6-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 6-K

REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the Period   February 2010            File No.    0-51352

PORTAL RESOURCES LTD.

(Name of Registrant)

Suite 750, 625 Howe Street, Vancouver, British Columbia, Canada, V6C 2T6

(Address of principal executive offices)

1.

Interim Financial Statements (unaudited) for the 6 month period ended December 31, 2009

2.

Management Discussion and Analysis for the period ended December 31, 2009.

3.

Certification of CEO

4.

Certification of CFO

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.     

FORM 20-F XXX

FORM 40-F ____

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.     

Yes _____

No XXX

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.

Portal Resources Ltd.

(Registrant)

Dated:  February 22, 2010 By:   /s/  David Hottman David Hottman President and CEO

EX-99.1

PORTAL RESOURCES LTD.

Consolidated Financial Statements

(Unaudited)

For the six months ended

December 31, 2009

(An exploration stage company)

Portal Resources Ltd.

Trading Symbol: PDO

Head Office: Suite 750 – 625 Howe Street

Telephone:  604-629-1929

Vancouver, British Columbia, Canada V6C 2T6

Facsimile:   604-629-1930

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements of Portal Resources Ltd. have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

PORTAL RESOURCES LTD.

CONSOLIDATED BALANCE SHEETS

(stated in Canadian dollars)

(Unaudited)

	December 31, 2009 (Unaudited)	June 30, 2009 (Audited)
ASSETS
Current
Cash and cash equivalents	$           303,815	$             248,572
Short-term investments (Note 3)	675,263	1,255,956
Marketable securities (Note 4)	55,178	34,875
Amounts receivable	8,991	4,395
Prepaid expenses	26,109	21,916
	1,069,356	1,565,714
Equipment (Note 5)	32,260	38,839
Oil and gas properties (Note 7)	433,473	361,437
	$       1,535,089	$          1,965,990
LIABILITIES
Current
Accounts payable and accrued liabilities	$            50,878	$               72,092
SHAREHOLDERS’ EQUITY
Share capital (Note 8)	$     14,760,161	$        14,760,161
Contributed surplus (Note 8)	886,115	805,151
Deficit	(14,162,065)	(13,671,414)
	1,484,211	1,893,898
	$       1,535,089	$          1,965,990

Nature of operations (Note 1)

Commitments (Note 9)

Subsequent events (Note 15)

         Approved by the Board of Directors:

“David Hottman”	“Mark T. Brown”
David Hottman, Director	Mark T. Brown, Director

See notes to consolidated financial statements

PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

(stated in Canadian dollars)

(Unaudited)

	For the three months ended December 31,		For the six months ended December 31,
	2009	2008	2009	2008
Expenses
Accounting and audit	$      12,180	$     16,711	$     17,430	$       27,438
Amortization	3,717	6,266	7,435	13,062
Bank charges and interest	630	2,357	1,156	4,765
Consulting and management fees	2,132	14,659	26,882	39,361
Director fees	6,500	6,500	14,333	6,500
Foreign exchange	1,911	(9,514)	10,151	(7,887)
Investor relations	21,565	39,392	25,349	112,943
Legal	7,172	20,403	19,594	54,866
Office and miscellaneous	26,976	38,454	50,742	80,136
Rent	22,930	23,622	48,314	40,228
Project investigation	64,012	16,104	97,499	54,589
Salaries and benefits	50,047	123,466	96,623	391,294
Stock-based compensation (Note 8)	27,330	8,411	80,964	10,211
Travel	10,935	19,334	15,056	47,437
Transfer agent and filing fees	3,311	3,081	4,063	3,807
Valuation allowance for foreign value added tax credit (IVA)	-	2,284	-	3,957
	261,348	331,530	515,591	882,707
Other Items
Gain on sale of equipment	-	(1,132)	-	(1,132)
Interest income	(872)	(17,436)	(4,637)	(42,404)
Loss on the sale of mineral properties	-	-	-	-
Write-off of unproven mineral rights	-	163	-	3,601
Unrealized gain on marketable securities (Note 4)	(13,362)	-	(20,303)	-
	(14,234)	(18,405)	(24,940)	(39,935)
Net loss and comprehensive loss for the period	$ (247,114)	$ (313,125)	$ (490,651)	$   (842,772)
Loss per share (Note 2)	$        (0.01)	$       (0.01)	$       (0.02)	$         (0.03)
Weighted average number of common   shares outstanding	29,651,539	29,651,539	29,651,539	29,651,539

PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 (stated in Canadian dollars)

(Unaudited)

	Number of Shares	Amount	Shares Subscribed	Contributed Surplus	Deficit	Total Shareholders Equity
Balance at June 30, 2007 (Audited)	21,759,539	9,823,918	59,800	636,998	(4,016,745)	6,503,971
Share issues:
Private placement	7,887,000	5,126,550	(59,800)	-	-	5,066,750
Exercise of options	5,000	2,600	-	-	-	2,600
Fair market value of stock options exercised	-	1,402	-	(1,402)	-	-
Stock based compensation	-	-	-	147,744	-	147,744
Finders fees	-	(151,997)	-	-	-	(151,997)
Share issue costs	-	(42,312)	-	-	-	(42,312)
Net loss and comprehensive income	-	-	-	-	(3,288,433)	(3,288,433)
Balance June 30, 2008 (Audited)	29,651,539	14,760,161	-	783,340	(7,305,178)	8,238,323
Share issues:
Stock based compensation	-	-	-	21,811	-	21,811
Net loss and comprehensive income	-	-	-	-	(6,366,236)	(6,366,236)
Balance June 30, 2009 (Audited)	29,651,539	14,760,161	-	805,151	(13,671,414)	1,893,898
Share issues:
Stock-based compensation	-	-	-	80,964	-	80,964
Net loss and comprehensive income	-	-	-	-	(490,651)	(490,651)
Balance, December 31, 2009 (Unaudited)	29,651,539	14,760,161	-	886,115	(14,162,065)	1,484,211

See notes to consolidated financial statements

PORTAL RESOURCES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (stated in Canadian dollars)

(Unaudited)

