Gold prices can fluctuate widely and may be affected by numerous factors, such as expectations for inflation, levels of interest rates, currency exchange rates, central bank sales, forward selling or other hedging activities, demand for precious metals, global or regional political and economic crises, and production costs in major gold-producing regions, such as South Africa and the former Soviet Union. The aggregate effect of these factors, all of which are beyond our control, is impossible for us to predict. The demand for and supply of gold affect gold prices, but not necessarily in the same manner as supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new mineral production and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations, and private individuals. As the amount produced in any single year constitutes a small portion of the total potential supply of gold, normal variations in current production do not have a significant impact on the supply of gold or on its price. If gold prices decline substantially, it could adversely affect the realizable value of our assets and potential future results of operations and cash flow.

The use of hedging instruments may not prevent losses being realized on subsequent price decreases or may prevent gains being realized from subsequent price increases.

We may from time to time sell some future production of gold pursuant to hedge positions. If the gold price rises above the price at which future production has been committed under these hedge instruments, we will have an opportunity loss. However, if the gold price falls below that committed price, our revenues will be protected to the extent of such committed production. In addition, we may experience losses if a hedge counterparty defaults under a contract when the contract price exceeds the gold price. As of the date of filing of this report, we have no open hedge positions.

Since our business consists of exploring for or acquiring gold prospects, the drop in the price of gold will negatively affect our asset values, cash flows, potential revenues and profits.

We plan to pursue opportunities to acquire properties with gold mineralized material and exploration potential. The price that we pay to acquire these properties will be influenced, in large part, by the price of gold at the time of the acquisition. Our potential future revenues are expected to be derived from the production and sale of gold from these properties or from the sale of some of these properties. The value of any mineralized material, and the value of any potential mineral production therefrom, will vary in direct proportion to variations in those mineral prices. The price of gold has fluctuated widely as a result of numerous factors beyond our control. The effect of these factors on the price of gold, and therefore the economic viability of any of our projects, cannot accurately be predicted. Any drop in the price of gold would negatively affect our asset values, cash flows, potential revenues, and profits.

We compete with other mineral exploration and mining companies

We compete with other mineral exploration and mining companies or individuals, including large, established mining companies with substantial capabilities and financial resources, to acquire rights to mineral properties containing gold and other minerals. There is a limited supply of desirable mineral lands available for claim staking, lease, or other acquisition. There can be no assurance that we will be able to acquire mineral properties against competitors with substantially greater financial resources than we have.

Our activities are inherently hazardous and any exposure may exceed our insurance limits or may not be insurable.

Mineral exploration and operating activities are inherently hazardous. Operations in which we have direct or indirect interests will be subject to all the hazards and risks normally incidental to exploration and production of gold and other metals, any of which could result in work stoppages, damage to property, and possible environmental damage. The nature of these risks is such that liabilities might exceed any liability insurance policy limits. It is also possible that the liabilities and hazards might not be insurable, or we could elect not to insure ourselves against such liabilities because of the high premium costs, in which event, we could incur significant costs that could have a material adverse effect on our financial condition.

We do not have proven or probable reserves, and our mineral calculations are only estimates; any material change may negatively affect the economic viability of our properties.

Substantial expenditures are required to acquire existing gold properties with established reserves or to establish proven or probable reserves through drilling and analysis. We do not anticipate expending sums for additional drilling and analysis to establish proven or probable reserves on our properties. We drill in connection with our mineral exploration activities and not with the purpose of establishing proven and probable reserves. Therefore, our activity must be called exploration or test mining. While we estimate the amount of mineralized material we believe exists on our properties, our calculations are estimates only, subject to uncertainty due to factors, including the quantity and grade of the material, metal prices, and recoverability of minerals in the mineral recovery process. There is a great degree of uncertainty attributable to the calculation of any mineralized material, particularly where there has not been significant drilling, mining, and processing. Until the mineralized material located on our properties is actually mined and processed, the quantity and quality of the mineralized material must be considered as an estimate only. In addition, the quantity of mineralized material may vary depending on metal prices. Any material change in the quantity of mineralized material may negatively affect the economic viability of our properties. In addition, there can be no assurance that we will achieve the same recoveries of metals contained in the mineralized material as in small-scale laboratory tests or that we will be able to duplicate such results in larger scale tests under on-site conditions or during production.

Our operations are subject to strict environmental regulations, which result in added costs of operations and operational delays.

Our operations are subject to environmental regulations, which could result in additional costs and operational delays. All phases of our operations are subject to environmental regulation. Environmental legislation is evolving in some countries and jurisdictions in a manner that may require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that any future changes in environmental regulation will not negatively affect our projects.

We have no insurance for environmental problems.

Insurance against environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production, has not been available generally in the mining industry. We have no insurance coverage for most environmental risks. In the event of a problem, the payment of environmental liabilities and costs would reduce the funds available to us for future operations. If we are unable to fund fully the cost of remedying an environmental problem, we might be required to enter into an interim compliance measure pending completion of the required remedy.

We are subject to federal laws that require environmental assessments and the posting of bonds, which add significant costs to our operations and delays in our projects.

