U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended February 29, 2012

☐ 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. 001-34976

GUNPOWDER GOLD CORPORATION

(Exact name of small business issuer as specified in its charter)

Nevada	26-3751595
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

4830 Impressario Court

Suite 109

Las Vegas, NV 89149

(Address of principal executive offices)

Registrant’s telephone number, including area code: (800) 939-5793

(Former name, address and fiscal year, if changed since last report)

None

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 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 ☒   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,” “non-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

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of April 5, 2012:   92,641,961 shares of common stock.

PART I – FINANCIAL INFORMATION			2
	Item 1.	Financial Statements	2
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	2
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4
	Item 4.	Control and Procedures	5
PART II – OTHER INFORMATION			6
	Item 1.	Legal Proceedings	6
	Item 1A.	Risk Factors	6
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
	Item 3.	Defaults Upon Senior Securities	6
	Item 4.	Removed and Reserved	6
	Item 5.	Other Information	6
	Item 6.	Exhibits	6
SIGNATURE			7

PART I – FINANCIAL INFORMATION

Item 1.  Financial Information

BASIS OF PRESENTATION

The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Item 310 under subpart A of Regulation S-B.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included.  Operating results from year end (August 31, 2011) and six months ended February 29, 2012, are not necessarily indicative of results that may be expected for the year ending August 31, 2012.  The financial statements are presented on the accrual basis.

CONDENSED FINANCIAL STATEMENTS

GUNPOWDER GOLD CORPORATION

Table of Contents

	PAGE
CONDENSED BALANCE SHEETS	F-1
CONDENSED STATEMENTS OF OPERATIONS	F-2
CONDENSED STATEMENTS OF CASH FLOWS	F-3
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS	F-4

2

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

Unaudited Interim Condensed Balance Sheets

ASSETS	February 29, 2012			August 31, 2011
Current assets:
Cash and cash equivalents	$52,884			$57,396
Prepaid expense	14,000			5,436
Deposit	-			542
Total current assets	$	66,884		$	63,374
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities	$	8,190		$	18,416
Accounts payable to related-party		7,000			3,000
Note payable to related-party		-			76,860
Total current liabilities		15,190			98,276
Stockholders' equity
Preferred stock; $.001 par value, 5,000,000 shares
authorized, zero shares issued and outstanding		-			-
Common stock; $.001 par value, 300,000,000 shares authorized;
92,641,961 and 90,501,961 shares issued and outstanding
at February 29, 2012 and August 31, 2011, respectively		92,642			90,502
Additional paid-in-capital		609,789			363,971
Deficit accumulated during exploration stage		(650,737	)		(489,375	)
Total stockholders' equity (deficit)		51,694			(34,902	)
Total liabilities and stockholders' equity (deficit)	$	66,884		$	63,374

The accompanying notes are an integral part of the financial statements

F-1

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

Unaudited Interim Condensed Statements of Operations

													November 19, 2008
	For the three			For the three			For the six			For the six			(Inception)
	months ended			months ended			months ended			months ended			through
	February 29, 2012			February 28, 2011			February 29, 2012			February 28, 2011			February 29, 2012
Revenues	$	-		$	-		$	-		$	-		$	-
Operating expenses
General and administrative		11,433			85,525			59,009			127,755			382,326
Consulting fee - related-party		16,084			13,000			31,084			21,000			83,084
Advertising and marketing		-			12,960			1,875			12,960			21,380
Impairment loss on mineral claim		-			-			-			-			20,000
Exploration cost		-			-			69,150			-			146,799
		27,517			111,485			161,118			161,715			653,589
Loss from operations		(27,517	)		(111,485	)		(161,118	)		(161,715	)		(653,589	)
Other income (expense)
Other income		-			-			-			-			3,500
Gain(loss) from foreign exchange		(202	)		-			(244	)		-			(648	)
Loss before income taxes		(27,719	)		(111,485	)		(161,362	)		(161,715	)		(650,737	)
Income tax expense		-			-			-			-			-
Net loss	$	(27,719	)	$	(111,485	)	$	(161,362	)	$	(161,715	)	$	(650,737	)
Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic and diluted weighted average
common shares outstanding		91,657,760			90,000,000			91,079,860			90,000,000
The accompanying notes are an integral part of the financial statements