	For the three months ended December 31,		For the six months ended December 31,
	2009	2008	2009	2008
Cash provided by (used for):
Operating Activities
Net loss for the period	$   (247,114)	$  (313,125)	$  (490,651)	$  (842,772)
Items not involving cash:
Stock-based compensation	27,330	8,411	80,964	10,211
Amortization	3,717	6,266	7,435	13,062
Unrealized gain on marketable securities	(13,362)	-	(20,303)	-
Gain on sale of equipment	-	(1,132)	-	(1,132)
	(229,429)	(299,580)	(422,555)	(820,631)
Changes in non-cash working capital:
Amounts receivable	(3,056)	(10,132)	(4,596)	90,470
Prepaid expenses	3,927	(10,297)	(4,193)	56,436
Accounts payable and accrued liabilities	7,646	64,074	(21,214)	(5,866)
	(220,912)	(255,935)	(452,558)	(679,591)
Investing Activities
Purchase of equipment and software	-	(1,318)	(856)	(1,318)
Proceeds from the sale of fixed assets	-	5,969	-	5,969
Short-term investments	399,662	586,980	580,693	1,077,914
Expenditures on unproven mineral rights	-	(224,370)	-	(245,251)
Expenditures on oil and gas properties	(43,658)	-	(72,036)	-
	356,004	367,261	507,801	837,314
Net increase (decrease) in cash and cash equivalents	135,092	111,326	55,243	157,723
Cash and cash equivalents – beginning of period	168,723	233,948	248,572	187,551
Cash and cash equivalents– end of period	$    303,815	$    345,274	$     303,815	$     345,274
Supplementary disclosure of non-cash Investing and Financing Activities:
Deferred expenditures on unproven mineral rights included in accounts payable	$                -	$        9,896	$                -	$       9,896

See notes to consolidated financial statements

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

1.

NATURE OF OPERATIONS

Portal Resources Ltd. was incorporated on August 14, 2000 under the Company Act of the Province of British Columbia.  

The Company is an exploration stage company whose business activity is the exploration of mineral rights located in Mexico, and the exploration of oil and gas in central Alberta, Canada. The Company has not yet determined if any of these rights contain economic mineral reserves, oil or gas reserves, and, accordingly, the amounts shown for deferred exploration costs represent costs incurred to date, less write-downs, and do not necessarily reflect present or future values.  The recovery of these amounts is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration of the rights, and upon the commencement of future profitable production or, alternatively, upon the Company’s ability to dispose of its interests on an advantageous basis. To date, the Company has not earned significant revenues and has an accumulated operation defici t of $14,162,065.

Current economic conditions have limited the Company’s ability to access financing through equity markets and this has created significant uncertainty as to the Company’s ability to fund ongoing operations for the next operating period. In a response to conserve capital the Company has significantly curtailed operations.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and the classification of liabilities that might be necessary should the Company be unable to continue in the normal course of business.

2.

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). These interim consolidated financial statements have been prepared in accordance with the accounting policies described in the Company’s annual consolidated financial statements, do not include in all respects the annual disclosure requirements of generally accepted accounting principles, and should be read in conjunction with the most recent annual consolidated financial statements. The differences between those principles and the ones that would be applied under U.S. generally accepted accounting principles (U.S. GAAP) are disclosed in Note 14.

References to the Company are inclusive of the Canadian parent company, its wholly owned U.S. subsidiary, Portal Resources US Inc., and its formerly owned subsidiary Portal del Oro S.A.  All significant inter-company transactions and balances have been eliminated.

The accounting policies followed by the Company are set out in Note 2 to the audited consolidated financial statements for the year ended June 30, 2009 and have been consistently followed in preparation of these interim consolidated financial statements, except with respect to the following new and revised accounting standards which the Company is required to adopt under Canadian GAAP for interim and annual financial statements relating to its fiscal year commencing July 1, 2009.

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

2.

SIGNIFICANT ACCOUNTING POLICIES, (Continued)

Accounting Policies Not Yet Adopted

Convergence to international Financial Reporting Standards (“IFRS”)

In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal year. The transition date of July 1, 2011 will require the restatement for comparative purposes, amounts reported by the Company for the year ended June 30, 2011, for which the current and comparative information will be prepared under IFRS.

The Company has commenced its IFRS conversion project in 2008. The Company’s IFRS project consists of three phases – scoping, evaluation and design, and implementation and review. The Company has commenced the scoping phase of the project, which consists of project initiation and awareness, identification of high-level differences between Canadian GAAP and IFRS and project planning and resourcing. The Company has completed a high level scoping exercise and has prepared a preliminary comparison of financial statement areas that will be impacted by the conversion.

A detailed assessment of the impact of adopting IFRS on the Company’s consolidated financial statements, accounting policies, information technology and data systems, internal controls over financial reporting, disclosure controls and procedures, and the various covenants and capital requirements and business activities has not been completed. The impact on such elements will depend on the particular circumstances prevailing at the adoption date and the IFRS accounting policy choices made by the Company. The Company has not completed its quantification of the effects of adopting IFRS. The financial performance and financial position as disclosed in our Canadian GAAP financial statements may be significantly different when presented in accordance with IFRS.

Business combinations

In January 2009, the CICA issued the new handbook Section 1582, “Business Combinations” effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of Section 1582 is permitted. This pronouncement further aligns Canadian GAAP with US GAAP and IFRS and changes the accounting for business combinations in a number of areas. It establishes principles and requirements governing how an acquiring company recognizes and measures in its financial statements identifiable assets acquired, liabilities assumed, any non-controlling interest in the acquisition, and goodwill acquired. The section also establishes disclosure requirements that will enable users of the acquiring company’s financial statements to evaluate the nature and financial effects of its business combinations. Although the Company is considering the impact of adopting this pronouncement on the consolidated financial statements, it will be li mited to any future acquisitions beginning in fiscal 2012.

Consolidated financial statement and non-controlling interests

In January 2009, the CICA issued the new handbook Section 1601, “Consolidated Financial Statements”, and Section1602, “Non-controlling Interests”, effective for fiscal years beginning on or after January 1, 2011. Earlier adoption of these recommendations is permitted. These pronouncements further align Canadian GAAP with US GAAP and IFRS. Sections 1601 and 1602 change the accounting and reporting for ownership interest in subsidiaries held by parties other than the parent. Non-controlling interests are to be presented in the consolidated statement of financial position within equity but separate from the parent’s equity. The amount of consolidated net income attributable to the parent and to the non-controlling interest is to be clearly identified and presented on the face of the consolidated statement of income. In addition, these pronouncements establish standards for a change in a parent’s ownership interest in a subsidiary and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. They also establish reporting requirements for providing sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company is currently considering the impact of adopting these pronouncements on its consolidated financial statements in fiscal 2012 in connection with the conversion to IFRS.

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

3.

SHORT TERM INVESTMENTS

Short term investments consists of highly liquid investments, including guaranteed investment certificates with major financial institutions, having a maturity of 12 months or less at acquisition and that are readily convertible to contracted amounts of cash.

