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Volkswagen 20-F 2010
Golden Goliath Form 20-F Annual Report



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


FORM 20-F/A

Amendment No. 1



[  ]

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

Fiscal Year Ended August 31, 2009


OR

[  ]

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

For the transition period from __________ to ________


OR

[  ]

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



Commission file number 000-31204


Golden Goliath Resources Ltd.

(Exact name of Registrant as specified in its charter)


British Columbia, Canada

(Jurisdiction of incorporation or organization)


675 West Hastings Street, #711, Vancouver, British Columbia  Canada  V6B 1N2

(Address of principal executive offices)


J. Paul Sorbara:: 604-682-2950; jps@goldengoliath.com; 675 West Hastings St. #711, Vancouver, BC  V6B 1N2

(Name, Telephone, E-mail and/or Facsimile and Address of Company Contact Person)


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


Securities 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


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.

60,934,037 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 [  ]

No [X]


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 [  ]

No [X]


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 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 ninety days

Yes [X]

No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer:

(Check one)   Large accelerated filer [ ]      Accelerated filer [ ]

Non-accelerated filer [X]


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

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

Other [X]


If “Other” has been checked in response to the 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 [  ]

No [X]



Page 1 of 97

Index to Exhibits on Page 65






GOLDEN GOLIATH RESOURCES LTD.


FORM 20-F ANNUAL REPORT

AUGUST 31, 2009


TABLE OF CONTENTS



Part I

 

Page

 

Introduction

3

Item 1

Identity of Directors, Senior Management and Advisors

4

Item 2

Offer Statistics and Expected Timetable

4

Item 3

Key Information

4

Item 4

Information on the Company

11

Item 5

Operating and Financial Review and Prospects

37

Item 6

Directors, Senior Management and Employees

43

Item 7

Major Shareholders and Related Party Transactions

55

Item 8

Financial Information

57

Item 9

The Offer and Listing

57

Item 10

Additional Information

59

Item 11

Quantitative and Qualitative Disclosures About Market Risk

61

Item 12

Description of Securities Other Than Equity Securities

61

   

Part II

  

Item 13

Defaults, Dividend Arrearages and Delinquencies

61

Item 14

Material Modifications to the Rights of Security Holders and Use of Proceeds

61

Item 15

Controls and Procedures

61

Item 16

Reserved

64

Item 16A

Audit Committee Financial Expert

64

Item 16B

Code of Ethics

64

Item 16C

Principal Accountant Fees and Services

64

Item 16D

Exemptions from the Listing Standards for Audit Committee

64

Item 16E

Purchases of Equity Securities by the Company and Affiliated Purchasers

64

Item 16F

Change in Registrant’s Certifying Accountant

64

Item 16G

Corporate Governance

64

   

Part III

  

Item 17

Financial Statements

65

Item 18

Financial Statements

65

Item 19

Exhibits

65




2





INTRODUCTION

Golden Goliath Resources Ltd. is organized under the British Columbia Business Corporations Act.  In this Annual Report, the “Company”, “Golden Goliath”, “we”, “our” and “us” refer to Golden Goliath Resources Ltd. and its subsidiaries (unless the context otherwise requires).  We refer you to the actual corporate documents for more complete information than may be contained in this Annual Report.  Our principal corporate offices are located at 675 West Hastings Street, #711, Vancouver, British Columbia, Canada  V6B 1N2.  Our telephone number is 604-682-2950.


We file reports and other information with the Securities and Exchange Commission located at 100 F Street NE, Washington, D.C. 20549; you may obtain copies of our filings with the SEC by accessing their website located at www.sec.gov.  Further, we file reports under Canadian regulatory requirements on SEDAR; you may access our reports filed on SEDAR by accessing their website at www.sedar.com.  Finally, corporate information may be found at the Company’s website: goldengoliath.com.


BUSINESS OF GOLDEN GOLIATH RESOURCES LTD.

Golden Goliath Resources Ltd. is principally a mineral company engaged in the acquisition and exploration of mineral properties.


There are no known proven reserves of minerals on Golden Goliath’s properties.  The Company does not have any commercially producing mines or sites, nor is the Company in the process of developing any commercial mines or sites.  The Company has not reported any revenue from operations since incorporation.  As such, the Company is defined as an “exploration-stage company”.  The Company is well capitalized with $712,378 in working capital at 8/31/2009 (supplemented by a $3,750,000 private placement announced in December 2009) to fund the current exploration program, estimated at $2.0 million for Fiscal 2010.


FINANCIAL AND OTHER INFORMATION

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).


FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains forward-looking statements.


Forward-looking statements and information can generally be identified by the use of forward-looking terminology or words, such as, “predict”, “designed”, “potential”, “promote”, “become”, “developing”, “vision”, “plans”, “expects”, “anticipates”, “believes”, “intends”, “conducting” “estimates”, “to be”, “being”, “projects”, “hopefully”, “possibly”, “develop”, “contemplated”, “hypothesizes”, “pursue”, “likely”, “future”, “2008”, “opportunities”, “going forward”, “next”, and similar expressions or variations thereon, or statements that events, conditions or results “can”, “might” “will”, “shall”, “may”, “must” “would”, “could”, or “should” occur or be achieved and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends.  Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.  Actual outcomes and results may differ materially from these expectations/assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors.  We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise.  These factors include, but are not limited to, the fact that the Company is early in its development and will need additional financing to develop its products, which factors are set forth in more detail in the sections entitled “Risk Factors” in Item #3D, “Business Overview” in ITEM #4B, and “Operating and Financial Review and Prospects” at ITEM #5.



3





PART I


ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

         --- Not Applicable ---


ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.

         --- No Disclosure Necessary ---



ITEM 3.  KEY INFORMATION.


3.A.1.  Selected Financial Data

3.A.2.  Selected Financial Data

The selected financial data of the Company for Fiscal 2009/2008/2007 ended August 31st was derived from the consolidated financial statements of the Company that were audited by Morgan & Company, independent Chartered Accountants, as indicated in their audit report which is included elsewhere in this Annual Report.


The Company’s consolidated financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the consolidated financial statements.


The consolidated financial statements are the responsibility of the Company’s management.  The auditor’s responsibility is to express an opinion on the consolidated financial statements based on their audit.


The auditor’s conducted their audits in accordance with United States and Canadian generally accepted auditing standards, and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  The auditor’s report states that they believe that their audits provided a reasonable basis for their opinion.


The selected financial data should be read in conjunction with the consolidated financial statements and other financial information included elsewhere in the Annual Report.


The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.



4






Table No. 1

Selected Financial Data


 

       Year

       Year

       Year

       Year

       Year

 

      Ended

      Ended

      Ended

      Ended

      Ended

 

  8/31/2009

  8/31/2008

  8/31/2007

  8/31/2006

  8/31/2005

Canadian GAAP

     

Sales Revenue

         $0

         $0

         $0

         $0

         $0

Operating Income (Loss)

  ($760,523)

  ($821,077)

($1,035,556)

($1,136,374)

($1,072,936)

Net Income (Loss)

($2,196,183)

  ($821,077)

($1,035,556)

($1,136,374)

($1,072,936)

Basic/Diluted (Loss) Per Share

     ($0.04)

     ($0.01)

     ($0.02)

     ($0.03)

     ($0.03)

Dividends Per Share

         $0

         $0

         $0

         $0

         $0

Weighted Avg. Shares O/S

 60,934,037

 60,875,845

 49,092,397

 39,937,319

 37,242,902

Period-End Shares O/S

 60,934,037

 60,934,037

 60,754,037

 42,283,561

 37,246,311

Working Capital

   $712,378

 $2,427,739

 $7,058,037

 $1,677,930

 $1,068,911

Mineral Property Interests

 $7,342,303

 $7,784,381

 $3,763,023

 $2,973,452

 $2,306,953

Long-Term Obligations

    $26,000

    $46,000

    $37,000

         $0

         $0

Shareholder’s Equity

 $8,156,342

$10,295,018

$10,948,315

 $4,738,854

 $3,421,196

Total Assets

 $8,222,221

$10,795,721

$11,249,718

 $4,661,003

 $3,462,681

US GAAP

     

Net Income (Loss)(1)

($1,717,619)

($4,858,895)

($1,787,253)

($1,782,239)

($1,034,276)

Net Income (Loss) Per Share

     ($0.03)

     ($0.08)

     ($0.04)

     ($0.04)

     ($0.03)

Mineral Property Interests

         $0

         $0

         $0

         $0

 

Shareholders’ Equity

   $814,039

 $2,510,637

 $7,185,292

 $1,687,551

 

Total Assets

   $879,918

 $3,011,340

 $7,486,695

 $1,765,402

 
      

(1) Cumulative Net Loss to 8/31/2009 under USGAAP was ($19,888,928).

   (2) Certain of the comparative figures have been reclassified to conform to the current year’s presentation



3.A.3.  Exchange Rates

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).


The following table sets forth the rate of exchange for the Canadian Dollar at the end of the five most recent fiscal periods ended August 31st, the average rates for the period, and the range of high and low rates for the period.  The data for each month during the previous six months are also provided.


For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.


Table No. 2

U.S. Dollar/Canadian Dollar

 
 

Average

High

Low

Close

December 2009

 

1.07

1.04

1.05

November 2009

 

1.08

1.05

1.06

October 2009

 

1.08

1.03

1.08

September 2009

 

1.11

1.06

1.07

August 2009

 

1.10

1.07

1.10

Fiscal Year Ended 8/31/2009

1.18

1.30

1.03

1.08

Fiscal Year Ended 8/31/2008

1.00

1.07

0.92

1.06

Fiscal Year Ended 8/31/2007

1.17

1.19

1.04

1.06

Fiscal Year Ended 8/31/2006

1.15

1.20

1.10

1.12

Fiscal Year Ended 8/31/2005

1.23

1.31

1.18

1.19



3.B.  Capitalization and Indebtedness

      --- Not Applicable ---


3.C.  Reasons For The Offer And Use Of Proceeds

      --- No Disclosure Necessary ---



6





3.D.  RISK FACTORS

In addition to the other information presented in this Annual Report, the following should be considered carefully in evaluating the Company and its business.  This Annual Report contains forward-looking statements that involve risks and uncertainties.  The Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed below and elsewhere in this Annual Report.


Risks Pertaining to Golden Goliath

Cumulative Unsuccessful Exploration Efforts By Golden Goliath Personnel Could Result In the Company Having to Cease Operations:

The expenditures to be made by Golden Goliath in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and this occurrence could ultimately result in Golden Goliath having to cease operations. Management feels that if exploration efforts were unsuccessful for a period of ten years, the Company would cease operations. If that were the case, investors would lose their entire investment in the Company.

Golden Goliath Has No Reserves on the Properties in Which It Has an Interest and If Reserves Are Not Defined the Company Could Have to Cease Operations:

The properties in which Golden Goliath has an interest or the concessions in which Golden Goliath has the right to earn an interest are in the exploratory stage only and are without a known body of ore.  If Golden Goliath does not ultimately find a body of ore, it would have to cease operations. As stated above, management believes that if reserves were not defined on any of the properties on which Golden Goliath has an interest after a period of ten years, the Company would cease operations.  If that were the case, investors would lose their entire investment in the Company.

Golden Goliath Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations. Public distributions of capital result in dilution to existing shareholders:

None of Golden Goliath’s properties have advanced to the commercial production stage and Golden Goliath has no history of earnings or positive cash flow from operations.  Golden Goliath does not know if it will ever generate material revenue from mining operations or if it will ever achieve self-sustaining commercial mining operations. Historically, the only source of funds available to Golden Goliath has been through the sale of its common shares.  Any future additional equity financing would cause dilution to current stockholders.


As of 12/31/2009, Golden Goliath currently had 4,955,000 share purchase options outstanding and no share purchase warrants outstanding.  If all of the share purchase warrants and share purchase options were exercised, the number of common shares issued and outstanding would increase from 60,934,037 (as of 12/31/2009) to 65,889,037.  This represents a potential increase of 8.1% in the number of shares issued and outstanding and would result in dilution to current shareholders.



7




Dilution Through Employee/Director/Consultant Options Could Adversely Affect Golden Goliath’s Stockholders

Because the success of Golden Goliath is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted.  At 12/31/2009, there are currently 4,955,000 share purchase options outstanding, which, if exercised, would result in an additional 4,995,000 common shares being issued and outstanding.  (For a breakdown of dilution, refer to the risk factor entitled: “Golden Goliath Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations.  Public distributions of capital will result in dilution to existing shareholders”).

The Amount of Capital Necessary to Meet All Environmental Regulations Associated with the Exploration Programs of Golden Goliath Could Be In An Amount Great Enough to Force Golden Goliath to Cease Operations:

The current and anticipated future operations of Golden Goliath, including further exploration activities require permits from various Federal and State governmental authorities in Mexico.  Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.


Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in resource exploration may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.


Large increases in capital expenditures resulting from any of the above factors could force Golden Goliath to cease operations.  If that were the case, investors would lose their entire investment in the Company.

The Risks Associated with Penny Stock Classification Could Affect the Marketability of the Common Stock of Golden Goliath and Shareholders Could Find It Difficult to Sell Their Stock:

Golden Goliath’s stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3a51-1.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Golden Goliath’s common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than US$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).



8





The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.


In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Company’s common shares in the United States and shareholders may find it more difficult to sell their shares.

Golden Goliath is Dependent on Key Personnel and the Absence of Any of These Individuals Could Result in the Company Having to Cease Operations:

While engaged in the business of exploring mineral properties, the nature of Golden Goliath’s business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel.  Competition for such personnel is intense and the Company may not be able to attract and retain such personnel.  Golden Goliath’s growth will depend, on the efforts of its Senior Management, particularly its: President/Director, J. Paul Sorbara; its CFO/Corporate Secretary, Stephen Pearce; Daniel Fermandez, a Director and Manager of a wholly-owned subsidiary, Minera Delta S.A. de C.V.

U.S. Investors May Not Be Able to Enforce Their Civil Liabilities Against Us or Our Directors, Controlling Persons and Officers:

It may be difficult to bring and enforce suits against Golden Goliath.  Golden Goliath is a corporation incorporated in the province of British Columbia under the British Columbia Business Corporations Act.  A substantial portion of Golden Goliath’s assets are located outside of the United States, predominately in Mexico and Canada.  As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them.  In addition, a shareholder should not assume that the courts of Canada, (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.


However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided that they are in compliance with applicable Canadian legislation regarding the limitation of actions.  Also, a Canadian court would generally recognize a judgment obtained in a U.S. Court except, for example:



9





a)

where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law;

b)

the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state;

c)

the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure;

d)

a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court;

e)

the outcome of the judgment of the U.S. court was inconsistent with Canadian public policy;

f)

the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or

g)

there has not been compliance with applicable Canadian law dealing with the limitation of actions.

As a “foreign private issuer”, Golden Goliath is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act. This could result in shareholders having less complete and timely Data

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result in shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.


Risks Pertaining to the Industry

Mineral Prices May Not Support Corporate Profit for Golden Goliath:

The resource exploration industry is intensely competitive and even if commercial quantities of mineral resources are developed (which is not guaranteed), a profitable market may not exist for the sale.  If a profitable market does not exist, Golden Goliath could have to cease operations.

Operating Hazards and Risks Associated with the Exploration-stage Mining Industry Could Result in Golden Goliath Having to Cease Operations:

Resource exploration activities generally involve a high degree of risk.  Hazards such as unusual or unexpected formations and other conditions are involved.  Operations in which Golden Goliath has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration for precious and base metals, any of which could result in work stoppages, damage to or destruction of exploration facilities, damage to life and property, environmental damage and legal liability for any or all damage.  Golden Goliath may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks.  The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force Golden Goliath to cease operations.



10





ITEM 4.  INFORMATION ON THE COMPANY


4.A. History and Progress of the Company


Introduction

Golden Goliath ’s executive office is located at:

Suite 711, 675 West Hastings Street

Vancouver, British Columbia, Canada  V6B 1N2

Telephone: 604-682-2950

Facsimile: 604-685-3764

Website: www.goldengoliath.com

Email: jps@goldengoliath.com


The contact person is: Mr. J. Paul Sorbara, President/Director.


Golden Goliath’s fiscal year ends August 31st.


Golden Goliath’s common shares trade on the TSX Venture Exchange under the symbol: “GNG”.  The common shares also trade in Europe on the Berlin Stock Exchange, the Frankfurt Stock Exchange, the Munich Stock Exchange, and the XETRA Exchange.


The authorized capital of Golden Goliath consists of an unlimited number of common shares without par value. At 8/31/2009, the end of the most recent fiscal year, there were 60,934,037 common shares issued and outstanding; and at 12/31/2009 there were 60,934,037 common shares issued and outstanding.


In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).


Incorporation and Name Changes

The Company was incorporated in British Columbia under the Company Act (British Columbia) on 6/12/1996 by Certificate of Incorporation under the name 521858 B.C. Ltd. and was granted a certificate of change of name on 9/10/1998 under the name of Golden Goliath Resources Ltd.


Subsidiaries

The Company has two wholly-owned subsidiaries:

a.  Minera Delta SA de CV; incorporated in Mexico on 7/17/1992; and

b.  4347 Investments Ltd.; incorporated in British Columbia on 2/3/1999.


Financings

The Company has financed its operations through funds raised public/private placements of common shares.  Also shares have been issued upon exercise of options and warrants; and as agent commissions.  Refer to ITEM #10.A.6 for additional information.


Fiscal Year

Nature of Share Issuance

Number of Securities

Net Amount

Fiscal 2010

Private Placement of Units (1)

12,641,466

$1,896,220

Fiscal 2009

None

  

Fiscal 2008

Exercise of Stock Options

180,000

$45,000

Fiscal 2007

Private Placement of Units

16,618,000

$6,647,200

(1)Financing announced in December 2009 for 25,000,000 units at a price of $0.15 per unit.  Golden Goliath has as of the date hereof completed the sale of 12,641,466 units.



11





Capital Expenditures


Fiscal Year

Capital Expenditures

Purpose

Fiscal 2009

$1,365,900

Mineral Property Expenditures

Fiscal 2009

$0

Property Exploration Advances

Fiscal 2009

$22,247

Purchase of Capital Assets

Fiscal 2008

$3,566,852

Mineral Property Expenditures

Fiscal 2008

$0

Property Exploration Advances

Fiscal 2008

$54,314

Purchase of Capital Assets

Fiscal 2007

$579,748

Mineral Property Expenditures

Fiscal 2007

$90,146

Property Exploration Advances

Fiscal 2007

$34,141

Purchase of Capital Assets



Plan Of Operations


Source of Funds for Fiscal 2010 Ending 8/31/2010

The Company’s primary source of funds since incorporation has been through the issuance of equity.  As of 8/31/2009, the Company had working capital of $712,378; supplemented by a $3,750,000 private placement announced in December 2009.


Use of Funds for Fiscal 2010 Ending 8/31/2010

During Fiscal 2010, the Company estimates that it might expend approximately $0.7 million on general/administrative, investor-relations expenses, etc.  During Fiscal 2010, the Company estimates that it might expend approximately $2.0 million on property exploration/development.


Anticipated Changes to Facilities/Employees

The Company has no current plans to add any additional personnel.  Management anticipates that any additional property exploration efforts will be carried out by outside contractors.



United States vs. Foreign Sales

The Company has recorded no sales since incorporation.


At 8/31/2009, $7,506,218 in assets were located in Mexico, primarily mineral properties and $716,003 in assets were located in Canada, primarily current assets.


At 8/31/2008, $8,031,503 in assets were located in Mexico, primarily mineral properties and $2,764,218 in assets were located in Canada, primarily current assets.



12





4.B.  BUSINESS OVERVIEW


Corporate Overview

Golden Goliath Resources Ltd. is a junior exploration company listed on the TSX Venture Exchange (symbol GNG).  The Company is focused on exploring and developing the gold and silver potential of an historic mining camp located in the Sierra Madre Occidental Mountains of northwestern Mexico.  The Uruachic mining camp lies directly in the center of the several-hundred-kilometer trend of important past producers and new discoveries that characterize the Sierra Madre Occidental.  Uniquely, Golden Goliath controls an entire old mining camp, or district, that covers an area of 15-kilometers by 25-kilometers, with numerous past-producing gold and silver mines dating back to the time of the Spaniards.  Golden Goliath’s Uruachic claims are owned 100% by the Company and are fully paid for with no property option or purchase payments to make.


Golden Goliath also owns two other significant properties outside of the Uruachic Camp.


One of these is a silver property called La Cruz, which is located on the eastern edge of the Sierra Madre Belt.   La Cruz has several old mine workings and extensive old dumps, attesting to considerable past production.  However the property has been inactive for at least 75 years and there are no available records of production or previous exploration drilling.  La Cruz gained the attention of well-known international silver producer, Pan American Silver, and in September 2007, Golden Goliath signed an Option and Joint Venture Agreement with Pan American’s Mexican subsidiary.  Under the terms of the option agreement, Pan American Silver Corp’s Mexican subsidiary, Minera Corner Bay S.A. de C.V., has the right to earn a 60% interest in La Cruz by making cash payments totaling US$300,000 and spending US$450,000 on the property over a period of three years.  The property will consist of: the Company’s La Cruz property; additional ground staked around the La Cruz property; and the La Cruzada property for which Pan American’s subsidiary already has an option.  Golden Goliath will be responsible for 25% of the costs associated with La Cruzada.  Upon Minera Corner Bay exercising its option, a 60/40 joint venture would proceed on the La Cruz and newly staked grounds, with Pan American having the right to earn an additional 15% by completing a feasibility study.  This option was terminated after an initial drill program conducted by Corner Bay.


The other exploration property that Golden Goliath owns is called Chamizal.  This property differs from the others in that it is a lead, zinc, silver target and it lies outside of the Sierra Madre in central Chihuahua State.  This region hosts two lead, zinc, silver mines called Santa Eulalia and Naica.  Together these two deposits have produced 60 million tonnes of ore grading 15% combined lead-zinc and 150 grams silver per tonne.  The Chamizal Property is hosted in the same geological formation as the Santa Eulalia and Naica and also has the same style of alteration.  Chamizal also has old workings that were used to produce lead, zinc and silver, and as in Uruachic, these workings have never been drilled.”



