Rouge Resources Ltd.: Form 20-F - Filed by newsfilecorp.com

20-F 1 form20f.htm ANNUAL REPORT FOR YEAR ENDED JANUARY 31, 2010 Rouge Resources Ltd.: Form 20-F - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F
SEC File No. 001-31799

(Mark One)

[ ] Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
or

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended January 31, 2010
or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________________ to _________________

[ ] Shell Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Date of event requiring this shell company report _______________________

ROUGE RESOURCES LTD.
(Exact name of registrant as specified in this charter)

British Columbia, Canada
(Jurisdiction of incorporation or organization)

#203-409 Granville Street, Vancouver
British Columbia, V6C 1T2, Canada
(Address of principal executive offices)

Darcy Krell - (Tel) 604-831-2739, (Fax) 604-831-2735
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act:

None	None
(Title of each class)	(Name of each exchange
	on which registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Common Shares Without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
40,565,171 Common Shares

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
[ ] Yes [X] No

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

Indicate by check mark wether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [X] (Not Required)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing

U.S. GAAP [ ]	International Financial Reporting Standards as issued	Other [X]
	by the International Accounting Standards Board [ ]

If “Other” has been checked in response to previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 [X] Item 18 [ ].

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No

TABLE OF CONTENTS

			PAGE

PART I

ITEM 1.	Identity of Directors, Senior Management and Advisors
		1.1 Directors and Senior Management	1
		1.2 Advisors	2
		1.3 Auditor	2

ITEM 2.	Offer Statistics and Expected Timetable		2

ITEM 3.	Key Information
		3.1 Selected Financial Data	2
		3.2 Capitalization and Indebtedness	4
		3.3 Reasons for the Offer and Use of Proceeds	4
		3.4 Risk Factors	4

ITEM 4.	Information on the Company
		4.1 History and Development	9
		4.2 Mineral Property Interests	9
		4.3 Competition	14
		4.4 Management & Employees	14
		4.5 Environmental Regulations	14

ITEM 5.	Operating and Financial Review and Prospects
		5.1 Results of Operations	15
		5.2 Liquidity and Capital Resources	17

ITEM 6.	Directors, Senior Officers and Employees
		6.1 Directors and Senior Officers	19
		6.2 Compensation of Directors	20
		6.3 Board Practices	21
		6.4 Employees	22
		6.5 Share Ownership of Directors and Senior Officers	22

ITEM 7.	Major Shareholders and Related Party Transactions
		7.1 Beneficial Ownership	22
		7.2 Related Party Transactions	23
		7.3 Interests of Experts and Counsel	24

ITEM 8.	Financial Information
		8.1 Legal Proceedings	24
		8.2 Significant Changes	24

ITEM 9.	The Offer and Listing
		9.1 Offer and Listing Details	24

ITEM 10.	Additional Information
		10.1 Share Capital	26
		10.2 Memorandum and Articles of Association	28
		10.3 Material Contracts	29

III

		10.4 Exchange Controls and other Limitations Affecting Security Holders	29
		10.5 Canadian Federal Income Tax Consequences to U.S. Investors	30
		10.6 United States Federal Income Tax Consequences to U.S. Investors	30
		10.7 Statements by Experts	34
		10.8 Documents on Display	34

ITEM 11.	Quantitative and Qualitative Disclosures About Market Risk		34

ITEM 12.	Descriptions of Securities Other than Equity Securities
		12.1 Warrants	35
		12.2 Stock Options	35

PART II

ITEM 13.	Defaults, Dividend Arrearages and Delinquencies		35

ITEM 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		36

ITEM 15	Controls and Procedures		36

ITEM 16A	Audit Committee Financial Expert		37

ITEM 16B	Code of Ethics		37

ITEM 16C	Public Accountant Fees and Services		38

ITEM 16D	Exemptions from the listing Standards for Audit Committees		38

ITEM 16E	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		38

ITEM 16F	Change in Registrant’s Certifying Accountant		39

ITEM 16G	Corporate Governance		39

PART III

ITEM 17.	Financial Statements		39

ITEM 18.	Exhibits		40

SIGNATURE			40

FORWARD-LOOKING STATEMENTS

We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F annual report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “except,” “believe,” “anticipate,” “intend,” “could,” estimate,” or “continue,” or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.

PART I

ITEM 1. Identity of Directors, Senior Management and Advisors

1.1 Directors and Senior Management:

Linda Smith #203-409 Granville Street, Vancouver British Columbia, V0R 1X0, Canada	President, Chief Executive Officer and Director
Darcy Krell #203-409 Granville Street, Vancouver British Columbia, V0R 1X0, Canada	Secretary, Chief Financial Officer and Director
Shannon Krell #203-409 Granville Street, Vancouver British Columbia, V0R 1X0, Canada	Director
Ryan Krell #203-409 Granville Street, Vancouver British Columbia, V0R 1X0, Canada	Director
Ivan Martinez #203-409 Granville Street, Vancouver British Columbia, V0R 1X0, Canada	Director

1.2 Advisors:

Doug Eacrett, Barrister & Solicitor, Suite 203 – 409 Granville St, Vancouver BC, Canada V6C 1T2	Company Lawyer
Ms. Caitlin Jeffs, P.Geo, 48 Peter Street, Thunder Bay ON, Canada P7A 4H3, (part owner of Fladgate Exploration Consulting Corp.)	Consulting Geologist
Mr. Andre M Pouwels, P. Geo., 4900 Mariposa Court, Richmond BC, Canada V7C 2J9	Consulting Geologist

1.3 Auditor:

Dale Matheson Carr-Hilton Labonte LLP,
Chartered Accountants,
Suite 1500 – 1140 West Pender Street,
Vancouver BC, Canada V6E 4G1

Replaced Morgan & Company for the year ended January 31, 2009 forward.

Our auditors are members in good standing with the Institute of Chartered Accountants of British Columbia and are registered with the Canadian Public Accountability Board (CPAB) and the Public Company Accounting Oversight Board - United States (PCAOB).

ITEM 2. Offer Statistics and Expected Timetable

Not applicable

ITEM 3. Key Information

3.1 Selected Financial Data

The following tables set forth selected financial data of the Company for the fiscal years ended January 31, 2010, 2009, 2008, 2007 and 2006. We derived all figures from our financial statements, which were audited by our independent auditor. This information should be read in conjunction with our audited financial statements for the fiscal years ended January 31, 2010, 2009 and 2008 included in this annual report. Our audited financial statements for the fiscal years ended January 31, 2007 and 2006 are not included in this annual report.

Our audited financial statements and the table below have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). A reconciliation to United States generally accepted accounting principles (“US GAAP”) is included in Note 11 of our audited financial statements in this annual report. All amounts are expressed in Canadian dollars.

The first table below presents this financial data for five years in accordance with US GAAP. The second table presents the data in accordance with Canadian GAAP.

US GAAP (in Cdn $)

	Year Ended January 31, 2010	Year Ended January 31, 2009	Year Ended January 31, 2008	Year Ended January 31, 2007	Year Ended January 31, 2006
Net Operating Revenue	Nil	Nil	Nil	Nil	Nil
Loss from operations	($125,361)	($198,370)	($154,327)	($181,066)	($203,256)
Loss per common share	($0.01)	($0.05)	($0.28)*	($0.32)*	($0.36)*
Total assets	$67,839	$20,346	$23,810	$21,873	$34,856
Shareholders’ deficiency	($1,087,545)	($1,062,184)	($1,363,814)	($1,209,487)	($1,028,421)
Long term debt	Nil	Nil	Nil	Nil	$39,676
Cash dividends per share	Nil	Nil	Nil	Nil	Nil
Deficit	($2,804,875)	($2,679,514)	($2,481,144)	($2,326,817)	($2,145,751)
Capital stock	$1,613,471	$1,613,471	$1,113,471	$1,113,471	$1,113,471
Weighted average number of shares outstanding	10,565,171	3,597,958	565,171*	565,171*	565,171*

Note – Certain figures above have been modified to reflect the disclosure for year ended January 31, 2010

* Reflects retroactive consolidation of issued and outstanding shares on a one-for-ten basis (1:10) in October, 2007.

Canadian GAAP (in Cdn $)

	Fiscal Year ended January 31, 2010	Fiscal Year ended January 31, 2009	Fiscal Year ended January 31, 2008	Fiscal Year ended January 31, 2007	Fiscal Year ended January 31, 2006
Net Operating Revenue	Nil	Nil	Nil	Nil	Nil
Loss from operations	($118,922)	($195,335)	($156,658)	($182,422)	($138,379)
Loss per common share	($0.01)	($0.05)	($0.28)*	($0.32)*	($0.24)*
Total assets	$169,424	$101,485	$90,043	$88,106	$101,089
Shareholders’ deficiency	($971,033)	($952,111)	($1,256,776)	($1,141,899)	($959,477)
Long term debt	Nil	Nil	Nil	Nil	$39,676
Cash dividends per share	Nil	Nil	Nil	Nil	Nil
Deficit	($2,737,861)	($2,618,939)	($2,423,604)	($2,266,946)	($2,084,524)
Capital stock	$1,613,471	$1,613,471	$1,113,471	$1,113,471	$1,113,471
Weighted average number of shares outstanding	10,565,171	3,597,958	565,171*	565,171*	565,171*

Since June 1, 1970, the government of Canada permitted a floating exchange rate to determine the value of the Canadian dollar compared to the United States dollar. On June 4, 2010, the exchange rate in effect was C$1.00 = US$0.95. This exchange rate is based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Federal Reserve Bank of New York. For the past five fiscal years and the past six months ended January 31, 2010, the following exchange rates were in effect for United States dollars exchanged into Canadian dollars:

Year Ended	Actual Year End Exchange Rate
January 31, 2010	$0.93
January 31, 2009	$0.81
January 31, 2008	$1.00
January 31, 2007	$0.85
January 31, 2006	$0.87

Month Ended	Average Month End Exchange Rate
January 31, 2010	$0.96
December 31, 2009	$0.95
November 31, 2009	$0.94
October 31, 2009	$0.95
September 30, 2009	$0.92
August 31, 2009	$0.92

3.2 Capitalization and Indebtedness

The following table sets forth our indebtedness and capitalization as at January 31, 2010 in Canadian dollars:

	US GAAP	Canadian GAAP
Indebtedness
Short term debt (unsecured and not guaranteed)	$1,155,384	$1,140,457
Long term debt	$Nil	$Nil
Total	$1,155,384	$1, 140,457

Shareholders’ Deficiency
Common shares	$1,613,471	$1,613,471
APIC/ Contributed surplus	$11,576	$53,357
Accumulated deficit	($2,804,875)	($2,737,861)
Total	($1,087,545)	($971,033)

3.3 Reasons for the Offer and Use of Proceeds

Not Applicable

3.4 Risk Factors

Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares The following is a list of all known material risks relating to our business and an investment in our common shares:

We have a history of losses. Our inability to achieve profitability will negatively impact any investment in our shares.