4.

MARKETABLE SECURITIES

On May 29, 2009 Portal Resources US Inc. acquired 150,000 shares of Pengram Corporation (“Pengram”) in return for assigning all of its interest in an option agreement.  At December 31, 2009, the fair value of the Pengram shares was $55,178 (June 30, 2009 - $ 34,875). During the year the Company recorded an unrealized gain of $20,303 (June 30, 2009 - $Nil).

5.

EQUIPMENT

	December 31, 2009			June 30, 2008
	Cost	Accumulated amortization	Net book value	Cost	Accumulated amortization	Net book value
Computer equipment	$   17,458	$   14,697	$   2,761	$   16,603	$   13,815	$   2,788
Computer software	20,854	20,654	200	20,854	20,553	301
Furniture & fixtures	5,655	3,197	2,458	5,655	2,717	2,938
Vehicles	25,896	7,769	18,127	25,896	3,884	22,012
Field equipment	20,867	12,153	8,714	20,867	10,067	10,800
	$   90,730	$   58,470	$ 32,260	$   89,875	$   51,036	$ 38,839

6.

UNPROVEN MINERAL RIGHTS

Argentina

As at May 14, 2009, the Company held a subsidiary and mineral properties in Argentina. During the most recent completed fiscal year the Company after reviewing work done on the properties, concluded that the potential did not justify further work and renounced the mining rights held under the projects. As such the project expenditures were written off and subsequently Portal’s Argentinean subsidiary was sold.

United States

On September 2, 2008, the Company announced that it had entered into an option agreement under which it has the right to acquire, from Claremont Nevada Mines, Scoonover Exploration and JR Exploration, three properties located in the Walker Lane Belt and Battle Mountain/Eureka Trend in Nevada, USA.

On May 29, 2009, the Company closed an Assignment Agreement with Pengram Corporation (“Pengram”) to transfer all the rights on the Nevada claims, in exchange for 150,000 shares of Pengram’s common stock. The Company has no further commitments on the Nevada properties (See Note 4 – Marketable Securities).

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

7.

OIL AND GAS PROPERTIES

The Company’s oil and gas interests are all located in Central Alberta, Canada.

Oil and Gas Joint Ventures

Bigwave Joint Venture

On November 1, 2008 the Company signed a Joint Venture Agreement to participate for a 15% interest in the exploration, exploitation and production of petroleum and natural gas relating to lands located in central Alberta. In December of 2008 the Agreement was modified to allow the Company to participate up to a 20% interest. During the quarter ended September 30, 2009, the Company increased its interest in the Joint Venture to 22%.

Within the area of interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations.

On January 5, 2009 the Company signed an agreement, “Participation Agreement”, with certain other partners in the Bigwave Joint Venture. Portal agreed to pay 100% of Portal’s cost per Drill Spacing Unit to earn a 100% interest until pay-out and then, after pay-out, to drop to a 70% interest per Drill Spacing Unit.

As at December 31, 2009 the Company has spent a total of $415,473 on the Bigwave Joint Venture.

Manito Joint Venture

On March 9, 2009 the Company signed the Manito Joint Venture Agreement to participate for a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources from certain land in central Alberta.

The Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced.

The Manito Joint Venture has acquired one section of land to date through the Alberta Crown Sale.

As at December 31, 2009 the Company has spent a total of $18,000 on the Manito Joint Venture.

Oil and gas expenditures  

Oil and gas expenditures  

	Bigwave	Manito	Total
Total as at June 30, 2008 (audited)	$                  -	$                 -	$                -
Crown Lease	120,229	-	120,229
Lease costs	21,276	18,000	39,276
Drilling (well costs)	196,044	-	196,044
Geological and engineering	5,888	-	5,888
Total expenditures	343,437	18,000	361,437
Total as at June 30, 2009 (audited)	$  343,437	$  18,000	$  361,437
Crown Lease	12,023	-	12,023
Lease costs	2,767	-	2,767
Drilling (well costs)	56,657	-	56,657
Geological and engineering	589	-	589
Total expenditures	72,036	-	72,036
Total as at December 31, 2009 (unaudited)	$  415,473	$  18,000	$  433,473

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

8.

SHARE CAPITAL

Authorized

100,000,000 Common Shares without par value

100,000,000 Preferred shares issuable in series

Stock-based Compensation

The Company has a stock option plan as described in the most recent annual financial statements of the Company.  The maximum aggregate number of common shares reserved and authorized to be issued pursuant to options granted under the Stock Option Plan is 4,447,730 common shares.  

The exercise price for options granted under the Stock Option Plan is determined by the Board upon grant provided the price is not less than the closing trading price on the day immediately preceding the date of grant, less any discounts permitted by the TSX Venture Exchange or such other stock exchanges on which the common shares are listed.  Options granted under the Stock Option Plan are subject to a minimum one year vesting schedule whereby 25% of each option will vest on each of the three month anniversaries of the date of grant, up to and including the end of the first year after such grant, or such other more restrictive vesting schedule as the administrator of the Stock Option Plan may determine.  Options are non-assignable and are exercisable for a period of up to five years from the date the option is granted, subject to earlier termination after certain events such as the optionee’s cessation of service to the Company or death.< /P>

The Company accounts for its option grants in accordance with the fair value method of accounting for stock-based compensation.  For the six months ended December 31, 2009, the Company recognized $80,964 (2008 - $10,211) in stock-based compensation for employees, directors and consultants.

The fair value of the options has been calculated using the Black-Scholes option-pricing model, based on the following assumptions:

	Years ended June 30,
	2009	2008	2007
Stock compensation	$      21,811	$    147,744	$      340,206
Risk-free interest rate	1.50% - 2.90%	4.00%	3.4% – 4.6%
Expected stock price volatility	121% - 227%	74%	49% - 76%
Expected option life in years	5 years	1 year	3 years
Expected dividend yield	Nil	Nil	Nil

Option prices models require the input of highly subjective assumptions regarding the expected volatility and expected life. Changes in assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide the reliable measure of the fair value of the company’s stock options at the date of grant.

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

8.

SHARE CAPITAL, (Continued)

Stock-based Compensation, (Continued)

A summary of changes to stock options outstanding is as follows:

	December 31			June 30
	2009			2009
		Weighted Average			Weighted Average
	Number of shares	Exercise Price	Number of shares		Exercise Price
Outstanding at beginning of period	3,688,600	$0.35	2,753,600		$0.54
Granted under plan	-	-	2,132,200		$0.16
Forfeited or cancelled	(825,000)	$0.50	(1,197,200)		$0.44
Outstanding at end of period	2,863,600	$0.30	3,688,600		$0.35
Options vested and exercisable at end of period	2,345,000	$0.35	2,113,900		$0.50

At December 31, 2009, the weighted average remaining life of the outstanding options is 3.27 years (June 30, 2009 – 3.59 years).