13





Figure No. 1

Mineral Property Location Map


[gg20fannual2009amend1001.jpg]


In May 2007, Golden Goliath entered into an option agreement with Comstock Capital Corp. on Golden Goliath’s Corona and Chamizal properties.  Under the terms of the agreement Comstock Capital has the right to earn a 60% interest in the properties.  To exercise the El Chamizal Option, Comstock Capital shall spend $200,000 in work expenditures on the El Chamizal Property over a period of three years or less and also issue a total of 150,000 of its shares to Golden Goliath once that company goes public over three years: 25,000 shares to be issued on listing on a stock exchange; 50,000 shares on the date which is 12 months after the date of listing; and 75,000 shares on the date which is 24 months after listing.  Once Comstock Capital has earned its interest a joint venture will be formed.



14





Expenditures on the Company’s properties for the 2009 and 2008 fiscal years are detailed below:


 

SAN TIMOEO

ORO LEON

NUEVA UNION

LA REFORMA

CORONOA

OTEROS

LA ESPERANZA

BUFALO

LA HERMOSA

LA BARRANCA

BECK

EL CHAMIZAL

LOS HILOS

LAS BOLAS

EL MANTO

DON LAZARO

AMPLIACION

LA VERDE

NOPALERA

FLOR DEL

TRIGO

EL CARNARC

LA CRUZ

TOTAL FY2009

TOTAL FY2008

Acquisition costs

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

  


     




Exploration costs






  




Assaying

$   58,255

$nil

$nil

$nil

$nil

$nil

$ 94,154

$nil

$  152,409

$  382,773

Drilling

Nil

$nil

$nil

$nil

$nil

$nil

434,750

$nil

434,750

2,750,769

Geology and mapping

12,534

350

$nil

$nil

$nil

$nil

79,580

$nil

92,464

267,914

Property taxes and passage rights

2,288

591

10,233

$nil

2,214

16,068

4,340

12,091

47,825

58,938

Salaries

Nil

11

$nil

$nil

$nil

$nil

238

$nil

249

78,808

Travel

6,629

8,078

$nil

$nil

$nil

509

16,257

8

31,481

11,688

Road construction and site preparation

6,041

$nil

5,832

$nil

$nil

$nil

29,355

$nil

41,228

198,084

Facilities and other

17,246

22,566

$nil

$nil

$nil

10,823

140,052

2,488

193,175

272,384

Current costs

$102,993

$31,596

$16,065

$nil

$2,214

$27,400

$798,726

$14,587

$993,581

$4,021,358

Write-Down

$nil

$nil

($1,435,660)

$nil

$nil

$nil

  

$(1,435,660)

 

Balance,

beginning of year

$3,441,092

$111,893

$1,494,594

$35,473

$11,675

$36,337

$2,300,379

$352,938

$7,784,382

3,763,023

Balance, end of year

$3,544,085

$143,489

$75,000

$35,473

$13,889

$63,737

$3,099,105

$367,525

$7,342,303

$7,784,381

           

Costs summary

          

Acquisition

$   69,257

nil

$75,000

nil

Nil

nil

$  187,123

$  3,393

$  334,773

$  334,773

Exploration

$3,474,828

$143,489

nil

$35,473

$13,889

$63,737

$2,911,982

$364,132

$7,007,530

$7,449,608


 

SAN TIMOEO

ORO LEON

NUEVA UNION

LA REFORMA

CORONOA

OTEROS

LA ESPERANZA

BUFALO

LA HERMOSA

LA BARRANCA

BECK

EL CHAMIZAL

LOS HILOS

LAS BOLAS

EL MANTO

DON LAZARO

AMPLIACION

LA VERDE

NOPALERA

FLOR DEL

TRIGO

EL CARNARC

LA CRUZ

TOTAL FY2008

TOTAL FY2007

Acquisition costs

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

$nil

  


     




Exploration costs






  




Assaying

$  274,301

$nil

$ 70,051

$nil

$nil

$nil

$ 38,421

$nil

$  382,773

$ 55,894

Drilling

1,540,075

nil

761,226

nil

nil

nil

449,468

nil

2,750,769

350,150

Geology and mapping

117,204

221

43,850

nil

nil

nil

106,639

nil

267,914

89,548

Property taxes and passage rights

4,911

577

11,163

6,693

2,186

12,998

5,862

14,548

58,938


48,639

Salaries

22,614

12,276

32,370

nil

nil

139

11,409

nil

78,808

52.171

Travel

1,720

2,727

4,058

nil

nil

nil

3,183

nil

11,688

6,740

Road construction and site preparation

74,269

11,673

38,500

nil

nil

nil

73,642

nil

198,084


85,455

Facilities and other

53,364

29,028

47,570

nil

nil

1

142,421

nil

272,384

100,974

Current costs

$2,088,458

$ 56,502

$1,008,788

$6,693

$2,186

$13,138

$831,045

$14,548

$4,021,358

$  789,571

Balance,

beginning of year

1,352,634

55,391

485,806

28,780

9,489

23,199

1,469,334

338,390

3,763,023


2,973,452

Balance, end of year

$3,441,092

$111,893

$1,494,594

$35,473

$11,675

$36,337

$2,300,379

$352,938

$7,784,381

$3,763,023

          


Costs summary

         


Acquisition

$   69,257

nil

$   75,000

nil

nil

nil

$  187,123

$  3,393

$  334,773

$  334,773

Exploration

$3,371,835

$111,893

$1,419,594

$35,473

$11,675

$36,337

$2,113,256

$349,545

$7,449,608

$3,428,250



15





Fiscal 2009 Property Acquisition and Exploration


First Quarter:  During the quarter ended 11/30/2008, the Company ended its exploratory diamond-drilling program on some of its Uruachic area properties.  Data compilation and surface work, including mapping and sampling continued through the end of the quarter.


During the Company’s first fiscal quarter, the exploratory diamond drilling program on the San Timoteo and Las Bolas properties was concluded.  The last holes in the San Timoteo area were completed in late September 2008 and at Las Bolas the last hole was completed in mid October 2008.  More work, including additional drilling, is needed in both areas.  The Company believes it has sufficient data to start on a mineral inventory.


San Timoteo Property.  The last drill holes on the San Timoteo property were drilled in the Sucursal area, which lies several hundred meters north of the old San Martin tunnel.  Very encouraging values were obtained from these holes and follow up drilling is definitely warranted.


The Company also searched for an electric underground drill for the holes that are required within the San Martin tunnel itself.  These holes will trace and further define several distinct high-grade silver and gold zones within the tunnel itself identified by continuous chip sampling of the walls.  These high-grade shoots are characterized by brecciation and intense alteration.  The extent and overall grade of these zones are important for the purpose on a resource calculation and the origin of them is important for continued exploration.  The zones, which occur at different locations along the length of the tunnel, are very difficult and expensive to drill from surface due to topographic conditions.  The surface is about 175 vertical meters above the tunnel and the steep hillside makes drill pad preparation only possible in certain areas.


In total for the San Timoteo area, the Company drilled 34 drill holes totaling 8,588 meters, targeting the San Timoteo claim itself, the area around the San Martin Tunnel, Sucursal and a geophysical chargeability anomaly.



Las Bolas Property.  At Las Bolas, the Company’s 2008 diamond drill program had three primary targets: a) manto structures (on the western side of the one-kilometer-square exploration area, around the old El Manto tunnel); b) high grade silver bearing iron oxides and manganese clay structures (in the central area including the old Las Bolas and Gambusino mine tunnels); and c) the Frijolar structure (in the southern part of the area including the Frijolar tunnel.


In the manto structure target area, twelve diamond drill holes, namely BD-08-03 to BD-08-10 & BD-08-13 to BD-08-16 were drilled to intersect carbonaceous dark lutite manto-like units that have returned high silver and gold grades in some sections.  Other much wider intersections of lower, but still very good, grades were also encountered.


Drill holes BD-08-07 to BDD-08-09 were abandoned prior to reaching the manto level due to drill rods becoming stuck, however BD-08-13 & BD-08-14 did reach the manto target zone and returned anomalous grade assays.  BD-08-15, the northern most drill hole on the manto target, was drilled into an intrusive and hence determines the northern limit of the manto mineralized horizon.



16





From the current drilling program the Company has reached the conclusion that the manto horizon precious and base metal concentrations increase to the west and southwest.  Management will focus future drilling in these directions with the goal of building potentially mineable tonnage.  A surface sample taken to the west over a width of one meter from a manto exposure returned encouraging gold and silver mineralization.


On the high grade Las Bolas - Gambusino front, the Company successfully completed diamond drill hole BD-08-19, which tested the northern extension of the Las Bolas Contrapozo (raise).  Previous sampling of this raise returned encouraging gold/silver mineralization; the overall weighted average of the 127 chip samples taken in this area also was encouraging.  Drill hole BDD-08-20 also returned encouraging gold/silver mineralization.


Due to market conditions, after completing 26 holes in the Las Bolas area the Company decided to suspend the drilling of additional holes and concentrate its efforts on compiling the data already obtained and generating the sections needed in order to attempt a mineral inventory.  The mineral inventory estimation will take place, upon review of the existing data, under the supervision of an independent qualified person and will be conducted pursuant to NI 43-101 standards.  The study will greatly assist the Company in developing its 2009 drill program by defining target areas which can most easily add tonnage to the mineralization.


In total, the Las Bolas Diamond 2008 drilling program consisted of 26 diamond drill holes (3,551 meters).


Other Properties.  During the months of September, October and November, little work was performed by the Company on its other properties.



Second Quarter:  During the quarter ended 2/28/2009, the Company continued its data compilation and surface work and began a comprehensive program of detailed mapping and structural analysis including underground mapping and sampling.


Las Bolas Property.  During the quarter ended February 28, 2009 the Company compiled the final results of the 2008 drilling and initiated a program of large-scale detailed mapping and structural analysis program focusing on the Las Bolas corridor, as well as other parts of the property, in order to begin work on a mineral inventory.  During January and February 2009, Golden Goliath’s technical team started preparing all the necessary data, level plans, cross sections and longitudinal sections for the study.  The study will also greatly assist the Company in developing its 2009 drill program by defining target areas that can most easily add tonnage to the mineralization.  The mineral inventory also requires additional underground sampling and detailed mapping which was initiated during this quarter.  Additional underground drilling of short holes into the walls of the tunnel may also be required and mining consultants have been brought in to assess the requirements that may be needed.


An effort was also launched during this period to open one or more of the other existing old workings on the Las Bolas property.  This includes the Papacho workings which trend towards the Arbolito shaft and areas of higher grade gold mineralization found in the past.  This involves both hand and caterpillar excavation and must proceed slowly for safety concerns as the loosely consolidated material surrounding the entrance to Papacho is unstable.



17





During the month of January a new zone with the potential of hosting more Las Bolas style mineralization was identified about 500 meters north of the main Las Bolas underground workings.  The host rock, andesitic breccia, and mineralization found in the new area, called Las Bolas II, are considered to be identical to the Las Bolas-Gambusino area and has been mapped to date over a 300-meter length and is open in two directions.  Preliminary grab samples of the mineralized structures returned encouraging assays of gold and silver mineralization.


San Timoteo Property.  During the quarter ended 2/28/2009, the Company also compiled the final drilling results from the San Timoteo area.  The Company would like to commence a mineral inventory of this area following the work being done at Las Bolas.  Consultants have been retained to access the safety and physical conditions within the San Martin tunnel.  Underground drilling within this tunnel will be required in order to determine the extent of the high grade gold and silver zones identified within the tunnel that could not be efficiently targeted from surface.


Other Properties.  During the months of December 2008, January 2009 and February 2009, little work was performed by the Company on its other properties.



Third Quarter:  During the quarter ended 5/31/2009, the Company continued working on its Las Bolas property.  Underground sampling and mapping in the Las Bolas tunnel focused on two main areas, Stations 19 and 37, but work also included sampling from the furthest reaches of the tunnel.  The highest grades of gold ever recorded in the Uruachic camp, over 50 gms/tonne, were returned from Station 19 and Station 37 stopes.  Silver grades were very encouraging.


The assay results were not repeats of previous chip samples but comprise new information.  The assay results show the presence of high grade silver and gold mineralization not only in the structures, but in the hanging-wall and footwall as well.  These values demonstrate substantial mining widths.  The main portion of Station 19 covers a length of approximately 45 meters in the Las Bolas tunnel, approximately 60 meters below the surface, with a parallel zone 11 meters to the north that is exposed for a length of 20 meters.


Station 37 is approximately 200 meters further along the Las Bolas workings than Station 19.  The main portion of Station 19 covers a length of approximately 45 meters in the Las Bolas tunnel, and is approximately 60 meters below the surface.


The recent results from stations 19 and 37, along with reverse circulation drill hole B-04-3, clearly show that this is a substantial zone, over 200 meters long, containing much higher gold values.


This new data will be included in the Company’s preliminary resource calculation already underway.  The detailed mapping in these areas revealed very important structural information that will assist with the targeting of the next round of drilling, which is planned to include both surface and underground drilling.



18





The underground work was augmented with preliminary sampling of old tunnels over 1,000 meters east of the Las Bolas tunnel.  In April 2009, the Company reported the identification of four-old workings located about 1,350 meters northeast of the entrance to the Las Bolas mine tunnel.  These workings have an east-west structural orientation on strike with the dominant mineralization associated in the high-grade areas of the Las Bolas workings.  The alteration zone in this new area is at least 12 meters wide exhibiting structures up to two meters in width in places, with rhyolites coming in contact with conglomerates.  These structures may be part of the Las Bolas-Gambusino mineralized system, which if confirmed, would significantly expand the strike length of this mineralized system.  These new discoveries add significantly to the exploration potential and size of the Las Bolas-Gambusino Gold Silver project, which has already been shown to host high-grade mineralization.   The mineralized structure is hosted in a polymictic conglomerate.  The occurrence of this structure in the polymictic conglomerate will expand the exploration potential, as it was previously believed that the mineralization was hosted in andesite and dacite only.


Other Properties.  During the months of March, April and May 2009, little work was performed by the Company on its other properties.



Fourth Quarter:

During the fourth fiscal quarter, the Company was working on its NI 43-101 technical report and continued underground sampling and mapping at its Las Bolas property as well as surface prospecting and sampling along strike of the known mineralization at Las Bolas.


Las Bolas Property

During Fiscal 2009 the Company ended the drilling program from the previous year on the San Timoteo, La Reforma and Las Bolas properties, but continued extensive underground and surface work on Las Bolas. The drilling ended in November 2008 with encouraging results from San Timoteo and Las Bolas, but with limited success on La Reforma.  Exploration work shifted to underground and surface work on Las Bolas with very encouraging results.


From late 2008 and throughout most of 2009, exploration work was concentrated within the main underground workings of the Las Bolas property, including the Las Bolas tunnel, Frijolar, Providencia, Gambusino and El Corazon.  Very detailed underground mapping and sampling was carried out in these workings resulting in a dramatic improvement in the understanding of the nature and distribution of the mineralization.  This work determined, for example, that the Las Bolas vein actually consists of seven discrete vein structures that are in close proximity to each other, that there are two separate mineralized structures within the Frijolar workings and that there are four separate fracture systems controlling the mineralization.  The detailed sampling returned extremely encouraging results particularly in the Station 37 area in the Las Bolas tunnel.


Surface work and data compilation resulted in the identification of at least eleven mineralized veins or vein systems on the Las Bolas property.  Some of these systems, such as the one on which the Las Bolas tunnel was developed, were found to actually contain numerous closely spaced mineralized veins that increased the potential economic viability of the deposit.


The mineralization was found to fall within three recognized mineral trends that cross the Las Bolas property in a northeast–southwest direction.  These are called the Las Bolas-Gambusino trend, the Frijolar trend and the El Corazon trend.  The strike length of these trends extends for at least 2,500 meters and old workings with known mineralization are present over a vertical interval of 600 meters.  Subsequent work to the west across the Rio Uruachic has uncovered several new showings indicating that the strike length may be closer to 3.000 meters.



19





In May 2009, an independent consultant, Victor Jaramillo P.Geo of Discover Geological Consultants, was retained to write a 43-101 compliant report on the Las Bolas property.  His work, which overlapped with the Company’s underground mapping and sampling, confirmed the distribution of the mineralization.  The author of the report believes that the Las Bolas-Los Hilos Property hosts an early stage mesothermal system of silver-lead-zinc veins followed by a later low sulphidation epithermal gold-silver phase.  Both systems are structurally controlled and confined mainly along fault zones as veins, silica stockworks and breccias.


Mesothermal vein systems are formed at considerable depths (from 600 meters to 1000 meters or more) by hydrothermal processes in a temperature range of 200°C to 300°C.  The presence of dark gray quartz veins, cutting and brecciating the early silver-base metal mesothermal veins or oxide veins may be related to this later epithermal event.  The report proposes the following mineral characterization:

Type-1 mineralization: Ag + Pb + Zn (Au)

Type-2 mineralization: Au + Ag + As (Cu)


It is the opinion of the author of the NI 43-101 report that “at Las Bolas-Los Hilos Property, the possibility for defining considerable more silver and gold mineralization is excellent.”


The report also provided specific recommendations including the development of a new underground cross cut within the Las Bolas workings in order to provide a new clear section across all of the vein structures which will allow further detailed sampling and understanding of the structures.


In Summer 2009, the Company also identified a new mineralized trend on the east side of the Las Bolas property that runs in a near north-south direction, crossing the other three main trends.  The new trend, called Filo do Oro also has old workings and has a higher gold ratio than the most of the mineralization in the workings further west.  This cross cutting trend contains gold/silver veins as well as disseminated mineralization, suggesting good potential for a bulk mineable gold/silver deposit with high grade feeder veins running through it.  Filo de Oro is open in all directions and has a higher gold ratio.


Other Properties

During Fiscal 2009, the Company completed the drilling programs on its La Reforma and San Timoteo properties and then concentrated efforts on Las Bolas. Little work was performed by the Company on its other properties.



20





Fiscal 2008 Property Acquisition and Exploration


First Quarter: During September, October and November 2007, diamond drilling continued on the San Timoteo and La Reforma properties.  For most of this time two drills were working on each property.  Assay results were very slow in coming, and the results of drilling during this period were not available for release until January 2008.  With the drills themselves, there were no technical problems and core recovery was excellent.


The drill holes were collared in topographically high areas above the old San Martin mine on the San Timoteo property.  Drill holes ST-DD-07-4 & 8 were both drilled into the San Martin structure, 173 vertical meters above the main old San Martin Mine tunnel.  The old San Martin Mine ore was mined from a structure that was 800 meters long and 2.2 meters wide.  The San Martin Mine tunnel was developed at the lowest adit level and has not yet been drill tested below that level.  The high grade, near surface intercepts may be related to a larger polymetallic (Pb,Zn,Ag) vein system which displays dilational fissure and subsidiary vein arrays as mineralization controls.  These veins are typically galena-sphalerite dominant and multi-directional.  Metal zonation in polymetallic vein systems may be complicated by repeated activity and telescoping.  Dilatant structural environments may result in telescoping outwards of vein systems to form at considerable distances from intrusion metal sources.  Higher-grade mineralization commonly occurs within shoots along through-going structures.  Some of the deeper drill holes were planned to go under the 150-meter chargeability high and have intersected up to 200-meter-wide zones with sphalerite, galena and other sulphides.  Some of these holes were drilled into a porphyryitic dacite body with disseminated sulphides including galena, sphalerite and chalcopyrite, and others cut andesitic volcanics in contact with the intrusive.  The andesitic rocks include wide sections containing veins of massive galena and sphalerite, with blebs of chalcopyrite.  The system is strengthening with depth.  Drill hole ST-DD-07-10a was drilled to a depth of 505 meters, which was the maximum extent of the available drill rods.  The hole had to be stopped in strengthening mineralization, with polymetallic veins up to a centimeter wide hosted in andesitic volcanics adjacent to an intrusive dacite porphyry.


The Company started on an extension of the existing access road in order to drill from a lower topographic level and thereby continue testing this mineralization.  Additional drill rods have now been obtained by the drilling contractor, allowing for longer holes, over 600 meters.


An IP geophysical survey is planned for February 2008 on the San Timoteo II claim in order to overlap the old data and extend depth penetration in this important area.  The road will be continued to the nearby mouth of the San Martin adit, which will then also allow drilling the down dip extension of that high-grade structure.


The San Martin mine mineralization may be related to the deeper polymetallic system as well as the near surface results in Holes #4 and #8.  The Company believes that a large porphyry-type system may underlie the near surface gold and silver mineralization at San Timoteo.  The intrusive dacitic porphyry is mineralized as are the adjacent volcanic rocks.  Evidence seen in the core indicates that there were several episodes on mineralization and veining.  This porphyry system, which already has a possible strike length of 1,200 meters, has a large tonnage potential.


Drill holes ST-DD-07-10, 10a, 11, 12, 13, 17, 18 have been drilled and sampled.  Drill holes ST-DD-07-01, 02, 03, all of which were short holes, had no significant values to report.  Drill holes ST-DD-05, 07-09, 09B had no significant values to report.



21





On the La Reforma Property a series of shorter holes have tested the north central area of the property known as Pat’s Knob, as well as most of the Dickite Zone, without significant results.  Preliminary drilling of a chargeability-high on the east side of La Reforma Property was underway in Winter 2007 and was yielding core with similar disseminated sulphide mineralization.  This site is about 2.5 kilometers west of the San Timoteo drilling with similar looking mineralization.


During the months of September, October and November, little work was performed by the Company on its other properties.  Comstock Capital started work in November on the Corona property, which it optioned from the Company.  In addition, the Company signed an option agreement on its La Cruz property with Pan American Silver’s Mexican subsidiary in September 2007.



Second Quarter.  The Company has been conducting a program of exploratory   In March 2008, this program was expanded to include the Las Bolas property with most of this drilling taking place in third/fourth fiscal quarters of 2008.


During the months of December, January and February diamond drilling continued on the San Timoteo and La Reforma properties with two drills on San Timoteo and one drill on Reforma.  Assay results were very slow in coming during 2007, and the results of drilling during November 2008 and December 2008 and results were not available for release until January 2008.  In January 2008, the Company switched to a new lab for assays in order to get results more quickly.