The Bureau of Land Management requires that mining operations on lands subject to its regulation obtain an approved plan of operations subject to environmental impact evaluation under the National Environmental Policy Act. Any significant modifications to the plan of operations may require the completion of an environmental assessment or Environmental Impact Statement prior to approval. Mining companies must post a bond or other surety to guarantee the cost of post-mining reclamation. These requirements could add significant additional cost and delays to any mining project undertaken by us. Our mineral exploration operations are required to be covered by reclamation bonds deemed adequate by regulators to cover these risks. We believe we currently maintain adequate reclamation bonds for our operations.

Changes in state laws, which are already strict and costly, can negatively affect our operations by becoming stricter and costlier.

At the state level, mining operations in Nevada are regulated by the Nevada Division of Environmental Protection, or NDEP. Nevada state law requires our Nevada projects to hold Nevada Water Pollution Control Permits, which dictate operating controls and closure and post-closure requirements directed at protecting surface and ground water. In addition, we are required to hold Nevada Reclamation Permits required under Nevada law. These permits mandate concurrent and post-mining reclamation of mines and require the posting of reclamation bonds sufficient to guarantee the cost of mine reclamation. Other Nevada regulations govern operating and design standards for the construction and operation of any source of air contamination and landfill operations. Any changes to these laws and regulations could have a negative impact on our financial performance and results of operations by, for example, requiring changes to operating constraints, technical criteria, fees or surety requirements.

Title claims against our properties could require us to compensate parties, if successful, and divert management’s time from operations.

There may be challenges to our title in the properties in which we hold material interests. If there are title defects with respect to any of our properties, we might be required to compensate other persons or perhaps reduce our interest in the effected property. The validity of unpatented mineral claims, which constitute most of our holdings in the United States, is often uncertain and may be contested by the federal government and other parties. The validity of an unpatented mineral claim, in terms of both its location and its maintenance, depends on strict compliance with a complex body of federal and state statutory and decisional law. Although we have attempted to acquire satisfactory title to our properties, we have not obtained title opinions or title insurance with respect to the acquisition of the unpatented mineral claims. While we have no pending claims or litigation pending contesting title to any of our properties, there is nothing to prevent parties from challenging our title to any of our properties. While we believe we have satisfactory title to our properties, some risk exists that some titles may be defective or subject to challenge. Also, in any such case, the investigation and resolution of title issues would divert management’s time from ongoing exploration programs.

We have never paid a cash dividend on our common stock and do not expect to pay cash dividends in the foreseeable future.

We have never paid cash dividends, and we do not plan to pay cash dividends in the foreseeable future. Consequently, your only opportunity to achieve a return on your investment in us will be if the market price of our common stock appreciates and you sell your shares at a profit. There is no assurance that the price of our common stock that will prevail in the market after this offering will ever exceed the price that you pay.

Our business depends on a limited number of key personnel, the loss of whom could negatively affect us.

Robert Faber, Chief Executive Officer, President and acting-Chief Financial Officer and Jim Golden, our COO, are important to our success. If either becomes unable or unwilling to continue in his present position, our business and financial results could be materially negatively affected.

If we fail to adequately manage our growth, we may not be successful in growing our business and becoming profitable.

We plan to expand our business and the number of employees over the next 12 months. In particular, we intend to hire additional operational personnel. Our inability to hire and retain additional qualified employees could have a negative impact on our chances of success.

The issuance of securities by us may not have complied with or violated federal and state securities laws and, as a result, the holders of these shares and warrants may have rescission rights.

Securities issued by us may not have complied with applicable federal and state securities laws, the result of which is that the holders of these securities may have rescission rights that could require us to reacquire the securities.

Outstanding convertible securities and warrants may result in substantial dilution.

At December 31, 2008 we had outstanding 3, 380,948,371 shares of common stock. In addition, we had outstanding convertible notes and related interest plus various common stock purchase warrants. At December 31, 2008, these notes, related interest and warrants were convertible into or exercisable for a total of approximately 1.5 billion additional shares of our common stock, subject to further anti-dilution provisions.

Our stock is a penny stock and trading of our stock may be restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9, which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers that sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock. NASD sales practice requirements may also limit a stockbroker’s ability to buy or sell our stock.

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretation of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy or sell our stock and have an adverse effect on the market for our shares.

Item 2. Properties

Comstock Lode Project

Location, Access, and Title to the Property

We own the following mineral exploration projects: The Comstock gold and silver exploration and test mining project and the Como mineral Claims. The Comstock project is located in Storey and Lyon Counties, Nevada. The Plum property is physically situated roughly three miles south of Virginia City, Nevada. Paved state highways from Reno, Carson City, and Virginia City provide access to the property. The Como mineral Claims are located in Lyon County, Nevada, approximately 15 miles east of Carson City, and have not been explored or developed by us.

OCCIDENTAL LEASE:

Our property rights to the mineral properties consist of several mineral leases, unpatented mineral claims, and fee ownership of real property. We have a mineral exploration and mining lease agreement with Claire Obester, Jim Obester, Alan Obester, and Julian Smith dated May 1, 2008 covering mineral rights to six patented claims located in Storey County. The lease remains in effect for 15 years as long as exploration, development, mining, or processing operations are conducted on a continuous basis, without a lapse of activity for more than 180 days. We agree to spend $100,000.00 on drilling and associated costs within the first 36 months of the term. We agree to pay $10,000.00 upon execution of the lease. We pay a monthly rent to the lessor of $500 per month beginning April 2009 during the Exploration Term. During the Development Term we pay a royalty of $1000 a month or a royalty percentage on the amount received by us on the sale of the mineral products less the costs incurred for marketing, distribution, processing and sales, commonly referred to as a Net Smelter Return. The royalty percentage varies based on the price of gold: 2% if gold is less than $501 per ounce, 3% if gold is at least $501 per ounce but less than $801 per ounce, 4% if gold is at least $801 per ounce but less than $901 per ounce, 5% if gold is at least $901 per ounce but less than $1001, 6% if gold is at least $1001 per ounce but less than $1101 per ounce, 7% if gold is at least $1101 per ounce but less than $1201 per ounce, 8% if gold is at least $1201 per ounce but less than $1301 per ounce, 9 % if gold is at least $1301 per ounce but less than $1401 per ounce and 10% if gold is $1401 per ounce or greater. We are also responsible for payment and filing of annual maintenance fees, if any, and taxes for these claims.