We have incurred losses in our business operations since inception, and we expect that we will continue to incur losses for the foreseeable future. From March 31, 1998, the date of incorporation, to January 31, 2010, we have incurred losses totalling C$2,804,875 under US GAAP and $2,737,861 under Canadian GAAP. Very few junior resource companies ever become profitable. Failure to achieve and maintain profitability may adversely affect the market price of our common stock.

We have limited financial resources and no source of operating cash flow. If we are unable to generate revenue, our business may fail.

We have limited financial resources, no source of operating cash flow and no commitments for additional funding for further exploration of our mineral property interests. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and ultimately the failure of our business.

Very few mineral properties are ultimately developed into producing mines. If we are unable to prove that a mineral reserve exists on our mineral property interests, our business may fail.

The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. At present, our mineral properties have no known body of commercial ore. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.

Substantial expenditures are required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.

It is unknown whether we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The probability of an individual mineral exploration prospect ever containing reserves is extremely remote. It is unlikely that the property contains reserves, so any funds expended on the property will most likely be lost.

If we do not obtain additional financing, our business will fail.

As at January 31, 2010, we had cash in the amount of $53,623. Our ability to continue as a going concern is dependent upon the ability of management to obtain sufficient financing. Subsequent to year ended January 31, 2010, management closed a private placement of 30,000,000 units for proceeds of $1,500,000. There are no other specific commitments for investment in the Company which raises doubt about the company’s ability to continue as a going concern. These financial statements do not include adjustments that would be necessary should the company be unable to continue as a going concern.

Because management has only limited experience in resource exploration, the business has a higher risk of failure.

Our management has only limited experience in resource exploration. None of our directors or officers has any significant technical training or experience in resource exploration, starting or operating a mine. With no direct training or experience in this sector, our management may not be fully aware of many of the specific requirements related to working within the industry. Their business decisions may not take into account standard engineering or managerial approaches that mineral exploration companies with qualified management commonly use. As a result, our operations, earnings and ultimate financial success could suffer irreparable harm due to management’s lack of experience in this industry.

Mineral exploration involves a high degree of risk against which we are not currently insured. If an environmental liability was incurred, it may irreparably harm our business.

Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs.

It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock. We do not currently maintain insurance against environmental risks relating to our mineral property interests.

If title to our mineral property interests is disputed, we may lose our business assets and our business may fail.

Our mineral property interests may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. There is a risk that the property boundaries could be challenged. In such circumstances, we will incur costs defending our title to our mineral property interests and may lose our interest in the claims, causing our business to fail.

We may require permits and licenses that we may not be able to obtain. If we are unable to obtain such permits and licenses, our business plan will fail.

Our operations may require licenses and permits from various governmental authorities. If we are unable to obtain such licenses and permits, we will not be able to continue exploration and development of our mineral property interests and we may have to abandon our business plan.

We will be required to obtain work permits from the Ontario Ministry of Northern Development and Mines for any subsequent exploration work that results in a physical disturbance to the land if the program calls for the disturbance of more than 10,000 square meters of the property surface, or such areas that would total that amount when combined. A work permit is also required for the erection of structures on the property. There is no charge to obtain a work permit under the Mining Act.

Metal prices fluctuate widely. A decrease in metal prices may prevent us from raising the capital necessary to continue our business plan in the future. As well, low metal prices will reduce the value of any reserve we discover on our mineral property interests.

Factors beyond our control may affect the marketability of any minerals we discover. Metal prices have fluctuated widely, particularly in recent years. Our ability to raise capital for continuing exploration of our mineral property interests depends to a large degree on the market price for metals generally, as well as for gold in particular. In addition, the value of any reserve we discover on the Dotted Lake property will fluctuate depending on current metal prices. Low metal prices may make it uneconomical to commence production on our mineral property interests, if a reserve is established, of which there is no guarantee.

The resource industry is very competitive. The competitive nature of the business may increase our cost of operations and prevent us from obtaining interests in additional mineral properties.

The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

In conducting exploration on our mineral property interests, we will be subject to environmental regulations. In addition, our operations may be adversely affected by changes in environmental regulations. A significant change in such regulations may prevent us from proceeding with our business plan.

Our operations are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations. We do not maintain environmental liability insurance.

When our exploration program on our mineral property interests proceeds to the drilling stage, we may be required to post small bonds if the rights of a private land owner may be affected. We may also be required to file statements of work with the Ministry of Northern Development and Mines. We will also be required to undertake remediation work on any exploration that results in physical disturbance to the land. The cost of remediation work will vary according to the degree of physical disturbance.

Our listed securities are subject to penny stock regulation, which may impede an investor’s ability to purchase our common shares.

The price of our common stock is below $5.00 per share and is subject to "penny stock" regulation. "Penny stock" rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with a spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our shares of common stock. The market price of our shares would likely suffer as a result.

Enforcement of legal process may be difficult.

All members of our Board of Directors and management reside in Canada. As well, our address for service is a Canadian address. Accordingly, investors will not be able to:

1.	effect legal process upon us or upon individuals related to us within the United States;

2.	enforce judgments obtained in United States courts against us based upon the civil liability provisions of the United States securities law; or

3.	enforce United States court judgments based upon the civil liability provisions of the United States federal securities law.

However, investors may commence original actions against us, our directors and officers and our experts in British Columbia courts. However, as our sole mineral property asset is located in Ontario, additional legal proceedings would need to be commenced in that province in order to satisfy any judgment.

Investors may not be able to seek judgment in British Columbia or Ontario if the court determines that it is unable to rule in a matter that involves determinations respecting United States securities laws. In such circumstances, investors would be prevented from obtaining judgment that is enforceable against us.

As we are incorporated pursuant to the laws of British Columbia, duties of our directors and officers, and the ability of shareholders to initiate a lawsuit on our behalf, are governed by the British Columbia Business Corporations Act.

ITEM 4 Information on the Company

4.1 History and Development

We were incorporated under the name “Gemstar Resources Ltd.” pursuant to the Company Act in the Province of British Columbia, Canada by registration of our Memorandum and Articles of Association and the issuance by the Registrar of Companies of a Certificate of Incorporation on March 31, 1988. In March 2006, we transitioned to the province’s Business Corporations Act. In October, 2007, we changed our name to Rouge Resources Ltd.; restructured our share capital by consolidating our issued and outstanding common shares on a one for ten (1:10) basis; and increased our authorized share capital from 10,000,000 common shares to an unlimited number without par value. This resulted in all share and per share information in the financial statements being presented on a retroactive basis as if the share consolidation took place at the beginning of all years presented.

We are a reporting issuer in both British Columbia and Alberta and a foreign issuer in the United States with the Securities and Exchange Commission. Our common shares are posted for trading on the Over-The-Counter: Bulletin Board (OTC:BB) in the United States under the symbol ROUGF:OB.

We are engaged in the acquisition, exploration and, if warranted, development of mineral resource properties. Our head office is located at #203 – 409 Granville Street, Vancouver British Columbia, Canada, V6C 1T2 and our telephone number is (604) 831-2739.

We have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets.

Since the Company is in the exploration stage, it has no current revenues nor has it earned any since inception. There is no assurance that a commercially viable mineral deposit exists on our Mineral Property Interests. Further exploration is required before a final evaluation of the economic feasibility can be determined. Significant additional financing and considerable time will be required before our mineral claim can be explored and, if warranted, developed into a commercial enterprise.

4.2 Mineral Property Interests

In fiscal 2001, we entered into an agreement to acquire 100% interest in a single 15-unit mining claim totaling 375 hectares, called the Dotted Lake Property (“the Property”), located in the Thunder Bay Mining District of North Central Ontario, Canada. Since then, we have conducted certain acquisition and exploration activities described below; completed a 43-101 compliant geological report; expanded our claims on the Property; and kept our Mineral Property Interests in good standing with the Ontario Ministry of Northern Development and Mines for future exploration.

As at January 31, 2010, the Company had incurred the following expenditures on the Dotted Lake Property since inception:

		January 31,		January 31,
		2010		2009

Mineral properties
Staking	$	15,261	$	4,206

Deferred exploration costs
Geological survey		69,736		64,236
Geological consulting fees		20,794		16,903
		90,530		81,139

	$	105,791	$	85,345

(i) Location and Access

The Property is situated in north central Ontario, approximately 50 kilometers northeast of Lake Superior and 260 kilometers east-northeast of Thunder Bay. Manitouwadge (45 kilometers north), Marathon (45 kilometers southwest) and White River (50 kilometers southeast) are the closest towns. The latter two communities are situated along Highway 17, part of the Trans-Canada Highway network, while the property itself lies approximately 20 kilometers north of Highway 17. Hemlo Gold Mines is 20km south of the Property and currently being mined by Barrick Gold Corp.