The holes on the San Timoteo and La Reforma properties were collared in topographically high areas above the old San Martin mine on the San Timoteo property.  Drill holes ST-DD-07-4 & 8 were both drilled into the San Martin structure, 173 vertical meters above the main San Martin mine tunnel.  The San Martin mine tunnel was developed at the lowest adit level and has not yet been drill tested below that level.


The high grade, near surface intercepts may be related to a larger polymetallic (Pb,Zn,Ag) vein system  which displays dilational fissure and subsidiary vein arrays as mineralization controls.  These veins are typically galena-sphalerite dominant and multi-directional.  Metal zonation in polymetallic vein systems may be complicated by repeated activity and telescoping.  Dilatant structural environments may result in telescoping outwards of vein systems to form at considerable distances from intrusion metal sources.  Higher-grade mineralization commonly occurs within shoots along through-going structures.


Some of the deeper drill holes were planned to go under the 150-meter chargeability high and have intersected up to 200-meter-wide zones with sphalerite, galena and other sulphides.  Some of these holes were drilled into a porphyryitic dacite body with disseminated sulphides including galena, sphalerite and chalcopyrite, and others cut andesitic volcanics in contact with the intrusive.  The andesitic rocks include wide sections containing veins of massive galena and sphalerite, with blebs of chalcopyrite. The system is strengthening with depth.  Drill hole ST-DD-07-10a was drilled to a depth of 505 meters, which was the maximum extent of the available drill rods.  The hole had to be stopped in strengthening mineralization, with polymetallic veins up to a centimeter wide hosted in andesitic volcanics adjacent to an intrusive dacite porphyry.  The Company has started on an extension of the existing access road in order to drill from a lower topographic level and thereby continue testing this mineralization.  Additional drill rods have now been obtained by the drilling contractor, allowing for longer holes, over 600 meters.



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An IP geophysical survey was planned for February 2008 on the San Timoteo II claim in order to overlap the old data and extend depth penetration in this important area.  This survey was delayed and actually started in late March.


The drill road network on San Timoteo was continued to the nearby mouth of the San Martin adit, in order to allow for drilling the extension of mineralization seen in Hole ST-DD-07-10a and to test beneath the old San Martin mine.


The San Martin mine mineralization may be related to the deeper polymetallic system as well as the near surface results in holes #4 and #8.  The Company believes that a large porphyry-type system may underlie the near surface gold and silver mineralization at San Timoteo.  The intrusive dacitic porphyry is mineralized as are the adjacent volcanic rocks.  Evidence seen in the core indicates that there were several episodes on mineralization and veining.  So far results have indicated that the intrusive porphyry and the polymetallic veining are of relatively low grade.


On the La Reforma property a series of shorter holes have tested the north central area of the property known as Pat’s Knob, as well as most of the Dickite Zone, without significant results.  Preliminary drilling of a chargeability high on the east side of La Reforma property yeilded core with similar disseminated sulphide mineralization, but of low grade.


In the southeast portion of La Reforma, an area referred to as the Red Ridge, three drill holes were completed in 2008.  Two of these holes yielded anomalous results, but the third and most promising hole is still missing assays.


In March 2008, the drill that had been working at La Reforma, which was under contract with a second operator, was moved to the Las Bolas property where it completed two short preliminary drill holes before being demobed.  One of the two drills at San Timoteo will be moved to Las Bolas in order to carry on with this drilling.


During the months of December, January and February, little work was performed by the Company on its other properties.  Comstock Capital was working during December, January and February on the Corona property, which it optioned from the Company.  Subsequently, Comstock completed its NI43-101 technical report by A.C.A. Howe International Limited and was preparing to file it with the TSX Venture Exchange.


The Company signed an option agreement on its La Cruz property with Pan American Silver’s Mexican subsidiary on September 25, 2007.  During the second fiscal quarter Pan American conducted a work program on La Cruz that included underground rehabilitation and sampling, geological mapping, surface geochemistry and geophysics as well as road rehabilitation.  The Company has been advised that drilling should start at La Cruz during the month of May 2008.


Third Quarter.  During the months of March, April and May, diamond drilling and underground rehabilitation and sampling continued on the San Timoteo with one diamond drill.  Diamond drilling was started on Las Bolas during the quarter.  Initially, the smaller diamond drill that had been used on the Company’s La Reforma property was tried at Las Bolas, but this machine proved unsuitable for the conditions.  Consequently, one of the two larger drills that were in use at San Timoteo was moved to Las Bolas and the smaller drill was demobilized.  On April 8, 2008, results from this work were released for the San Timoteo area.



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Underground chip sampling in the San Martin tunnel on the San Timoteo property returned a 40-meter section with encouraging mineralization.  This section is located approximately 250 meters from the entrance to the tunnel in an area that contains old cross cuts, raises and an internal shaft.  The high-grade area, which is now undergoing more detailed mapping and sampling, is an irregular quartz rich, brecciated zone, with locally intense oxidation.


The newly discovered underground zone is approximately 90-meters northeast and 200-vertical meters below the collar of a drill hole ST-DD-07-8, which was reported in January 2008.  Several of the drill holes discussed in March 2008 are designed to further test and extend this near surface mineralized corridor have been completed, but no assays are yet available.  The spatial relationship to the near surface mineralized corridor and the high-grade tunnel zone is very encouraging.


In May 2008, the next batch of results for work in this area was released.  These results expanded the size and potential of the San Timoteo / San Martin Tunnel Zone considerably.  The new data builds on previously reported results and outlines a mineralized zone over 200 meters long.  Diamond drilling from the surface above the tunnel has outlined a second, perpendicular mineralized zone that is over 400 meters long.


The ST-DD-08-5 drill hole expands the known mineralized area by adding a perpendicular zone, while the ST-DD-08-7 hole adds additional depth and an additional eastern zone.


Zone A begins approximately 209 meters from the tunnel entrance with all three zones depicted in the graphic included below.  In addition to the above results, drill hole ST-DD-08-7, which undercut the tunnel about 100 meters from the entrance, returned encouraging gold mineralization.  This further expands the overall zone of gold mineralization by an additional 100 meters.


Zone B opens in 3 directions (North, South and vertically) whereas Zone C opens to the South and vertically.


In addition to the underground sampling results, diamond drill hole data also increased the size of the mineralized zone in and around the San Martin tunnel.  Drill hole ST-DD-08-5 is located approximately 450 meters horizontally southwest of Zone B in the San Martin tunnel and trends directly towards it.  This drill hole returned four mineralized intervals that lie approximately 50-to-75 meters above the tunnel assays.


Diamond drill hole ST-DD-08-7 undercut the eastern end of the San Martin tunnel, approximately 90 meters from the entrance.  This hole also encountered gold values that lie on the southern side of the tunnel.  This intersection lies approximately 40 meters vertically below the tunnel indicating that gold mineralization extends further than originally anticipated and is open to depth.


The area between drill hole ST-DD-08-5 and the west end of the San Martin tunnel hosts the near surface silver and gold mineralization from the 2006/2007 shallow drilling program reported earlier.  These mineralization values were found 125 vertical meters above the tunnel assays.


The combination of the Zone C tunnel assays, the near surface mineralization and the ST-DD-08-5 results define a zone that measures approximately 450 meters long, by 50 meters wide, with a vertical extent down to the tunnel level of 125 meters.



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In May 2008, the first results were released from the Company’s recent work on the Las Bolas property, which lies about 5.5 kilometers southwest of San Timoteo.  This work was also very positive and essentially opened a second discovery front within the Uruachic mining camp.


A previously unknown old mine working was uncovered and rehabilitated.  This new tunnel, called Frijolar II, is located approximately 175 meters south of the Arbolito shaft and has been opened for a length of 72 meters.  During rehabilitation an obvious mineralized zone and a second sub-level was exposed where detailed chip sampling was conducted.  Some of the samples were also highly anomalous in gold.  This new zone, along with many others, will be drill tested as part of the current program.  The Frijolar II tunnel lies about 175 meters from Frijolar I.


In addition to Frijolar II, another new underground zone connected to the extensive Las Bolas mine was also uncovered, rehabilitated and sampled.  This zone lies about 225 meters northwest of Frijolar II and about 200 meters west of the Arbolito shaft.


The underground rehabilitation program is currently focused on the El Manto mine.  The El Manto mine lies at least 800 meters west of the Arbolito shaft and about 400 vertical meters below its collar, demonstrating that mineralization at the Las Bolas property extends over a very large area and has a large vertical extent.


The first two drill holes were tests by the drill company that drilled the La Reforma property, which had a smaller, man portable drill.  These two holes were spotted to test beneath another large underground zone lying between the Las Bolas and Gambusino workings, that was sampled in early 2007.


That zone returned both silver and gold mineralization over a total chip sample length of 183 meters.  Both drill holes had excellent recoveries of almost 100%, but drilling was extremely slow and neither of them reached their target depths of 250 meters and the small drill was demobilized in favor of the larger drill now at work.  The first drill hole (LB-DD-08-1) reached a total depth of 107.7 meters.  The second hole (LB-DD-08-2) reached a depth of only 88.45 meters.  However, this hole, despite the fact that it did not reach the area below the high-grade workings, did return silver mineralization.  This appears to be an up-dip extension of the mineralization in the working and is very encouraging.


In addition to the excellent values, these results support the Company’s theory that earlier reverse circulation drilling, which averaged only about 50% recovery, often did not return fine grained precious metal mineralization hosted within clay alteration.  The Company is therefore also encouraged that the current diamond drilling will be much more successful than the earlier reverse circulation work.



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During the months of March April and May, little work was performed by the Company on its other properties.  Comstock Capital continued work on the Corona property, which it optioned from the Company.  Subsequently, Comstock completed its NI43-101 technical report by A.C.A. Howe International Limited and was preparing to file it with the TSX Venture Exchange.  The Company signed an option agreement on its La Cruz property with Pan American Silver’s Mexican subsidiary on September 25, 2007.  During the second fiscal quarter Pan American conducted a work program on La Cruz that included underground rehabilitation and sampling, geological mapping, surface geochemistry and geophysics as well as road rehabilitation.  The Company was advised that drilling would start at La Cruz during May 2008.


Fourth Quarter.  During the months of June, July and August 2008, diamond drilling along with underground rehabilitation and sampling, road building and road cut sampling continued on the San Timoteo and Las Bolas properties.  In addition, the Company commissioned an Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) survey of the Uruachic mining camp by Ward E. Kilby P.Geo of Cal Data Ltd., Kelowna, BC.  The ASTER survey identified target zones containing kaolinite and ammoniated minerals, including buddingtonite.  These minerals are very strong indicators of hydrothermal alteration similar to that found in highly auriferous regions of the Carlin Trend.  The largest and strongest target was found to be located several hundred meters north of the San Martin tunnel on the Company’s San Timoteo II claim.


The results of an Induced Polarization (IP) geophysical study conducted on the San Timoteo II claim earlier in the year were also received during this quarter.  The IP survey also indentified drill targets in this area.


By the end of July 2008, Golden Goliath had drilled 5,783.1 meters in 21 diamond drill holes on the San Timoteo property, mostly focused around the old San Martin tunnel.  Apart from drilling, results were returned from direct underground sampling within the San Martin tunnel.


During the quarter ending August 31st, encouraging results were returned from the Las Bolas property, with an entirely new, high-grade target being developed in the area of the old El Manto mine on the western side of the property.  This target comprises extensive carbonaceous and dark lutite manto-like units that can carry extremely high silver and gold grades.


The Company was particularly encouraged with intercept in drill hole BD-08-3.  This intercept is a fine grained, carbonaceous, lutite with intercalated graphite and is a manto-like unit at a depth of approximately 160 meters that is similar to gold bearing rocks in the Carlin trend in Nevada.  A second manto layer was also encountered in this hole at a depth of approximately 95 meters.  These units have been intercepted with thicknesses up to four meters in subsequent holes over a 700-meter area.  This important and promising area coincides with an IP chargeablity anomaly at 150-meter depth that is spread over approximately 1,033-meter long and 533-meter wide and is open to the north.


During 2007 and early 2008, the Company also carried out diamond drilling, assaying and road building on the La Reforma property.  Drilling targets included both geophysical and geochemical anomalies across the property.  Including 2007 and 2008 the Company drilled a total of 25 diamond-drill holes totaling 5,443.94 meters on the La Reforma property.  The last three of the 2008 holes intersected anomalous mineral horizons up to 32 meters wide.  The source of this mineralization is believed to be a nearby intrusive body.  The Company is encouraged with these results, which warrant further follow up work including detailed geological mapping, geochemical sampling and further drilling.



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During the months of June July and August, little work was performed by the Company on its other properties. Comstock Capital continued work on the Corona property, which it optioned from the Company.  Subsequently, Comstock completed its NI43-101 technical report by A.C.A. Howe International Limited and filed it with the TSX Venture Exchange.  On August 14th, the Company received notice from Pan American Silver’s Mexican subsidiary, Minera Corner Bay S.A. de C.V. that it was dropping its option on Golden Goliath’s La Cruz property.  Minera Corner Bay had encouraging surface work but only limited success in several diamond drill holes.



Fiscal 2007 Property Acquisition and Exploration

Since March 2007, the Company has been drilling on its San Timoteo property and commenced drilling on the La Reforma property in September 2007.  The Company also completed an option agreement with Pan American Silver on Golden Goliath’s La Cruz property in September 2007.


Las Bolas Property

In March 2007, the Company received assay results from additional sampling of underground workings on its Las Bolas property.  These latest values came from three different areas, all of which are outside of the recently announced newly opened underground zone (herein called the “New High Grade Zone” or NHGZ).  Two of these newly sampled areas lie below the New High Grade Zone, along the Las Bolas mine workings.  The first of these two zones occurs about 50 meters vertically below and 150 meters west of the NHGZ.  Twelve contiguous chip samples taken from this 15 meter stretch of the Las Bolas mine returned gold and silver mineralization.  The second of the newly sampled Las Bolas working zones also occurs about 50 meters below the NHGZ, but extends about 25 meters further to the east.  The third area of new results lies just above and some 50 meters to the west of the NHGZ in an extension of the Gambusino mine workings.  A total of 28 meters of chip samples were collected from these non-linear workings.


In February 2007, the Company received the results of the new Induced Polarization geophysical survey completed in the Las Bolas – El Manto area, which was commissioned in order to aid in the selection of drill targets.  The results show a distinctive signature coincident with the New High Grade Zone at a depth of 75 meters below surface.  This anomaly extends at least 700 meters from the NHGZ into an area not previously drilled.  At least two new holes were planned to test this extension of the NHGZ anomaly.


Figure No. 2

Las Bolas Property

2007 Exploration Diagram


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San Timoteo Property

During June 2007, drilling with the original contractor on the San Timoteo property continued to be slow.  New contractors were sought and a suitable company, GlobeXplore Drilling, was hired in early July 2007.  The original driller was notified of their termination on July 2nd and then they were demobilized on July 10th.  GlobeXplore started their drilling on July 9th with a much superior drill rig, much improved production and very few problems.  In late August 2007, GlobeXplore notified the Company that they had a second drill rig available and that rig was then mobilized to the San Timoteo property.


The initial San Timoteo and La Reforma drill roads were completed in August 2007, with 14.5 kilometers of road and 30 drill pads built.  Road building and drill-pad construction continued as new drill targets were delineated.  The Company also negotiated in August 2007 with a second drilling company, Energold Drilling, to supply a diamond-drill rig for the La Reforma property.  That drill was mobilized to La Reforma on September 6th.  


On August 23rd, the first drill results from the San Timoteo program were released.  At that time, five holes totaling 1,104 meters had been completed in the vicinity of the old San Martin mine.  These were the first drill holes to ever test this area and adjacent structures.  Additionally, five shorter holes totaling 462 meters had been completed just north of the San Timoteo workings, close to the old Las Animas Mine.  The first San Timoteo hole intersected silver over 1.25 meters at a depth of 192 meters, which was just prior to entering an unknown underground working that stopped the hole just as it entered the target zone.  This hole will be re-drilled to avoid the workings and test the target zone in the near future.  The first short Las Animas hole also cut silver gold from 42-meters to 43-meters.


Other Properties

During the months of June, July and August 2007, little work was performed on the other properties held by the Company.  The Company intends to continue drilling in 2008 and will initiate a drill program on the Las Bolas property.  Comstock Capital was busy arranging their financing for upcoming work on the Corona property, but this work did not start until November 2007.  Negotiations continued with Pan American Silver regarding the Company’s La Cruz property and was signed on September 25th.



4.C. Organization Structure

The Company was incorporated in British Columbia under the Company Act (British Columbia) on 6/12/by Certificate of Incorporation under the name 521858 B.C. Ltd. and was granted a certificate of change of name on 9/10/1998 under the name of Golden Goliath Resources Ltd.  The authorized capital of the Company consists of an unlimited number of common shares without par value.


The Company directly or indirectly owns all of the issued and outstanding shares of Minera Delta S.A. de C.V. (“Minera Delta”).  Currently there are 50,000 Class “B” shares issued and outstanding in the capital of Minera Delta, 49,999 of which are held directly by the Company and one Class “B” share is held indirectly through 4247 Investments Ltd. (“4247”).  4247 is a wholly owned subsidiary of the Company, incorporated under the Company Act (British Columbia) on 2/3/1999.


Minera Delta is a Mexican mining company that was incorporated under the laws of Mexico on 7/17/1992.  The business office of Minera Delta is located at Pascual Orozco 909, 3er Piso, Desp. 13, Chihuahua, Chih, Mexico, CP31240.



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4.D.  Property, Plant and Equipment

This section first discloses where Golden Goliath’s office is located in Canada and then describes the mineral properties in which Golden Goliath has an interest.  In the description of the mineral properties, it is disclosed that these properties are only exploration stage properties and that a substantial amount of capital will have to be spent on each property before management will know if they contain commercially viable mineral deposits.


Golden Goliath’s executive offices are located in rented premises of approximately 1,500 sq. ft. at Suite 711, 675 West Hastings Street, Vancouver, British Columbia Canada  V6B 1N2.  Golden Goliath began occupying these facilities in January 2001.  Monthly rent is $3,500.


All of the Company’s current mineral exploration properties except two (Chamizal and La Cruz) are located in close proximity to each other within the historic mining district of Uruachic in Chihuahua, Mexico.  Golden Goliath has a 100% interest in 10,000 hectares (25,000 acres) in the district.


During Fiscal 2009, the Company expended the majority of its exploration efforts and funds on the Las Bolas – Los Hilos and San Timoteo properties.  During Fiscal 2008, the Company expended the majority of its exploration efforts and funds on the San Timoteo, La Reforma, and Las Bolas – Los Hilos properties.  During Fiscal 2007, the Company expended the majority of its exploration efforts and funds on the San Timoteo property.


Mineral Properties

The Company has a 100% interest in claims grouped into seven properties totaling 20,794 acres within the Uruachic Mining District.  The Company also owns two other significant properties outside of the Uruachic Camp.  One, La Cruz, is a silver property located on the eastern edge of the Sierra Madre Belt.  The other exploration property that Golden Goliath owns is Chamizal; this property differs from the others in that it is a lead, zinc, silver target and it lies outside of the Sierra Madre in central Chihuahua State.


Uruachic Mining Camp Properties

The Company acquired its 100% interest in the seven Uruachic Mining Camp properties and the Chamizal Property, partially as a result of a default on a promissory held by Golden Goliath from Minera Uruachic S.A. de C.V. (“Minera Uruachic”).  Minera Uruachic originally purchased certain claims from local residents.  Minera Uruachic is a related company to Golden Goliath in that it is controlled by J. Paul Sorbara, the President/Director of Golden Goliath and Daniel Nofrietta Fernandez, a Director of Golden Goliath.


The town of Uruachic is located in the northwestern part of Chihuahua State, some 60 kilometers south of the main highway connecting the cities of Chihuahua and Hermosillo, Sonora.  A secondary road leads from the highway to the waterfalls at Basaseachic and then continues south for a further 45 kilometers to Uruachic.  The geographic (Google Earth) coordinates for the town are: 27° 52’ 06” North and 108° 12’ 52” West.


The Uruachic district is located approximately 250 kilometers southwest of the city of Chihuahua.  The town of Uruachic of 1,000 people is located in the approximate center of the project area.  Access to the area is via a paved highway from the city of Chihuahua to Las Estrellas, then via a gravel road to the project area.  Total travel time from Chihuahua is about six hours.  Local services, such as gasoline and food, are available in Uruachic.  Power lines run from Las Estrellas to Uruachic.



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The project area is located in the Sierra Madre Occidental mountain range, and elevations in the area are from 1000 meters to 2000 meters.  Topography is moderate to rugged.  During winter from November to January, the temperature can drop below freezing and snow and ice are common at the higher elevations.  During July and August, rain is very common and roads are often washed out.  Vegetation at lower elevations is tropical, while oak and pine forests cover higher elevations.


The Uruachic mining camp is predominantly underlain by Tertiary volcanic rocks on the Lower Volcanic Complex, cut locally by small intrusive bodies.  These rocks are highly favorable for hosting gold and silver mineralization, with an estimated 90% of the precious metal mines in the Sierra Madre Occidental occurring within this package.  Throughout most of the Sierra Madre, the Lower Volcanic Sequence is covered by a thick layer of rhyolitic tuffaceous rocks of the Upper Volcanic Sequence, which prohibits the exploration of the favorable rocks underlying it.  In the Uruachic area, the Rio Oteros has eroded the overlying rhyolitic rocks and has left exposed a complete section through the Lower Volcanic suite.  It is in these highly altered rocks that the precious metal mineralization of the Uruachic camp is found.


The history of the Uruachic mining camp dates back to 1735 when two Spaniards searching for gold and silver founded the town in order to exploit the areas riches.  At that time the Town was named Real De Minas De Santa Rosa De Uruachic.  The town and the many mines surrounding it became very prosperous, eventually minting their own silver coins.   The prosperity continued until about the time of the Mexican Revolution in the early 1900’s.


Figure No. 3

Uruachic Mining Camp Map


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San Timoteo Property.  The San Timoteo property includes several claims, which total 793 hectares.  These are San Timoteo, San Timoteo II, Oro Leon, Las Trojas and Bufalo B.


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La Reforma Property.  The La Reforma property comprises three claims totaling 987.4 hectares.  The claims are La reforma, La Lluvia and Bufalo A.


[gg20fannual2009amend1005.jpg]



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Nueva Union Property.  The Nueva Union property has just one claim, called Nueva Union, which covers 211.89 hectares.