Stock options outstanding as at December 31, 2009 are as follows:

Number	Exercise Price	Expiry Date
150,000	$0.86	14-Apr-10
75,000	$0.70	20-Jan-11
766,400	$0.52	5-Dec-11
835,000	$0.20	7-Oct-13
1,037,200	$0.12	9-Jun-14
2,863,600

9.

COMMITMENTS

The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2013.  The remaining future minimum lease payments for the non-cancellable lease are:

2010

$43,229

2011

$90,709

2012

$94,961

2013

$65,197

10.

RELATED PARTY TRANSACTIOINS

Payments to related parties were made in the normal course of operations and were valued at fair value as determined by management.  Amounts due to or from related parties are unsecured, non-interest bearing and due on demand.

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

10.

RELATED PARTY TRANSACTIOINS, (Continued)

During the six months ended December 31, 2009

a)

$5,774 (2008 - $21,064) was charged to a public company with a director in common with the Company for rent.  As at December 31, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this public company.

b)

$3,150 (2008 - $16,642) was charged to a private company with a director in common with the Company for administrative fees. As at December 31, 2009, $3,150 (June 30, 2009 - $Nil) was receivable from this private company.

c)

$1,050 (2008 - $Nil) was charged to a private company with a director in common with the Company for rent.  As at December 31, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this private company.

d)

the Company paid or accrued to pay a private company with a director in common with the Company an aggregate of $4,179 (2008 - $5,565) for fees and expense. As at December 31, 2009, the Company owed this company an aggregate of $525 (June 30, 2009 - $788).

e)

the Company incurred director fees of $14,333 (2008 - $6,500) to five directors.

11.

FINANCIAL INSTRUMENTS

The fair values of the Company’s cash and cash equivalents, marketable securities, short-term investments, amounts receivable, accounts payables and accrued liabilities approximate their carrying values.

The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest risk.

(a)

Currency risk

The Company may have property interests in foreign jurisdictions which could make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks.

(b)

Credit risk

The Company’s cash and cash equivalents are held in a Canadian financial institution. The Company does not have any asset-backed commercial paper in its cash and cash equivalents or short-term investments. The Company’s amount receivable consists primarily of recovered rent and office expense, and tax due from the federal government of Canada.

(c)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.

(d)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash and cash equivalents is limited because they are generally held to maturity. A 1% change

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

11.

FINANCIAL INSTRUMENTS, (Continued)

(d)

Interest rate risk, (continued)

in the interest rate, with other variables unchanged, would affect the Company by an annualized amount of interest equal to approximately $1,000.

12.

MANAGEMENT OF CAPITAL RISK

The Company manages its cash and cash equivalents, common shares and stock options as capital (see Note 8). The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral and oil and gas properties and to maintain a flexible capital structure which optimizes the cost of capital at an acceptable risk.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.

The Company expects its current capital resources will be sufficient to carry its exploration plans and operations through its current operating period.

13.      SEGMENTED INFORMATION

The Company operates in a single reportable operating segment, being exploration and development of mineral and oil and gas properties.

Summarized financial information for the geographic segments the Company operates in are as follows:

	Canada	USA	Argentina	Total
Six months ended December 31, 2009
Loss for the period	$    490,651	$                -	$               -	$      490,651
Six months ended December 31, 2009
Loss for the period	$    571,729	$        5,574	$    265,469	$      842,772
As at December 31, 2009
Assets	$  1,535,089	$               -	$               -	$   1,535,089
As at June 30, 2009
Assets	$  1,965,990	$               -	$               -	$   1,965,990

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

14.      

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)

Under Canadian GAAP for junior mining exploration companies, mineral exploration expenditures are deferred on prospective mineral rights until such time as it is determined that further exploration work is not warranted, at which time the mineral right costs are written-off. Under U.S. GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the mineral rights are capable of economic commercial production. The following items (a) to (g) provide a summary of the impact of these financial statements that would result from the application of U.S. accounting principles to preferred mineral rights.

	Three months ended December 31,			Six months ended December 31,			Year ended June 30,
	2009	2008	2009		2008	2009
a)  Assets
Unproven Mineral Rights Costs
Unproven mineral rights costs under Canadian GAAP:	$                  -	$    5,190,744	$                    -		$   5,190,744	$                     -
Add oil and gas properties costs under Canadian GAAP	433,473	-	433,473			361,437
Less unproven mineral rights costs and oil and gas properties	(433,473)	(5,190,744)	(433,473)		(5,190,744)	(361,437)
Unproven mineral rights and oil and gas properties costs under U.S. GAAP	$                  -	$                   -	$                    -		$                  -	$                     -
b)  Operations
Net loss under Canadian GAAP	$    (247,114)	$     (313,125)	$      (490,651)		$    (842,772)	$   (6,366,236)
Unproven mineral rights costs expensed under U.S. GAAP	-	(119,454)	-		(225,149)	4,965,595
Oil and Gas Properties under U.S. GAAP	(43,658)	-	(72,036)		-	(361,437)
Net loss under U.S. GAAP	$    (290,772)	$     (432,579)	$      (562,687)		$ (1,067,921)	$   (1,762,078)
c)  Deficit
Closing deficit under Canadian GAAP	$ (14,162,065)	$  (8,147,950)	$ (14,162,065)		$ (8,147,950)	$ (13,671,414)
Adjustment to deficit for accumulated unproven mineral rights expensed under U.S. GAAP net of income items	(433,473)	(5,190,744)	(433,473)		(5,190,744)	(361,437)
Closing deficit under U.S. GAAP	$ (14,595,538)	$ (13,338,694)	$ (14,595,538)		$ (13,338,694)	$ (14,032,851)
d)  Cash Flows - Operating Activities
Cash applied to operations under Canadian GAAP	$      (220,912)	$      (299,580)	$      (452,558)		$     (820,631)	$   (1,097,448)
Add net loss following Canadian GAAP	247,114	313,125	490,651		842,772	6,366,236
Add change in non cash unproven mineral rights expensed U.S. GAAP	-	(104,916)	-		(20,102)	8,637
Add proceeds on sale of mineral properties	-	-	-		-	99,127
Less net loss under U.S. GAAP	(290,772)	(432,579)	(562,687)		(1,067,921)	(1,762,078)
Less unproven mineral rights expensed under Canadian GAAP	-	-	-		-	(5,056,420)
Cash applied to operations under U.S. GAAP	$     (264,570)	$     (523,950)	$    (524,594)		$  (1,065,882)	$  (1,441,946)
e)  Cash Flows - Investing Activities
Cash applied under Canadian GAAP	$        356,004	$        367,261	$      507,801		$       837,314	$    1,158,469
Less change in non cash unproven mineral rights expensed under US GAAP	-	104,916	-		20,102	(99,127)
Add unproven mineral rights costs expensed under U.S. GAAP	-	119,954	-		225,149	261,054
Add oil and gas properties under U.S. GAAP	43,658	-	72,036		-	322,802
Cash applied under U.S. GAAP	$        399,662	$       592,131	$      579,837		$    1,082,565	$     1,643,198