Currently, there is no road access directly onto the Property but drivable logging roads are within 1km. From Highway 614, located 13 kilometres north of Highway 17, a bush road leads seven kilometers north-eastward to the southwest shore of Dead Otter Lake. From there, the property may be conveniently reached by boat in summer and snowmobile in winter. Alternatively, another bush road that connects with Highway 614, approximately 19.2 kilometers north of Highway 17, terminates 0.7 kilometers north of the north claim boundary.

The Property experiences a temperate climate with moderate to long cold winters and short warm to hot summers. Total annual precipitation is about 1,000 millimeters, including over three meters of snow. Break up or freeze up conditions may impinge upon exploration activities, but normally exploration and mining may be conducted year round. However, it is more economical to explore in spring and summer when access to and travel across the Property is much easier because snow removal for surface exploration is not required.

(ii) Title and Claim Status

Our original claim on the Property was staked in 2001 and then re-staked in March 2003. In October, 2009, the Company expanded its 100% owned holdings in the Property from a single 15-unit claim to ten claims of 82 units. The claims are now in good standing with the Ontario Ministry of Northern Development for Mines and Forestry until March 14, 2011.

From the beginning, the claim was registered in the name of 1179406 Ontario Ltd., a private Ontario company owned by Mr. R.J. Reukl, in trust as a convenience for us to help keep costs down since we were an extra-provincial claimholder in Ontario. However, on April 8, 2009 the trust arrangement was changed from Mr. Reukl to Mr. D.T. Krell, one of our directors, who now owns the claim in trust for us. We do not have any third party obligations against the claims.

There is no assurance that a commercially viable mineral deposit exists on the Property and further exploration will be required before final evaluation of its economic feasibility.

(iii) Previous Exploration

Several companies and individuals have conducted exploration activities on various parts of the Property over many years. To date, no mineral deposit has been delineated and, consequently, there has been no production from the Property nor any reserve or resource estimated.

In fiscal 2002, we completed our initial acquisition of the Property by paying $200,000 in cash to an unrelated private British Columbia company called LCM Equity Inc. (“LCM”). We also advanced $152,000 to LCM for planned exploration of the Property. All of these funds came from our officers and immediate family members in the form of unsecured related party loans.

Near the end of calendar 2002, as a result of extreme weather conditions, we were having difficulty undertaking our planned work program on the Property, including the required assessment work to keep the claims in good standing. Following discussion with our consulting geologist at the time, Mr Andre Pauwels P. Geo, we decided it would be less expensive to allow the claim to lapse and then re-stake it early the following year. As a result, the claim was permitted to lapse and, consequently, the acquisition cost was written off during the year ended January 31, 2003. Once the weather conditions improved, our consulting geologist re-staked the claim on our behalf in March 2003 at a cost of $4,206.

During the quarter ended April 30, 2005, we completed an airborne VLF-EM survey of the mineral claim at a cost of $40,000 paid in full from the $152,000 of exploration funds advanced to LCM per above. We were searching for changes in the magnetic field over certain areas of the Property, since Magnetic anomalies may result from accumulations of certain magnetic rocks such as phrhotite, hematite and magnetite. These rock types are often found alongside base metals such as copper, zinc and nickel, or precious metals such as gold and silver.

A VLF-EM survey consists of two separate surveys: a Very Low Frequency survey and an ElectroMagnetic survey. Very low frequency surveys use radio waves to determine whether rocks on a mineral property conduct electricity. Almost all of the precious and base metals that we seek are above average conductors of electricity and will affect VLF readings. Electromagnetic surveys involve measuring the strength of the earth’s magnetic field. Variations in the magnetic readings on a property may indicate the increased likelihood of precious or base minerals in the area.

Also, during the quarter ended April 30, 2005, we commissioned and advanced $4,500 to our consulting geologist to complete an evaluation report regarding the merits of the Property in accordance with Form 43-101 prescribed by the regulatory authorities.

During the quarter ended July 31, 2005, we undertook a ground VLF (Very Low Frequency) and magnetic survey over 100 meter spaced cut lines (15 km) at the north western side of the Property costing $14,636. Also, during this quarter, the $112,000 balance of funds advanced to LCM in fiscal 2002 was returned to us after we discontinued using LCM’s exploration services.

Effective December 6, 2005, the 43-101 compliant evaluation report was completed by our consulting geologist, Mr. Andre Pauwels, P.Geo., for an additional cost of $7,097. The report recommended a two phase exploration program with a total budget of $223,400 as follows:

- Phase 1 spending of $51,500 on geological surveys (see below) to explore the exhalite horizon on the Property including a TDEM (Time Domain Electromagnetic) survey centered at the Fairservice showing to test for massive sulphides bodies at depth and to do research to delineate the possible western extension of the exhalite horizon on the property. The TDEM survey is one of several geophysical exploration methods. In the conventional TDEM survey, an induction coil is used as the magnetometer which allows conductivity of rock below the surface to be measured at greater depths.

Planning , organization, supervision (senior geologist 9 days at $600 each)	$	5,400
Line cutting (15 kilometers at $500 each)	$	7,500
TDEM contract (12 kilometers at $1,500 each)	$	18,000
Mobilization of TDEM crew	$	6,000
Supplemental VLF/HLEM ground surveys	$	3,000
Research western area of the claims (senior geologist 6 days at $600 each)	$	3,600
Processing 2005 airborne VLF data	$	2,500
Drafting, travel costs and miscellaneous	$	3,000
Contingency 5%	$	2,500

Total	$	51,500

- Phase 2 spending of $171,900 on extensive targeted diamond drilling (six holes) to determine the mineral content of rock below the surface of the Property. Drilling involves extracting a long cylinder of rock, known as a drill core, from the ground for analysis to determine the amount of metal content at different depths. This phase will only be considered after Phase I has proven successful.

Contract price (1,000 meters at $85 per meter):	$	85,000
Drill mobilization and de-mobilization:	$	15,000
Drill site preparation:	$	7,200
Core boxes and supplemental drill supplies:	$	6,000
Assays (75 samples at $20):	$	1,500
Senior geologist supervision, organization, logging travel:	$	21,000
Field assistant for sampling and core handling (25 days at $200/day):	$	5,000
Report:	$	5,000
Drafting:	$	3,000
Domicile for geologist and field assistant:	$	5,200
Transportation (rental of trucks and snowmobiles)	$	2,000
Supplies for sampling and surveys, sample transport:	$	2,000
Permitting and reclamation:	$	6,000
Contingency 5%:	$	8,000

Total	$	171,900

This 43-101 report is available under our public disclosures on www.sedar.com.

During the years ended January 31, 2007 and 2008, we kept our claim in good standing but did not conduct any work on the Property. In fiscal 2007, this was mainly due to the significant time, effort and cost required to lift the cease trade orders initiated by the British Columbia and Alberta Securities Commissions in late fiscal 2004, which was accomplished by August 2006.

In May 2008, we hired Caitlin Jeffs, P.Geo. as consulting geologist and part owner of Fladgate Exploration Consulting to conduct a soil sampling program on the Property to try and find a drilling target. The program involved examining surface soil samples for base metal content which cost $14,906. Their report dated August 5, 2008 indicated the possibility of some gold and zinc mineralization in certain of the 47 samples collected.

(iv) Current and Proposed Exploration

In October, 2009, the Company expanded its 100% owned holdings in the Dotted Lake Property from a single 15-unit claim to ten claims of 82 units by means of additional staking at a cost of $11,055. At the same time, an additional $9,392 was expended on soil sampling in accordance with the Fladgate report of August 2008 which identified anomalous zinc with coincident gold anomalies. Further work has been recommended once again to expand on the anomalies.

At January 31, 2010, we had expended $105,791 exploring the Property of which $15,261 related to staking and $90,530 to soil sampling, geological surveys and consulting fees & expenses.

Subsequent to the January 31, 2010 year end, we entered into an option agreement (the "Option") with local prospectors to purchase an additional 2 claims of 22 units adjacent to the Dotted Lake Property known as the Lampson Lake Property. Mr. Darcy Krell as Company director is the optionee to the agreement in trust for the Company. It is close to the world class 21 million ounce Hemlo gold deposit, currently being mined by Barrick Gold Corp. We have an exclusive option to purchase a 100% interest in this new property by making option payments totaling $60,000 over the next 3 years as follows: $7,000 upon signing the agreement which has already been paid, $12,000 one year later, $16,000 two years later and $25,000 three years later. This new property is subject to a 3% net smelter royalty when and if mineral exploration and development eventually leads to mining revenue from the property.

Upon exercise of the Option, our holdings will then total 12 claims of 104 mining units on 1683 hectares which include some favourable rock formations that host the Fairservice zinc occurrence. Soil samples taken from this occurrence by previous operators have shown reasonable quantities of both zinc and gold. Moreover, our modest soil sampling program on the original Dotted Lake claim in the summer of 2008 and again in the Fall of 2009 noted anomalous zinc with coincident gold anomalies a relatively short distance south of the Fairservice zinc occurrence. Since further work has been recommended to expand on the anomalies, we have asked Fladgate Exploration Consulting to conduct a follow-up work program. This will include mapping, prospecting, soil sampling, trenching and analyzing trhe new property over the next few months at an estimated cost of $85,000.