Obester Patented Claims:

Claim Number	Claim Name	Position	Land Source	Acres
800-001-010	North Occidental	Purchase	Private	7.2
800-001-025	East North Occidental	Purchase	Private	12.2
800-001-021	Dean Parcel	Purchase	Private	11
800-001-024	South Occidental	Purchase	Private	20.6
800-001-068	Occidental	Purchase	Private	7.8
800-001-026	Edwards	Purchase	Private	17.8

BILLIE THE KID LEASE:

Obester Patented Claims:

Claim Number	Claim Name	Position	Land Source	Acres
800-001-009	Green	Purchase	Private	11
800-001-11	Echo Parcel	Purchase	Private	7
800-001-12	Lucerne	Purchase	Private	8
800-001-08	St. Louis Parcels	Purchase	Private	7
800-002-71	Billie the Kid	Purchase	Private	18

DONOVAN LEASE:

We have a second mineral exploration and mining lease agreement with the Donovan Silver Hills, LLC dated September 1, 1999 covering seven patented claims and 13 unpatented claims located in Storey and Lyon Counties. The lease remains in effect for as long as exploration, development, mining, or processing operations are conducted on a continuous basis, without a lapse of activity for more than 180 days. We pay a royalty to the lessor amounting to the greater of $500 per month or a royalty percentage of the Net Smelter Returns. The royalty percentage varies based on the price of gold: 3% if gold is less than $400 per ounce, 4% if gold is at least $400 per ounce but less than $500 per ounce, and 5% if gold is $500 or greater per ounce. We are also responsible for payment and filing of annual maintenance fees, if any, and taxes for these claims.

Donovan Patented Claims:

Claim Number	Claim Name	Position	Land Source	Acres
84	Tarto Lode	Lease	Private Land	1
86	Hartford	Lease	Private Land	14
1723	Succor Lode	Lease	Private Land	6
3760	Olympia	Lease	Private Land	6
4728	Hardluck	Lease	Private Land	6
4728	Friendship	Lease	Private Land	7
4728	Brown Lode	Lease	Private Land	8
125	Niagra Mining Claim	Lease	Private Land	3
1066	S. Comstock Mining Claim	Lease	Private Land	12

Donovan Unpatented Claims:

Serial #

Claim Name

Location

Date

Owner / Lease

Holder

Type

Position

Land

Source

Acres

NMC416049

Big Mike

4/7/1987

Donovan

Lode

Lease

BLM

NMC416048

Cliff House Fraction

4/7/1987

Donovan

Lode

Lease

BLM

NMC416043

Echo St. Louis Fraction

4/7/1987

Donovan

Lode

Lease

BLM

.30

NMC416041

Green St. Louis Fraction

3/41987

Donovan

Lode

Lease

BLM

NMC676492

Hartford Lucerne Fraction

4/7/1987

Donovan

Lode

Lease

BLM

0.9

NMC416040

Hartford South Extension

4/7/1987

Donovan

Lode

Lease

BLM

NMC416042

Hartford St. Louis Fraction

4/7/1987

Donovan

Lode

Lease

BLM

6.5

NMC416044

Justice Lucerne Fraction

4/7/1987

Donovan

Lode

Lease

BLM

1.7

NMC416046

Justice Woodville Fraction

4/7/1987

Donovan

Lode

Lease

BLM

3.1

NMC416047

New Deal Fraction

4/7/1987

Donovan

Lode

Lease

BLM

NMC416045

South Comstock St. Louis

4/7/1987

Donovan

Lode

Lease

BLM

NMC416033

Vindicator #8

4/61987

Donovan

Lode

Lease

BLM

20.7

FRED GARRET LEASE:

We entered into a mineral exploration and mining lease agreement with the Fred Garret et al on April 1, 2008 covering one patented claim located in Storey, Nevada. The lease remains in effect for as long as exploration, development, mining, or processing operations are conducted on a continuous basis, without a lapse of activity for more than 180 days. We pay a royalty to the lessor of $250 per month or a 3% Net Smelter Return, which ever is greater. We are also responsible for payment and filing of annual maintenance fees, if any, and taxes for these claims.