[gg20fannual2009amend1006.jpg]




Los Hilos/Las Bolas Property.  The Las Bolas property comprises seven claims totaling 656.76 hectares: Los Hilos, Los Hilos II, Los Hilos II Frac.1, Mina de Las Bolas, Don Lazaro, El Manto, Ampliation La Verde.


[gg20fannual2009amend1007.jpg]



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Nopalera Property.  The Nopalera property comprises three claims totaling 1,308.65 hectares; Nopalera, Nopalera II and La Flor Del Trigo.


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Oteros Property.  The Oteros property is comprised of three claims totaling 1,130.00 hectares: oteros, Esperanza and Bufalo R2.


Corona Property.  The Corona property consists of six claims that total 850 hectares (2,100 acres): Corona, Corona II, Corona III, Corona Norte, Corona Sur and La Esperanza. Corona along with the El Chamizal property have been optioned to Comstock Capital. The agreement grants Comstock Capital the right to earn a 60% interest in the property. In order to exercise the option, Comstock Capital shall spend $500,000 in work expenditures on the Corona Property over a period of three years or less and also issue a total of 150,000 shares to Golden Goliath once the company goes public over three years.  25,000 shares to be issued on listing on a stock exchange, 50,000 shares on the date which is 12 months after the date of listing and 75,000 shares on the date which is 24 months after listing.  Once Comstock Capital has earned its interest a joint venture will be formed.


[gg20fannual2009amend1009.jpg]



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La Cruz Property

The Company acquired its 100% interest in the seven Uruachic Mining Camp properties and the Chamizal Property as a result of a default on a promissory held by Golden Goliath from Minera Uruachic S.A. de C.V. (“Minera Uruachic”).  Minera Uruachic originally purchased the claims from local residents.  Minera Uruachic is a related company to Golden Goliath in that it is controlled by J. Paul Sorbara, the President/Director of Golden Goliath and Daniel Nofrietta Fernandez, a Director of Golden Goliath.


The La Cruz property has one claim, called La Cruz covering 90.00 hectares which was staked by the Company in 2006.  Preliminary surface mapping was completed by Golden Goliath, along with underground mapping and sampling of some of the several old mine workings on the property.  The property gained the attention Pan American Silver, who conducted at least two property examinations.  La Cruz was then optioned to the Mexican subsidiary of Pan American.  An internal claim, called La Cruzada, was obtained directly by Pan American and was rolled into the agreement.


Under the terms of the option agreement, Pan American Silver Corp’s Mexican subsidiary, Minera Corner Bay S.A. de C.V., has the right to earn a 60% interest in La Cruz by making cash payments totaling US$300,000 and spending US$450,000 on the property over a period of three years.  The property will consist of: the Company’s La Cruz Property; additional ground staked around the La Cruz Property; and the La Cruzada Property for which Pan American’s subsidiary already has an option.  Golden Goliath will be responsible for 25% of the costs associated with La Cruzada Property.  Upon Minera Corner Bay exercising its option, a 60/40 joint venture would proceed on the La Cruz and newly staked grounds, with Pan American having the right to earn an additional 15% by completing a feasibility study.  This agreement has since been terminated with the La Cruz property being returned to the Company.


The La Cruz Property, which is not in the Uruachic Camp, lies on the extreme eastern edge of the Sierra Madre Occidental.  The property hosts numerous old underground workings and dumps along a 1.5 kilometer trend.  The workings and extensive dumps are associated with two parallel, strongly silicified and brecciated structures separated by a distance of about 200 meters.  The structures strike Az 220º, dip 75º N, and average about two-meters to five-meters in width at the surface.  The workings, mostly shafts, appear to extend from 25-meters to 80-meters and preliminary mapping indicates that the structures widen at depth.  The main working area occurs on a hill that rises about 250 meters above the adjacent plains.  A principal working, adjacent to the mojonera, lies about 75 meters above the base of this hill and appears to be the lowest working level, and the top of the hill lies some 300 meters to the south.


The age of the workings is uncertain, but they are not recent and it appears that no drilling has ever been done on the ground.  A Company director first visited this property about 20 years ago and at that time asked a 70-year-old man who was born in the local village of Tajirachic about the mines.  The local replied that they were already closed down when he was a boy.  Subsequent claim owners (individuals, not companies) only worked the old dumps in a limited way.


Preliminary work by the Company’s geologists included taking 17 chip samples across widths ranging from 1.0 meters to 2.5 meters and averaging 1.75 meters.



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Tertiary volcanic rocks underlie the La Cruz claim, with andesites being overlain by rhyolites and ignimbrites.  The rocks are intensely fractured and silicified with fracture fillings of grey quartz.  Silver sulphide mineralization is present along with iron and manganese oxides.  The fractures have predominant trends of north-south, Az 340 and Az 025 with vertical dips and the working following the northeast trend.   A breccia zone that is about 3.5 meters wide on surface characterizes the mineralized trend.  Preliminary examination of the old shafts has been conducted to a depth of 45 meters, but they appear to descend to about 80 meters.


The La Cruz property is located in the central part of Chihuahua State, approximately 1.5 hours drive south-southwest of the city of Cuauhtemoc, and has good road access to within a few kilometers of the property.  The road follows an arroyo for the last few kilometers, but this section can easily be rehabilitated.  Geographic coordinates for the mojonera are Latitude 28º 02’ 52.14” and Longitude 107º 09’ 56.94”.


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Chamizal Property

The Chamizal property consists of two claims, Chamizal Este and Chamizal Oeste, which cover an area of 689.00 hectares.


The Chamizal property, which is outside of the Uruachic camp and the Sierra Madre Occidental, has not had extensive exploration work to date.  Surface and underground mapping, as well as preliminary geochemical sampling has been conducted, but no geophysical surveys have been completed.  Chamizal along with the Corona property have been optioned to Comstock Capital. The agreement grants Comstock Capital the right to earn a 60% interest in the property. In order to exercise the option, Comstock Capital shall spend $200,000 in work expenditures on the El Chamizal Property over a period of three years or less and also issue a total of 150,000 shares to Golden Goliath once the company goes public over three years.  25,000 shares to be issued on listing on a stock exchange, 50,000 shares on the date which is 12 months after the date of listing and 75,000 shares on the date which is 24 months after listing.  Once Comstock Capital has earned its interest a joint venture will be formed.


The Chamizal Property is not in the Uruachic Camp.  This property is part of a potentially very important massive play located 85 kilometers south-southwest of the city of Chihuahua in central Chihuahua State.  This region hosts the famous Santa Eulalia and Naica mining districts which have carbonate hosted, massive Pb-Zn-Ag mineralization.  The Santa Eulalia district, located 90 kilometres northeast of Chamizal, has a mining history dating back to the late 1500's.  The Chamizal Property is underlain by the same limestone formation that hosts the mineralization at Santa Eulalia and Naica, and has old mine workings in both the northeast and southwest portion of the property.  The southwestern workings comprise two tunnels that total more than 400 meters in length and contain large stopes where replacement style Pb-Zn-Ag mineralization has been mined.  Despite the presence of two sizable adits with stopes and one shaft attesting to past mine production, there is no record of any drilling ever having been done on the Chamizal Property.


The Chamizal Property lies in central Chihuahua, approximately 80 kilometers west of the famous Naica Pb-Zn-Ag mine, and about 80 kilometers southwest of the famous Santa Eulalia Mine.


[gg20fannual2009amend1011.jpg]



36






ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the fiscal years ended 8/31/2009, 8/31/2008, and 8/31/2007 should be read in conjunction with the financial statements of the Company and the notes thereto.


Selected Annual Data


 

Year Ended August 31

2009

Year Ended August 31

2008

Year Ended August 31

2007

Sales Revenue

         $0

         $0

         $0

Net Income (loss)

($2,196,183)

  ($821,077)

($1,035,556)

Basic and Diluted (loss) EPS

     ($0.04)

     ($0.01)

     ($0.02)

Weighted Avg. No. Shares Outstanding

 60,934,037

 60,875,845

 49,092,397

Working Capital

   $712,378

 $2,427,739

 $7,058,037

Mineral Property Interests

 $7,342,303

 $7,784,381

 $3,763,023

Shareholders Equity

 $8,156,342

$10,295,018

$10,948,315

Total Assets

 $8,222,221

$10,795,721

$11,249,718


General/Administrative, and thus losses, have risen in the last several years; from $466,410 in FY2004 to $821,077 in FY2008; but declined in FY2009 to $760,523 primarily due to Office/General and Investor-Relations expenses.  Such expenses span the full gamut of corporate activities as the Company ramped up exploration activities and corporate structure.  Losses were increased in FY2005 by a write-down of mineral properties; and in all years by the non-cash income statement line item for “stock-based compensation”.  Stock-based Compensation declined in FY2007, FY2008, and FY2009.



Summary of Quarterly Results


Net (Loss)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal 2009

($182,506)

($260,255)

($184,103)

($1,569,319)

Fiscal 2008

($166,814)

($337,038)

($221,738)

($95,487)

Fiscal 2007

($159,770)

($171,367)

($250,015)

($454,404)


EPS (Loss)

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal 2009

($0.00)

($0.00)

($0.00)

($0.04)

Fiscal 2008

($0.00)

($0.01)

($0.00)

($0.00)

Fiscal 2007

($0.00)

($0.00)

($0.00)

($0.01)


Exploration efforts are conducted year-round and administrative/general expenses are generally not seasonal.  The higher fourth quarter losses primarily relate to year-end write-downs of mineral properties.



37





Financings

In December 2009, the Company announced a private placement of 25,000,000 units at a price of $0.15 per unit.  Each unit consisted of one common share and one half of one share purchase, with each whole warrant entitling the holder to purchase one additional common share for a period of two years at a price of $0.25.  Once resale restrictions on the shares have expired and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice (in writing to warrant holders and via a news release).  The proceeds will be primarily used to expand the mineral resource at the Company’s Las Bolas property and to work on the new Filo de Oro zone on the east side of the Las Bolas property.  Finder’s fees of 8% cash and 8% warrants having the same terms as the warrants under the units may be paid.  The financing is subject to regulatory approval.  Prior to the date hereof the Company completed the first tranche of this financing being 12,641,466 units raising a total of $1,896,220.


During Fiscal 2009, 18,352,726 warrants expired unexercised.

As at 8/31/2009, the Company had no share purchase warrants outstanding


In April 2007, the Company closed a brokered private placement of 16,618,000 units at a price of $0.40 per unit.  Each unit consisted of one share and one non-transferable share purchase warrant exercisable for a period of two years at a price of $0.45 for each warrant.  Once resale restrictions on the shares expire and upon the Company’s shares trading at or above a weighted average trading price of $0.75 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice.  The Company’s agents received a commission of $378,145 in cash and 252,476 units, having the same terms as those issued pursuant to the private placement, and 1,482,250 agent’s warrants exercisable at $0.45 per share for two years valued at $335,909 (risk-free interest rate of 4.2%, dividend yield of Nil, volatility factor of 87%, an expected life of two years).


In February 2006, the Company completed a brokered private placement of 4,000,000 units at a price of $0.35 per unit.  Each unit consisted of one share and one non-transferable share purchase warrant exercisable for a period of one year at a price of $0.45 for each whole warrant.  Subsequently the warrants were extended until 5/15/2007.  The Company’s agent received a cash commission of $106,487, 400,000 warrants valued at $80,013 (risk-free interest rate of 4.0%, dividend yield of Nil, volatility factor of 100%, expected life of one year) and 15,750 units.


Fiscal 2009 Ended August 31, 2009 vs. Fiscal 2008


Results from Operations

Golden Goliath is a Canadian listed public company with its shares traded on the TSX Venture Exchange under the symbol “GNG” as a Tier 2 company.


Golden Goliath is a junior exploration company with no revenues from mineral producing operations.  The Company’s properties are all located in the State of Chihuahua, Mexico.  Activities include acquiring mineral properties and conducting exploration programs.  The mineral exploration business is risky and most exploration projects will not become mines.  The Company may offer to a major mining company the opportunity to acquire an interest in a property in return for funding by the major mining company, of all or part of the exploration and development of the property.  For the funding of property acquisitions and exploration that the Company conducts, the Company does not use long-term debt.  Rather, it depends on the issue of shares from the treasury to investors.  Such stock issues in turn depend on numerous factors, important among which are a positive mineral exploration climate, positive stock market conditions, a company’s track record and the experience of management.



38





For Fiscal 2009, the Company incurred a net loss of ($2,196,183) compared to a net loss of ($821,077) during the prior year.  The significant differences between the two years were:

a.

a writedown of mineral property exploration costs of $1,435,660 in FY2009 compared to nil the prior year.  As a result of the large exploration program in 2008 and into 2009 the Company was better able to evaluate its mineral properties.  Results at La Reforma were disappointing and while the Company intends to maintain its interest in La Reforma as there are still several interesting untested target areas, the Company wrote down its past exploration expenditures based on these results.

b.

a decrease of $191,490 in interest income in FY2009 compared to FY2008 due to both lower interest rates and reduced capital earning interest as the Company financed its exploration activities.

c.

an increase of $52,945 in foreign exchange expense due to the decrease in value of the Canadian dollar against the Mexican peso.

d.

stock-based compensation charge of $57,507 in FY2009 compared to $122,780 in the prior year which are non-cash based charges and are a result of accounting practices which require a calculation using the Black-Scholes option valuation model to expense stock options.  The lower charges last year was a result of issuing less options during that year.

e.

a decrease of $138,575 in investor relations expenses during FY2009 as the Company sought to reduce expenses in FY2009 due to difficult market conditions.

f.

a decrease of $25,948 in transfer agent and filing fees as the Company completed a private placement in the prior year which resulted in various one time fees.

g.

a reduction of $2,130,185 in current assets as the Company was completing an aggressive exploration program during the past year reducing the Company’s cash position.


Net Loss per Share for FY2009 was ($0.04) per share compared with ($0.01).



Liquidity and Capital Resources

As of 8/31/2009, deferred mineral property exploration costs totaled $7,007,530 compared to $7,449,608 at 8/31/2008.  During the year, the Company incurred a total of $993,581 in exploration expenditures including $434,750 on drilling, $152,409 on assaying, $92,464 doing geology and mapping and $41,228 on road construction and site preparation, mainly on its Las Bolas property.  $193,175 of facilities and other exploration expenditures in deferred exploration costs included such expenses as core boxes, rental of a core shack and a water truck used during drilling.


At 8/31/2009, the Company had working capital of $712,378 compared to its 8/31/2008 working capital of $2,427,739.  There was a reduction in cash and short-term investments as the Company was working on an aggressive exploration program during the past year.  The Company completed no financings during FY2009; but, raised $3.75 million in December 2009.  The Company is able to meet its ongoing financial obligations at this time.


Cash Used by Fiscal 2009 Operating Activities totaled ($721,124), including the ($2,196,183) Net Loss.  Significant adjustments included: $1,435,660 writedown of the La Reforma Property; $57,507 in stock-based compensation; and ($37,570) in changes in non-cash working capital balances related to operations”.  Cash Provided in Fiscal 2009 Investing Activities was $771,074, including: $2,153,945 from “redemption of short-term investments”; and ($1,365,900) for “expenditures on mineral properties”.  Cash provided from Fiscal 2008 Financing Activities was $nil.



39





Fiscal 2008 Ended August 31, 2008 vs. Fiscal 2007


Results from Operations

Golden Goliath is a Canadian listed public company with its shares traded on the TSX Venture Exchange under the symbol “GNG” as a Tier 2 company.


Golden Goliath is a junior exploration company with no revenues from mineral producing operations.  The Company’s properties are all located in the State of Chihuahua, Mexico.  Activities include acquiring mineral properties and conducting exploration programs.  The mineral exploration business is risky and most exploration projects will not become mines.  The Company may offer to a major mining company the opportunity to acquire an interest in a property in return for funding by the major mining company, of all or part of the exploration and development of the property.  For the funding of property acquisitions and exploration that the Company conducts, the Company does not use long-term debt.  Rather, it depends on the issue of shares from the treasury to investors.  Such stock issues in turn depend on numerous factors, important among which are a positive mineral exploration climate, positive stock market conditions, a company’s track record and the experience of management.


Since March 2007, the Company has been drilling on its San Timoteo property and commenced drilling on the La Reforma property in September 2007.  The Company also completed an option agreement with Pan American Silver on Golden Goliath’s La Cruz property in September 2007.  During the months of September, October and November 2007, diamond drilling continued on the San Timoteo and La Reforma properties.  For most of this time two drills were working on each property.  Assay results were very slow in coming, and the results of drilling during this period were not available for release until January 2008.  With the drills themselves, there were no technical problems and core recovery was excellent.


Operating expenses for Fiscal 2008 were down 9% at $1,030,761 versus $1,152,748 for last year.  The line item, “stock-based compensation”, fell over 70% to $122,780 (2007 = $333,813); the stock based compensation expense is related to the Company granting options during the year; while all the options were granted at the market price, the Company is required to expense the options when they are granted according the Black & Scholes Option Pricing Model.  Wages/Benefits expenses rose 19% to $265,076 because the Company added personnel mid-FY2007.  Investor Relations expenses were $172,625 (2007 = $135,861) as the Company hired two firms to revamp the Company’s website and image, produce video presentations for investor information, increase awareness of the Company in Europe and the United States which included attending additional conferences. This also added to the FY2008 travel expenses; these expenditures have since been significantly reduced.  Management Fees were unchanged at $120,000.  There was a decrease of $55,422 in foreign exchange expense due to the increased value of the Canadian dollar against the Mexican peso.


Interest Income more than doubled to $209,684 (2007 = $117,192) as the Company had more funds on hand than last year.


Net Loss for Fiscal 2008 was ($821,077) or ($0.01) per share.  Net Loss for Fiscal 2007 was ($1,035,556) or ($0.02) per share.  Weighted Average Number of Shares increased to 60.9 million from 49.1 million.



40





Liquidity and Capital Resources

At 8/31/2008, the Company had working capital of $2,427,739 compared to its 8/31/2007 working capital of $7,058,037.  There was a reduction of $4,439,998 in current assets as the Company was completing an aggressive exploration program during the past year that consumed a lot of the cash and resulted in an increase of $4,021,358 in deferred mineral property exploration costs.  The Company is able to meet its ongoing financial obligations at this time.


Cash Used by Fiscal 2008 Operating Activities totaled ($910,581), including the ($821,077) Net Loss.  Significant adjustments included $122,780 in stock-based compensation, and ($231,980) in changes in non-cash working capital balances related to operations”.  Cash Provided in Fiscal 2008 Investing Activities was $800,834: $4,422,000 from “redemption of short-term investments” and ($3,566,852) for “expenditures on mineral properties”.  Cash provided from Fiscal 2007 Financing Activities was $45,000, from the exercise of stock options.



Fiscal 2007 Ended August 31, 2007 vs. Fiscal 2006


Results from Operations

Golden Goliath is a Canadian listed public company with its shares traded on the TSX Venture Exchange under the symbol “GNG” as a Tier 2 company.


Golden Goliath is a junior exploration company with no revenues from mineral producing operations.  The Company’s properties are all located in the State of Chihuahua, Mexico.  Activities include acquiring mineral properties and conducting exploration programs.  The mineral exploration business is risky and most exploration projects will not become mines.  The Company may offer to a major mining company the opportunity to acquire an interest in a property in return for funding by the major mining company, of all or part of the exploration and development of the property.  For the funding of property acquisitions and exploration that the Company conducts, the Company does not use long-term debt.  Rather, it depends on the issue of shares from the treasury to investors.  Such stock issues in turn depend on numerous factors, important among which are a positive mineral exploration climate, positive stock market conditions, a company’s track record and the experience of management.


Since March 2007, the Company has been drilling on its San Timoteo property and commenced drilling on the La Reforma property in September 2007.  The Company also completed an option agreement with Pan American Silver on Golden Goliath’s La Cruz property in September 2007.  During the months of September, October and November 2007, diamond drilling continued on the San Timoteo and La Reforma properties.  For most of this time two drills were working on each property.  Assay results were very slow in coming, and the results of drilling during this period were not available for release until January 2008.  With the drills themselves, there were no technical problems and core recovery was excellent.


Operating expenses for Fiscal 2007 were basically flat at $1,152,748 versus $1,177,068 for last year.  The line item, “stock-based compensation”, fell in half to $333,813 (2006 = $610,754); the stock based compensation expense is related to the Company granting options during the year; while all the options were granted at the market price, the Company is required to expense the options when they are granted according the Black & Scholes Option Pricing Model.  Wages/Benefits expenses rose 12% to $222,653 because the Company added personnel.  Office/General expenses fell to $52,497 (2006 = $76,485) as the Company hired additional staff, expanded offices, commenced an advertising campaign, and operations ramped up for an extensive drilling program.  Management Fees were unchanged at $120,000.  Transfer Agent/Filing Fees tripled to $80,869 related to the costs associated with the April 2007 private placement.  Investor Relations expenses were $135,861 (2006 = $nil) as the Company hired two firms to increase investor awareness and help build the name of Golden Goliath.



41





Interest Income more than doubled to $117,192 (2006 = $40,694) as the Company had more funds on hand than last year.


Net Loss for Fiscal 2007 was ($1,035,556) or ($0.02) per share.  Net Loss for Fiscal 2006 was ($1,136,374) or ($0.03) per share.  Weighted Average Number of Shares increased to 49.1 million from 39.9 million.



Liquidity and Capital Resources

At 8/31/2007, the Company had working capital of $7,058,037 compared to its 8/31/2006 working capital of $1,677,930.  The completion of an April 2007 private placement significantly added to short-term investments.  The Company is able to meet its ongoing financial obligations at this time.


Cash Used by Fiscal 2007 Operating Activities totaled ($766,888), including the ($1,035,556) Net Loss.  Significant adjustments included $333,813 in stock-based compensation, and ($77,798) in changes in non-cash working capital balances related to operations”.  Cash Used in Fiscal 2007 Investing Activities was ($6,172,221), ($7,630,945) for “purchase of short-term investments”, ($579,748) for “expenditures on mineral properties”, and offset by $2,162,759 “proceeds from redemption of short-term investments”.  Cash provided from Fiscal 2007 Financing Activities was $6,989,055, primarily the aforementioned financings, offset by share issue costs.