Depending on the results, we remain committed to the phase 2 diamond drilling recommendations contained in our 43-101 compliant Evaluation Report dated December 6, 2005.

4.3 Competition

The mineral property exploration business, in general, is intensely competitive and there is no assurance that even if commercial quantities of ore are discovered, a ready market will exist for the sale of same. Numerous factors beyond our control may affect the marketability of any minerals discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, environmental protection, etc. The exact effect of these factors cannot be accurately predicted, but in combination they may make it very difficult to realize an adequate return on investment.

We compete with many companies possessing greater financial resources and technical capabilities than we have regarding the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified staff.

4.4 Management and Employees

We do not have any employees other than our directors and officers. When required, we retain geological, financial and other consultants on a contract basis in order to keep overhead expenses to a minimum.

We are party to an amended agreement dated May 1, 2008 with Mr. Darcy Krell, our Secretary and Chief Financial Officer, who is engaged to perform certain management and administrative services on our behalf for a fee of $7,500 per month, including $5,000 for management fees and $2,500 for office rent. Mr. Krell is the husband of our President, Ms. Linda Smith, and the father of our director, Ms. Shannon Krell.

We retain Mr. Krell to arrange and negotiate mineral property acquisitions and exploration contracts (subject to director approval); arrange for and secure financings for the company; arrange for the payment of all company obligations and the collection of all receivables, if any; establish and maintain suitable banking relationships; ensure the maintenance of proper accounting records and compliance with all statutory reporting requirements; and administer corporate inquiries and correspondence as required.

4.5 Environmental Regulations

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in Canada generally, and in the Province of Ontario, specifically. Under these laws, prior to production, we have the right to explore the property, subject only to a notice of work which may entail posting a bond. To date, we have not been required to post a bond with respect to our exploration activities on the Dotted Lake property.

In addition, production of minerals in Ontario will require prior approval of applicable governmental regulatory agencies. We can provide no assurance to investors that such approvals will be obtained. The cost and delay involved in attempting to obtain such approvals is unknown at this time.

We have budgeted for regulatory compliance costs as part of our operations. We will have to incur the cost of reclamation and environmental mediation for all exploration work undertaken. The amount of these costs is also unknown at this time as we do not know the extent of future exploration.

Permits and regulations will control all aspects of any production program if the project continues to that stage because of the potential impact on the environment. Examples of regulatory requirements include:

	-	Water discharge will have to meet water standards;

	-	Dust generation will have to be minimal or otherwise re-mediated;

	-	Dumping of material on the surface will have to be re-contoured and re-vegetated;

	-	An assessment of all material to be left on the surface will need to be environmentally benign;

	-	Ground water will have to be monitored for any potential contaminants;

	-	The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be re-mediated; and

	-	There will have to be an impact report of the work on the local fauna and flora.

We did not require any government authorization to proceed with Phase 1 of the exploration program recommended in our 43-101 technical evaluation report since it has caused little, if any, physical disturbance of the land to date. However, we will be required to obtain work permits from the Ontario Ministry of Northern Development and Mines for the Phase 2 drilling program and any subsequent exploration work that results in a physical disturbance to the land should we decide to proceed. If more than 10,000 square meters of property surface are affected, or such areas that would total that amount when combined, a work permit is required. There is no charge to obtain a work permit under the Mining Act.

When our exploration program proceeds to the drilling stage, we may be required to post small performance bonds if the rights of a private land owner may be affected. We may also be required to file statements of work with the Ministry of Northern Development and Mines and to undertake remediation work on any exploration that results in physical disturbance to the land. The cost of remediation work will vary according to the degree of physical disturbance.

ITEM 5. Operating and Financial Review and Prospects
(stated in Canadian $ under Canadian GAAP)

5.1 Results of Operations

We are an exploration stage company currently owning 10 claims of 82 mining units on the Dotted Lake property located in north-central Ontario, Canada and no revenue has been realized to date.

The following table shows selected information for the three most recently completed fiscal years taken from our audited financial statements:

	Year Ended January 31, 2010	Year Ended January 31, 2009	Year Ended January 31, 2008
FINANCIAL POSITION
Total Assets	$ 169,424	$ 101,485	$ 90,043
Total Liabilities (all current)	$ 1,140,457	$ 1,053,596	$ 1,346,819
Accumulated Deficit	$ (2,737,861)	$ (2,618,939)	$
OPERATIONS
Total Revenues	Nil	Nil	Nil
Total Expenses / Net Loss	$ (118,922)	$ (195,335)	$ (156,658)
Net Loss per Share	$ (0.01)	$ (0.05)	$ ( 0.28)

The following results of operations should be read in conjunction with the audited financial statements for the years ended January 31, 2010 and 2009:

		Year Ended			Year Ended
		January 31, 2010			January 31, 2009
Revenue	$	Nil		$	Nil

Expenses
Amortization and accretion	$	14,562		$	12,664
Management fees		60,000			52,750
Office administration and travel		44,395			48,234
Professional fees		40,338			70,055
Transfer agent and filing fees		11,308			11,632

Sub-total		(170,603	)		(195,335	)
Write-off accounts payable		51,681			-

Net and Comprehensive Loss for the Year	$	(118,922	)	$	(195,335	)

Revenue
The Company is in the exploration stage and has not generated any revenues since inception.

Net and Comprehensive Loss
The Company reported a net loss of $118,922 during the 2010 fiscal year compared to $195,335 during the 2009 fiscal year. This $76,413 decrease in net loss resulted from lower operating expenses of $24,732 and an accounts payable write-off of $51,681 as follows:

-	decrease of $3,839 in office administration and travel expenses primarily due to reduction in management travel.
-	decrease of $29,717 in professional fees (legal, audit and accounting) due to relatively low activity levels in 2010 and higher costs in 2009 from delayed billings of prior year which distorted the comparison somewhat.
-	decrease of $324 in transfer agent and filing fees

-	accounts payable write-off from 2001 totaling $51,681

partially offset by higher operating expenses as follows:

-	increase of $1,898 in accretion of convertible promissory note due to re-calculation of the equity component following extension of the maturity date to January 31, 2011.
-	increase of $7,250 in management fees following implementation of a new agreement

5.2 Liquidity and Capital Resources

		As At			As At
*(i) Working Capital (Deficiency)*		January 31, 2010			January 31, 2009

Current assets	$	55,439		$	7,392
Current liabilities		(1,140,457	)		(1,053,596	)

Working capital (deficiency)	$	(1,085,018	)	$	(1,046,204	)

During the year ended January 31, 2010, the working capital deficiency increased by $38,814 mainly due to decreased amounts owing to related parties partially offset by larger bank balances.

*(ii) Cash Flow*		Year Ended			Year Ended
		January 31, 2010			January 31, 2009
Net cash used in Operating Activities	$	(157,773	)	$	(162,573	)
Net cash used in Investing Activities		(20,446	)		(14,906	)
Net cash provided by Financing Activities		226,946			176,336
Incr. (Decr.) in Cash during the Year	$	48,767		$	(1,143	)

Cash, Beginning of Year		4,856			5,999
Cash, End of Year	$	53,623		$	4,856

At January 31, 2010, the Company’s cash position was $53,623 compared to $4,856 at January 31, 2009. The $48,767 increase in cash in 2010 and $1,143 decrease in cash in 2009 resulted from the following activities:

	(i)	Net cash used in operating activities of $157,773 in 2010 and $162,573 in 2009 was primarily due to operating losses in both years along with a non-cash write-off of an old accounts payable in 2010.

	(ii)	Net cash used in investing activities of $20,446 in 2010 and $14,906 in 2009 resulted from on- going expenditures on claim staking and soil sampling.

	(iii)	Net cash provided by financing activities of $226,946 in 2010 and $176,336 in 2009. The 2009 funding came from related parties and share subscriptions from an early start to a new private placement. The 2009 funding came from shares issued for cash net of loan re- payments to related parties.

(iii) Anticipated Cash Requirements

Over the next 12 months, the Company has estimated its minimum cash requirements as follows:

Operating Expenses
Management fees	$	60,000
Professional fees		40,000
General, administration and other expenses		55,000
	$	155,000
Mineral exploration		85,000

Total	$	240,000

Further exploration on our mineral property interests will be managed over the next few months by our present consulting geologist, Fladgate Exploration Consulting, at an estimated cost of $85,000 to expand on the anomalous zinc and coincident gold anomalies noted from previous soil samples tested. We also anticipate spending approximately $155,000 for on-going management, professional fees and administration of our corporate affairs during the ensuing twelve month period.

With no operating revenues to date, we continue to finance our operations through the issuance of common shares and borrowings from related parties. Accordingly on May 13, 2010, the Company announced the closing of a private placement of 30,000,000 units at a price of $0.05 per unit for proceeds of $1,500,000. As at January 31, 2010, $100,000 of this amount was recorded as subscriptions received. Each unit consists of one common share and one non-transferable share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at a price of $0.10 per share for a period of two years.

There can be no assurance that additional financing will be available when needed or, if available, on commercially reasonable terms. If we are unable to obtain additional financing on a timely basis, either through issuance of more common shares or obtaining additional advances from related parties, we may not be able to meet our obligations as they come due and may be forced to scale down or perhaps even cease business operations.

At January 31, 2010, we had total assets of $169,424 in accordance with Canadian GAAP as follows: cash $53,623, GST receivable $1,816, credit card deposit $6,900, mineral property interests $105,791 and computer equipment $1,294. At the same date, we had total liabilities of $1,140,457 consisting of $70,556 in accounts payable and accrued liabilities and $1,069,901 in amounts due to related parties.