PORTAL RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the six months ended December 31 2009 (Unaudited)

(stated in Canadian dollars)

14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), (Continued)

OTHER DIFFERENCES BETWEEN CANADIAN AND U.S. GAAP

f)

Stockholders’ Equity

Common Stock

There are no differences between Canadian and U.S. GAAP for the years ended June 30, 2009, 2008 and 2007 or the six months ended December 31, 2009 with respect to the disclosure of stock-based compensation.

g)

Loss per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted loss per share calculations.  Diluted loss per share is not presented as it is anti-dilutive.

	For the six months ended		Year ended
	December 31,		June 30,
	2009	2008	2009
Numerator: Net loss for the period under U.S. GAAP	$(562,687)	$(1,067,921)	$(1,762,078)
Denominator: Weighted-average number of shares under Canadian and U.S. GAAP	29,651,539	29,651,539		29,651,539
Basic and fully diluted loss per share under U.S. GAAP	$       (0.02)	$        (0.03)			$      (0.06)

15.

SUBSEQUENT EVENTS

On January 18, 2010, the Company granted stock options to directors, consultants and employees of the Company to purchase a total of 620,000 common shares at a price of 15 cents per share, exercisable until January 19, 2015.

On January 26, 2010 the Company announced that, subject to Regulatory approval the Company has negotiated a $1-million non brokered private placement; the proceeds of which will be used for general working capital. The placement consists of four million units at a price of 25 cents per unit. Each unit consists of one common share and a one-half share purchase warrant. Each whole share purchase warrant will be exercisable for one common share at a price of 30 cents for a period of 12 months. A 7-per-cent finder’s fee will be paid on a portion of the placement. Company officers and directors will purchase a portion of the financing.

EX-99.2

PORTAL RESOURCES LTD.

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the six months ended December 31, 2009

NOTE TO READER

This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Portal Resources Ltd. (“Portal” or the “Company”), its history, business environment, strategies, performance and risk factors from the viewpoint of management.  The information provided should be read in conjunction with the Company’s audited annual consolidated financial statements and notes for the years ended June 30, 2009 and 2008, and the Company’s unaudited interim consolidated financial statements and notes for the six months ended December 31, 2009.  The Company’s consolidated financial statements and related notes have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and all amounts are presented in Canadian dollars unless otherwise noted.

The following comments may contain management estimates of anticipated future trends, activities or results. These are not a guarantee of future performance, since actual results will change based on other factors and variables beyond management control.

Management is responsible for the preparation and integrity of the consolidated financial statements, including the maintenance of appropriate information systems, procedures and internal controls, and to ensure that information used internally or disclosed externally, including the consolidated financial statements and MD&A, is complete and reliable.

The Company’s board of directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders.  The board’s audit committee meets with management regularly to review financial statement results, including the MD&A and to discuss other financial, operating and internal control matters.

The reader is encouraged to review Company statutory filings on www.sedar.com and to review general information, including maps on the Company’s website at www.portalresources.net.

DATE

This MD&A has been prepared based on information known to management as of February 18, 2010.  

DESCRIPTION OF BUSINESS AND OVERVIEW

Portal is a growth oriented natural resource exploration company focused primarily on the acquisition exploration and development of mineral rights in Mexico and Canada, and light crude oil projects in Canada. The Company is concentrating on identifying early stage mineral and/or oil or natural gas properties that have potential for discovery of large deposits as well as acquiring more advanced projects that with further development have good production potential.

On November 1, 2008, the Company signed a Joint Venture Agreement to participate for the exploration, exploitation and production of oil and natural gas located in Central Alberta – see “Exploration review”.

EXPLORATION REVIEW

HIGHLIGHTS

•

Portal has an administrative office in Hermosillo, Sonora State, Mexico with the mandate to focus primarily on the acquisition and development of mineral rights.

•

Portal entered into the Bigwave Joint Venture Agreement to participate for a 22% interest in the exploration, exploitation and production of oil and natural gas from lands located in central Alberta.

•

Portal entered the Manito Joint Venture Agreement to participate as to a 33.3% interest for the exploration, exploitation and production of oil and natural gas resources in central Alberta.

OIL AND GAS JOINT VENTURES

Bigwave Joint Venture

On November 1, 2008 Portal signed the Bigwave Joint Venture Agreement to participate for a 15% interest in the exploration, exploitation and production of petroleum and natural gas from lands located in central Alberta. In December of 2008 the Agreement was modified to allow Portal to participate up to a 20% interest. During the quarter ended September 30, 2009 the Company increased its interest in the Joint Venture to 22%.

Within the area of interest, the Company has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations.

During the quarter ended December 31, 2009, the Company completed drilling the first horizontal well operated by partner Bigwave Exploration Inc. of Calgary, Alberta. The Bigwave Joint Venture now controls 10,720 acres of land covering a source oil sand-shale sequence with several potential reservoirs (Bakken Formation type).

On January 5, 2009, the Company signed an agreement, “Participation Agreement”, with certain other partners in the Bigwave Joint Venture. Portal agreed to pay 100% of Portal’s cost per Drill Spacing Unit to earn a 100% interest until pay-out and then, after pay-out, to drop to a 70% interest per Drill Spacing Unit.

Manito Joint Venture

On March 9^th, 2009 Portal signed the Manito Joint Venture Agreement to participate in a 33.3% interest for the exploration, exploitation and production of petroleum and natural gas resources in central Alberta.

Portal has agreed to pay a 5.5% Gross Over Riding Royalty (GORR) on all products produced from certain geological formations.

The Manito Joint Venture has acquired one section of land to date through the Alberta Crown Sale.