5.C.  Research and Development, Patents and Licenses, Trademarks, etc.

5.D.  Trend Information

No Disclosure Necessary.



5.E.  Off-Balance Sheet Arrangements

At 8/31/2009 and 8/31/2008, the Company has no off-balance sheet arrangements.



5.F.  Tabular disclosure of contractual obligations

The Company has no “hard” contractual obligations at 12/31/2009.  However, under certain of its property acquisition agreements, the Company is committed to expend funds on exploration and/or make cash option payments and/or issue common shares to maintain or complete its option arrangements.  The Company is required to pay approximately $50,000 in taxes each year to the Mexican government for its mineral exploration properties.



5.G.  Safe harbor.

      --- No Disclosure Necessary ---



42






ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES


6.A.  Directors and Senior Management



Table No. 3

Directors and Senior Management

December 31, 2009

 

Name

Positions

Age

Date First Elected or Appointed

Ing. Daniel N. Fernandez (2)

Director

68

June 1998

Richard W. Hughes

Director

76

June 1998

Robin Bruce Hutchison

Director

53

December 2000

Marc Legault

Director

49

January 2006

Stephen Pearce (1)(3)

Director/CFO/Secretary

39

December 2000

Andrew Robertson (1)

Director

65

December 1998

Edward K. Sorbara (1)

Director

65

June 1998

J. Paul Sorbara (2)

Director/President

56

February 1997

(1)  Member of Audit Committee.

(2)  He spends full time on the affairs of the Company.

(3)  He spends about a fourth of his time on the affairs of the Company.


Daniel Nofrietta Fernandez was graduated with a degree in engineering from the Universidad Autonoma De Mexico in 1965.  In 1969, he attended the University of Arizona, studying geology.  He has been the President and a Director of Minera Uruachic S.A. de C.V. since 1999.   He has been Manager and a Director of the Company’s wholly-owned subsidiary, Minera Delta S.A. de C.V. since 1992.  As an independent director of the Company, Mr. Fernandez supervises management and helps to ensure compliance with corporate governance policies and standards.


Richard W. Hughes has been the President of Hastings Management Corp. since 1967; Hastings Management is a private company owned by Mr. Hughes that assists Canadian public companies with capital formation, management and investor relations.  As an independent director, Mr. Hughes supervises management and helps to ensure compliance with corporate governance policies and standards. He currently is associated with the following public companies:


Position

Issuer

Exchange

Since

Director/President

Abitibi Mining Corp.

NEX

1983

Director

Alamos Gold Corp.

TSX

2000

Director

Amador Gold Corp.

TSX.V

2002

Director

Chalice Diamond Corp.

TSX.V

2006

Director

Fortune River Resources Corp.

TSX.V

2002

Director

Genco Resources Ltd.

TSX.V

2004

Director/President

Golden Chalice Resources Inc.

TSX.V

2004

Director

Gryphon Gold Corporation

TSX.V

2003

Director

Kalahari Resources Inc.

TSX.V

1994

Director/President

Klondike Gold Corp.

TSX.V

1985

Director

Klondike Silver Corp.

TSX.V

2005

Director

Kootenay Gold Inc.

TSX.V

2005

Director

Radiant Resources Inc.

TSX.V

1997

Director/President

Sedex Mining Corp.

TSX.V

1980

Director/President

Zinccorp Resources Inc.

TSX.V

2008



43





Robin Bruce Hutchison was graduated from the University of British Columbia with a Bachelor of Science Degree in 1978.  A co-founder of eCharge Corporation (www.echarge.com), he held numerous position within eCharge including, President and Chief Technical Officer.  Prior to co-founding eCharge Corporation, he was President of SNI Corporation, which specialized in the integration of SUN Microsystems UNIX based systems and Internet & Firewall Security.  As an independent director of the Company, Mr. Hutchinson supervises management and helps to ensure compliance with corporate governance policies and standards.


Marc Legault, with Agnico-Eagle Mines Ltd. since 1988, is manager of project evaluations in Toronto.  He is currently managing the exploration and evaluation program at Agnico’s Pinos Altos project in Chihuahua and is also directly involved in evaluating other exploration and mining opportunities in Mexico.  As an independent director of the Company, Mr. Legault supervises management and helps to ensure compliance with corporate governance policies and standards.


Stephen Pearce has been the Corporate Secretary of the Company since 12/11/2000 and CFO and a Director of the Company since 1/26/2006.  He was graduated from York University in 1993 with a degree in Economics.  He received his law degree from the University of British Columbia in 1996.  He is an attorney specializing in junior mining companies.  Mr. Pearce serves as a Director and/or Corporate Secretary of the following TSX Venture Exchange listed companies: Neodym Technologies Inc. (since 2001); and Sable Resources Ltd. (since 2003) and Sunorca Development Corporation (since 2008).  As a director of the Company, Mr. Pearce participates in management oversight and helps to ensure compliance with our corporate governance policies and standards.  


Dr. Andrew Robertson received his Doctorate and Bachelor of Science Degrees from the University of Witwatersrand in the Republic of South Africa.  He holds the designation of Professional Engineer that was awarded to him from both the Association of Professional Engineers & Geoscientists of British Columbia and the Association of Professional Engineers of Ontario.  Since April 1994, Robertson Geoconsultants Inc., a company he owns, has employed him; through this company he provides consulting services to mining companies. Since April 1994, he has been a Director of Gemcom Software International Inc. He has been President/Director of InfoMine Inc. since 1984.  As an independent director of the Company, Mr. Robertson supervises management and helps to ensure compliance with corporate governance policies and standards.


Edward K. Sorbara received his Bachelors Degree in Commerce from the University of Toronto in 1964 and his MBA from the University of Chicago in 1967.  He has been employed by Sorbara Services Ltd. as Principal since 1967. Sorbara Services Ltd. is involved in the real estate industry in Toronto as developers.  As an independent director of the Company, Mr. Sorbara supervises management and helps to ensure compliance with corporate governance policies and standards.



44






J. Paul Sorbara has been the President of the Company since 2/5/1997 and a Director of the Company since 5/10/1998.  He is a graduate of the University of Toronto where he received a Bachelor of Science Degree in 1976 and a Master of Science Degree in 1979.  He received the designation of Professional Geologist in 1991 from the Association of Professional Engineers and Geoscientists in British Columbia; and in 1985 the Geological Association of Canada awarded him the designation of Fellow of the Geological Association of Canada.  He also serves as the President of Minera Delta S.A. de C.V., a wholly owned subsidiary of Golden Goliath.  He owns a consulting firm, Sorbara Geological Consulting Ltd., but devotes very little time to that company. Since January 2004, he has been a Director of Petro Horizon Energy Corp. Since August 2007, he has been a Director of Jiulian Resources Inc.  He devotes full time to his duties as the President of the Company.  As a director of the Company, Mr. Sorbara participates in management oversight and helps to ensure compliance with our corporate governance policies and standards.



The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles of the Company.  Their functions within the Company are detailed in ITEM #1.A.1.


The Senior Management serves at the pleasure of the Board of Directors.  Their functions within the Company are detailed in ITEM #1.A.2.


The Board has adopted a written Code of Business Ethics.  The Board of Directors expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity.  Management is expected to execute the Company’s business plan and to meet performance objectives and goals.  In addition, the Board of Directors must comply with conflict of interest provisions in Canadian corporate law, including relevant securities regulatory instruments, in order to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.


During the last five years, no Director and/or Senior Management has been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.


Edward Sorbara, Director, is the cousin of J. Paul Sorbara, President/Director of the Company.  There are no other family relationships between any Directors or Senior Management.  There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.



45





6.B.  Compensation


Director Compensation

The Company has no formal program for compensating Directors for their service as directors.  There are no Director service contracts with the Company providing for benefits upon termination of employment.  Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors.  The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director.  The Company’s directors also participate in the Company’s Stock Option Plan; during Fiscal 2009, 225,000 stock options were granted to Directors.   No Director received any compensation for his services as a Director, including committee participation and/or special assignments, other than detailed in the following table which details Director (Richard Hughes) compensation paid/accrued for Fiscal 2009.


Senior Management Compensation  

Total cash compensation accrued and/or paid (directly and/or indirectly) (refer to ITEM #7B for information regarding indirect payments) to all Senior Management/Directors during Fiscal 2009 was $277,350.  The following table details Senior Management/Director compensation paid/accrued for Fiscal 2009.


Table No. 4

Director and Senior Management Compensation

Name and principal position

Year

Salary

Share-based awards

Option-based awards

Non-equity incentive plan compensation

Pension value

All other compensation

Total compensation(3)

Annual incentive plans

Long-term incentive plans

J. Paul

Sorbara,

President (1)

2009

$120,000

NA

450,000

NA

NA

NA

NA

$120,000

Stephen Pearce,

CFO/Secretary

2009

$60,000

NA

75,000

NA

NA

NA

NA

$75,000

Daniel Fernandez

Manager of Minera Delta S.A.

2009

$44,020

NA

50,000

NA

NA

NA

NA

$44,020

Richard Hughes, Director (2)

2009

NA

NA

50,000

NA

NA

NA

$53,330

$53,330

(1) Mr. Sorbara’s “salary” is paid to Sorbara Geological Consulting Ltd., private company owned/controlled by him.

(2) Mr. Hughes’s “All Other Compensation” is paid to Hastings Management Corp., a company wholly owned by him; pursuant to administrative services provided to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with executive offices.

(3) During the Senior Management’s employment, the Company reimburses Senior Management for all travel and other expenses actually, properly and necessarily incurred by the NEO in connection with the Senior Management’s duties in accordance with the policies set from time to time by the Company, in its sole discretion.  The Senior Management is required to furnish such receipts, vouchers or other evidence as are required by the Company to substantiate such expenses.  Such reimbursements are excluded from the “Total Compensation”.



46





Options/SARs Granted/Cancelled During The Most Recently Completed Fiscal Year

At the beginning of Fiscal 2009, the most recently completed fiscal year; there were 4,925,000 stock options outstanding.  During Fiscal 2009, 1,150,000 stock options were granted to Senior Management, Directors, and employees/ consultants; all stock options vested upon granting.  During Fiscal 2009, no SARs (stock appreciation rights) were granted.  During Fiscal 2009: no stock options were exercised; 175,000 options were cancelled; 430,000 expired; and none were re-priced.


Table No. 5

Stock Option Grants in Fiscal 2009 Ended 8/31/2009

Name

Number of

Options

Granted

Percent

Of Total

Options

Granted

Exercise

Price

per

Share


Grant Date

Expiration

Date

Mkt. Value of

Securities

Underlying

Options on

Date of

Grant

Daniel Fernandez

50,000

4%

$0.10

12/08/2008

12/07/2013

$0.05

Richard Hughes

50,000

4%

$0.10

12/08/2008

12/07/2013

$0.05

Robin Hutchison

25,000

2%

$0.10

12/08/2008

12/07/2013

$0.05

Marc Legault

25,000

2%

$0.10

12/08/2008

12/07/2013

$0.05

Stephen Pearce

75,000

7%

$0.10

12/08/2008

12/07/2013

$0.05

Andrew Robertson

25,000

2%

$0.10

12/08/2008

12/07/2013

$0.05

Edward Sorbara

50,000

4%

$0.10

12/08/2008

12/07/2013

$0.05

J. Paul Sorbara

450,000

39%

$0.10

12/08/2008

12/07/2013

$0.05

Management/Directors

750,000

     

Employees/Consultants

175,000

15%

$0.10

12/08/2008

12/07/2013

$0.05

Employees/Consultants

75,000

7%

$0.10

4/24/2009

4/24/2014

$0.10

Employees/Consultants

150,000

13%

$0.12

4/24/2009

4/24/2014

$0.10

TOTAL

1,150,000

100%

    



47





Options/SARs Exercised During The Most Recently Completed Fiscal Year

During Fiscal 2009 Ended 8/31/2009, the most recently completed fiscal year, no stock options were exercised by Senior Management and/or Directors.  No SARs (stock appreciation rights) were exercised during this period.


The following table gives certain information concerning stock option exercises during Fiscal 2009 by the Company’s Senior Management and Directors.  It also gives information concerning stock option values.


Table No. 6

Aggregated Stock Options Exercises in Fiscal 2009

Fiscal Yearend Unexercised Stock Options

Fiscal Yearend Stock Option Values

Senior Management/Directors

Name

Number of Shares Acquired on Exercise

Aggregate Value Realized (1)

Number of

Unexercised

Options at

Fiscal Yearend

Exercisable/

Unexercisable

Value of

Unexercised

In-the-Money

Options at

Fiscal Yearend (2)

Exercisable/

Unexercisable

Ing. Daniel N. Fernandez

nil

$nil

475,000/nil

$1,500/$nil

Richard W. Hughes

nil

$nil

275,000/nil

$1,500/$nil

Robin Hutchison

nil

$nil

275,000/nil

$750/$nil

Marc Legault

nil

$nil

400,000/nil

$750/$nil

Stephen Pearce

nil

$nil

475,000/nil

$2,250/$nil

Andrew Robertson

nil

$nil

325,000/nil

$750/$nil

Edward K. Sorbara

nil

$nil

325,000/nil

$1,500/$nil

J. Paul Sorbara

nil

$nil

1,000,000/nil

$13,500/$nil

(1)

Value using the closing price of common shares of the Company on the Toronto Venture Exchange on the date of exercise, less the exercise price per share.

(2)

The market price for the Company’s common shares on 8/31/2009 was $0.13.  No value has been given to unexercised options that were out-of-the-money on 8/31/2009.



Stock Options.  The Company may grant stock options to Directors, Senior Management and employees.  Refer to ITEM #6.E., “Share Ownership” and Tables No. 4/5/6/7/8 for information about stock options.


Change of Control Remuneration.  The Company has no plans or arrangements in respect of remuneration received or that may be received by Senior Management of the Company in Fiscal 2009 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$100,000 per Senior Management.


Bonus/Profit Sharing/Non-Cash Compensation.  The Company has no Bonus/Profit Sharing/Non-Cash Compensation arrangements.


Pension/Retirement Benefits.  No funds have been set aside or accrued by the Company since incorporation to provide pension, retirement or similar benefits for Directors or Senior Management.


Other Compensation.  No Senior Management and/or Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation, other than disclosed in Table No. 4/5/6/7/8, ITEM #6B and ITEM #7B.



48





Written Management Agreements

The Company has retained Mr. Hughes through Hastings Management Corp., a company wholly owned by him.  Pursuant to administrative services provided to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with executive offices.  Currently, he is paid $3,500 per month.  The contract is on a month to month basis and can be terminated by either party with one month’s written notice.



6.C.  Board Practices

All directors hold office until the next meeting of the shareholders of the Company unless they resign or are removed in accordance with the Company’s Articles.  Senior Management are appointed to serve at the discretion of the Board of Directors.  The Board of Directors and Committees of the Board schedule regular meetings over the course of the year.


The fundamental objective of the Board is to ensure that it operates in a fashion that maximizes shareholder value over the long term.  The Board’s duties and responsibilities are all carried out in a manner consistent with that fundamental objective.   The principal duty and responsibility of the Board is to oversee the management and operations of the Company, with the day-to-day management of the business and affairs of the Company delegated by the Board to the President/CEO and other Senior Management.


The Board’s responsibilities include overseeing the conduct of the Company’s business, providing leadership and direction to its management, and setting policies.  Strategic direction for the Company is developed through the Board’s annual planning process.  Through this process, the Board adopts the operating plan for the coming year, and monitors management’s progress relative to that plan through a regular reporting and review process.


The Board has delegated to the President/CEO and other Senior Management responsibility for the day-to-day management of the business of the Company.  Matters of policy and issues outside the normal course of business are brought before the Board for its review and approval, along with all matters dictated by statute and legislation requiring Board review and approval.  The President/CEO and other Senior Management review the Company’s progress in relation to the current operating plan at in-person and telephone-conference Board meetings.  The Board meets on a regular basis with and without management present.  Financial, operational and strategic issues facing the Company are reviewed, monitored and approved at the Board meetings.



6.C.1.  Terms of Office.  Refer to ITEM 6.A and ITEM 6.C.

6.C.2.  Directors’ Service Contracts.  No Disclosure Necessary



49





6.C.3.  Board Independence

The Board of Directors has adopted standards for determining whether a director is independent from management.  The Board reviews, consistent with the Company’s corporate governance guidelines, whether a director has any material relationship with the Company that would impair the director’s independent judgment.  The Board of Directors has affirmatively determined, based on its standards, that the Messrs. Richard Hughes, Robert Hutchinson, Marc Legault, Andrew Robertson, and Edward Sorbara are independent.


6.C.4.  Board meetings and committees; annual meeting attendance

During Fiscal 2009, the Board of Directors held three scheduled meetings.  For various reasons, Board members may not be able to attend a Board meeting; all Board members are provided information related to each of the agenda items before each meeting, and, therefore, can provide counsel outside the confines of regularly scheduled meetings.  No director attended fewer than 75% of the aggregate of: (1) the total number of meetings of the Board of Directors, while he was a Director; and (2) the total number of meetings of committees of the Board of Directors on which the director served.  Directors are encouraged to attend annual meetings of our stockholder; all but Marc Legault, Robin Hutchinson and Daniel Fernandez of the directors attended the February 2009 annual shareholders meeting.


The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Company’s audits, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company.  The Company has an Audit Committee charter, adopted 9/1/2006.  The current members of the Audit Committee are: Stephen Pearce, Andrew Robertson (independent), and Edward Sorbara (independent).  The Audit Committee met once during Fiscal 2009 and has met once during Fiscal 2010-to-date but regularly communicate informally throughout the year.


The Company does not have an “audit committee financial expert” serving on its Audit Committee.  The Company’s Audit Committee consists of two independent directors and the CFO/Secretary/Director, all of whom are both financially literate and very knowledgeable about the Company’s affairs.  Because the Company’s structure and operations are straightforward, the Company does not find it necessary to augment its Board with a financial expert.


6.C.5.  Code of Ethics  

The Board has not adopted a written Code of Business Ethics.  However, the Board of Directors expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity.  Management is expected to execute the Company’s business plan and to meet performance objectives and goals.  In addition, the Board of Directors must comply with conflict of interest provisions in Canadian corporate law, including relevant securities regulatory instruments, in order to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.  During Fiscal 2009 and Fiscal 2010-to-date, there are no material change reports relating to the conduct of any Directors or executive officers of the Company.


6.D.  Employees

As of 12/31/2009, the Company had eight full-time employees and several part-time employees/consultants, including the Senior Management; five of these employees are directly engaged in mineral exploration/development.  As of 8/31/2009 and 8/31/2008, the Company had ten and ten employees, respectively, including the Senior Management.  None of the Company's employees are covered by collective bargaining agreements.



50





6.E.  Share Ownership

The following table lists Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.  The table also includes all persons/companies where the Company is aware that they have 5% or greater beneficial interest in the Company’s voting securities.


 

Table No. 7

Shareholdings of Directors and Senior Management

Shareholdings of 5% Shareholders

December 31, 2009

 
   

Title of

Class

Name of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percent of Class

Common

Sprott Asset Management (1)

8,934,868

14.7%

Common

Agnico Eagle Mines Limited (2)

5,362,000

8.8%

 

5% Shareholder Subtotal

14,296,868

23.5%

Common

J. Paul Sorbara (3)

2,119,600

3.5%

Common

Daniel Fernandez (4)

1,542,000

2.5%

Common

Edward Sorbara (5)

686,625

1.1%

Common

Richard Hughes (6)

575,000

0.9%

Common

Andrew Robertson (7)

526,000

0.8%

Common

Stephen Pearce (8)

569,000

0.9%

Common

Robin Hutchison (9)

275,000

0.4%

Common

Marc Legault (10)

400,000

0.6%

 

Directors and Senior Management Subtotal

6,693,225

11.0%

 

TOTAL

20,990,093

34.5%

 (1) Sprott Asset Management is a financial institution.

Their address is:  200 Bay Street, Toronto, Ontario, Canada  M5J 2J1

The contact person is: Eric Sprott


The Company believes that of this total, 1,500,000, or approximately 2.5% of the Company’s outstanding shares, represent shares issued in April 2007 by way of private placement, as agent for beneficial owners and that Sprott Asset Management does not beneficially own, directly or indirectly, or exercise control or direction over such shares.  The Company is not aware whether Sprott Asset Management beneficially owns or exercises control or direction over the remaining 7,434,868 shares, representing approximately 12.2% of the Company’s outstanding shares


(2) Agnico Eagle Mines Limited is a Canadian mining company publicly traded on the NYSE and TSX Exchange.  Their address is: 145 King Street East, Toronto, Ontario, M5C 2Y7.  The contact person is: David Smith; VP, Investor Relations.


(3)

1,000,000 represent currently exercisable stock options.

    

1,119,600 common shares and 550,000 stock options are held indirectly through Sorbara Geological Consulting Limited, a private company control by Mr. Sorbara.

(4)

475,000 represent currently exercisable stock options.

(5)

325,000 represent currently exercisable stock options.

(6)

275,000 represent currently exercisable stock options.

(7)

325,000 represent currently exercisable stock options.

  

The 201,000 common shares are registered in the name of A. MacG. Robertson & Associates Inc. and A. MacG. Holdings Inc., of which Andrew MacG. Robertson is the sole owner of all issued voting shares.

(8)

475,000 represent currently exercisable stock options.

(9)

275,000 represent currently exercisable stock options.

(10)

400,000 represent currently exercisable stock options.


#  Based on 60,934,037 common shares outstanding at 12/31/2009, and warrants and stock options held by each beneficial holder exercisable within sixty days.



51





Stock Options

Incentive stock options are granted by the Company in accordance with the rules and policies of the TSX Venture Exchange, the Business Corporations Act (British Columbia), including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto.  The Company adopted its current formal written stock option plan (the “Stock Option Plan”) on 2/5/2006.


The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.


Under the Stock Option Plan, the Company’s board of directors (the “Board”) may, from time to time, designate a director or other senior officer or employee of the Company as administrator (the “Administrator”) for the purposes of administering the Plan.  Currently, the Administrator is the Corporate Secretary.


The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.