At January 31, 2010, we had accumulated $1,042,000 of non-capital losses available for carry forward as deduction against future taxable incomes (if any) which expire from 2015 to 2030.

To a significant extent, our ability to raise capital is also affected by trends and uncertainties beyond our control. These include the market prices for base and precious metals and results from our exploration programs. Our ability to attain our business objectives may be significantly impaired if prices for metals such as gold, copper and platinum fall or if results from our intended exploration programs on our Mineral Property Interests are unsuccessful.

ITEM 6. Directors, Senior Officers and Employees

6.1 Directors and Senior Officers

As at January 31, 2010, our directors and senior officers, their ages, positions held and duration of such, are as follows:

Name	Position Held with the Company	Age	Date First Elected or Appointed
Linda Smith ⁽¹⁾	President, Chief Executive Officer and Director	61	October 27, 2000
Darcy Krell ⁽¹⁾	Secretary, Chief Financial Officer and Director	62	October 10, 2008
Shannon Krell	Director	33	October 27, 2000
Ryan Krell	Director	36	November 13, 2008
Ivan Martinez	Director	29	November 13, 2008

⁽¹⁾Member of the Audit Committee

There are no arrangements or undertakings between any of our directors or executive officers, pursuant to being selected as a director or senior officer. However, there are family relationships among our directors and officers in that Ms. Linda Smith and Mr. Darcy Krell are husband and wife and Ms. Shannon Krell and Mr. Ryan Krell are their daughter and son.

The following describes the business experience of our directors and senior officers, including other directorships held in reporting companies:

Linda Smith

Ms. Linda Smith has acted as our president and one of our directors since October 27, 2000 to present. She spends approximately 15% of her time assisting Mr. Darcy Krell in providing management services to us and receives no compensation for her services.

Ms. Smith acted as Blue Lightning Ventures Inc.’s president and director from October 1999 to July 2004. She also acted in the same capacities for Big Bar Gold Corporation from June 1999 to April 2003; for Candorado Operating Company Ltd. from June 2000 to November 2001; and for Algorithm Media Inc. from December 2005 to December 2009. All of these companies are British Columbia and Alberta reporting corporations and involved in mineral property exploration.

Ms. Smith was also employed as a part-time dental assistant from May 1995 to October 2002.

Darcy Krell

Mr. Krell has acted as our Secretary, Chief Financial Officer and one of our directors since October 10, 2008 to present and has been a private investor in various public and private companies since 1996. He is long on business experience but has no professional training or technical credentials in the field of mineral property exploration or development. He spends approximately 35% of his time on our affairs.

Mr Krell also acted as a director of Big Bar Gold Corporation from March 2000 to April 2004 and Blue Lightning Ventures Inc. from March 2002 to July 2004. In addition, Mr. Krell acted as a director of Algorithm Media Inc. from December 2005 to January 2010. All of these companies are Alberta and British Columbia reporting companies and involved in mineral property exploration.

Shannon Krell

Ms. Shannon Krell has acted as one of our directors since October 27, 2000 to present and spends approximately 5% of her time on our affairs. She graduated with a Bachelor’s Degree in social sciences in May 2008 from the University of Victoria on Vancouver Island, BC.

She is currently working as a professional counselor for both Vancouver Coastal Health and Aids Vancouver since January 2002 and October 2004 respectively. Ms. Krell has no professional training nor experience in the field of mineral property exploration and development.

Ryan Krell

Mr. Ryan Krell has acted as one of our directors since November 13, 2008 to present and spends approximately 5% of his time on our affairs. He graduated with a Business Administration diploma in January 2004 from Douglas Community College in Vancouver, BC.

He acted as director of Blue Lightning Ventures Inc from August 1999 to November 2004. He is currently working as an Office Coordinator for Vancouver Coastal Health since February 2004 and before that, part time as IWA Canada union representative. Mr. Krell has no professional training nor experience in the field of mineral property exploration and development.

Ivan Martinez

Mr. Martinez has acted as one of our directors since November 13, 2008 to present and spends approximately 5% of his time on our affairs. He graduated with an Engineering Degree March 2005 from the Instituto Tecnologico in Queretaro, Mexico.

He is currently working as Office Manager for Vancouver Coastal Health since March 2009 and prior to that, as an engineer for Data Link Technologies in Vancouver from February 2004 to November 2008 and for Dana Mexico in Toluca Mexico from May 1999 to January 2004. Mr. Martinez has no professional training nor experience in the field of mineral property exploration and development.

6.2 Compensation of Directors

We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors. The following fairly reflects all material information regarding compensation paid to our directors for the fiscal years ended January 31, 2010 and 2009:

Summary Compensation Table

NAME AND PRINCIPAL POSITION	YEAR	ANNUAL COMPENSATION			LONG-TERM COMPENSATION
		Salary	Bonus	Other Annual Compen- sation	Awards		LTIP payouts	All Other Compen- sation
		Salary	Bonus	Other Annual Compen- sation	Restricted Stock Awards	Securities Underlying Options/ SAR’s	LTIP payouts	All Other Compen- sation
Linda Smith as President, Chief Executive Officer and Director	2010 2009	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil
Darcy Krell, as Secretary, Chief Financial Officer and Director	2010 2009	$60,000 $52,750	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil
Shannon Krell as Director	2010 2009	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil

We did not pay any compensation for director services per se in the fiscal years ended January 31, 2010 and 2009. However, certain management and administrative services are performed by Mr. Darcy Krell, our Secretary and Chief Financial Officer, for a fee of $5,000 per month for management services which are included in the above table. The management fees were increased from $2,500 to $5,000 per month effective May 1, 2008 due to more time and effort required to run the business.

6.3 Board Practices

Linda Smith was appointed as our president and one of our directors on October 27, 2000 and Darcy Krell and Shannon Krell were also appointed as directors on the same date. The directors hold office until the next annual general meeting of the shareholders at which time they may stand for reelection. We are required to hold an annual general meeting once every calendar year and not longer than thirteen months from the last annual general meeting. The last annual general meeting was held in Vancouver, BC on December 14, 2009.

Our audit committee is comprised of Linda Smith and Darcy Krell and we have not appointed a compensation committee.

6.4 Employees

We do not have any employees other than our directors and officers. When required, we retain geological, financial and other consultants.

6.5 Share Ownership of Directors and Senior Officers

Our directors and officers own beneficially the following common shares as of the date of this annual report:

		Percentage of Issued and
	Number of Shares Owned	Outstanding Shares

Linda Smith *	500,000	1.2%
Darcy Krell *	550,000	1.4%
Shannon Krell **	500,000	1.2%
Ryan Krell **	1,550,000	3.8%
Ivan Martinez	2,000,000	4.9%
	5,100,000	12.5%

* Darcy Krell and Linda Smith are husband and wife.
** Shannon Krell and Ryan Krell are daughter and son of Linda Smith and Darcy Krell.

The above percentages are based on the 40,565,171 common shares issued and outstanding in our capital stock as of the date of this annual report .

In December 2006, we adopted an incentive stock option plan but to date no stock options have been granted to our directors and officers and no stock options are outstanding to the date of this annual report.

ITEM 7. Major Shareholders and Related Party Transactions

7.1 Beneficial Ownership

As used in this section, the term "beneficial ownership" with respect to a security is defined by Regulation 228.403 under the Securities exchange Act of 1934, as amended, as consisting of: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership.

As of the date of this annual report, 40,565,171 common shares are issued and outstanding and we are authorized to issue an unlimited number of common shares without par value.

As of the date of this annual report, the following persons known to us were the beneficial owner of more than five percent of our outstanding common shares.

	Number of Shares	Percentage of Issued and
Name of Shareholder	Owned	Outstanding Shares

Ted Hayes	2,900,000	7.2%
Steve Chen	2,700,000	6.7%
	5,600,000	13.9%

Each of our issued shares entitles the holder to one vote at our annual general shareholder meetings. There are no disproportionate or weighted voting privileges.

We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.

There are no arrangements which at a subsequent date may result in a change in our control.

7.2 Related Party Transactions

As at January 31, 2010, there were no balances or transactions with any director, executive officer or beneficial holder of more than 5% of our outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, which materially affected or will materially affect us, except as follows:

	a)	As at January 31, 2010, loans payable aggregating $1,069,901 (2009 - $928,948) are owing to officers of the Company and an immediate family member of an officer of the Company. These amounts are unsecured, non-interest bearing and have no specific terms of repayment.

		Included in the amounts due to related parties is a convertible promissory note from an immediate family member of an officer of the Company in the amount of $41,827 (2009 - $77,820). The amount is non-interest bearing and is unsecured and the maturity date is January 1, 2011. The note was convertible into 213,510 common shares of the Company prior to maturity at the holder’s option. During the year ended January 31, 2010, $50,000 was repaid.

		Subsequent to January 31, 2010, all related party loans and advances were repaid from a $1,500,000 private placement.

	b)	A director of the Company charged the following amounts to the Company during the years ended January 31:

		January 31,		January 31,		January 31,
		2010		2009		2008

Management fees	$	60,000	$	52,750	$	30,000
Office rent		30,000		18,000		18,000

All related party transactions are conducted in the normal course of business and are recorded at their exchange amount, which is the consideration agreed to between the parties.

7.3 Interests of Experts and Counsel

Our experts and legal counsel have no interest in our shareholdings.

ITEM 8. Financial Information

The audited financial statements for the year ended January 31, 2010 are attached hereto as an exhibit and incorporated herein by reference.

8.1 Legal Proceedings

To the best of our knowledge there are no legal or arbitration proceedings threatened, pending or in progress against us.