F-2

 GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

Unaudited Interim Condensed Statements of Cash Flows

							November 19, 2008
	For the six			For the six			(Inception)
	months ended			months ended			through
	February 29, 2012			February 28, 2011			February 29, 2012
Operating activities:
Net (loss) profit	$	(161,362	)	$	(161,715	)	$	(650,737	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Amortization expense		-						10,000
Stock issued for services		-			-			2,500
Impairment loss on mineral claim					-			20,000
Expenses paid by shareholder/officer					36,964			76,860
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expense		(8,564	)		-			(24,000	)
Decrease (increase) in deposit		542			-			-
Increase in accounts payable to related-party		4,000			20,000			7,000
Increase (decrease) in accounts payable		(10,226	)		104,591			8,190
Net cash (used in) operating activities		(175,610	)		(160	)		(550,187	)
Cash flows from investing activities:
Purchase of mineral claims		-			-			(20,000	)
Net cash (used in) investing activities		-			-			(20,000	)
Financing activities:
Capital contribution		100			-			6,100
Payment for release of debt from shareholder		(2	)		-			(2	)
Proceeds from issuance of common stock		171,000			200,000			616,973
Net cash provided by financing activities		171,098			200,000			623,071
Net change in cash		(4,512	)		199840			52,884
Cash, beginning of period		57,396			160			-
Cash, ending of period	$	52,884		$	200,000		$	52,884
Supplemental cash flow disclosures
Cash paid for:
Interest expense	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-
Non-cash activities:
Issuance of common stock for services	$	-		$	-		$	2,500
Gain (loss) foreign exchange	$	84		$	-		$	(320	)
Debt forgiveness	$	74,858			-		$	-

The accompanying notes are an integral part of the financial statements

F-3

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

February 29, 2012

Note 1.  Condensed Financial Statements

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at February 29, 2012, and for all periods presented herein, have been made. The Company's fiscal year end is August 31.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s August 31, 2011 audited financial statements.  The results of operations for the periods ended February 29, 2012 and February 28, 2011 are not necessarily indicative of the operating results for the full years.

Note 2.  Nature of Business

Gunpowder Gold Corp. (the “Company”), formerly named Spartan Business Services Corp., was incorporated in the State of Nevada on November 19, 2008.  The Company is an Exploration Stage Company as defined by Guide 7 of the Securities Exchange Commission’s Industry Guide and ASC Topic 915-10 “Development Stage Entities”.   The Company has entered into an agreement to acquire a mineral property located in the La Paz County, Arizona, and has not yet determined whether this property contains reserves that are economically recoverable.  The recoverability of property expenditures will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreement and upon future profitable production or proceeds from the sale thereof.

On December 13, 2011 Mr. Neil Pestell resigned as President, Treasurer, Secretary and Director of Gunpowder Gold Corp. (“the Company”).

On December 13, 2011, Mr. Michael Nott was appointed President, Treasurer, Secretary and Director of the Company. Mr. Nott is paid $2,000 per month for his services to the Company.

Note 3.  Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred a net operating loss of $650,737 through February 29, 2012, and has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

F-4

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

February 29, 2012

Note 4.  Significant Accounting Policies

Revenue recognition

The Company has no revenues to date from its operations.  Once revenues are generated, management will establish a revenue recognition policy.

Advertising costs

Advertising costs are generally expensed as incurred and are included in advertising and marketing expenses in the accompanying statement of operations.

Mineral Rights and Exploration Costs

Costs of acquisition and option costs of mineral rights are capitalized upon acquisition. Exploration costs incurred to develop new ore deposits substantially in advance of current exploration are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current exploration or to maintain assets on a standby basis are charged to operations. If the Company does not continue with exploration after the completion of the feasibility study, the mineral rights will be expensed at that time. Costs of abandoned projects are charged to exploration costs including related property and equipment costs. To determine if these  costs are in excess of their recoverable amount periodic evaluation of carrying value of capitalized costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance with FASB Accounting Standards Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Environmental expenditures

The operations of the Company have been, and may in the future, be affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs.  Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable.  The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures.