Oil and Gas Exploration Expenditures

	Bigwave	Manito	Total
Total as at June 30, 2008 (audited)	$                  -	$                 -	$                -
Crown Lease	120,229	-	120,229
Lease costs	21,276	18,000	39,276
Drilling (well costs)	196,044	-	196,044
Geological and engineering	5,888	-	5,888
Total expenditures	343,437	18,000	361,437
Total as at June 30, 2009 (audited)	$  343,437	$  18,000	$  361,437
Crown Lease	12,023	-	12,023
Lease costs	2,767	-	2,767
Drilling (well costs)	56,657	-	56,657
Geological and engineering	589	-	589
Total expenditures	72,036	-	72,036
Total as at December 31, 2009 (unaudited)	$  415,473	$  18,000	$  433,473

#

MINERAL PROPERTY EXPENDITURES

During the six months ended December 31, 2009, the Company did not own any mineral properties and did not capitalize any mineral property expenditures (2008 - $188,644).The Company wrote off all its mineral properties in fiscal year ending June 30, 2009. A breakdown of carrying values by property and significant expenditures by category is as follows:

	Arroyo Verde (Argentina)	San Rafael (Argentina)	La Pampa Uranium (Argentina)	Tiger Uranium (Argentina)	Slick Rock Uranium (USA)	Golden Snow, Fish and CPG (USA)	Total
Total as at June 30, 2007 (audited)	3,839,209	1,477,757	171,636	61,239	133,518	-	5,683,359
Land acquisition & holding costs	108,687	(27,301)	11,523	-	16,873	-	109,782
Environment	3,611	206	4,778	1,894	21,907	-	32,396
Geology	155,866	101,517	415,886	6,416	62,353	-	742,038
Geophysics	6,164	26,985	104	-	-	-	33,253
Surface geochemistry	4,654	297	4,806	-	9,848	-	19,605
Drilling	3,636	499	-	-	123,831	-	127,966
Total expenditures	282,618	102,203	437,097	8,310	234,812	-	1,065,040
Property write offs	-	(1,414,474)	-	-	(368,330)	-	(1,782,804)
						-
Total as at June 30, 2008 (audited)	$  4,121,827	$     165,486	$   608,733	$    69,549	$              -	$              -	$   4,965,595
Land acquisition & holding costs	53,853	2,087	37,481	-	-	30,677	124,098
Environment	123	-	-	-	-	-	123
Geology	26,034	15,342	32,958	22,934	4,215	4,136	105,619
Geophysics	-	-	-	-	-	-	-
Surface geochemistry	-	852	171	-	-	193	1,216
Drilling	-	-	-	-	-	-	-
Total expenditures	80,010	18,281	70,610	22,934	4,215	35,006	231,056
Gain (loss) on sale of properties	(99,127)	-	-	-	-	(41,104)	(140,231)
Property write-offs	(4,102,710)	(183,767)	(679,343)	(92,483)	(4,215)	6,098	(5,056,420)
Total as at June 30, 2009 (audited)	$                 -	$                -	$              -	$              -	$              -	$                -	$                -
Total expenditures	-	-	-	-	-	-	-
Property write-offs	-	-	-	-	-	-	-
Total as at December 31, 2009	$                 -	$                -	$              -	$              -	$              -	$                -	$                -

SUMMARY OF QUARTERLY RESULTS

	Three Months Ended
	December 31 2009	September 30 2009	June 30 2009	March 31 2009
	$	$	$	$
Interest Income	872	3,765	10,447	12,567
General & Administration (excluding property write-offs)	247,986	247,302	242,751	250,248
Property write-offs on sale of subsidiary	-	-	58,194	5,134,856
Net loss	247,114	243,537	152,802	5,372,537
Net loss per share	0.01	0.01	0.01	0.18

	Three Months Ended
	December 31 2008	September 30 2008	June 30 2008	March 31 2008
		$	$	$
Interest Income	17,436	24,968	33,617	40,834
General & Administration (excluding property write-offs)	330,398	551,177	396,004	385,575
Property write-offs	163	3,438	1,782,804	Nil
Net loss	313,125	529,647	2,145,191	344,738
Net loss per share	0.01	0.02	0.07	0.01

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008

This review of the Results of Operations should be read in conjunction with the unaudited Consolidated Financial Statements of the Company for the six months ended December 31, 2009 and 2008.

Results of Operations for the three months ended December 31, 2009 and 2008

For the three months ended December 31, 2009 the Company incurred a net loss of $247,114 ($0.01 per share) compared to a net loss of $313,125 ($0.01 per share) for the three months ended December 31, 2008. The decrease of $66,011 in the net loss for the period from 2008 to 2009 is primarily due to: (a) a decrease in salaries and benefits of $73,419 due to a reduction of staff; (b) a decrease in investor relations expenses of $17,827 due to a reduced number of trade show attendances and a decrease in the cost of the Annual General Meeting material; (c) a decrease of interest income of $16,564 due to the decrease in the interest rates and lower cash amount invested; (d) a decrease of legal expenses of $13,231 due to the reduction of legal services due to the sale of the Argentinean subsidiary and (e) a decrease of office and miscellaneous expenses of $11,478 due to the sale of the Argentinean subsidiary, offset by an increase in stock based compensation expense of $18,919 an d an increase on project investigation expenses of $47,908.

Expenses

General and administrative costs were $261,348 for the three months ended December 31, 2009, a decrease of $70,182 as compared to $331,530 for the same period in the prior year.  The six largest expense items for this fiscal period, which account for 81% (2008 – 75%) of total general and administrative expenditures are: project investigation of $64,012 (2008 - $16,104), salaries and benefits of $50,047 (2008 - $123,466), stock based compensation expense of $27,330 (2008 – $8,411), office and miscellaneous expenses of $26,976 (2008 – $38,454), rent of $22,930 (2008 – 23,622) and investor relations expense of $21,565 (2008 – $39,392). The increase in project investigation expenses is due to the Company’s increased efforts in finding new opportunities, the increase in stock based compensation expense is due to the vesting of officers’, consultants’ and employees’ stock options; the decrease in salaries and benefits is the resu lt of the decrease in the number of salaried employees, as well as the sale of the Argentinean subsidiary. The decrease in office and miscellaneous expenses is the result of the sale of the Argentinean subsidiary. The decrease in investor relation expenses is due to the reduction of show attendances and the decrease of the Annual General Meeting costs.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 2009 AND 2008

For the six months ended December 31, 2009 the Company incurred a net loss of $490,651 ($0.02 per share) compared to a net loss of $842,772 ($0.03 per share) for the six months ended December 31, 2008. The decrease in the net loss for the period from 2008 to 2009 of $352,121 is primarily due to: (a) a decrease in salaries and benefits of $294,671 due to a reduction of staff and a compensation package paid to the former CEO of the Company in August 2008; (b) a decrease in investor relations expenses of $87,594 due to a reduced number of trade show attendances and a decrease in the cost of the Annual General Meeting material; (c) a decrease of interest income of $37,767 due to the decrease in the interest rates and lower cash amount invested; (d) a decrease of legal expenses of $35,272 due to the reduction of legal services due to the sale of the Argentinean subsidiary and (e) a decrease of travel expenses of $32,381 due to the cessation of trips to Argentina since the sale of the subsidiary and (f) a decrease of office and miscellaneous expenses of $29,394 due to the sale of the Argentinean subsidiary, offset by an increase in stock based compensation expense of $70,753 and an increase of project investigation expenses of $42,910.