The Stock Option Plan provides that stock options may be granted to directors, senior officers, employees and consultants of the Company (and any subsidiary of the Company) and management-company employees.  For the purposes of the Stock Option Plan, the terms “employees”, “consultants” and “management company employees” have the meanings set out in TSX Venture Exchange Policy 4.4.  In addition, the term “director” is defined in TSX Venture Exchange Policy Manual section 4.4 to include directors, senior officers and management company employees.



52






The Stock Option Plan provides for the issuance of stock options to acquire at any time up to a maximum of 10% of the issued and outstanding common shares of the Company (subject to standard anti-dilution adjustments).  If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Stock Option Plan.  Any stock option outstanding when the Stock Option Plan is terminated will remain in effect until it is exercised or it expires.  The Stock Option Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:


(a)

options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death;

(b)

options may be exercisable for a maximum of five years from grant date;

(c)

options to acquire no more than 5% of the issued shares of the Company may be granted to any one individual in any twelve-month period;

(d)

options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any twelve-month period;

(e)

options to acquire no more than an aggregate of 2% of the issued shares of the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any twelve-month period;

(f)

options held by an option holder who is a director, employee, consultant or management company employee must expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee;

(g)

options held by an option holder who is engaged in investor relations activities must expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and

(h)

in the event of an option holder’s death, the option holder’s personal representative may exercise any portion of the option holder’s vested outstanding options for one year following the option holder’s death.



53





The names and titles of the Directors/Senior Management of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in following table, as well as the number of options granted to Directors/Senior Management, and all employees and consultants as a group.


 

Table No. 8

Stock Options Outstanding

December 31, 2009

 
     

Name

Number of Options Granted or Remaining

Exercise Price per Share

Grant Date

Expiration Date

Officers/Directors

    

J. Paul Sorbara

450,000

$0.10

12/8/2008

12/7/2013

 

250,000

$0.40

7/16/2006

7/16/2012

 

300,000

$0.36

6/29/2006

6/29/2011

Stephen Pearce

75,000

$0.10

12/8/2008

12/7/2013

 

150,000

$0.40

7/16/2006

7/16/2012

 

250,000

$0.36

6/29/2006

6/29/2011

Daniel Fernandez

50,000

$0.10

12/8/2008

12/7/2013

 

175,000

$0.40

7/16/2006

7/16/2012

 

250,000

$0.36

6/29/2006

6/29/2011

Richard Hughes

50,000

$0.10

12/8/2008

12/7/2013

 

100,000

$0.40

7/16/2006

7/16/2012

 

125,000

$0.36

6/29/2006

6/29/2011

Robin Hutchison

25,000

$0.10

12/8/2008

12/7/2013

 

100,000

$0.40

7/16/2006

7/16/2012

 

150,000

$0.36

6/29/2006

6/29/2011

Marc Legault

100,000

$0.40

7/16/2006

7/16/2012

 

275,000

$0.36

6/29/2006

6/29/2011

 

25,000

$0.10

12/8/2008

12/7/2013

Andrew Robertson

25,000

$0.10

12/8/2008

12/7/2013

 

100,000

$0.40

7/16/2006

7/16/2012

 

200,000

$0.36

6/29/2006

6/29/2011

Edward Sorbara

50,000

$0.10

12/8/2008

12/7/2013

 

100,000

$0.40

7/16/2006

7/16/2012

 

175,000

$0.36

6/29/2006

6/29/2011

Total Officers/Directors

4,085,000

   

Employees/Consultants/etc.

175,000

$0.10

12/8/2008

12/7/2013

 

190,000

$0.35

11/26/2007

11/25/2012

 

225,000

$0.40

7/16/2006

7/16/2012

 

320,000

$0.36

6/29/2006

6/29/2011

TOTAL

4,995,000

   



54





ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


7.A.  Major Shareholders.


7.A.1.a.  Holdings By Major Shareholders.

Refer to ITEM #6.E, and Tables No. 4/5/6/7/8/9/10/11, for details regarding securities held by 5% Shareholders, Senior Management, Directors, and others.


7.A.1.b.  Significant Changes in Major Shareholders’ Holdings.  

The participation in private placements of equity by the Company and exercise of stock options/share purchase warrants has lead over the last several years to some significant changes in the holdings of major shareholders (five percent) direct/indirect holdings of common shares.  Refer to ITEM #6E and Table No. 4/5/6/7/8 for additional information.  


 

Common Shares Owned at 8/31/2009

Common Shares Owned at 8/31/2008

Common Shares Owned at 8/31/2007

Sprott Asset Management

8,934,868

6,958,500

9,910,500

Agnico Eagle Mines Limited

5,362,000

5,362,000

5,362,000


7.A.1.c.  Different Voting Rights.  The Company’s major shareholders do not have different voting rights.



7.A.2.  Canadian Share Ownership.  On 12/16/2009, the Company’s shareholders’ list showed 60,934,037 common shares outstanding, with 42 registered shareholders.  15 of these shareholders were resident in Canada, holding 58,130,399 common shares (representing about 95.4% of the issued/outstanding shares); 26 registered shareholders were resident in the United States, holding 2,743,638 common shares (representing about 4.5%); and one registered shareholder was resident in other countries, holding 60,000 common shares.


The Company has researched the indirect holding by depository institutions and other financial institutions; based on this research and other research into the indirect holdings of other institutions, the Company estimates that it has about 700 “holders of record” in Canada, holding approximately 90% of the outstanding shares of the Company, and over 800 beneficial owners that own 100% of its common shares.



7.A.3.  Control of Company.  The Company is a publicly owned Canadian corporation, the shares of which are owned by Canadian residents, United States’ residents, and other foreign residents.  The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., “History and Growth of the Company”; and ITEM #6.E., “Share Ownership”.



7.A.4.  Change of Control of Company Arrangements.

        No Disclosure Necessary



55





7.B.  Related Party Transactions

The Company has an administrative services agreement with Hastings Management Corp. whereby Hastings provides services to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with office needs; and providing such other additional instructions and directions as the Company may require. These costs to Hastings Management are divided between several public and private companies and not all the costs of each category is paid by any one company. As such, while most companies charge these expenses individually to the income statement the Company reduces these costs by sharing them with other companies. Hastings Management estimates the percentage of time spent on any one company in any given period and it is charged proportionately. Richard Hughes, a Director of Golden Goliath, owns Hastings Management.  During the Fiscal 2009 Ended August 31, 2009, Hastings Management charged the Company $53,330 (2008 = $54,300)(2007 = $53,000) for these services.


J.Paul Sorbara’s “annual compensation” is paid to Sorbara Geological Consulting Ltd., private company owned and controlled by him.  During Fiscal 2009/2008/2007, this firm was paid $120,000, $120,000, and $120,000.


Accounts payable and accrued liabilities at 8/31/2009 included $30 (2008 = $16,122)(2007 = $3,382) due to a numbered investment, a company controlled by a director.


During Fiscal 2009 Ended August 31, 2009, the Company paid $44,020 (2008 = $51,186)(2007 = $40,682) in wages and benefits to Daniel Fernandez, Manager of Minera Delta S.A. and a director.


During Fiscal 2009 Ended August 31, 2009, the Company paid $60,000 (2008 = $60,000)(2007 = $15,000) in consulting fees to Stephen Pearce, CFO/Secretary/Director.



Other than as disclosed above and in the MD&A in ITEM #5, there have been no transactions since 8/31/2008, or proposed transactions, which have materially affected or will materially affect the Company in which any director, executive officer, or beneficial holder of more than 10% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest.  Management believes the transactions referenced above were on terms at least as favorable to the Company as the Company could have obtained from unaffiliated parties.



7.C.  Interests of Experts and Counsel

--- No Disclosure Necessary ---



56





ITEM 8.  FINANCIAL INFORMATION


8.A.  Statements and Other Financial Information

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.


The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Morgan & Company LLP, Chartered Accountants are included herein immediately preceding the financial statements.


Audited Financial Statements

Fiscal 2009/2008/2007 Ended August 31st



8.A.7.  Legal/Arbitration Proceedings

The Directors and the Senior Management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.


The Directors and the Senior Management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.



8.B.  Significant Changes

No undisclosed significant change has occurred since the date of the annual financial statements and/or since the date of the most recent interim financial statements.




ITEM 9.  THE OFFER AND LISTING


9.A.  Common Share Trading Information

The Company's common shares began public trading on 10/16/2001.  The current stock symbol on the TSX Venture Exchange in Canada is “GNG”.  The CUSIP number is 381059104.


The following table lists the volume of trading and high, low and closing sales prices on the TSX Venture Exchange for the Company's common shares for: the last six months, the last nine fiscal quarters, and the last five fiscal years.


Table No. 9

TSX Venture Exchange

Common Shares Trading Activity

Canadian Dollars

 

Period Ended

Volume

High

Low

Closing

Monthly

    

12/31/2009

2,530,400

$0.19

$0.14

$0.19

11/30/2009

2,998,500

$0.20

$0.14

$0.16

10/31/2009

2,175,100

$0.24

$0.16

$0.18

 9/30/2009

3,878,500

$0.32

$0.13

$0.24

 8/31/2009

1,022,700

$0.14

$0.10

$0.13

Quarterly

    

11/30/2009

9,052,100

$0.32

$0.14

$0.16

 8/31/2009

2,555,400

$0.17

$0.10

$0.13

 5/31/2009

3,114,800

$0.18

$0.07

$0.16

 2/29/2009

7,736,000

$0.13

$0.04

$0.08

11/30/2008

6,264,700

$0.16

$0.04

$0.06

 8/31/2008

1,539,100

$0.30

$0.13

$0.15

 5/31/2008

1,730,200

$0.33

$0.22

$0.26

 2/29/2008

4,449,900

$0.40

$0.20

$0.31

11/30/2007

4,284,500

$0.45

$0.27

$0.35

Yearly

    

 8/31/2009

19,670,900

$0.18

$0.04

$0.13

 8/31/2008

12,113,700

$0.45

$0.13

$0.15

 8/31/2007

13,298,900

$0.49

$0.24

$0.29

 8/31/2006

23,673,000

$0.70

$0.15

$0.35

 8/31/2005

9,882,700

$0.35

$0.14

$0.16



The Company’s common shares began trading on the Berlin Stock Exchange on 4/23/2004, with the trading symbol of “GGZ.BE”.  Total volume through 12/31/2009 was 99,500.  Prices ranged from euro$0.02 to euro$0.51; the closing price on 12/31/2009 was euro$0.10.


The Company’s common shares began trading on the Frankfurt Stock Exchange on 1/14/2004, with the trading symbol of “GGZ.F”.  Total volume through 12/31/2009 was 6,162,900.  Prices ranged from euro$0.01 to euro$0.50; the closing price on 12/31/2009 was euro$0.10.


The Company’s common shares began trading on the Munich-Stock Exchange on 1/17/2006, with the trading symbol of “GGZ.MU”.  Total volume through 12/31/2009 was 2,198,800.  Prices ranged from euro$0.01 to euro$0.47; the closing price on 12/31/2009 was euro$0.11.


The Company’s common shares began trading on the XETRA-Stock Exchange in Europe on 1/10/2006, with the trading symbol of “GGZ.DE”.  Total volume through 12/31/2009 was 84,700.  Prices ranged from euro$0.08 to euro$0.56; the closing price on 10/18/2007 (last trade) was euro$0.08.



57





9.A.5.  Common Share Description


Registrar/Common Shares Outstanding/Shareholders

The Company's common shares are issued in registered form and the following information is taken from the records of Computershare Investor Services Inc. [located at 510 Burrard Street, Vancouver, British Columbia Canada  V5K 1A1], the registrar and transfer agent for the common shares.


The authorized capital of Golden Goliath consists of an unlimited number of common shares without par value.


Common Share Description

All of the authorized common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.  Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.


Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.


Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the British Columbia Business Corporations Act.  Unless the British Columbia Business Corporations Act or the Company's Articles otherwise provide, any action to be taken by a resolution of the shareholders may be taken by an ordinary resolution or by a vote of a majority or more of the shares represented at the shareholders' meeting.


The Company's Articles and the British Columbia Business Corporations Act contain provisions, which require a “special resolution” for effecting certain corporate actions.  Such a “special resolution” requires a two-third vote of shareholders rather than a simple majority for passage.  The principle corporate actions that require a “special resolution” include:

a.  Transferring the Company's jurisdiction from British Columbia to

    another jurisdiction;

b.  Giving financial assistance under certain circumstances;

c.  Certain conflicts of interest by Directors;

d.  Disposing of all/substantially all of Company's undertakings;

e.  Removing Director before expiration of his term in office;

f.  Certain alterations of share capital;

g.  Changing the Company name; and

h.  Certain reorganizations of the Company.



There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.



Stock Options

Refer to ITEM #6E and Tables No. 4/5/6/7/8 for additional information.


Warrants

At 12/31/2009, there were no warrants outstanding.



58





9.A.6.    Differing Rights

9.A.7.a.  Subscription Warrants/Right


9.A.7.b.  Convertible Securities/Warrants

The Company has no convertible securities.

Refer to ITEM #9.4.5. “Warrants” above for information about warrants.


9.C.  Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange in Canada and in Europe on the Berlin Stock Exchange, the Frankfurt Stock Exchange, the Munich Stock Exchange, and the XETRA Exchange.




ITEM 10.  ADDITIONAL INFORMATION


10.A.  Share Capital

       --- Not Applicable ---


10.B.  Memorandum and Articles of Association

Refer to discussion in Form-20-FR Registration Statement and amendments for more information about the Company’s articles.


10.C.  Material Contracts

       --- No Disclosure Necessary ---


10.D.  Exchange Controls

Canada has no system of exchange controls.  There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors.  There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10.E., “Taxation” below.


Restrictions on Share Ownership by Non-Canadians

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of “control” of the Company by a “non-Canadian”.  The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company.  “Non-Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.


10.E  Taxation

The Company believes the following is a brief summary of all material principal Canadian federal income tax consequences to a holder of common shares of the Company (a “U.S. Holder”) who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the “Act”) and the Canada – United States Income Tax Convention (the “Treaty”), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.


U.S. Holders are urged to consult their own tax advisors with respect to their particular circumstances.



59





Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares.  The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.


In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the Company’s capital stock was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the Company’s common shares at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada.  For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits situated in Canada, rights to amounts computed by reference to the amount or value of production from such mineralization, certain other rights in respect of properties situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.


The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.  The Company believes that it was not a passive foreign investment company for the taxable years ended 8/31/2009 or 8/31/2008 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.  


This summary does not address potential tax effects relevant to our Company or those tax considerations that depend upon circumstances specific to each investor.  In addition, this discussion does not address the tax consequences that may be relevant to particular investors subject to special treatment under certain U.S. Federal income tax laws, such as dealers in securities, tax-exempt entities, banks, insurance companies and non-U.S. Holders.  Accordingly, holders and prospective holders of our common shares should consult with their own tax advisors with respect to the income tax consequences to them of purchasing, owning and disposing of common shares in our Company


10.F.  Dividends and Paying Agents

The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.


Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders.  The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.



60





10.G.  Statement by Experts

       --- Not Applicable ---


10.H.  Documents on Display

The Company’s documents can be viewed at its Canadian office, located at:

 675 West Hastings Street, #711, Vancouver, British Columbia, Canada  V6B 1N2.


The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and files reports, registration statements and other information with the Securities and Exchange Commission (the “SEC”).  The Company’s reports, registration statements and other information can be inspected on the SEC’s website at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities maintained by the SEC at the following location: Judiciary Plaza, 100 F Street NE, Washington, D.C.  20549.  Further, we file reports under Canadian regulatory requirements on SEDAR; you may access our reports filed on SEDAR by accessing their website at www.sedar.com.  Finally, corporate information may be found at the Company’s website: goldengoliath.com.



ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a small business issuer, as defined in Section 240.12b-2; and thus, Item #11 is not applicable.



ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A.  Debt Securities            --- No Disclosure Necessary ---

12.B.  Warrants and Rights        --- Refer to ITEM #9, “Warrants”

12.C.  Other Securities           --- No Disclosure Necessary ---

12.D.  American Depository Shares  -- No Disclosure Necessary ---




PART II


ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY

          HOLDERS AND USE OF PROCEEDS

          --- No Disclosure Necessary ---



ITEM 15.  CONTROLS AND PROCEDURES  


Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that material items requiring disclosure by the Company are identified and reported in a timely manner.  As of August 31, 2009, an evaluation was carried out under the supervision of, and with the participation of, the Company management, including by the Chief Executive Officer and Chief Financial Officer of the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities and Exchange Act of 1934, as amended).  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures as of August 31, 2009, were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the Chief Executive Office and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



61





It should be noted that while the Company's Chief Executive Officer and Chief Financial Officer believe that the Company’s disclosure controls and procedures provide a reasonable level of assurance and that they are effective, they do not expect that the disclosure controls and procedures can prevent all errors or mistakes.  A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  The Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this report our disclosure controls and procedures are effective at that reasonable assurance level.


Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on this evaluation, management concluded that the Company’s internal control over financial reporting were effective as of August 31, 2010.  


Management is responsible for designing, establishing and maintaining a system of internal controls over financial reporting to provide reasonable assurance that the financial information prepared by the Company for external purposes is reliable and has been recorded, processed and reported in an accurate and timely manner in accordance with GAAP.  The Board of Directors is responsible for ensuring that management fulfills its responsibilities. The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements.  Management reviewed the results of their assessment with the Company’s Audit Committee.


There are inherent limitations in the effectiveness of internal controls over financial reporting, including the possibility that misstatements may not be prevented or detected.  Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation.  Furthermore, the effectiveness of internal controls can change with circumstances.  The Company has paid particular attention to segregation of duties matters surrounding its internal controls over financial reporting as the Company has only limited staff resources at the present time such that “ideal” segregation of duties is not feasible.  This risk is mitigated by management and Board review where appropriate.  At the present time, the Company does not anticipate hiring additional accounting or administrative staff as this is not considered necessary or practical and accordingly, will continue to rely on review procedures to detect potential misstatements in reporting of material to the public.


The Company’s management, including the CEO and CFO, believe that any internal controls over financial reporting, including those systems determined to be effective and no matter how well conceived and operated, have inherent limitations and can provide only reasonable, not absolute, assurance that the objectives of the control system are met with respect to financial statement preparation and presentation.  Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control.  The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.



62





As of the end of the period covered by this annual report, an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and the Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures.  Based upon that evaluation, the CEO and the CFO have concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.


The Company's disclosure controls and procedures operated such that important information flowed to appropriate collection and disclosure points in a timely manner and were effective so as to allow the Exchange Act reporting information to flow to the Company's CEO and CFO, including the period when this Annual Report on Form 20-F was prepared, as appropriate to allow timely decision regarding the required disclosure. In addition, the CEO and CFO have certified that the disclosure and procedures were effective so that the information in our Exchange Act reports was communicated to our management.


There have been no changes in the 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 the Company’s internal control over financial reporting.  Nor have there been any corrective actions with regard to deficiencies or material weaknesses, other than to ensure proper disclosure in the Company’s Form 20-F Annual Report.


Attestation Report of the Registered Accounting Firm.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Form 20-F Annual Report.



63





ITEM 16.  RESERVED


ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

The Company does not have an “audit committee financial expert” serving on its audit committee.  The Company’s Audit Committee consists of two independent directors and the President/CEO, all of whom are both financially literate and very knowledgeable about the Company’s affairs.  Because the Company’s structure and operations are straightforward, the Company does not find it necessary to augment its Board with a financial expert.


ITEM 16B.  CODE OF ETHICS  

The Company has not adopted a written ”code of ethics” that meets the new United States' Sarbanes-Oxley standards; the Board of Directors believes that existing Canadian standards and procedures is adequate for its purposes.  The Company has not seen any need to adopt a written code of ethics on the basis that its corporate culture effectively deters wrongdoing and promotes honest and ethical conduct, full, fair and accurate, timely, and understandable disclosure in reports and documents, the compliance with applicable governmental laws, rules and regulations; the prompt internal reporting of violations of the code; and accountability for adherence to the code.


ITEM 16C. PRINCIPAL ACCOUNTIING FEES AND SERVICES

The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.


The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy / procedure.  The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.


In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by Morgan & Company, including audit services, audit related services, tax services and other services.  The procedure requires that all proposed engagements of Morgan & Company for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.


Fees, including reimbursements for expenses, for professional services rendered by Morgan & Company to the Company are detailed below.


Principal Accountant Fees and Services

Fiscal 2009

Ended 8/31/2009

Fiscal 2008

Ended 8/31/2008

Audit Fees

$36,000

$34,800

Audit-Related Fees

$nil

$nil

Tax Fees

$nil

$nil

All Other Fees

$nil

$nil

TOTAL

$36,000

$34,800



ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

ITEM 16F.  CHANGE IN REGISTRANTS’S CEERTIFYING ACCOUNTANT

ITEM 16G.  CORPORTE GOVERNANCE

           --- No Disclosure Necessary ---



64





PART III


ITEM 17.  FINANCIAL STATEMENTS

The Company's consolidated financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the consolidated financial statements.


The consolidated financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Morgan & Company, Chartered Accountants included herein immediately preceding the audited consolidated financial statements.


Audited Financial

    Auditor's Report, dated 12/22/2009

    Consolidated Balance Sheets at 8/31/2009 and 8/31/2008

    Consolidated Statements of Operations and Deficit

      for the years ended 8/31/2009, 8/31/2008, and 8/31/2007

    Consolidated Statements of Cash Flows

      for the years ended 8/31/2009, 8/31/2008, and 8/31/2007

    Notes to Consolidated Financial Statements


ITEM 18.  FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to ITEM #17.