Impairment of Long-Lived Assets

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17, if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-10 through 15-5, Impairment or Disposal of Long-Lived Assets.

Basic and diluted net loss per share

The Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period.

In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

F-5

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

February 29, 2012

Concentrations of credit risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and accounts payable.  The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits.

Risks and uncertainties

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

Income taxes

The Company accounts for its income taxes in accordance with ASC Topic 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Note 5.  Mineral Property

The Company entered into a mineral property purchase option agreement dated January 21, 2011 and amended on March 9^th, 2011. This agreement was replaced by a new agreement dated January 17, 2012, pursuant to this new agreement the Company plans to acquired a 100% undivided right, title and interest in a mineral claim, located in the La Paz County, Arizona, known as the Dome Rock Property. The effect of the transactions was to preserve the Company’s rights under the old agreement and cash payments required under the old option agreement are still required under the new option agreement, but their due dates were all extended by approximately one year. The Company cannot apply prior payments to the new option agreement. The Option shall be in good standing and exercisable by the Optionee by:

i. Paying the following amounts on or before the dates specified in the following schedule to the Optionor:

1. Paying $40,000 on or before January 17, 2013, the first anniversary of the Agreement;

2. Paying $40,000 on or before January 17, 2014, the second anniversary of the Agreement;

3. Paying $40,000 on or before January 17, 2015, the third anniversary of the Agreement;

4. Paying $50,000 on or before January 17, 2016, the fourth anniversary of the Agreement;

5. Paying $60,000 on or before January 17, 2017, the fifth anniversary of the Agreement;

6. Paying $60,000 on or before January 17, 2018, the sixth anniversary of the Agreement;

7. Paying $60,000 on or before January 17, 2019, the seventh anniversary of the Agreement;

ii. Paying all amounts to keep the property in good standing which includes all annual maintenance fees, exploration and other permits, property taxes, levies, insurance, and other assessments.

The Optionee shall incur the following annual work requirements as defined below and agreed to by the parties for the benefit of the Horizon Property:

1. Exploration expenditures on the property of $750,000 on or before the first anniversary of the execution of the Agreement;

2. Exploration expenditures on the property of $750,000 on or before the second anniversary of the execution of the Agreement;

3. Exploration expenditures on the property of $500,000 on or before the third anniversary of the execution of the Agreement;

F-6

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

February 29, 2012

In the event that the Optionee spends, in any period, more than the specified sum, the excess shall be carried forward and applied to the exploration expenditures to be incurred in the succeeding period for no more than three consecutive years. In the event the exploration expenditures are not completed during the required time frame, any deficits will be paid in cash to Horizon immediately after the end of the anniversary in which it occurs.

The Company has not incurred any exploration cost of under the new agreement.

Note 6.  Recent Accounting Pronouncements

The Company has evaluated the recent accounting pronouncements and believes that none of them will have a material effect on the Company’s financial statements.

Note 7.  Related Party Transactions

During the six months ended February 29, 2012 and February 28, 2011, a former director/shareholder paid $-0- and $36,964, respectively, of expenses on behalf of the Company from his personal account. These amounts are reflected as unsecured and non-interest bearing advances with no maturity date. On December 13, 2011, the former director /shareholder, agreed to forgive all debts owing to him by the Company for a nominal consideration of $2. The total amount of debt forgiven was $76,858.

During the six months ended February 29, 2012 and February 28, 2011, the Company recorded consulting expenses payable to shareholders/officers of the Company in the amount of $31,084 and $21,000, respectively.

Note 8.  Stockholders’ Equity and Warrants

In November 2010, the Company revised and restated its Articles of Incorporation to increase the amount of authorized capital to 305,000,000 shares, consisting of 5,000,000 preferred shares and 300,000,000 shares of Common stock, and the Company had a 10:1 forward stock split.  All references in the accompanying financial statements have been retroactively stated to reflect these changes.