Expenses

General and administrative costs were $515,591 for the six months ended December 31, 2009, a decrease of $367,116 as compared to $882,707 for the same period in the prior year.  The six largest expense items for this fiscal period, which account for 78% (2008 – 70%) of total general and administrative expenditures were: project investigation of $97,499 (2008 - $54,589),salaries and benefits of $96,623 (2008 - $391,294), stock based compensation expense of $80,964 (2008 – $10,211), office and miscellaneous expenses of $50,742 (2008 – $80,136), rent of $48,314 (2008 – 40,228) and consulting and management fees of $26,882 (2008 – $39,361). The increase in project investigation expenses is due to the Company’s increased efforts in finding new opportunities, the decrease in salaries and benefits is the result of the decrease in the number of salaried employees and a compensation package paid to the former CEO of the Company in August 2008, the increase in stock based compensation expense is due to the vesting of officers’, consultants’ and employees’ stock options. The decrease in office and miscellaneous expenses is the result of the sale of the Argentinean subsidiary. The increase in rent is a result of a decrease in the recovery charge for rent to related parties which moved out of the space. The decrease in consulting and management fees is due to a decrease of consulting services required after the sale of the Argentinean subsidiary.

SELECTED ANNUAL INFORMATION

For the years ended June 30^th

	2009	2008	2007
Interest Income	$      65,418	$       161,429	$       106,674
Net income (loss)	(6,366,236)	(3,288,433)	(1,877,224)
Basic and diluted EPS	(0.21)	(0.11)	(0.09)
Total assets	1,965,990	8,319,819	7,007,477
Total long-term liabilities	Nil	Nil	Nil
Cash dividends declared	Nil	Nil	Nil

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and short term investments of $979,078 and working capital of $1,018,478 as of December 31, 2009 (June 30, 2009: $1,504,528 and $1,493,622 respectively).  The decrease in working capital is primarily due to expenditures on oil and gas properties of $72,036 and the funding of operating activities of $422,555.

The Company has sufficient cash to meet its on-going obligations as they become due and will modify budgeted exploration activities as necessary to ensure it continues to meet its on-going obligations.

The Company’s authorized capital consists of 100,000,000 common shares without par value and 100,000,000 preferred shares, issuable in series.  As at December 31, 2009, the Company’s share capital was $14,760,161 representing 29,651,539 common shares (June 30, 2009 - $14,760,161 representing 29,651,539 common shares).  

As at December 31, 2009, contributed surplus totaled $886,115 (June 30, 2009 - $805,151).  During the six months ended December 31, 2009, the Company recognized $80,964 (2008 - $10,211) in compensation expense for share purchase options that vested during the period.

Stock options outstanding as at December 31, 2009 are as follows:

Number	Exercise Price	Expiry Date
150,000	$0.86	14-Apr-10
75,000	$0.70	20-Jan-11
766,400	$0.52	5-Dec-11
8385,000	$0.20	7-Oct-13
1,037,200	$0.12	9-Jun-14
2,863,600

At December 31, 2009 the Company had 2,863,600 (June 30, 2009 – 3,688,600) outstanding stock options with a weighted average exercise price of $0.30. If the remaining outstanding options were exercised, the Company’s available cash would increase by $871,492 (See also “Subsequent Events).

As the date of the MD&A there were 29,651,539 common shares issued and outstanding and 33,135,139 common shares outstanding on a diluted basis.

The Company relies on equity financings to fund its exploration activities and corporate overhead expenses.  There is no guarantee that the Company will be able to secure additional financing in the future at terms that are favourable.  To date, the Company has not used debt or other means of financing to further its exploration programs, and the Company has no plans to use debt financing at the present time.

TRANSACTIONS WITH RELATED PARTIES

During the six months ended December 31, 2009

a)

$5,774 (2008 - $21,064) was charged to a public company with a director in common with the Company for rent.  As at December 31, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this public company.

b)

$3,150 (2008 - $16,642) was charged to a private company with certain directors in common with the Company for administrative fees. As at December 31, 2009, $3,150 (June 30, 2009 - $Nil) was receivable from this private company.

c)

$1,050 (2008 - $Nil) was charged to a private company with a director in common with the Company for rent.  As at December 31, 2009, $Nil (June 30, 2009 - $Nil) was receivable from this private company.

d)

the Company paid or accrued to pay a private company with a director in common with the Company an aggregate of $4,179 (2008 - $5,565) for fees and expenses. As at December 31, 2009, the Company owed this company an aggregate of $525 (June 30, 2009 - $788).

e)

the Company Incurred director fees of $14,833 (2008 - $6,500) to five directors.

ADDITIONAL INFORMATION

Additional information about the Company is available on SEDAR at www.sedar.com.

Outstanding Share Data

As at February 18, 2010 the Company had the following items issued and outstanding (see also “Subsequent Events”):

•

29,651,539 common shares

•

3,483,600 common stock options with a weighted average exercise price of $0.28 expiring at various dates until January 17, 2015.

Commitments and Contingencies

The Company has obligations under an operating lease for its corporate office that is in effect until February 28, 2013.  The remaining future minimum lease payments for the non-cancellable lease are:  2010 - $43,229; 2011 - $90,709; 2012 - $94,961; and 2013 - $65,197.

RISK FACTORS

The Company’s financial success will be dependent upon the extent to which it can discover mineralization, oil and gas reserves or acquire mineral or oil and gas properties and the economic viability of developing its properties.

The Company competes with many companies possessing greater financial resources and technical facilities than itself.  The market price of minerals, metals and/or oil and gas is volatile and cannot be controlled. There is no assurance that the Company’s mineral exploration, oil and gas exploration and development activities will be successful. The development of mineral resources and oil and gas properties involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome.