ITEM 19.  EXHIBITS


1.  Notice of Articles and Articles of Incorporation as currently in effect:

    Incorporated by reference to Form 20-FR Registration Statement, as amended


2.  Instruments defining the rights of holders of equity or debt securities

 being registered.    --- Refer to Exhibit No. 1 ---


3.  Voting Trust Agreements:  No Disclosure Necessary


4.  Material Contracts:

    Incorporated by reference to Form 20-FR Registration Statement, as amended

    and Form 6-K’s


5.  Foreign Patents:                     No Disclosure Necessary

6.  Earnings Per Share Calculation:      No Disclosure Necessary

7.  Ratio of Earnings To Fixed Charges:  No Disclosure Necessary

8.  List of Subsidiaries:                              Refer to ITEM #4.C.

9.   Statement Regarding Date of Financial Statements: No Disclosure Necessary

10.  Notice Required by Rul3e 104 of Regulation BTR:   No Disclosure Necessary

11.  Code of Ethics as required by ITEM No. 16B:       No Disclosure Necessary


12.1  Certifications required by Rule 13a-14(a) or Rule 15d-14(a)

12.2  Certifications required by Rule 13a-14(a) or Rule 15d-14(a)


13.1  Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

      Section 1350 of Chapter 63 of Title 18 of the United States Code

13.2  Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

      Section 1350 of Chapter 63 of Title 18 of the United States Code


14.  Legal Opinion required by Instruction 3 of ITEM 7B: No Disclosure Necessary


15.  (a) Any additional exhibits you wish to file as part of the registration statement or report, clearly marked to indicate their subject matter:

         --- No Disclosure Necessary---

     (b) any document or part of a document incorporated by reference in this filing if it is not otherwise required Additional Exhibits:

         ---Incorporated by reference to Form 20-FR Registration Statement,

            as amended and Form 6-K’s ---


65




















GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)



CONSOLIDATED FINANCIAL STATEMENTS


(Expressed in Canadian Dollars)


YEARS ENDED AUGUST 31, 2009 and 2008













66



INDEPENDENT AUDITORS’ REPORT



To the Shareholders of

Golden Goliath Resources Ltd.


We have audited the consolidated balance sheets of Golden Goliath Resources Ltd. as at August 31, 2009 and 2008, and the consolidated statements of loss and deficit, and cash flows for each of the years in the three-year period ended August 31, 2009.  These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.  


We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.


In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2009 in accordance with Canadian generally accepted accounting principles.




Vancouver, Canada

“Morgan and Company”


December 22, 2009

Chartered Accountants



COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCES


The reporting standards of the Public Company Accounting Oversight Board (United States) for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern, such as those described in Note 1 to the consolidated financial statements.  Our report to the shareholders, dated December 22, 2009, is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditor’s report when these are adequately disclosed in the consolidated financial statements.




Vancouver, Canada

“Morgan and Company”


December 22, 2009

Chartered Accountants



[gg20fannual2009amend1012.jpg]



67




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian Dollars)


 

AUGUST 31

 

 2009

 2008

  


 


ASSETS

 


 


  


 


Current

 


 


Cash

$

169,781

$

119,831

Short term investments (Note 3)

 

405,000

 

2,558,945

Accounts receivable (Note 4)

 

164,327

 

177,176

Prepaid expenses

 

13,149

 

26,490

  

752,257

 

2,882,442

  


 


Exploration Advances

 

23,461

 

20,171

Mineral Property Acquisition Costs (Note 5)

 

334,773

 

334,773

Mineral Property Exploration Costs (Note 5)

 

7,007,530

 

7,449,608

Property and Equipment (Note 6)

 

104,200

 

108,727

  


  
 

$

8,222,221

$

10,795,721

  


  

LIABILITIES

 


  
  


  

Current

 


  

Accounts payable and accrued liabilities

$

39,879

$

454,703


Employment Benefit Obligations

 

26,000

 


46,000

  

65,879

 

500,703

     

SHAREHOLDERS’ EQUITY

    
     

Share Capital (Note 7)

 

19,133,783

 

19,133,783

     

Contributed Surplus (Note 7)

 

1,569,184

 

1,511,677

     

Deficit

 

(12,546,625)

 

(10,350,442)

  

8,156,342

 

10,295,018

     
 

$

8,222,221

$

10,795,721

 



Approved on behalf of the Board of Directors:

   

“J. Paul Sorbara”

 

“Stephen W. Pearce”

Director

 

Director


The accompanying notes are integral part of these consolidated financial statements.


68






GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT

(Expressed in Canadian Dollars)



 

YEARS ENDED AUGUST 31

  

2009

 

2008

 

2007

  


 


 


Expenses

 


 


 


  


 


  

Amortization

$               

23,800

$

19,696

$

12,653

Automobile

 

3,288

 

3,519

 

3,860

Consulting (Note 10(e))

 

68,346

 

60,143

 

22,703

Foreign exchange loss (gain)

 

36,485

 

(16,460)

 

38,962

Investor relations

 

34,050

 

172,625

 

135,861

Management fees (Note 10(b))

 

120,000

 

120,000

 

120,000

Corporate office and general

    (Note 10(d))

 


61,417

 


54,082

 

  

52,497

Professional fees

 

72,433

 

44,487

 

29,512

Rent and utilities

 

59,013

 

72,088

 

68,256

Transfer agent and filing fees

 

15,043

 

40,991

 

80,869

      Travel

 

43,260

 

71,734

 

31,109

      Stock based compensation

 

57,507

 

122,780

 

333,813

      Wages and benefits (Note 10(c))

 

189,846

 

265,076

 

222,653


Loss Before Other Income (Expense)

 

(784,488)

 

  

(1,030,761)

 

 

(1,152,748)

  


   


OTHER INCOME (EXPENSE)

 


   


Gain On Sale Of Equipment

 

2,302

 

-

 

-

Write Down Of Mineral Property

    Exploration Costs

 


(1,435,660)

 


-

 


-

Sales Taxes Recovery

 

3,469

 

-

 

-

Interest Income

 

18,194

 

209,684

 

117,192

  


   


Net Loss For The Year

 

 (2,196,183)

 

(821,077)

 

(1,035,556)

  


    

Deficit, Beginning Of Year

 

(10,350,442)

 

(9,529,365)

 

(8,493,809)

  


    

Deficit, End Of Year

$

(12,546,625)

$

(10,350,442)

$

   (9,529,365)

  


 


  
  


 


  

Loss Per Share – Basic and Diluted

$

           (0.04)

$

(0.01)

$

(0.02)

 



    

Weighted Average Number Of Shares Outstanding – Basic and diluted


 60,934,037

 

60,875,845

 


49,092,397



The accompanying notes are integral part of these consolidated financial statements.


69




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)


 

YEARS ENDED AUGUST 31

 

   2009

2008

2007

    


 


Cash Provided By (Used For)

   


 


    


 


Operating Activities

   


 


Net loss for the year

$

(2,196,183)

$

(821,077)

$

  (1,035,556)

Items not affecting cash:

     


            Amortization

 

23,800

 

19,696

 

12,653

            Gain on sale of equipment

 

(2,302)

 

-

 

-      

            Stock based compensation

 

57,507

 

122,780

 

333,813

            Unrealized foreign exchange loss

 

(2,036)

 

-

 

-      

Write down of mineral property exploration costs

 


1,435,660

 


-

 


-

      


Change in non-cash operating assets and liabilities:

     


Accounts receivable

 

12,849

 

(42,805)

 

(79,144)

Prepaid expenses

 

13,341

 

(3,944)

 

(12,383)

Accounts payable and accrued liabilities

 

(43,760)

 

(194,231)

 

7,729

Employment benefit obligations

 

(20,000)

 

9,000

 

6,000

  

(721,124)

 

(910,581)

 

(766,888)

Investing Activities

   


 


      Exploration advances

 

-      

 

-

 

(90,146)

      Expenditures on mineral properties

 

(1,365,900)

 

 (3,566,852)

 

(579,748)

      Purchase of short term investments

 

-      

 

-

 

(7,630,945)

      Proceeds from redemption of short term investments

 


2,153,945

 

  4,422,000

 


 2,162,759

      Purchase of property and equipment

 

(22,247)

 

(54,315)

 

(34,141)

      Proceeds from sale of equipment

 

5,276

 

-

 

-      

  

771,074

 

415,594

 

(6,172,221)

Financing Activities

      

Share issuances for cash

 

-      

 

45,000

 

7,367,200

Share issue costs

 

-      

 

-

 

(378,145)

  

-      

 

45,000

 

6,989,055

    


 


 Increase (Decrease) In Cash

 

49,950

 

(64,747)

 

49,946

  


    

Cash, Beginning of Year

 

119,831

 

184,578

 

134,632

       

Cash, End of Year

$

169,781

$

119,831

$

184,578

  


 


 


Supplementary Cash Flow Disclosure And Non-Cash Investing and Financing Activities:

 


 


 


Interest paid

$

-      

$

-

$

  -      

Income taxes paid

$

-      

$

-

$

 -      

 Shares issued for agent’s commission

$

-      

$

-

$

100,990



The accompanying notes are integral part of these consolidated financial statements.



70





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



1.

NATURE OF OPERATIONS AND GOING CONCERN


Golden Goliath Resources Ltd. (the “Company”) was incorporated under the Company Act of British Columbia on June 12, 1996.  The Company is a public company listed on the Toronto Stock Venture Exchange (the “TSX.V”), trading under the “GNG” symbol.    


The Company is in the development stage and is in the process of exploring and developing its Mexican resource properties and has not yet determined whether these properties contain reserves that are economically recoverable.  The recoverability of amounts shown for resources properties and related deferred exploration expenditures are dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development of the properties and upon future profitable production or proceeds from the disposition thereof.  Managements’ plan in this regard is to secure additional funds through future equity financings, which either may not be available or may not be available on reasonable terms.


These financial statements have been prepared in accordance with Canadian generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization value may be substantially different from carrying value as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At August 31, 2009, the Company had not yet achieved profitable operations, had a working capital of $712,378 and expects to incur further losses in the development of its business, all of which casts substantial doubt on the Company’s ability to continue as a going concern.  The Company’s ability to continue as a going concern is dependent upon its ability to generate and maintain future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due.



2.

SIGNIFICANT ACCOUNTING POLICIES


These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) as prescribed by The Canadian Institute of Chartered Accountants (“CICA”) and are stated in Canadian dollars unless otherwise noted.



71





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


a)

Basis of Consolidation


The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Minera Delta S.A. de C.V. of Mexico, and 4247 Investments Ltd. (inactive) of British Columbia. Significant inter-company balances and transactions have been eliminated on consolidation.


b)

Variable Interest Entities


The CICA issued Accounting Guideline 15, “Consolidation of Variable Interest Entities”, to provide accounting guidance related to variable interest entities (“VIE”).  A VIE is an entity in which equity investors do not have the characteristics of a “controlling financial interest” or there is not sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.  The Company has determined that it does not have a primary beneficiary interest in a VIE.


c)

Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures.  Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates.


Significant areas requiring the use of management estimates relate to the identification and capitalization of exploration costs, determination of impairment in the carrying values for long-lived assets, the existence of contingent assets and liabilities, amounts recorded for related party transactions and balances, asset retirement obligations and stock-based compensation valuations.  Management reviews significant estimates on a periodic basis and, when changes in estimates are necessary, makes adjustments prospectively.


d)

Financial Instruments


The Company follows CICA Handbook Sections 1530, “Comprehensive Income”, Section 3251, “Equity”, Section 3855, “Financial Instruments – Recognition and Measurement”, Section 3862, Financial Instruments – Disclosures, and Handbook Section 3863, Financial Instruments – Presentation, and Section 3865, “Hedges”.  Section 1530 establishes standards for reporting and presenting comprehensive income, which is defined as the change in equity from transactions and other events from non-owner sources.  Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with Canadian generally accepted accounting principles.



72




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


d)   Financial Instruments (Continued)


Sections 3862 and 3863 establish standards for disclosure and presentation of financial instruments and non-financial derivatives and identifies the information that should be disclosed about them (Note 8).  Section 3865 describes when and how hedge accounting can be applied as well as the disclosure requirements.  Hedge accounting enables the recording of gains, losses, revenues and expenses from derivative financial instruments in the same period as for those related to the hedged item.


Section 3855 prescribes when a financial asset, financial liability or non-financial derivative is to be recognized on the balance sheet and at what amount, requiring fair value or cost-based measures under different circumstances.  Under Section 3855, financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities.  All financial instruments, including derivatives, are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are measured at amortized cost.  Subsequent measurement and changes in fair value will depend on their initial classification, as follows: held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net earnings; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net earnings.


The Company has made the following designations of its financial instruments:  cash and short-term investments as held-for-trading; accounts receivable as loans and receivables and accounts payable and accrued liabilities and employee benefits obligations as other financial liabilities.  The Company has determined that no adjustments are currently required for transaction costs related to the acquisition of financial assets and financial liabilities that are classified as other than held-for-trading. (Note 8)


e)

Foreign Currency Translation


The Company’s reporting currency is the Canadian dollar.  Transactions in United States (“US”) and Mexican (“MXN”) foreign currencies have been translated into Canadian dollars using the temporal method as follows:


i)

Monetary items at the rate prevailing at the balance sheet date;

ii)

Non-monetary items at the historical exchange rate;

iii)

Revenues and expenses at the average rate in effect during the applicable accounting period; and

iv)

Gains or losses arising on foreign currency translation are included in the statements of loss and deficit.



73




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


f)

Cash and Cash Equivalents


Cash includes cash on hand, cash held in trust and demand deposits.  Cash equivalents include short-term, highly liquid investments that are readily convertible to known amounts of cash which are subject to insignificant risk of change and have maturities of three month or less from the date of acquisition, held for the purpose of meeting short-term cash commitments rather than for investing or other purposes.  


g)

Mineral Property Costs


The Company records its interest in mineral properties at cost, less option income realized. The cost of mineral properties and related exploration costs are deferred and capitalized until the properties are brought into production, sold or abandoned. These deferred costs will be amortized on the unit-of-production basis over the estimated useful life of the properties following the commencement of production or are written-off if the properties are sold, allowed to lapse or abandoned. Amounts shown for the mineral property acquisition exploration costs represent costs incurred and are not intended to reflect present or future values. Capitalized costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge that changes in future conditions could require a material change in the recorded amounts.


Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of permits and the potential for problems arising from government conveyance accuracy, prior unregistered agreements or transfers, indigenous land claims, confirmation of physical boundaries, and title may be affected by undetected defects.  The

Company does not carry title insurance.  The Company has evaluated title to all of its mineral properties and believes, to the best of its knowledge, that evidence of title is adequate and acceptable given the current stage of exploration.


h)

Equipment


Equipment is recorded at cost and amortized on a straight-line basis over their estimated useful lives at the following rates:


 

Equipment

10% - 25%

 

Vehicles

25%


i)

Employee Future Benefits


The Company is subject to Mexican statutory laws and regulations governing employee termination benefits and accrues for employee future benefits based on management’s estimates of the expected payments.



74





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


i)   Employee Future Benefits (Continued)


These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit.


Under Mexican Labour Law, the Company also provides statutorily mandated severance benefits to its employees terminated under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year of service payable upon involuntary termination without just cause.


Employee future benefits are unfunded.


j)

Impairment of Long-Lived Assets


The Company periodically evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated future cash flows resulting from the use of an asset and its eventual disposition is less than its carrying amount.


A mining enterprise in the exploration stage is not obliged to conclude that capitalized costs have been impaired due to the absence of a projected estimated future net cash flow from the mining enterprise. Mineral properties in the exploration stage do not have established mineral reserves and a basis for the preparation of a projection of the estimated future net cash flow from the properties does not exist. However, a mining enterprise is required to consider the conditions for impairment write-down. The conditions include significant unfavourable economic, legal, regulatory, environmental, political and other factors. In addition management’s development activities towards its planned principal operations are a key factor considered as part of the ongoing assessment of the recoverability of the carrying amount of mineral properties. Whenever events or changes in circumstances indicate that the carrying amount of a mineral property in the exploration stage may be impaired the capitalized costs is written down to the estimated recoverable amount.



75




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


k)

Asset Retirement Obligations


The Company applies CICA accounting standard 3110 – “Asset Retirement Obligations” to account for the obligations to reclaim and remediate the mineral properties.  Under the standard, the estimated fair value of the legal obligations are recognized in the period incurred, at the net present value of the cash flows required to settle the future obligations. A corresponding amount is capitalized to the related asset.  Asset retirement obligations are subject to accretion over time for increases in the fair value of the liabilities.


As of August 31, 2009, the Company had determined that there were no significant legal obligations for reclamation and remediation costs.  The Company’s estimates of its ultimate asset retirement obligations could change as a result of changes in regulations, the extent of environmental remediation required, and the means of reclamation or cost estimates.  Changes in estimates are accounted for prospectively from the period estimates are revised.  


l)

Share Capital


i)

Non-monetary consideration – The fair value of the shares issued is based on the trading price of those shares on the TSX.V on the grant date determined by the Board of Directors. Agent’s warrants, stock options and other equity instruments issued in non-monetary transactions are recorded at fair value determined by management using the Black-Scholes option pricing model. Proceeds from unit placements are allocated between shares and warrants issued according to their relative fair value using the residual method.


ii)

Stock based compensation – Compensatory stock option transactions with directors, officers, employees and outside consultants are charged to operations or capitalized to mineral properties with an offsetting credit to contributed surplus. Stock options which vest immediately are recorded at the date of grant. Stock options issued to directors, officers and employees that vest over time are valued at the grant date and recorded using the straight line method over the vesting period. Stock options issued to consultants that vest over time are valued at each vesting date as services are rendered. Consideration received on the exercise of stock options together with the related portion previously recorded in contributed surplus is credited to share capital.


iii)

Share issuance costs – Costs directly identifiable with the raising of share capital financing are charged against share capital.  Share issuance costs incurred in advance of share subscriptions are recorded as non-current deferred assets.  Share issuance costs related to uncompleted share subscriptions are charged to operations.



76




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


m)

Earnings (Loss) Per Share


Earnings (loss) per share are calculated based on the weighted average number of shares outstanding. The Company uses the treasury stock method to compute the dilutive effect of options, warrants and other similar instruments. Under this method, the dilutive effect on earnings per share is calculated to reflect the use of the proceeds that could be obtained upon the exercise of options and warrants. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. Basic and diluted losses per share are equal as the assumed conversion of outstanding options and warrants would be anti-dilutive.


n)

Income Taxes


Income taxes are calculated using the liability method of accounting.  Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax liabilities or assets.  Future tax assets are recognized to the extent that they are considered more likely than not to be realized.  Future income tax liabilities or assets are calculated using the tax rates anticipated to apply in the periods that the temporary differences are expected to reverse.  Valuation allowances are provided when unrecognized net future income tax assets are not more likely than not to be realized.


o)

Accounting Policy Changes


Effective September 1, 2008, the Company adopted the following new CICA Handbook Sections on a prospective basis with no restatement to prior period financial statements:


i)

Section 1535, Capital Disclosures, requires the disclosure of both qualitative and quantitative information that enables users of financial statements to evaluate the Company’s objectives, policies and processes for managing capital.  Under this standard, the Company will be required to disclose the following:


  

qualitative information about its objectives, policies and processes for managing capital;

  

summary quantitative data about what it manages as capital;

  

whether during the period it complied with any externally imposed capital requirement to which it is subject; and

  

when the Company has not complied with such externally imposed capital requirements, the consequences of such non-compliance.



77





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


o)

Accounting Policy Changes (Continued)


ii)

Section 3862, Financial Instruments – Disclosures; and Section 3863, Financial Instruments – Presentation consist of a comprehensive series of disclosure requirements and presentation rules applicable to financial instruments. Section 3862 revises and enhances the disclosure requirements for financial instruments and Section 3863 carries forward unchanged the presentation requirements.


Section 3862 requires the Company to provide disclosures in its financial statements that enable users to evaluate:


the significance of financial instruments for the Company’s financial position and performance;

the nature and extent of risks arising from financial instruments to which the Company is exposed during the period and at the balance sheet date; and

how the Company manages those risks.


iii)

On June 1, 2007, the Emerging Issues Committee of the CICA issued Abstract No. 166, “Accounting Policy Choice for Transaction Costs” (“EIC-166”).  This EIC addresses the accounting policy choice of expensing or adding transaction costs related to the acquisition of financial assets and financial liabilities that are classified as other than held-for-trading.  Specifically, it requires that the same accounting policy choice be applied to all similar financial instruments classified as other than held-for-trading, but permits a different policy choice for financial instruments that are not similar.  The Company has adopted EIC-166 effective June 1, 2007, which requires retroactive application to all transaction costs accounted for in accordance with CICA Handbook Section 3855, Financial Instruments – Recognition and Measurement.  The Company has evaluated the impact of EIC-166 and determined that no adjustments were required.


iv)

The CICA approved amendments to CICA Handbook Section 1400 “General Standards of Financial Statement Presentation”. These amendments require management to assess an entity’s ability to continue as a going concern. When management is aware of material uncertainties related to events or conditions that may cast doubt on an entity’s ability to continue as a going concern, those uncertainties must be disclosed. In assessing the appropriateness of the going concern assumption, the standard requires management to consider all available information about the future, which is at least, but not limited to, twelve months from the balance sheet date. The new requirements of the standard are applicable for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008.



78




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


o)

Accounting Policy Changes (Continued)


v)

Effective September 1, 2008, the Company implemented CICA handbook section 3064, “Goodwill and intangible assets”, which establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets by profit-oriented enterprises.  The adoption of this new standard did not have a material impact on the Company’s financial statements.


p)   Future Accounting Changes


i)

International Financial Reporting Standards (“IFRS”)


In 2006, The Canadian Accounting Standards Board (“AcSB”) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies.  The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five-year transitional period.  In February 2008, the AcSB announced that 2011 is the changeover date for publicly listed companies to use IFRS, replacing Canada’s own GAAP.  The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  The adoption date of September 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended August 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.


              ii)

 Business Combinations


In January 2009, the CICA issued CICA Handbook Section 1582, “Business Combinations”, Section 1601, “Consolidations”, and Section 1602, “Non-controlling Interests”. These sections replace the former CICA Handbook Section 1581, “Business Combinations” and Section 1600, “Consolidated Financial Statements” and establish a new section for accounting for a non-controlling interest in a subsidiary.  CICA Handbook Section 1582 establishes standards for the accounting for a business combination, and states that all assets and liabilities of an acquired business will be recorded at fair value.  Obligations for contingent consideration and contingencies will also be recorded at fair value at the acquisition date.  The standard also states that acquisition-related costs will be expensed as incurred and that restructuring charges will be expensed in the periods after the acquisition date.



79






GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)


p)   Future Accounting Changes (Continued)


             ii)

 Business Combinations (Continued)


 It provides the Canadian equivalent to International Financial Reporting Standard (“IFRS”) 3, “Business Combinations” (January 2008).  The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011.


CICA Handbook Section 1601 establishes standards for the preparation of consolidated financial statements.