The Company closed a private placement in February 2011, for the sale of 266,667 Units at $0.75 per Unit, for aggregate gross proceeds of $200,000. A “Unit” consisted of the following: (1) one share of common stock; (2) one class A warrant, entitling the holder to purchase one share of common stock of the Company at an exercise price of $0.90 per share during a term of two years, expiring on March 1, 2013. No warrants have been exercised as of February 29, 2012. The subscription raised $200,000 in proceeds from one non-US investor.

The fair value of the warrants is treated as offering costs and it would be a debit and credit entry to additional paid in capital resulting in a null effect in net equity.

On April 8, 2011, the Company closed the private placement of 235,294 Units at .85 per unit per Unit, for aggregate gross proceeds of $200,000. A “Unit” consisted of the following: (1) one share of common stock; (2) one class A warrant, entitling the holder to purchase one share of common stock of the Company at an exercise price of $1.00 per share during a term expiring on April 15, 2013. No warrants have been exercised as of February 29, 2012. The subscription raised $200,000 in proceeds from one investor.

The fair value of the warrants is treated as offering costs and it would be a debit and credit entry to additional paid in capital resulting in a null effect in net equity.

F-7

GUNPOWDER GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

February 29, 2012

On September 12, 2011, the Company closed the private placement of 473,333 Units at .15 per unit per Unit, for aggregate gross proceeds of $71,000. A “Unit” consisted of the following: (1) one share of common stock; (2) one class A warrant, entitling the holder to purchase one share of common stock of the Company at an exercise price of $.25 per share during a term expiring on April 15, 2013. No warrants have been exercised as of February 29, 2012. The subscription raised $71,000 in proceeds from one investor.

The Company calculated the fair value of these warrants of $114,735 using the Black Scholes model. The Company used the following assumptions: stock price of $0.25, an exercise price of $0.25, expected term of 24 months (using the simplified method), volatility of 305%, and discount rate of 0.21%. The fair value of the warrants is treated as offering costs and it would be a debit and credit entry to additional paid in capital resulting in a null effect in net equity.

On February 14, 2012, the Company closed the private placement of 1,666,667 Units at $0.06 per unit, for aggregate gross proceeds of $100,000. The subscription raised $100,000 in proceeds from one non-US investor. There were no warrants issued with this subscription.

The following is a summary of the status of all of the Company’s stock warrants as of February 29, 2012.

	Number Of Warrants		Weighted-Average Exercise Price
Outstanding at September 1, 2011		-	$	0.00
Granted		975,294	$	0.61
Exercised		-	$	0.00
Cancelled		-	$	0.00
Outstanding at February 29, 2012		975,294	$	0.61
Warrants exercisable at February 29, 2012		975,294	$	0.61

The following tables summarize information about stock warrants outstanding and exercisable at February 29, 2012:

STOCK WARRANTS OUTSTANDING AND EXERCISABLE
Number of Warrants Outstanding	Weighted-Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
975,294	1.22	$	0.61
975,294	1.22	$	0.61

Note 9.  Subsequent Events

The Company has evaluated all subsequent events through the date the financial statements have been issued and has determined that no other events occurred. 

F-8

 Item 2.   Management’s Discussion and Analysis or Plan of Operation

Caution Regarding Forward-Looking Statements

The following information may contain certain forward-looking statements that are not historical facts. These statements represent our expectations or beliefs, including but not limited to, statements concerning future acquisitions, future operating results, statements concerning industry performance, capital expenditures, financings, as well as assumptions related to the foregoing. Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “shall,” “will,” “could,” “expect,” “estimate,” “anticipate,” “predict,” “should,” “continue” or similar terms, variations of those terms or the negative of those terms. Forward-looking statements are based on current expectations and involve various risks and uncertainties that could cause actual results and outcomes for future periods to differ materially from any forward-looking statement or view expressed herein. Our financial performance and the forward-looking statements contained in this report are further qualified by other risks including those set forth from time to time in documents filed by us with the U.S. Securities and Exchange Commission (“SEC”).

The following information has not been audited.  You should read this information in conjunction with the unaudited financial statements and related notes to the financial statements included in this report.