The development of mineral and oil and gas resources in Mexico and Canada are subject to a comprehensive review, approval and permitting process that involves various federal and regional agencies.  There can be no assurance given that the required approvals and permits for a mining or oil and gas project, if technically and economically warranted, on the Company’s claims can be obtained in a timely or cost effective manner.

All of the Company’s short to medium term operating and cash flow must be derived from external financing.  Actual funding may vary from what is planned due to a number of factors including the progress of exploration and development on its current properties.  Should changes in equity market conditions prevent the Company from obtaining additional external financing, the Company will need to review its exploration and oil and gas property holdings to prioritise project expenditures based on funding availability.

The Company competes with larger and better financed companies for exploration personnel, contractors and equipment.  Increased exploration activity has increased the demand for equipment and services.  There can be no assurance that the Company can obtain required equipment and services in a timely or cost effective manner.

The Company’s operations in Mexico and Canada and financing activities in Canada make it subject to foreign currency fluctuations and such fluctuations may materially affect its financial position and results.

OUTLOOK

Portal has planned exploration programs for the oil and gas project in Central Alberta and it is continuing to review other mineral exploration projects for acquisition.

The recently opened office in Hermosillo, Sonora, Mexico, brings together the core corporate functions and management personnel released after the takeover of Nevada Pacific Gold by US Gold in late 2007. When combined with the directors of the Company this group has the collective experience and success of acquiring, developing and producing from three different open pit gold mines in Mexico over the last 17 years. Portal will leverage this knowledge and the business relationships built to acquire a portfolio of quality exploration projects.

FORWARD LOOKING STATEMENTS

Certain information set forth in this report contains forward-looking statements.  By their nature, forward-looking statements are subject to numerous risks and uncertainties including: the results of current operation and exploration activities; market reaction to future operation and exploration activities; significant changes in metal prices; currency fluctuations; general market and industry conditions; and other factors detailed in the Company’s public filings. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.  Portal Resources Ltd.’s actual results, programs and financial position could differ materially from those expressed in or implied by these forward-looking statements, and accordingly, no assurance can be given that the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Portal Resources Ltd. will derive therefrom. Portal Resources Ltd. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Forward looking statements included or incorporated by reference in this document include statements with respect to:

•

The Company’s progress, potential and uncertainties of its oil and gas drilling program in central Alberta.

•

The Company’s expectations regarding the ability to find new projects by its recently opened office in Mexico.

•

Expectations regarding the ability to raise capital to continue its exploration and project search programs.

•

The Company’s future adoption of IFRS; and,

•

Plans to complete a financing.

INTERNAL CONTROLS AND PROCEDURES OVER FINANCIAL REPORTING

Changes in Internal Control Over Financial Reporting (“ICFR”)

No changes occurred in the current period of the Company’s ICFR that have materially affected or are reasonable likely to materially affect the Company’s ICFR.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

On February 13, 2008, the Canadian Accounting Standards Board (“AcSB”) confirmed the mandatory changeover date to International Financial Reporting Standards (“IFRS”) for Canadian profit-oriented publicly accountable entities (“PAE’s”) such as the Company.

The AcSB requires that IFRS compliant financial statements be prepared for annual and interim financial statements commencing on or after January 1, 2011. For PAE’s with a June 30 year-end, the first unaudited interim financial statements under IFRS will be the quarter ending September 30, 2011, with comparative financial information for the quarter ended September 30, 2010. The first audited annual financial statements will be for the year ending June 30, 2012, with comparative financial information for the year ended June 30, 2011. This also means that all the opening balance sheet adjustments relating to the adoption of IFRS must be reflected in the July 1, 2010 opening balance sheet which will be issued as part of the comparative financial information in the September 30, 2011 unaudited interim financial statements.

The Company intends to adopt these requirements as set out by the AcSB and other regulatory bodies. At this time, the impact of adopting IFRS cannot be reasonably quantify areas relating to IFRS that could materially affect the Company. During the fiscal 2010, the Company will continue to evaluate the impact of IFRS on the Company, The actual conversion work will occur in 2010 and 2011, in anticipation of the preparation of the July 1, 2010 balance sheet that will be required for comparative purposes for all periods ending in fiscal 2012.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The fair values of the Company’s cash and cash equivalents, marketable securities, short-term investments, amounts receivable, accounts payables and accrued liabilities approximate their carrying values.

The Company’s financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest risk.

(a)

Currency risk

The Company may acquire property interests in foreign jurisdictions that may make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks.

(b)

Credit risk

The Company’s cash and cash equivalents are held in a Canadian financial institution. The Company does not have any asset-backed commercial paper in its cash and cash equivalents or short-term investments. The Company’s amount receivable consists primarily of recovered rent and office expense, and tax due from the federal government of Canada.

(c)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.

(d)

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the cash and cash equivalents is limited because they are generally held to maturity. A 1% change in the interest rate, with other variables unchanged, would affect the Company by an annualized amount of interest equal to approximately $1,000.

SUBSEQUENT EVENTS

On January 18, 2010, the Company granted stock options to directors, consultants and employees of the Company to purchase a total of 620,000 common shares at a price of 15 cents per share, exercisable until January 19, 2015.

On January 26, 2010 the Company announced that, subject to Regulatory approval the Company has negotiated a $1-million non brokered private placement; the proceeds of which will be used for general working capital. The placement consists of four million units at a price of 25 cents per unit. Each unit consists of one common share and a one-half share purchase warrant. Each whole share purchase warrant will be exercisable for one common share at a price of 30 cents for a period of 12 months. A 7-per-cent finder’s fee will be paid on a portion of the placement. Company officers and directors will purchase a portion of the financing.

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EX-99.3

Form 52-109FV2

Certification of interim filings - venture issuer basic certificate

I, David Hottman, Chief Executive Officer & President of Portal Resources Ltd., certify the following:

1.

Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Portal Resources Ltd. (the “issuer”) for the interim period ended December 31, 2009.

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: February 18, 2010

“David Hottman”

_______________________

David Hottman

Chief Executive Officer & President

NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i)

controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii)

a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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EX-99.4

Form 52-109FV2

Certification of interim filings - venture issuer basic certificate

I, Mark T. Brown, Chief Financial Officer of Portal Resources Ltd., certify the following:

1.

Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of Portal Resources Ltd. (the “issuer”) for the interim period ended December 31, 2009.

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: February 18, 2010

“Mark T Brown”

_______________________

Mark T. Brown

Chief Financial Officer

NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i)

controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii)

a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.  Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

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