Garrett Patented Claims:

Claim Number		Claim Name		Position		Land Source		Acres
114		Pride of Washoe		Lease		Private Land		25.25

LEDA RESOURCES LLC LEASE:

We have a mineral lease agreement with Leda Resources LLC dated March 15, 2008 covering 3 unpatented mining claims located in Storey and Washoe Counties. The lease remains in effect for 20 years with automatic extensions so long as conditions of the lease are met. We are responsible for payment and filing of Federal and State maintenance fees for any year in which this agreement is in maintained in good standing after June 1, 2008. We are responsible for performing reclamation work on the Property as required by Federal, State, and Local law for disturbances resulting from Goldspring’s activities on the Property. The lease agreement includes a production royalty of a 3.0% Net Smelter Return (NRS). Also, we are required to make the following advance royalty payments: upon execution $5,000, 1st Anniversary $10,000, 2nd Anniversary $10,000, 3rd Anniversary $10,000, 4th Anniversary $25,000, 5th Anniversary $25,000, 6th Anniversary & thereafter $25,000 annually. Royalty advances are to be adjusted to annual changes in the consumer price index (CPI) with 2008 as the base year. CPI adjustment commence on the 7th Anniversary. The agreement also provides for an option for a partial Royalty Buy down, whereby we could purchase a 2% NSR for $5 million. .. The mineral lease agreement also requires the issuance of 5 million of our common shares; 1,000,000 common shares upon execution and 1,000,000 common shares on each anniversary starting with the first and ending with the fourth.

Leda Resources unpatented claims:

Serial #

Claim

Name

Location

Date

Owner/

Lease

Holder

Type

Position

Land

Sources

Acre

NMC832220

Checkup 1

Leda Resources

Lease

BLM

NMC832220

Checkup 21 amended

Leda Resources

Lease

BLM

NMC832220

Checkup 22

Leda Resources

Lease

BLM

KIM DROSSULIS LEASE:

We have a mineral lease agreement with Kim Drossulis dated January 15, 2008 covering 8 unpatented mining claims located in Storey County, Nevada. The lease remains in effect for 20 years with automatic extensions so long as conditions of the lease are met. We are responsible for payment and filing of Federal and State maintenance fees for any year in which this agreement is in maintained in good standing after June 1, 2008. We are responsible for performing reclamation work on the Property as required by Federal, State, and Local law for disturbances resulting from Goldspring’s activities on the Property. The lease agreement includes a production royalty of a 3.0% Net Smelter Return (NRS). Also, we are required to make the following advance royalty payments: upon execution $5,000, 1st Anniversary $10,000, 2nd Anniversary $10,000, 3rd Anniversary $10,000, 4th Anniversary $25,000, 5th Anniversary $25,000, 6th Anniversary & thereafter $25,000 annually. Royalty advances are to be adjusted to annual changes in the consumer price index (CPI) with 2008 as the base year. CPI adjustment commence on the 7th Anniversary. The agreement also provides for an option for a partial Royalty Buy down, whereby we could purchase a 2% NSR for $5 million. .. The mineral lease agreement also requires the issuance of 5 million of our common shares; 1,000,000 common shares upon execution and 1,000,000 common shares on each anniversary starting with the first and ending with the fourth

Kim Drossulis unpatented claims:

Serial #

Claim

Name

Location

Date

Owner /

Lease

Holder

Type

Position

Land

Source

Acres

NMC823682

SP #1

Drossulis

Lode

Lease

BL M

20.7

NMC823683

SP #2

Drossulis

Lode

Lease

BL M

20.7

NMC911164

SP #3

Drossulis

Lode

Lease

BL M

20.7

NMC911165

SP #4

Drossulis

Lode

Lease

BL M

20.7

NMC911166

SP #5

Drossulis

Lode

Lease

BL M

20.7

NMC911167

SP #6

Drossulis

Lode

Lease

BL M

20.7

NMC911168

SP #7

Drossulis

Lode

Lease

BL M

20.7

NMC911169

SP #8

Drossulis

Lode

Lease

BL M

20.7

MICHAEL & KATHRYN S. DONDERO LEASE:

On November 1, 2008 we entered into a mineral exploration and mining lease agreement with the Michael & Kathryn S. Dondero covering seven patented claims located in Lyon County. The lease remains in effect for as long as exploration, development, mining, or processing operations are conducted on a continuous basis, without a lapse of activity for more than 180 days. We pay a royalty to the lessor amounting to the greater of $1,000 per month or a 3% Net Smelter royalty. We are also responsible for payment and filing of annual maintenance fees, if any, and taxes for these claims. We also have an option to purchase land and related patents for $900,000.

Dondero Patented & Town Lots w/mineral rights Claims:

Claim Number	Claim Name	Position	Land Source	Acres
16-121-10		Lease	Private Land	2.9
16-121-11		Lease	Private Land	1.04
16-121-12		Lease	Private Land	.08
16-121-22		Lease	Private Land	20.03
16-121-23		Lease	Private Land	20
16-121-24		Lease	Private Land	20
16-121-25		Lease	Private Land	20

JAMES OBESTER LEASE:

We have a second mineral exploration and mining lease agreement with the James Obester dated August 1, 2008 covering one patented claim located in Storey County. The lease remains in effect for as long as exploration, development, mining, or processing operations are conducted on a continuous basis, without a lapse of activity for more than 180 days. We pay a royalty to the lessor amounting to the greater of $200 per month for two years and increase to $300 a month for three years then increase to $500 with a royalty percentage of the Net Smelter Returns. The royalty percentage is a 2% NSR when gold is $900 or less per ounce and 3% NSR when gold is greater than $900 per ounce. We are also responsible for payment and filing of annual maintenance fees, if any, and taxes for these claims.