Plan of Operation

On April 9, 2009, the Securities and Exchange Commission declared our Registration Statement on Form S-1 effective.  We registered 4,000,000 shares of our Common Stock at an offering price of $.01 per share in order to raise $40,000 as our initial capital.  The Company then filed an application with FINRA on Form 211 to have its Common Stock be listed for public trading.

The Company is a natural resource exploration company with an objective of acquiring, exploring, and if warranted and feasible, exploiting natural resource properties. We do not anticipate going into production ourselves but instead anticipate optioning or selling any ore bodies that we may discover to a major mining company. Most major mining companies obtain their ore reserves through the purchase of ore bodies found by junior exploration companies such as the Company. Although these major mining companies do some exploration work themselves, many of them rely on the junior resource exploration companies to provide them with future deposits for them to mine. By optioning or selling a deposit found by us to these major mining companies, it would provide an immediate return to our shareholders without the long time frame and cost of putting a mine into operation ourselves, and it would also provide future capital for the Company to continue operations.

The search for valuable natural resources as a business is extremely risky. We can provide investors with no assurance that the properties we have contain commercially exploitable reserves.  Exploration for natural resource reserves is a speculative venture involving substantial risks. Few properties that are explored are ultimately developed into producing commercially feasible reserves. Problems such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan and any money spent on exploration would be lost. To date, we have one mining property under option.

Mineral Exploration Property – Dome Rock

On January 21, 2011, the Company entered into an Option Agreement (the "Agreement") with Horizon Exploration Inc. ("Horizon"), whereby Horizon granted the Company the sole and exclusive right and option to acquire an undivided 100% right, title and interest in and to the Dome Rock Property which contains 62 unpatented mineral claims and subject only to a royalty, being located in La Paz County, Arizona (the "Property"). The Agreement was terminated by the Company and simultaneously entered into a New Option Agreement as further described herein.

On January 17, 2012, the Company entered into a new Option Agreement (the "Agreement") with Horizon Exploration Inc. ("Horizon"), whereby Horizon granted the Company an undivided 100% right, title and interest in and to the Dome Rock Property which contains 33 unpatented claims south-of and contiguous-to its BHR62 unpatented mineral claims and subject only to a royalty, being located in La Paz County, Arizona (the "Property").

Horizon Property

Under the terms of the Agreement, Horizon has granted the Company the sole and exclusive option to acquire a 100% undivided interest in and to the Property by making cash payments to Horizon $40,000 on or before the first Anniversary of the Agreement, $40,000 on or before the second Anniversary of the Agreement, $40,000 on or before the third anniversary of the Agreement, $50,000 on or before the fourth Anniversary of the Agreement, $60,000 on or before the fifth Anniversary of the Agreement, $60,000 on or before the sixth Anniversary of the Agreement, $60,000 on or before the seventh Anniversary of the Agreement. The Company shall also be responsible for making all necessary property payments to keep the Property in good standing which includes all annual maintenance fees, exploration and other permits, property taxes, levies, insurance, and other assessments.

3

 The Company shall complete the following exploration expenditures on the Property as follows: (i) $750,000 on or before the first anniversary of the signing of the Agreement (ii) $750,000 on or before the second anniversary of the signing of the Agreement; and (iii) $500,000 on or before the third anniversary of the signing of the Agreement.

The Company may terminate the Agreement at any time by giving 30 days notice of such termination of the Agreement.

In the event that the company spends, in any period, more than the specified sum, the excess shall be carried forward and applied to the exploration expenditures to be incurred in the succeeding period for no more than three consecutive years. In the event the exploration expenditures are not completed during the required time frame, any deficits will be paid in cash to Horizon immediately after the end of the anniversary in which it occurs.

The Company has the right to accelerate all payments due under this Agreement in order to exercise the Option at an earlier date.

If and when the Option has been exercised, a 100% right, title and interest in and to the Property will vest in the Company free and clear of all charges, encumbrances and claims, save and except for the royalty. At such time, the Company shall be entitled to record such transfers at its own cost with the appropriate government office to effect legal transfer of such interest in the Property into the name of the Company

Upon the commencement of commercial production, the Company shall pay to Horizon an amount equal to a 3.0% Net Smelter Return on the Property (Royalty), on the terms and conditions as set out in the agreement.