8.2 Significant Changes

The following significant events took place subsequent to the January31, 2010 year end:

a) On May 13, 2010, the Company announced the closing of a private placement of 30,000,000 units at a price of $0.05 per unit for proceeds of $1,500,000. As at January 31, 2010, $100,000 of this amount was recorded as subscriptions received. Each unit consists of one common share and one non-transferable share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at a price of $0.10 per share for a period of two years.

b) Effective April 20, 2010, the Company entered into an option agreement to purchase two claims of the Lampson Lake Property, adjacent to the Dotted Lake Property. The Company has an option to purchase a 100% interest by making option payments totalling $60,000 over the next 3 years as follows: $7,000 upon signing the agreement (paid), $12,000 one year later, $16,000 two years later and $25,000 three years later. The property is subject to a 3% net smelter royalty.

ITEM 9. The Offer and Listing

9.1 Offer and Listing Details

We are currently a reporting issuer in both British Columbia and Alberta and file as a foreign issuer with the United States Securities and Exchange Commission. After filing and receipting a registration statement on Form 20-F with the United States Securities and Exchange Commission, our common shares were posted for trading on the Over-The-Counter: Bulletin Board (OTC:BB) in the United States under the symbol GMSRF:OB on February 14, 2007. With the name change to Rouge Resources Ltd., the trading symbol was changed to ROUGF:OB effective March 26, 2008.

The following table sets forth the high and low prices of our common shares in US funds on a quarterly basis since trading began on the OTC:BB:

3 months ended	High	Low
February 14 to April 30, 2007	No trading
July 31, 2007	No trading
October 30, 2007	$0.50	$0.20
January 31, 2008	$0.70	$0.10
April 30, 2008	$1.00	$0.12
July 31, 2008	$0.13	$0.10
October 31, 2008	$0.10	$0.05
January 31, 2009	$0.07	$0.06
April 30, 2009	$0.06	$0.01
July 31, 2009	No trading
October 31, 2009	No trading
January 31, 2010	No trading
April 30, 2010	No trading
May 1 to May 31, 2010	$0.10	$0.06

Previously our common shares were traded on the Canadian Venture Exchange and its predecessor, the Vancouver Stock Exchange, under the symbol “GMS” before the name change to Rouge Resources Ltd. On July 12, 2001, our shares were suspended from trading on the Canadian Venture Exchange due to failure to meet the Exchange’s minimum working capital requirements. The Canadian Venture Exchange (now called the TSX Venture Exchange) requires that listed companies have a minimum of $50,000 in unallocated working capital. At that time, we did not meet this requirement and trading in our shares was suspended.

The Cease Trade Orders issued against us on November 7, 2003 by the Alberta Securities Commission (the “ASC”) and on January 14, 2004 by the British Columbia Securities Commission (the “BCSC”) were lifted on August 18, 2006 by the BCSC and on August 23, 2006 by the ASC. These reactivation and revocation orders resulted from the Company bringing its disclosure records up-to-date on SEDAR (www.sedar.com); preparing a new 43-101 report regarding the merits of the Dotted Lake property dated December 6, 2005; meeting all other regulatory requirements; and paying all required fees and penalties.

The following table sets forth the high and low closing prices in Canadian funds of our common shares during the time they traded through the facilities of the Canadian Venture Exchange, and its predecessor, the Vancouver Stock Exchange:

Period	High	Low
February 1, 1999 to January 31, 2000	$1.50	$0.30
February 1, 2000 to January 31, 2001	$2.50	$0.60
February 1, 2001 to July 12, 2001	$1.00	$0.60

ITEM 10. Additional Information

10.1 Share Capital

(i) Common Shares

Authorized

Unlimited common shares without par value

Issued and Outstanding

	January 31, 2010			January 31, 2009
	Number of		Amount	Number of		Amount
	shares			shares

Balance, beginning	10,565,171	$	1,613,471	565,171	$	1,113,471
Private placement @ $0.05 per share	-		-	10,000,000		500,000

Balance, ending	10,565,171	$	1,613,471	10,565,171	$	1,613,471

During the year ended January 31, 2008, the Company affected a one for ten (1:10) share consolidation of its authorized, issued and outstanding share capital resulting in all share and per share information in the financial statements continued herein being presented on a retroactive basis as if the share consolidation took place at the beginning of all years presented. Accordingly, the issued and outstanding share capital was reduced from 5,651,714 to 565,171 common shares. After the share consolidation, the Company increased its authorized share capital from 10,000,000 common shares to an unlimited number without par value.

During the year ended January 31, 2009, the Company completed a non-brokered private placement of 10 million units at $0.05 for total proceeds of $500,000. Each unit consists of one common share and one non-transferable share purchase warrant, each warrant entitling the holder to acquire one additional common share of the Company at a price of $0.10 per share for two years. No value was attributed to the warrants

During the year ended January 31, 2010, no shares were issued by the Company.

Subsequent to the year ended January 31, 2010, the Company announced the closing of a private placement of 30,000,000 units at a price of $0.05 per unit for proceeds of $1,500,000. As at January 31, 2010, $100,000 of this amount was recorded as subscriptions received. Each unit consists of one common share and one non-transferable share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the Company at a price of $0.10 per share for a period of two years.

We do not hold any of our own shares and have no potential obligations to increase our issued and outstanding share capital beyond the above.

(ii) Share Purchase Warrants

Balance		Balance
January 31,		January 31,	Exercise
2009	Issued	2010	Price	Expiry

10,000,000	-	10,000,000	$ 0.10	June 30, 2010

As at January 31, 2010, the weighted average remaining life of the share purchase warrants is 5 months and the weighted average exercise price is $0.10.

(iii) Stock Option Plan

The Company’s Stock Option Plan (the “Plan”) was adopted in December 2006 and is administered under the following basic terms and conditions:

(a)	the maximum available for grant is up to 10% of the Company’s issued shares outstanding at any one time;
(b)	Company employees, directors, officers and consultants are eligible to receive a grant of stock options provided that bona fide services have been rendered and that such services are not in connection with the offer or sale of securities in a capital-raising transaction. There is a 10% limitation of options granted in any one year to one specific employee, director or officer and a 2% annual limitation to one specific consultant;
(c)	the grant price shall not be less than the market value of the shares at the time of grant less any discount permitted by the relevant regulatory authorities;
(d)	the exercise price shall be determined by a plan committee at the time of grant; and
(e)	the option period shall not exceed five years from the date of grant.

No stock options have been granted and accordingly no stock options are outstanding at January 31, 2010 and 2009.

(iv) Contributed Surplus

		$
Balance, January 31, 2007		11,576
Equity component of convertible debt		41,781

Balance, January 31, 2010, 2009 and 2008		53,357

10.2 Memorandum and Articles of Association

We were incorporated pursuant to the Company Act of British Columbia by registration of our articles of incorporation and memorandum on March 31, 1988 and were subsequently transitioned to the replacement Business Corporations Act in March 2006. Pursuant to the provisions of the Business Corporations Act, a company may conduct any business that it is not restricted by the terms of its articles. Our articles contain no such restrictions.

Our directors are required to disclose to the board of directors the nature and extent of their interest in any proposed transaction or contract and must thereafter refrain from voting in respect thereof. An interested director may be counted in the quorum when a determination as to such director’s remuneration is being considered but may not vote in respect thereof. The directors have an unlimited power to borrow money, issue debt obligations and mortgage or charge our assets provided such actions are conducted bona fide and in our best interests. There are no mandatory retirement ages for directors or any required shareholdings.

All holders of common shares are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as the board of directors may from time to time determine. All holders of common shares will share equally on a per share basis in any dividend declared by the board of directors. The dividend entitlement time limit will be fixed by the board of directors at the time any such dividend is declared. Each outstanding common share is entitled to one vote on all matters submitted to a vote of our shareholders in general meeting. There are no cumulative voting rights attached to any of our shares and, accordingly, the holders of more than half of the shares represented at a general meeting can elect all of the directors to be elected in a general meeting. All directors stand for re-election annually. Upon any liquidation, dissolution or winding up, all common shareholders are entitled to share ratably in all net assets available for distribution after payment to creditors. The common shares are not convertible or redeemable and have no preemptive, subscription or conversion rights. In the event of a merger or consolidation, all common shareholders will be entitled to receive the same per share consideration.

The rights of shareholders may only be altered by the shareholders passing a special resolution at a general meeting. A special resolution may only be passed when it has been circulated to all shareholders by way of an information circular and then must be passed by seventy-five percent of the votes cast at the general meeting.

The board of directors may call annual and extraordinary general meetings when required. One or more shareholders holding in aggregate five percent or more of our issued shares may requisition an extraordinary meeting and the directors are required to hold such meeting within four months of such requisition. Only registered shareholders or persons duly appointed by proxy may be admitted to meetings unless otherwise permitted by the chairman of the meeting.

There are no national limitations or restrictions on the right to own our common shares.

There are no provisions in our articles of association that would have the effect of delaying, deferring or preventing a change in control.

There are no provisions in our articles of association that establish any threshold for disclosure of ownership. However, the British Columbia and Alberta Securities Commissions require that persons who are the registered owners of, and/or have voting control over 10% or more of our common shares must file insider reports disclosing securities holdings.

10.3 Material Contracts

We have only two material contracts currently outstanding as follows: (i) the amended management agreement with Mr. Darcy Krell whereby management fees increased from $2,500 to $5,000 per month effective May 1, 2008 due to more time and effort required to run the business; and (ii) the option agreement dated April 20, 2010 to purchase two claims of the Lampson Lake Property, adjacent to the Dotted Lake Property. We have an option to purchase a 100% interest by making option payments totalling $60,000 over the next 3 years as follows: $7,000 upon signing the agreement (paid), $12,000 one year later, $16,000 two years later and $25,000 three years later. The property is subject to a 3% net smelter royalty.