James Obesters Unpatented Claims:

Serial #

Claim

Name

Location

Date

Owner /

Lease

Holder

Type

Position

Land

Source

Acres

NMC275502

Alta #5

7/22/1983

Obester

Lode

Lease

BLM

20.66

NMC275503

Alta #6

7/22/1983

Obester

Lode

Lease

BLM

20.66

NMC275504

Alta #7

7/22/1983

Obester

Lode

Lease

BLM

20.66

NMC275505

Alta #8

7/22/1983

Obester

Lode

Lease

BLM

12.71

NMC275506

Alta #9

7/22/1983

Obester

Lode

Lease

BLM

20.66

NMC275507

Alta #10

7/22/1983

Obester

Lode

Lease

BLM

20.66

NMC276609

Alta #12

7/22/1983

Obester

Lode

Lease

BLM

12.05

NMC300858

Brunswick #1

12/24/1983

Obester

Lode

Lease

BLM

20.66

NMC300859

Brunswick #2

12/24/1983

Obester

Lode

Lease

BLM

20.66

NMC300860

Brunswick #4

12/24/1983

Obester

Lode

Lease

BLM

20.66

In addition to the mineral leases, we hold 100 unpatented mineral claims in Storey County, hold eight unpatented mineral claims in Lyon County, and own title to 40 acres of land in Storey County. The W. Hughes Brockbank Living Trust has a lien against and a security interest in these unpatented mineral claims and the 40 acres of land pursuant to a Deed of Trust dated October 31, 2003, entered into with W. Hughes Brockbank Living Trust. The Deed of Trust was granted to secure a promissory note, dated October 31, 2003, in the amount of $1 million for the balance of the purchase price for the property. The non-interest bearing promissory note requires ten quarterly payments of $100,000 each. As of December 31, 2007, the outstanding balance of the note was $250,000. In 2007, Winfield’s affiliates, Intergroup Corporation, Santa Fe Financial and Portsmouth Square, purchased the note from the W. Hughes Brockbank Living Trust.

Unpatented Mineral Claims:

Serial #

Claim Name

Location

Date

Owner /

Lease

Holder

Type

Position

Land

Source

Acres

NMC821729

Comstock #1

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821739

Comstock #11

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821740

Comstock #12

10/16/2000

GSPG

Lode

Fee

BLM

20.6

NMC821741

Comstock #13

12/1/2000

GSPG

Lode

Fee

BLM

20.6

NMC821742

Comstock #14

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821743

Comstock #15

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821744

Comstock #16

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821745

Comstock #17

12/1/2000

GSPG

Lode

Fee

BLM

20.7

NMC821746

Comstock #18

12/1/2000

GSPG

Lode

Fee

BLM

13.8

NMC821730

Comstock #2

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821731

Comstock #3

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821735

Comstock #7

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821736

Comstock #8

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821737

Comstock #9

10/16/2000

GSPG

Lode

Fee

BLM

20.7

NMC821492

Comstock #115

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821493

Comstock #116

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821494

Comstock #117

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821495

Comstock #118

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821496

Comstock #119

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821497

Comstock #120

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821498

Comstock #121

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821499

Comstock #122

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821500

Comstock #123

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821501

Comstock #124

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821502

Comstock #125

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821503

Comstock #126

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821504

Comstock #127

4/8/2004

GSPG

Lode

Fee

BLM

20.7

NMC821505

Comstock #128

4/8/2004

GSPG

Lode

Fee

BLM

13.8

NMC821506

Comstock #129

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821507

Comstock #130

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821508

Comstock #131

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821509

Comstock #132

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821510

Comstock #133

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821511

Comstock #134

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821512

Comstock #135

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821513

Comstock #136

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821514

Comstock #137

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821515

Comstock #138

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821516

Comstock #139

7/1/2004

GSPG

Lode

Fee

BLM

14.4

NMC821517

Comstock #140

7/1/2004

GSPG

Lode

Fee

BLM

18.3

NMC821518

Comstock #141

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC821519

Comstock #142

7/1/2004

GSPG

Lode

Fee

BLM

20.7

NMC965375

Ghost #1

9/30/2007

GSPG

Load

Fee

BLM

20.7

NMC965384

Ghost #10

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965385

Ghost #11

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965376

Ghost #2

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965377

Ghost #3

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965378

Ghost #4

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965379

Ghost #5

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965380

Ghost #6

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965381

Ghost #7

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965382

Ghost #8

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC965383

Ghost #9

9/30/2007

GSPG

Lode

Fee

BLM

20.7

NMC810323

Lee #2

11/31/1999

GSPG

Lode

Fee

BLM

19.8

NMC810324

Lee #3

11/31/1999

GSPG

Lode

Fee

BLM

20.7

NMC810321

Lee #5

11/31/1999

GSPG

Lode

Fee

BLM

19.4

NMC814553

Lee #8

1/29/2000

GSPG

Lode

Fee

BLM

19.5

NMC814554

Lee #9

1/29/2000

GSPG

Lode

Fee

BLM

19.2

NMC704516

Overman #1

8/27/1994

GSPG

Lode

Fee

BLM

NMC884216

Plum

11/19/2004

GSPG

Lode

Fee

BLM

20.4

NMC1000122

OMAHA FRACTION #1

10/30/2008

GSPG

Lode

Fee

BLM

7.2

NMC1000123

OMAHA FRACTION #2

11/8/2008

GSPG

Lode

Fee

BLM

0.9

NMC1000124

OMAHA FRACTION #3

10/30/2008

GSPG

Lode

Fee

BLM

1.6

NMC1000125

OMAHA FRACTION #4

10/30/2008

GSPG

Lode

Fee

BLM

0.2

NMC1000126

OMAHA FRACTION #5

10/30/2008

GSPG

Lode

Fee

BLM

0.2

NMC1000127

OMAHA FRACTION #6

10/30/2008

GSPG

Lode

Fee

BLM

1.8

NMC1000128

OMAHA FRACTION #7

10/30/2008

GSPG

Lode

Fee

BLM

2.3

NMC1000129

OMAHA FRACTION #8

10/30/2008

GSPG

Lode

Fee

BLM

0.3

NMC1000130

OMAHA FRACTION #9

10/30/2008

GSPG

Lode

Fee

BLM

6.5

NMC1000131

OMAHA FRACTION #10

10/30/2008

GSPG

Lode

Fee

BLM

0.8

NMC1000132

OMAHA FRACTION #11

10/30/2008

GSPG

Lode

Fee

BLM

1.1

NMC1000133

OMAHA FRACTION #12

10/30/2008

GSPG

Lode

Fee

BLM

0.4

NMC1000134

OMAHA FRACTION #13

10/30/2008

GSPG

Lode

Fee

BLM

1.1

NMC1000135

OMAHA FRACTION #14

10/30/2008

GSPG

Lode

Fee

BLM

1.4

NMC1000136

OMAHA FRACTION #17

10/30/2008

GSPG

Lode

Fee

BLM

1.6

NMC1000137

OMAHA FRACTION #18

10/30/2008

GSPG

Lode

Fee

BLM

1.3

NMC1000138

OMAHA FRACTION #19

10/30/2008

GSPG

Lode

Fee

BLM

2.2

NMC1000139

OMAHA FRACTION #20

10/30/2008

GSPG

Lode

Fee

BLM

1.0

NMC1000140

OMAHA FRACTION #21

10/30/2008

GSPG

Lode

Fee

BLM

1.1

NMC1000141

OMAHA FRACTION #22

10/30/2008

GSPG

Lode

Fee

BLM

3.0

NMC1000142

OMAHA FRACTION #23

10/30/2008

GSPG

Lode

Fee

BLM

2.3

NMC1000143

OMAHA FRACTION #24

10/30/2008

GSPG

Lode

Fee

BLM

2.3

NMC983353

COMSTOCK LODE 100

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

16.0

NMC983354

COMSTOCK LODE 101

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

6.1

NMC983355

COMSTOCK LODE 102

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

5.4

NMC983356

COMSTOCK LODE 103

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

2.0

NMC983357

COMSTOCK LODE 104

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

2.2

NMC983358

COMSTOCK LODE 105

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

1.1

NMC983359

COMSTOCK LODE 106

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

8.6

NMC983360

COMSTOCK LODE 107

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

12.7

NMC983361

COMSTOCK LODE 108

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

1.0

NMC983362

COMSTOCK LODE 109

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

2.3

NMC983363

COMSTOCK LODE 110

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

19.2

NMC983364

COMSTOCK LODE 111

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983365

COMSTOCK LODE 112

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

16.6

NMC983366

COMSTOCK LODE 113

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

17.1

NMC983367

COMSTOCK LODE 114

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

1.7

NMC983368

COMSTOCK LODE 115

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

12.2

NMC983369

COMSTOCK LODE 116

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.4

NMC983370

COMSTOCK LODE 117

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.4

NMC983371

COMSTOCK LODE 118

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983372

COMSTOCK LODE 119

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983373

COMSTOCK LODE 120

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

1.1

NMC983374

COMSTOCK LODE 121

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

4.1

NMC983375

COMSTOCK LODE 122

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983376

COMSTOCK LODE 123

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

4.6

NMC983377

COMSTOCK LODE 124

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983378

COMSTOCK LODE 125

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

13.5

NMC983379

COMSTOCK LODE 126

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983380

COMSTOCK LODE 127

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983381

COMSTOCK LODE 128

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983382

COMSTOCK LODE 129

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983383

COMSTOCK LODE 130

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983384

COMSTOCK LODE 131

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983385