If the Company is in default of the Agreement, Horizon may terminate the Agreement but only if:

Horizon has first given the Company notice of the default containing particulars of the obligation which the Company has not performed or the warranty breached and the Company has not, within 30 days following delivery of such notice of default, cured such default or commenced proceedings to cure such default by appropriate payment or performance, the Company hereby agreeing that should it so commence to cure any default it will prosecute the same to completion without undue delay. In the event the Company is forced to cure the defect to preserve the status of the Property, the cure of the defect by the Company will include a 10% overhead fee to Horizon.

Should the Company fail to comply with the provisions in the last paragraph, Horizon may thereafter terminate this Agreement by giving notice thereof to the Company, always provided that the default in question has not been cured or substantially cured at the time of Horizon giving such notice of termination.

The Agreement contains an arbitration clause and is governed by the laws of the State of Nevada.

Results of Operation

The Company did not have any operating income from inception (November 19, 2008) through February 29, 2012. For the period from inception, November 19, 2008 through the quarter ended February 29, 2012, the Company recognized a net loss of $650,737

Comparison of Six Months Ended February 29, 2012 and 2011

During the Six Months ended February 29, 2012, the Company incurred general and administrative expenses of $59,009 compared to expenses of $127,755 during the Six Month period ended February 28, 2011, a decrease of 54%.  The Company realized an increase in general and administrative expenses as a result of an increase in legal fees, accounting fees, and consulting services.

During the Six Months ended February 29, 2012, the Company incurred a consulting fee of $31,084 payable to a related party for services compared to $21,000 related party consulting fees during the Six Months ended February 28, 2011, an increase of 48%.

During the Six Months ended February 29, 2012, the Company incurred $1,875 in advertising and marketing fees compared to $12,960 in marketing or advertising fees during the Six Months ended February 28, 2011, a decrease of 86%.

During the Six Months ended February 29, 2012, the Company incurred $69,150 in exploration costs compared to no exploration costs during the Six Months ended February 28, 2011.

During the Six Months ended February 29, 2012, the Company realized a net loss of $161,362 compared to a net loss of $161,715 during the Six Month period ended February 28, 2011, a decrease of 0.02%.  The increase in net loss was attributable primarily to the decreases in its general administrative expenses, and advertising and marketing costs.

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Liquidity and Capital Resource

At February 29, 2012, the Company had limited capital resources and will rely upon the issuance of Common Stock and additional capital contributions from shareholders to fund administrative expenses pending full implementation of the Company’s business model.  During the six months ended February 22, 2012, the Company realized $171,000 from the sale of its common stock in a private placement. However, the Company anticipates that additional capital will be necessary to complete its business plans for fiscal 2012.

Critical Accounting Policies

Gunpowder Gold Corporation’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting Company as defined by Rule 12b-2 under the Securities Exchange Act of 1934, and are not required to provide the information required under this item.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management evaluated the effectiveness of our disclosure controls and procedures as of the end of our fiscal quarter ended February 29, 2012.  This evaluation was conducted by Michael Nott, our President and Chief Executive Officer.

Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.

Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met.

Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs.  These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control.  A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Conclusion

Based upon his evaluation of our controls, our Chief Executive Officer has concluded that, subject to the limitations noted above, the disclosure controls are not effective in providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared.  There were no changes in our internal controls and internal controls over financial reporting that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 1A. Risk Factors.

N/A

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On February 9. 2012, the Company closed a private placement of 1,666,667 Shares of Common Stock at .06 per Share, for aggregate gross proceeds of $100,000. No warrants were issued in connection with this private placement. The subscription raised $100,000 in proceeds from one Non-US investor pursuant to Regulation S promulgated under Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Removed and Reserved.

Item 5. Other Information.

None

Item 6.   Exhibits.

(a) Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of  2002

32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002

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SIGNATURES

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

GUNPOWDER GOLD CORPORATION

Date: April 16, 2012

/s/ Michael Nott_______________________

Michael Nott

Chief Executive Officer and President

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