10.4 Exchange Controls and Other Limitations Affecting Security Holders

There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. See "Item 10.5" below.

There is no limitation imposed by Canadian law or by our constituent documents on the right of a non-resident to hold or vote common shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the principal features of the Investment Canada Act (Canada).

The Investment Canada Act (Canada) requires certain "non-Canadian" individuals, governments, corporation or other entities who wish to acquire a "Canadian business" (as defined in the Investment Canada Act), or establish a "new Canadian business" (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The Investment Canada Act requires that certain acquisition of control of Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investment Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition, which has been completed, the acquired Canadian business must be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, amongst other things, an injunction or a court order directing disposition of assets of shares.

10.5 Canadian Federal Income Tax Consequences to U.S. Investors

A brief description of certain provisions of the tax treaty between Canada and the United States is included below, together with a brief outline of certain taxes, including withholding provisions to which United States security holders are subject under existing laws and regulations of Canada and United States; the consequences, if any, of state and local taxes are not considered. The following information is general and security holders are urged to seek the advice of their own tax advisors, tax counsel or accountants with respect to the applicability or effect on their own individual circumstances of not only the matters referred to herein, but also any state or local taxes.

Canadian federal tax legislation generally requires a 25% withholding from dividends paid or deemed to be paid to the Company's nonresident shareholders. However, shareholders resident in the United States will generally have this rate reduced to 15% through the tax treaty between Canada and the United States. The amount of stock dividends paid to non-residents of Canada will be subject to withholding tax at the same rate as cash dividends. The amount of stock dividend (for tax purposes) would generally be equal to the amount by which our stated capital has increased by reason of the payment of such dividend. We will furnish additional tax information to shareholders in the event of such a dividend. Interest paid or deemed to be paid on our debt securities held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty. Under present legislation in the United States, we are generally not subject to United States back up withholding rules, which would require withholding at a rate of 20% on dividends and interest paid to certain United States persons who have not provided us with a taxpayer identification number.

Gains derived from a disposition of shares of the company by a non-resident shareholder will be subject to tax in Canada only if not less than 25% of any class of our shares was owned by the nonresident shareholder and/or persons with whom the nonresident did not deal at arm's length at any time during the five-year period immediately preceding the disposition. In such cases gains derived by a U.S. shareholder from a disposition of our shares would likely be exempt from tax in Canada by virtue of the Canada-U.S. tax treaty.

10.6 United States Federal Income Tax Consequences to U.S. Investors

The following general discussion sets forth a summary of the material United States federal income tax consequences that are applicable to the following persons who invest in and hold our common shares as capital assets ("U.S. Shareholders"): (i) citizens or residents (as specially defined for federal income tax purposes) of the United States, (ii) corporations or partnerships created or organized in the United States or under the laws of the United States or of any state and (iii) estates or trust the income of which is subject to United States federal income taxation regardless of its source. This discussion does not deal with (a) all aspects of federal income taxation that may be relevant to a particular U.S. Shareholder based on such U.S. Shareholder's particular circumstances (including potential application of the alternative minimum tax, (b) certain U.S. Investors subject to special treatment under federal income tax laws or foreign individuals or entities, (c) U.S. Investors owning directly or by attribution 10% or more of our common shares, or (d) any aspect of state, local or non-United States tax laws. Additionally, the following discussion assumes that the Company will not be classified as a "foreign personal holding company" under the Internal Revenue Code of 1986 as amended (the "Code").

Passive Foreign Investment Company

For any of our taxable years, if 75% or more of our gross income is "passive income" (as defined in the Code) or if at least 50% of our assets, by average fair market value (or adjusted income basis if the Company elects), are assets that produce or are held for the production of passive income, we will be deemed to be a Passive Foreign Investment Company ("PFIC").

A U.S. Shareholder of a PFIC is subject to special U.S. federal income tax rules in Section 1291 to 1297 of the Code. As described below, these provisions set forth two alternative tax regimes at the election of each such U.S. Shareholder, depending upon whether the U.S. Shareholder elects to treat us as a "qualified electing fund" (a QEF election").

U.S. SHAREHOLDERS ARE STRONGLY URGED TO CONSIDER MAKING A QEF ELECTION TO AVOID CERTAIN POTENTIALLY SIGNIFICANT ADVERSE U.S. TAX CONSEQUENCES

The QEF Election Alternative

Each U.S. Shareholder is strongly urged to consider making a QEF Election because of the potential benefits of such election that are discussed below, and because we anticipate that we will not have any earnings and profits (as computed for United States federal income tax purposes) for the current taxable year and little, if any, earnings and profits for any future taxable year in which we are a PFIC. There can be no assurance, however, that this will be the case. Accordingly, the timely making of the QEF election, as discussed below, generally should, subject to the discussion below under "Other PFIC Rules", avoid any significant adverse United State federal income tax consequences resulting from any classification of us as a PFIC, although this may depend on a particular U.S. Shareholder's particular circumstances.

A U.S. Shareholder who elects in a timely manner to treat us as a QEF (an "Electing U.S. Shareholder") will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year in which we are a PFIC (or is treated as a PFIC with respect to the U.S. Shareholder) on such Electing U.S. Shareholder's pro-rata share of our (i) "net capital gain" (the excess of net long-term capital gain over short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Shareholder and (ii) "ordinary earnings" (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Shareholder, in each case, for the shareholder's taxable year in which, or with which, our taxable year ends, regardless of whether such amounts actually are distributed. An Electing U.S. Shareholder, however, would not take into account any income with respect to any of our taxable years for which we have no earnings and profits. Adjustments are provided generally to prevent double taxation at the time of later distributions on or dispositions of Common Shares.

The QEF election also allows the Electing U.S. Shareholder to (i) generally treat any gain realized on the disposition of our common shares (or deemed to be realized on the pledge of such shareholder's common shares) as capital gain; (ii) treat such shareholder's share of our net capital gain, if any, as long-term capital gain instead of ordinary income; (iii) probably (although in the absence of regulations this matter is not free from doubt) retain in the case of an individual Electing U.S. Shareholder, the "step-up" in the tax basis of Common Shares to the fair market value of such shares on the date of such Electing U.S. Shareholder's death (which would otherwise not be retained); and (iv) generally avoid interest charges resulting from PFIC status altogether.

In the event we are deemed a PFIC, we intend to comply with the reporting requirements prescribed by Treasury regulations. In particular, we will maintain information so that our ordinary earnings and net capital gain may be determined. However, future regulations may contain reporting and record-keeping requirements that are so onerous that it would not be practicable for us to comply. If, after review of the requirements, we decide not to comply with the PFIC record-keeping requirements, we will so notify our shareholders.

A QEF Election must be made by attaching the following documents to the timely filed U.S. federal income tax return for the first taxable year of the U.S. Shareholder in which or with which our taxable year during which we were a PFIC and the U.S. Shareholder held (or was considered to have held) common shares ends: (i) a "Shareholder Section 1295 Election Statement" executed by the U.S. Shareholder, (ii) a "PFIC Annual Information Statement" received by the U.S. Shareholder from us, and (iii) a Form 8621. In addition, the Electing U.S. Shareholder must file a copy of the Shareholder Section 1295 Election Statement with the Internal Revenue Center, PO Box 21086, Philadelphia, PA 19114. In the case of common shares owned through a U.S entity, the election is made at the entity level.

The following six paragraphs apply to electing U.S. shareholders:

(i) Dividends Paid on Common Shares:

Dividends paid on our common shares (including any Canadian taxes withheld) to an Electing U.S. Shareholder will be treated as ordinary dividend income for United States federal income tax purposes to the extent of our current and accumulated earnings and profits (as computed for U.S. federal income tax purposes) unless paid out of earnings and profits that were taxed to the Electing U.S. Shareholder under the QEF rules. Such dividends generally will not qualify for the dividends-received deduction available to corporations. Amount in excess of such earnings and profits will be applied against the Electing U.S. Shareholder's tax basis in the common shares, and to the extent in excess of such tax basis, will be treated as gain from a sale or exchange of such common shares.

(ii) Credit for Canadian Taxes Withheld:

Subject to the limitations set forth in Section 904 of the Code (which generally restricts the availability of foreign tax credits to a U.S. Shareholder's tax liability attributable to foreign-source income of the same type as the income with respect to which the tax was imposed, as determined under complex U.S. tax rules), the Canadian tax withheld or paid with respect to dividends on the common shares generally may be taken as a foreign tax credit against United States federal income taxes by an Electing U.S. Shareholder who chooses to claim such a credit for the taxable year. Electing U.S. Shareholders who do not choose to claim foreign tax credits for a taxable year may claim United States tax deduction for such Canadian tax in such taxable year.

(iii) Disposition of Common Shares:

Any gain or loss on a sale or exchange of common shares by an Electing U.S. Shareholder will be capital gain or loss, which will be long-term capital gain or loss if the common shares have been held for more than one year, and otherwise will be short-term capital or loss. The sale of common shares through certain brokers may be subject to the information reporting and back-up withholdings rules of the Code.

(iv) The Non-QEF Election Alternative

If a U.S. Shareholder does not timely make a QEF Election for the first taxable year during which he holds (or is considered to hold) the common shares in question and we are a PFIC (a "Non-electing U.S. Shareholder"), then special rules under Section 1291 will apply to (i) gains realized on the disposition (or deemed to be realized by reason of a pledge) of common shares, and (ii) certain "excess distribution" (as defined in the Code) by us. We have never made any distributions with respect to our common shares and we do not anticipate making any such distribution in the foreseeable future.