COMSTOCK LODE 132

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983386

COMSTOCK LODE 133

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983387

COMSTOCK LODE 134

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983388

COMSTOCK LODE 135

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983389

COMSTOCK LODE 136

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983390

COMSTOCK LODE 137

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983391

COMSTOCK LODE 138

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983392

COMSTOCK LODE 139

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983393

COMSTOCK LODE 140

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983394

COMSTOCK LODE 141

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983395

COMSTOCK LODE 142

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983396

COMSTOCK LODE 143

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983397

COMSTOCK LODE 144

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983398

COMSTOCK LODE 145

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983399

COMSTOCK LODE 146

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983400

COMSTOCK LODE 147

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983401

COMSTOCK LODE 148

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983402

COMSTOCK LODE 149

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.5

NMC983403

COMSTOCK LODE 150

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

8.4

NMC983404

COMSTOCK LODE 151

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

14.5

NMC983405

COMSTOCK LODE 152

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.1

NMC983406

COMSTOCK LODE 153

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983407

COMSTOCK LODE 154

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983408

COMSTOCK LODE 155

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983409

COMSTOCK LODE 156

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983410

COMSTOCK LODE 157

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983411

COMSTOCK LODE 158

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983412

COMSTOCK LODE 159

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983413

COMSTOCK LODE 160

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983414

COMSTOCK LODE 161

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

15.6

NMC983415

COMSTOCK LODE 162

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

19.5

NMC983416

COMSTOCK LODE 163

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

7.7

NMC983417

COMSTOCK LODE 164

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

12.8

NMC983418

COMSTOCK LODE 165

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.5

NMC983419

COMSTOCK LODE 166

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

6.3

NMC983420

COMSTOCK LODE 167

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

20.7

NMC983421

COMSTOCK LODE 168

12/21/2007

THE PLUM MINING CO LLC

Lode

Fee

BLM

16.2

NMC992973

COMSTOCK LODE 169

7/10/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

1.4

NMC992974

COMSTOCK LODE 172

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.7

NMC992975

COMSTOCK LODE 173

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.7

NMC992976

COMSTOCK LODE 174

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.2

NMC992977

COMSTOCK LODE 175

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.7

NMC992978

COMSTOCK LODE 176

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

15.5

NMC992979

COMSTOCK LODE 177

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

19.0

NMC992980

COMSTOCK LODE 179

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.7

NMC992981

COMSTOCK LODE 180

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.7

NMC992982

COMSTOCK LODE 181

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

20.1

NMC992983

COMSTOCK LODE 182

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

10.3

NMC992984

COMSTOCK LODE 183

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

19.8

NMC992985

COMSTOCK LODE 184

4/25/2008

THE PLUM MINING COMPANY

Lode

Fee

BLM

0.0

NMC17092

Como Comet 1

8/28/1976

GSPG

Lode

Fee

BLM

21.0

NMC17093

Como Comet 2

8/28/1976

GSPG

Lode

Fee

BLM

21.0

NMC4439

Como Comet 3

4/26/1977

GSPG

Lode

Fee

BLM

21.0

NMC4440

Como Comet 4

4/26/1977

GSPG

Lode

Fee

BLM

21.0

NMC6121

Como Comet 6

4/30/1977

GSPG

Lode

Fee

BLM

21.0

NMC6122

Como Comet 7

5/15/1977

GSPG

Lode

Fee

BLM

21.0

NMC6123

Como Comet 8

5/15/1977

GSPG

Lode

Fee

BLM

21.0

NMC6124

Como Comet 9

5/15/1977

GSPG

Lode

Fee

BLM

21.0

Present Condition of Property and Work Performed

We have not completed extensive characterization of mineralized material, geologic analysis, metallurgical testing, mine planning, or economic analysis on the Plum mineral assets. We have not established reserves on this property. Therefore, any activity we perform on the property is considered exploratory in nature. Part of our exploration includes operating a test mine. The purpose of the test mine is to determine our capital and operating costs, metallurgical recoveries, and other mining factors, and demonstrate that we can make a profit over and above our capital and operating costs.

Description of Equipment and other Infrastructure Facilities

Up until the shutdown in mining in February 2007, GoldSpring used a mining contractor to dig material from the Billie the Kid pit. The contractor used 50 ton Euclid haul trucks to haul the mineralized materials from the Billie the Kid/Lucerne open pit to the crushing and process facility located in the northeast corner of the property. The mineralized material is crushed, and agglomerated in a self-contained portable crushing plant. The mineralized material is fed to a vibrating plate feeder by a front-end loader. The feeder provides a steady feed to a Pioneer jaw crusher where material is crushed to -3” minus. Prior to agglomeration, 10 pounds of Type II Portland Cement is added for every ton of mineralized material and metered on to the pug mill feed conveyor which is then transported to the leach pads. A dilute cyanide solution is then applied to the mineralized material on the leach pads. Pregnant solution is accumulated from the leach pad and is then pumped to the 300 gpm Merrill-Crowe recovery plant. The resulting zinc precipitate collected in the presses is dried and smelted on the property using an electric furnace to produce gold and silver dore.

Our third-party contract mining company owns and provided the haul trucks, front end shovel, loaders and blade. We own the Merrill-Crowe gold precipitation plant, the agglomerator, crushers, screen, water truck, generators, dozers, cement silo with a screw feeder, and conveyors. The Merrill-Crowe gold precipitation plant and the mineral processing equipment are less than four years old. The total book value of our equipment associated with the Billie the Kid and the Lucerne facilities is approximately $330,000.

Power Utilization at the Plum Property:

We completed the installation of the grid power line replacing a Caterpillar 3516 (1000 kilowatt) diesel generator. The change has reduced our crushing costs and directly attributed to expanding our permit for tons crushed.

Geology, Structure and Mineralization

Several large low angle brecciate structural zones (faults) dominate the geology of the Billie the Kid/Lucerne deposit. The thickness of these structural zones ranges from 20 to 30 feet. Gold mineralization within the Billie the Kid/Lucerne deposit is closely associated with dikes and sills that are composed of Alta Andesite, a dark-colored, fine-grained volcanic rock, but these rocks are rarely or weakly mineralized. Hartford Rhyolite, a fine-grained volcanic rock, hosts approximately 70% to 80% of the gold mineralization and the remaining 20% to 30% is associated with Alta Andesite.

Mineralized Material

We have not established any proven or probable reserves that meet the requirements of SEC Industry Guide 7. Therefore, all of our activities are considered exploratory in nature. Part of our exploration includes operating a test mine. The purpose of the test mine is to determine our capital and operating costs, metallurgical recoveries, and other mining factors, and demonstrate that we can make a profit over and above our capital and operating cost. These test mining activities will assist us with sufficient data to prepare a formal mine plan and establish reserves in the future.