A non-electing U.S. Shareholder generally would be required to pro-rate all gains realized on the disposition of our common shares and all excess distributions over such shareholder's entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Shareholder (provided such U.S. Shareholder's holding period and beginning after December 31, 1986 for which it was a PFIC) would be taxed at the highest tax rates for each such prior year applicable to ordinary income. Special foreign tax credit rules apply with respect to withholding taxes imposed on amounts that are treated as excess distributions. The Non-electing U.S. Shareholder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-electing U.S. Shareholder that is not a corporation must treat this interest charge as "personal interest" which is non-deductible. The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution and no interest charge will be incurred with respect to such balance.

If we are a PFIC for any taxable year during which a non-electing U.S. Shareholder holds, or is considered to hold, our common shares, then we will continue to be treated as a PFIC with respect to such common shares, even if we no longer meet the definition of a PFIC. A Non-electing U.S. Shareholder may determine this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-electing U.S. Shareholders) as if such common shares had been sold on the last day of the last taxable year for which it was a PFIC. Certain other elections are also available to Non-Electing U.S. Shareholders.

(v) Other PFIC Rules

Certain special, generally adverse, rules will apply with respect to our common shares while we are a PFIC, regardless of whether the common shares are held, or considered to be held, by an Electing or Non-electing U.S. Shareholder. For example, under Section 1297(b)(6) of the Code, a U.S. Shareholder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such stock. In addition, under Section 1291(f) of the Code, the Treasury has authority to issue regulations that would treat as taxable certain transfers that are generally not so treated, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death, although it is not clear that such authority extends to transfers by Electing U.S. Shareholders.

(vi) Future Developments

The foregoing discussion is based on existing provisions of the Code, existing and proposed regulations thereafter, and current administrative rulings and court decisions, all of which are subject to change. Any such changes could affect the validity of this discussion. In addition, the implementation of certain aspects of the PFIC rules requires the issuance of regulations which in many such instances have not yet been promulgated and which may have retroactive effect. Furthermore, legislation has been proposed which would replace the PFIC provisions with a consolidated anti-deferral regime. While this legislation was vetoed, it may be re-introduced in subsequent years.

ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.

10.7 Statements by Experts

We have placed reliance upon:

(i) our lawyer, Doug Eacrett, Barrister & Solicitor, Suite 203 – 409 Granville St, Vancouver BC, Canada V6C 1T2, as expert in Canadian securities law.

(ii) our consulting geologists, Ms Caitlin Jeffs, 48 Peter Street, Thunder Bay ON, Canada P7A 4H3, part owner of Fladgate Exploration Consulting Corp., and Mr. Andre M Pouwels, P. Geo., 4900 Mariposa Court, Richmond BC, Canada V7C 2J9, as experts in exploration geology of precious and base metal mineral programs.

(iii) our auditor, Dale Matheson Carr-Hilton Labonte LLP, Chartered Accountants, Suite 1500 – 1140 West Pender Street, Vancouver BC, Canada V6E 4G1, as expert in Canadian and US accounting and auditing matters and Canadian income tax matters; and

10.8 Documents on Display

You may review a copy of our filings with the SEC, including exhibits and schedules filed with it, at the SEC's public reference facilities at 100 F Street NE, Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC maintains a Web site (HTTP://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. We have made our filings with the SEC electronically as a reporting foreign issuer.

ITEM 11. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial statements due to adverse changes in financial market prices and rates, including credit, foreign exchange, interest rates and liquidity.

We are engaged primarily in the mineral exploration business and manage related industry risk directly. We are potentially at risk for environmental reclamation and fluctuations in commodity-based market prices associated with resource property interests. We are of the opinion that we address environmental risk and compliance in accordance with industry standards and specific project environmental requirements. There is no certainty that all environmental risks and contingencies have been addressed.

We are also exposed in varying degrees to a variety of financial instrument related risks as follows:

(i)	Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Our primary exposure to credit risk is in our cash accounts. This risk is managed through the use of a major financial institution which has high credit quality as determined by the rating agencies.

(ii)	Foreign exchange risk is the risk that we will be subject to foreign currency fluctuations in satisfying obligations related to its foreign activities. We operate primarily in Canada and therefore are not exposed to foreign exchange risk arising from transactions denominated in a foreign currency.

(iii)	Interest rate risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because of changes in market interest rate. Our exposure to interest rate risk relates to our ability to earn interest income on cash balances at variable rates. The fair value of our cash account is relatively small and unaffected by changes in short term interest rates.

(iv)	Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. Our objective in managing liquidity risk is to maintain sufficient readily available capital in order to meet our liquidity requirements.

ITEM 12. Descriptions of Securities Other than Equity Securities

12.1 Warrants

Refer to Item 10.2 (ii) above.

12.2 Stock Options

Refer to Item 10.2 (iii) above.

PART II

ITEM 13. Defaults, Dividend Arrearages and Delinquencies

None

ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None

ITEM 15. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this annual report, being January 31, 2010, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our company’s management, including our company’s Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our company’s Chief Executive Officer and our Chief Financial Officer concluded that our company’s disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no changes in our company’s internal controls over financial reporting during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our Chief Executive Officer and our Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in Canada. A reconciliation of all material differences between Canadian and US GAAP has been disclosed in Note 11 to our audited financial statements.

Management conducted an assessment of the effectiveness of our Company’s internal control over financial reporting as of May 29, 2010, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of May 29, 2010 was effective.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in Canada; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisitions, use, or disposition of our Company’s assets that could have a material affect on our Company’s financial statements are prevented or detected on a timely basis.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ITEM 16A. Audit Committee Financial Expert

Audit Committee

Linda Smith and Darcy Krell act as our audit committee; undertake reviews of our company’s financial statements; and determine the adequacy of internal controls and other financial reporting matters. The members of our board of directors are Linda Smith, Darcy Krell and Shannon Krell and they have determined that no member of either the board or the audit committee is “independent” as the term is used in Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the definition of independent director as defined in section 4200 of the Marketplace Rules of the NASD.

Audit Committee Financial Expert

Our board of directors has determined that it does not have a member that qualifies as an “audit committee financial expert” as defined in Item 401(e) of Regulation S-B. We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any revenues to date.

ITEM 16B. Code of Ethics

Our board of directors has adopted a Code of Business Conduct and Ethics that applies to, among other persons, members of our board of directors, our company’s officers including President , Chief Financial Officer, contractors, consultants and advisors. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

(1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;

(3) compliance with applicable governmental laws, rules and regulations;

(4) the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and

(5) accountability for adherence to the Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other things, that all of our company’s personnel shall be accorded full access to our president with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of our company’s personnel are to be accorded full access to our company’s board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by our company officers.

In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our company’s President. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the President, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our Code of Business Conduct and Ethics by another.

ITEM 16C. Principal Accountant Fees and Services

During the years ended January 31, 2010 and 2009, we incurred $14,000 per year in fees to its principal independent accountant for professional services rendered in connection with the audits of our year end financial statements, our annual report filed on Form 20-F, and our corporate income tax returns.

During fiscal years ended January 31, 2010 and 2009, we did not incur any fees for professional services rendered by our principal independent accountant for any of the following:

(i) information technology services including, but not limited to, operating or supervising or managing our information or local area network or designing or implementing a hardware or software system that aggregate source data underlying the financial statements.

(ii) other non-assurance services including, but not limited to, actuarial services or valuation services.

ITEM 16D. Exemptions from the Listing Standards for Audit Committees

Not Applicable

ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not Applicable

ITEM 16F. Change in Registrant’s Certifying Accountant

Not Applicable

ITEM 16G. Corporate Governance

Not applicable.

PART III

ITEM 17. Financial Statements

Our financial statements for the year ended January 31, 2010 and 2009 were audited by Dale Matheson Carr-Hilton Labonte, Chartered Accountants, and for the year ended January 31, 2008 were audited by Morgan & Company, Chartered Accountants, all without reservation, as follows:

	Audit report dated May 18, 2010
	Balance sheets as at January 31, 2010 and 2009
	Statements for the years ended January 31, 2010, 2009 and 2008
		Operations, Comprehensive Loss and Deficit
		Cash Flows
	Notes to financial statements for the years ended January 31, 2010 and 2009

All our financial statements are prepared in accordance with Canadian GAAP and are reconciled to US GAAP in Note 11 of the audited financial statements. All figures are expressed in Canadian dollars.

ITEM 18. Exhibits

The unmarked exhibits below are attached to this report.

	Exhibit 1:	Audited financial Statements (May 18, 2010)
	Exhibit 2:	Certificate of Incorporation*
	Exhibit 3:	Memorandum and Articles of Association*
	Exhibit 3A:	Notice of Alteration of Articles of Association (Feb 25, 2008)**
	Exhibit 3B:	Certificate of name change ( March 6, 2008)**

	Exhibit 4:	Management agreement dated November 1, 2000 between Gemstar Resources Ltd. and Darcy Krell doing business as DK Financial Consultants.*
	Exhibit 4B:	Amended management agreement dated May 1, 2008 between Rouge Resources Ltd. and Darcy Krell doing business as DK Financial Consultants. **
	Exhibit 5:	Consent of Geologist*
	Exhibit 6:	Mineral Property Option Agreement dated April 20, 2010 between 3 optioners (Brian Fowler, Patrick Dick and Harold Griggs) and Darcy Krell (in trust for the Company)
	Exhibit 12.1:	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 12.2:	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 13.1:	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	Exhibit 13.2:	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Previously filed with Form 20-F on September 16, 2003
** Previously filed with Form 20-F on June 10, 2009

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	ROUGE RESOURCES LTD.

Dated: June 18, 2010
	By:	/s/ Linda Smith
		Linda Smith,
		President and Chief Executive Officer