On June 10, 2008, our third-party engineer, Telesto Nevada, Inc. of Reno, Nevada, released the Preliminary Resource Report for our Comstock Project based 450 drill holes from prior drill campaigns and 38 drill holes that we completed as of the date of the report. The third-party Report indicated a mineralized material volume of 4,926,000 tons grading 0.080 ounces per ton gold and containing 392,000 ounces at a limiting grade of 0.030 ounces per ton. In September 2008, Telesto updated the estimate of the mineralized material . The updated Report, which included 19 additional holes not in the June 2008 Report, showed a mineralized material volume of 7,179,984 tons grading 0.072 ounces per ton gold and containing 510,000 ounces of gold at a limiting grade of 0.030 ounces per ton. As of March 24, 2009, we have drilled a total of 179 holes. We expect an updated estimate and scoping / feasibility report to be released in the short term.

Future Exploration Potential

We are conducting an exploration program to test surface mineral targets as well as deep underground bonanza targets by using geological mapping, geochemical/geophysical investigations and drilling.

Gold Canyon and Spring Valley (Placer Claims)

We own a 100% interest in the 25 federal unpatented placer claims located in Lyon County, Nevada known as the Gold Canyon and Spring Valley claims. The 25 unpatented placer claims cover approximately 850 acres and are located about 30 miles southeast of Reno and six miles south of Virginia City, Nevada. We have not completed any exploration activity on the Gold Canyon or Spring Valley properties. The properties are undeveloped and do not contain any open-pit or underground mines. We have not established any proven or probable reserves on the mineral claims. All of our activities associated with these properties are exploratory in nature. The processing plant is stored at our Plum Mining property in American Flat, Nevada. We have no plans to begin test mining operations on these properties in the near-term.

Lyon County Unpatented Placer Claims:

Serial #

Claim Name

Location Date

Type

Lease

Holder

Position

Land

Source

Acres

NMC677117

Harlesk #1

3/8/1993

Placer

GSPG

Fee

BLM

4.4

NMC677118

Harlesk #2

3/8/1993

Placer

GSPG

Fee

BLM

19.7

NMC677119

Harlesk #3

3/8/1993

Placer

GSPG

Fee

BLM

17.8

NMC677120

Harlesk #4

3/8/1993

Placer

GSPG

Fee

BLM

4.5

NMC677121

Harlesk #5

3/8/1993

Placer

GSPG

Fee

BLM

20.1

NMC677122

Harlesk #6

3/8/1993

Placer

GSPG

Fee

BLM

17.7

NMC677123

Harlesk #7

3/8/1993

Placer

GSPG

Fee

BLM

20.3

NMC677124

Harlesk #8

3/8/1993

Placer

GSPG

Fee

BLM

17.4

NMC677125

Harlesk #9

3/8/1993

Placer

GSPG

Fee

BLM

18.9

NMC677126

Harlesk #10

3/8/1993

Placer

GSPG

Fee

BLM

19.9

NMC872176

Harlesk #100

4-19-2004

Placer

GSPG

Fee

BLM

21.0

NMC872177

Harlesk #101

4-19-2004

Placer

GSPG

Fee

BLM

21.2

NMC872178

Harlesk #102

4-19-2004

Placer

GSPG

Fee

BLM

21.0

NMC872179

Harlesk #103

4-19-2004

Placer

GSPG

Fee

BLM

20.8

NMC99064

SD Placer

9/30/1967

Placer

GSPG

Fee

BLM

42.3

NMC99065

DS Placer

9/30/1967

Placer

GSPG

Fee

BLM

82.1

NMC99066

Trio Claims

9/30/1967

Placer

GSPG

Fee

BLM

41.5

NMC99067

Gold Star Placers

7/18/1972

Placer

GSPG

Fee

BLM

NMC99068

Badger Placer

8/13/1966

Placer

GSPG

Fee

BLM

21.0

NMC99072

EZ Placer

2/6/1970

Placer

GSPG

Fee

BLM

40.2

NMC99075

Nugget Placer

9/1/1959

Placer

GSPG

Fee

BLM

80.0

NMC99076

Star Placer

11/12/1966

Placer

GSPG

Fee

BLM

41.1

NMC99078

Stans Placer

9/2/1969

Placer

GSPG

Fee

BLM

80.3

NMC99079

Stangs Placer

10/15/169

Placer

GSPG

Fee

BLM

NMC99074

Mustang

9/6/1969

Placer

GSPG

Fee

BLM

The “Big Mike” Copper Project

We own a 100% interest in the 17 unpatented lode claims and one placer claim covering a total of approximately 310 acres in Pershing County, Nevada that comprise the Big Mike Copper property. The Big Mike Copper property is located approximately 32 miles south of Winnemucca in Pershing County, Nevada. Access to this site is available by way of Grass Valley Road, a county maintained paved and gravel road, for 30 miles and then two miles on a BLM gravel road. The property is situated at an elevation of 5,000 to 5,500 feet. We have not completed any exploration activity or undertaken any geologic, engineering or economic studies on the Big Mike Copper property. The property includes an open pit, mineralized material in a stockpile, and waste dumps. As the site was previously mined, there are also roads and graded areas on the property. Two cased water wells with rights to two cubic feet per second are also present on the property.