CICA Handbook Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in the preparation of consolidated financial statements subsequent to a business combination.  It is equivalent to the corresponding provisions of International Financial Reporting Standard IAS 27, “Consolidated and Separate Financial Statements” (January 2008).


CICA Handbook Section 1601 and Section 1602 apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011.  Earlier adoption of these sections is permitted as of the beginning of a fiscal year. All three sections must be adopted concurrently.  The Company is currently valuating the impact of the adoption of these sections.


iii)

 Financial Statement Concepts


CICA Handbook Section 1000 has been amended to focus on the capitalization of costs that meet the definition of an asset and de-emphasizes the matching principle.  The revised requirements are effective for annual and interim financial statements relating to fiscal years beginning on or after October 1, 2008. The Company is currently evaluating the impact of the adoption of this change on its financial statements.



3.

SHORT-TERM INVESTMENTS


As at August 31, 2009, short–term investments in the amount of $405,000 (2008 - $2,558,945) were comprised of Canadian investments in guaranteed investment certificates maturing on May 21, 2010 and effective interest rates of 0.7% (2008 – 2.75%).  


80




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS ENDED AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



4.

ACCOUNTS RECEIVABLE


Accounts receivable consist of the following:


  

         2009

2008

   


 

Sales taxes recoverable

$    75,084

$   149,806

 

Interest receivable

792

20,822

 

Other receivable

88,451

6,548

  

    $  164,327

$   177,176





81



GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)


5.

MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS


                State of Chihuahua, Mexico


      

BUFALO

LOS HILOS

   
      

LA

LAS BOLAS

NOPALERA

  
      

HERMOSA

EL MANTO

FLOR DEL

  
 

SAN

   

OTEROS

LA BARRANCA

DON LAZARO

TRIGO

  
 

TIMOTEO

NUEVA

LA

 

LA

BECK

AMPLIACION

EL CANARIO

TOTAL

TOTAL

 

ORO LEON

UNION

REFORMA

CORONA

ESPERANZA

EL CHAMIZAL

LA VERDE

LA CRUZ

2009

2008

  


 


 


 


   


 


Acquisition costs

$

 -

$

-

$

   -

$

-

$

-

$

-

$


$


$


$

-

    


       


 


 


 


 


Exploration costs

 


 


 


 


 


 


 


 


 


 


Assaying

 

58,255

 

-       

 

   -

 

-       

 

-       

 

-       

 

94,154

 

-       

 

152,409

 

382,773

Drilling

 

-

 

-       

 

   -

 

-       

 

-       

 

-       

 

434,750

 

-       

 

434,750

 

2,750,769

Geology and mapping

 

12,534

 

350

 

-

 

-       

 

-       

 

-       

 

79,580

 

-       

 

92,464

 

267,914

Property taxes and passage rights

 

2,288

 

591

 

10,233

 

-

 

2,214

 

16,068

 

4,340

 

12,091

 

47,825

 

58,938

Salaries

 

-

 

11

 

-

 

-       

 

-       

 

-

 

238

 

-       

 

249

 

78,808

Travel

 

6,629

 

8,078

 

-

 

-       

 

-       

 

509

 

16,257

 

8

 

31,481

 

11,688

Road construction and site preparation

 

6,041

 

-

 

5,832

 

-       

 

-       

 

-       

 

29,355

 

-       

 

41,228

 

198,084

Facilities and other

 

17,246

 

22,566

 

-

 

-       

 

-       

 

10,823

 

140,052

 

2,488

 

193,175

 

272,384

Current costs

 

102,993

 

31,596

 

16,065

 

-

 

2,214

 

27,400

 

798,726

 

14,587

 

993,581

 

4,021,358

Write down

 

-

 

-

 

(1,435,660)

 

-

 

-

 

-

 

-

 

-

 

(1,435,660)

 

-

Balance, beginning of year

 

3,441,092

 

111,893

 

1,494,595

 

35,473

 

11,675

 

36,337

 

2,300,379

 

352,938

 

7,784,382

 

3,763,023

Balance, end of year

$

3,544,085

$

143,489

$

75,000

$

35,473

$

13,889

$

63,737

$

3,099,105

$

367,525

$

7,342,303

$

7,784,381

                    


Costs summary

                   


Acquisition

$

69,257

$

-       

$

75,000

$

-       

$

-       

$

-       

$

187,123

$

3,393

$

334,773

$

334,773

Exploration

$

3,474,828

$

143,489

$

-

$

35,473

$

13,889

$

63,737

$

2,911,982

$

364,132

$

7,007,530

$

7,449,608


82







GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)


5.   MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS (Continued)


State of Chihuahua, Mexico

         


      

BUFALO

LOS HILOS

   
      

LA

LAS BOLAS

NOPALERA

  
      

HERMOSA

EL MANTO

FLOR DEL

  
 

SAN

   

OTEROS

LA BARRANCA

DON LAZARO

TRIGO

  
 

TIMOTEO

NUEVA

LA

 

LA

BECK

AMPLIACION

EL CANARIO

TOTAL

TOTAL

 

ORO LEON

UNION

REFORMA

CORONA

ESPERANZA

EL CHAMIZAL

LA VERDE

LA CRUZ

2008

2007

  


 


 


 


   


 


Acquisition costs

$

 -

$

-

$

   -

$

-

$

-

$

-

$


$


$


$

-

    


       


 


 


 


 


Exploration costs

 


 


 


 


 


 


 


 


 


 


Assaying

 

274,301

 

-       

 

70,051

 

-       

 

-       

 

-       

 

38,421

 

-       

 

382,773

 

55,894

Drilling

 

1,540,075

 

-       

 

761,226

 

-       

 

-       

 

-       

 

449,468

 

-       

 

2,750,769

 

350,150

Geology and mapping

 

117,204

 

221

 

43,850

 

-       

 

-       

 

-       

 

106,639

 

-       

 

267,914

 

89,548

Property taxes and passage rights

 

4,911

 

577

 

11,163

 

6,693

 

2,186

 

12,998

 

5,862

 

14,548

 

58,938

 


48,639

Salaries

 

22,614

 

12,276

 

32,370

 

-       

 

-       

 

139

 

11,409

 

-       

 

78,808

 

52,171

Travel

 

1,720

 

2,727

 

4,058

 

-       

 

-       

 

-       

 

3,183

 

-       

 

11,688

 

6,740

Road construction and site preparation

 

74,269

 

11,673

 

38,500

 

-       

 

-       

 

-       

 

73,642

 

-       

 

198,084

 


85,455

Facilities and other

 

53,364

 

29,028

 

47,570

 

-       

 

-       

 

1

 

142,421

 

-       

 

272,384

 

100,974

Current costs

 

2,088,458

 

56,502

 

1,008,788

 

6,693

 

2,186

 

13,138

 

831,045

 

14,548

 

4,021,358

 

789,571

Balance, beginning of year

 

1,352,634

 

55,391

 

485,806

 

28,780

 

9,489

 

23,199

 

1,469,334

 

338,390

 

3,763,023

 

2,973,452

Balance, end of year

$

3,441,092

$

111,893

$

1,494,594

$

35,473

$

11,675

$

36,337

$

2,300,379

$

352,938

$

7,784,381

$

3,763,023

                    


Costs summary

                   


Acquisition

$

69,257

$

-       

$

75,000

$

-       

$

-       

$

-       

$

187,123

$

3,393

$

334,773

$

334,773

Exploration

$

3,371,835

$

111,893

$

1,419,594

$

35,473

$

11,675

$

36,337

$

2,113,256

$

349,545

$

7,449,608

$

3,428,250


83





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



5.

MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS (Continued)


The Company has an extensive property portfolio of mining concessions, acquired mainly through staking, in the Uruachic District of Mexico covering approximately 10,000 hectares. The Company has various net smelter returns on specific claims forming a part of the Company’s properties. The net smelter returns range from 1% to 3%, which have buyouts ranging from US$250,000 to US$2,000,000.


In September 2007, the Company optioned a 60% interest in La Cruz Property to a company which undertook to make cash payments to the Company totaling US $300,000 (40,000 received) and spend US $450,000 on the property over a period of three years. The agreement was terminated in 2008.


In April 2007, the Company signed an agreement to acquire the Todos Santos 50 hectare mining concession for approximately $25,000.  In April 2007 and July 2007, the Company paid $9,754 to bring the property into good standing with the Mexican authorities and committed to pay $5,000 in October 2007 (paid) and $10,000 in October 2008 (paid) to complete the acquisition.


In May 2007 and amended October 2007, the Company optioned the Corona and El Chamizal properties to a company which undertook to spend $500,000 and $200,000 on the respective properties over a period of three years and issue 300,000 and 150,000 shares respectively to the Company over a period of three years from when the company lists its shares on a stock exchange. As of August 31, 2009 the shares have not been listed on the stock exchange or been received.



6.

PROPERTY AND EQUIPMENT

  

    2009

  


 ACCUMULATED


  

COST

 AMORTIZATION

  NET

   


 


 

Equipment

$

  71,117

36,758

  34,359

 

Vehicles

 

  91,415

40,491

  50,924

 

Land

 

  18,917

-     

  18,917

    


 
  

$

181,449

77,249

104,200


  

                               2008

  


 ACCUMULATED


  

COST

 AMORTIZATION

  NET

   


 


 

Equipment

$

67,879

31,592

    36,287

 

Vehicles

 

84,303

30,780

    53,523

 

Land

 

18,917

-     

    18,917

    


 
  

$

171,099

62,372

  108,727



84




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



7.

SHARE CAPITAL


Authorized


The authorized share capital of the Company consists of an unlimited number of common shares without par value.

     

Issued and Fully Paid

  

NUMBER OF SHARES


AMOUNT

    


 

Balance, August 31, 2007

  60,754,037

$

18,905,829

     
 

Issued for options exercised

       180,000

 

45,000

 

Fair value of options allocated to shares on exercise

-

 

182,954

     
 

Balance, August 31, 2008 and 2009

  60,934,037

$

19,133,783


a)

Outstanding Warrants


On April 20, 2009 18,352,726 warrants expired unexercised. As at August 31, 2009, the Company had no share purchase warrants outstanding.


b)

Stock Options

           

In July 2007, the Exchange approved an investor relations agreement entered into by the Company with a consultant, for a three month period, at a monthly fee of US$7,500 and 60,000 stock options at a price of $0.42 per share. In October 2007, the contract was renewed for a six month term at US$7,500 per month and 120,000 stock options (vested) at a price of $0.31 per share.


In November 2007, the Company granted 200,000 incentive stock options to consultants and 225,000 incentive stock options to employees of the company at a price of $0.35 per share, exercisable for a period of five years.


In December 2008, the Company granted 925,000 incentive stock options to directors and employees of the Company, at a price of $0.10 per share, exercisable for a period of five years.


In April 24, 2009, the Company granted 225,000 incentive stock options to Consultants of the Company, 75,000 at a price of $0.10 per share and 150,000 at a price of $0.12 per share, exercisable for a period of five years.



85




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



7.

SHARE CAPITAL (Continued)


b)

Stock Options (Continued)

           

Stock based compensation on options granted during the year amounted to $57,507 (2008 - $122,780). The fair value for options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:  risk-free interest rate of 1.60% (2008 – 4.15%) dividend yield of nil, volatility factor of 107% (2008 – 99.50%), and a weighted average expected life of the options of 5 years.


A summary of changes in stock options since August 31, 2007 is presented below:


   

WEIGHTED

  

NUMBER

AVERAGE

  

OF

EXERCISE

  

SHARES

PRICE

    


 

Balance, August 31, 2007

4,985,000

 $

0.36

     
 

Granted

545,000

 

0.34

 

Exercised

(180,000)

 

0.25

 

Cancelled

(375,000)

 

0.35

 

Expired

(50,000)

 

0.25

     
 

Balance August 31, 2008

4,925,000

 

0.36

     
 

Expired

(430,000)

 

0.36

 

Granted

1,150,000

 

0.10

 

Cancelled

(175,000)

 

0,38

     
 

Balance, August 31, 2009

5,470,000

 $

0.31


*Subsequent to August 31, 2009, 515,000 stock options expired.


The following summarizes information about stock options outstanding at August 31, 2009:


 

OPTIONS OUTSTANDING

 

OPTIONS EXERCISABLE

  

WEIGHTED

    
  

AVERAGE

WEIGHTED

  

WEIGHTED

 

NUMBER

REMAINING

AVERAGE

 

NUMBER

AVERAGE

 

OF

CONTRACTUAL

EXERCISE

 

OF

EXERCISE

 

OPTIONS

LIFE

PRICE

 

OPTIONS

PRICE

        
 

5,470,000

2.54 years

  $    0.31

 

5,470,000

$

0.31



86



GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



7.

SHARE CAPITAL (Continued)


c)

Contributed Surplus


The following table summarizes the Company’s Contributed Surplus:


 

Balance, August 31, 2007

$ 1,571,851

   
 

Stock options granted

122,780

 

Stock options exercised

(182,955)

   
 

Balance, August 31, 2008

1,511,676

   
 

Stock options granted

57,507

   
 

Balance, August 31, 2009

$ 1,569,183



8.

FINANCIAL INSTRUMENTS


A financial instrument is any contract that gives rise to a financial asset of one party and a financial liability or equity instrument of another party.  A financial asset is any asset that is i) cash; ii) a contractual right to receive cash or another financial asset from another party; iii) a contractual right to exchange financial instruments with another party under conditions that are potentially favourable to the entity; or iv) an equity instrument of another entity.  A financial liability is any liability that is a contractual obligation to i) deliver cash or another financial asset to another party; or ii) exchange financial instruments with another party under conditions that are potentially unfavourable to the entity.  An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.


      Financial Instrument Risk Exposure and Risk Management


The Company is exposed in varying degrees to a variety of financial instrument related risks.  The Board of Directors approves and monitors the risk management process.  The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. The types of risk exposure and the way in which such exposure is managed is provided as follows:


      Credit Risk


The Company is primarily exposed to credit risk on its bank accounts.  Credit risk exposure is limited by placing its cash with high-credit quality financial institutions.



87



GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



8.   FINANCIAL INSTRUMENTS (Continued)


Liquidity Risk


The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account the Company’s holdings of cash.  The Company believes that these sources will be sufficient to cover the expected short and long term cash requirements.  


Market Risk


The significant market risk exposures to which the Company is exposed are foreign exchange risk, interest rate risk, and commodity price risk.


      Foreign Currency Risk


The Company has operations in Canada and Mexico subject to foreign currency fluctuations.  The Company’s operating expenses are incurred in Canadian dollars and Mexican pesos, and the fluctuation of the Canadian dollar in relation to this other currency will have an impact upon the profitability of the Company and may also affect the value of the Company’s assets and the amount of shareholders’ equity.  The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.


Financial assets and liabilities denominated in currencies other than the Canadian dollar are as follows:


  

FINANCIAL

FINANCIAL

  

ASSETS

LIABILITIES

    
 

Mexican Pesos

 $875,461

 $781,304



Based on the above net exposures at August 31, 2009, and assuming that all other variables remain constant, a 10% appreciation or depreciation of the Canadian dollar against the Mexican Peso would result in an increase/decrease of $774 in the Company’s loss from operations


Interest Rate Risk


As at August 31, 2009, the Company does not have any interest bearing financial instruments and accordingly the Company is not exposed to interest rate risks.



88



GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



9.   CAPITAL DISCLOSURES


The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.  The directors determine the Company’s capital structure and make adjustments to it based on funds available to the Company, in order to support the acquisition, exploration and development of mineral properties.  The directors have not established quantitative return on capital criteria for capital management.


The Company is dependent upon external financing to fund future exploration programs and its administrative costs.  The Company will spend existing working capital and raise additional amounts as needed.  The Company will continue to assess new properties and to seek to acquire an interest in additional properties if management feels there is sufficient geologic or economic potential provided it has adequate financial resources to do so.


The directors review the Company’s capital management approach on an ongoing basis and believe that this approach, given the relative size of the Company, is reasonable. The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern.


The Company considers the items included on the balance sheet in shareholders’ equity as capital.  The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.  In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders.  The Company is not subject to externally imposed capital requirements.



10. RELATED PARTY TRANSACTIONS


a)

Accounts payable and accrued liabilities include $30 (2008 - $16,122) due to a company controlled by a director.


b)

During the year ended August 31, 2009, the Company paid $120,000 (2008 - $120,000) recorded as management fees for geological and management services to a company controlled by a director.


c)

During the year ended August 31, 2009, the Company paid $44,020 (2008 - $51,186) in wages and benefits to a director.


d)

During the year ended August 31, 2009, the Company paid $53,330 (2008 - $54,300) in respect of corporate office and administration and other costs to a management company controlled by a director of the Company.



89





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



10. RELATED PARTY TRANSACTIONS (Continued)


e)

During the year ended August 31, 2009, the Company paid $60,000 (2008 - $60,000) in consulting fees to a director of the Company.



11. INCOME TAXES


The Company is subject to income taxes on its unconsolidated financial statements in Canada and Mexico.  The consolidated provision for income taxes varies from the amount that would be computed from applying the combined statutory income tax rates to the net loss before taxes were approximately as follows:


  

2009

2008

     
 

Combined statutory tax rate

30%

 

32%

  


 


 

Expected income tax recovery

$    (663,000)

$

(264,000)

 

Non-deductible differences

         17,000

 

42,000

 

Effect of changes in tax rate

         36,000

 

250,000

 

Tax benefits not recognized (recognized)

      610,000

 

(28,000)

 

Income tax provision

$                 -

$

-


The significant components of the Company’s future income tax assets were approximately as follows:


  

2009

2008

    


 

Capital assets

$       12,000

$

6,000

 

Mineral properties

698,000

 

577,000

 

Losses available for future periods

2,316,000

 

2,692,000

 

Share issue costs

20,000

 

85,000

 

Valuation allowance

(3,046,000)

 

(3,360,000)

 

Net future income tax asset

$                 -

$

-



90




GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



11. INCOME TAXES (Continued)


The Company has Canadian and Mexican non-capital losses of approximately $8,488,000 which may be carried forward and applied against taxable income in future years.  These losses expire as follows:


CANADA


MEXICO

  



  


2010

$

332,000


2010

$

368,000

2011

 

354,000


2011

 

298,000

2012

 

-      


2012

 

1,030,000

2013

 

-      


2013

 

1,074,000

2014

 

-      


2014

 

424,000

2015

 

362,000


2015

 

124,000

2026

 

404,000


2016

 

219,000

2027

 

535,000


2017

 

1,512,000

2028

 

530,000


2018

 

192,000

2029

 

515,000


2019

 

215,000

 

$

3,032,000


 

$

5,456,000



12. SEGMENTED INFORMATION


The Company has one operating segment, which is mineral exploration.  All mineral properties are located in Mexico.  All option proceeds are attributable to the Mexican mineral properties. Assets by geographic segment, at cost, are as follows:


  

CANADA

MEXICO

TOTAL

   


 


 


 

August 31, 2009

 


 


 


   


 


 


 

Current assets

$

680,295

$

71,962

$

752,257

 

Equipment

$

12,247

$

91,953

$

104,200

 

Mineral property costs

$

            -

$

7,342,303

$

7,342,303

 

Total assets

$

716,003

$

7,506,218

$

8,222,221

 

Interest income

$

17,770

$

424

$

18,194

 

Net loss

$

524,263

$

1,671,920

$

2,196,183

   


 


 


 

 August 31, 2008

 


 


 


   


 


 


 

      Current assets

$

2,731,249

$

151,193

$

2,882,442

 

Equipment

$

12,799

$

95,928

$

108,727

 

Mineral property costs

$

     -

$

7,784,381

$

7,784,381

 

Total assets

$

2,764,218

$

8,031,503

$

10,795,721

 

Interest income

$

195.304

$

15,380

$

209,684

 

Net loss

$

611,129

$

209,948

$

821,077



91





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP


The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) that differ in certain material respects from accounting principles generally accepted in the United States (“US GAAP”).  The major differences between Canadian and US GAAP, which affects the Company’s financial statements, are described below and the effect on the financial statements is summarized as follows:


Consolidated Balance Sheets


  

   2009

2008

2007

     
 

ASSETS

   
 

Total Assets, Canadian GAAP

$  8,222,221

   $  10,795,721

   $ 11,249,718

     
 

Deferred Mineral Property Acquisition Cost

(334,773)

     (334,773)


(334,773)

 

Deferred Mineral Property Exploration Costs

(7,007,530)

   (7,449,608)


(3,428,250)

     
 

Total Assets, US GAAP

$     879,918

$    3,011,340

$   7,486,695

     
 

LIABILITIES

   
 

Total Liabilities, Canadian and US GAAP

$       65,879

$       500,703


$      301,403

     
 

SHAREHOLDERS’ EQUITY

   
 

Share Capital and Contributed Surplus, Canadian and US GAAP

$20,702,967

$  20,645,460


$ 20,477,680

 

Deficit and Accumulated Other Comprehensive Income, US GAAP

(19,888,928)

(18,134,823)


(13,292,388)

     
 

Shareholders’ Equity, US GAAP

  $      814,039

$    2,510,637

$   7,185,292

  

  $      879,918

$    3,011,340

$   7,486,695



92





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)


Consolidated Statements of Loss and Deficit

  

2009

2008

2007

     
 

Loss for the year under Canadian GAAP

$ (2,196,183)

$     (821,077)

$ (1,035,556)

 

Foreign exchange loss (gain)

36,485

(16,460)

37,874

 

Mineral exploration expenditures

(993,581)

(4,021,358)

(789,571)

 

Write down of mineral property exploration costs


1,435,660

         

-


-

     
 

Loss under US GAAP

(1,717,619)

(4,858,895)

(1,787,253)

     
 

Comprehensive income

   
 

Foreign exchange translation adjustment

(36,485)

16,460


(38,962)

 

Comprehensive income (loss) under US GAAP

$ (1,754,104)

$  (4,842,435)


$ (1,826,215)

     
 

Weighted average number of common shares outstanding under US GAAP

60,934,037

60,875,845


49,092,397

     
 

Loss per share under US GAAP

$         (0.03)

$          (0.08)

$         (0.04)


      Consolidated Statements of Cash Flows

  

2009

2008

2007

     
 

Cash flows from operating activities

   
 

Under Canadian GAAP

$     (721,124)

$      (910,581)

$     (766,888)

 

Mineral exploration expenditures

(1,365,900)

(3,566,852)

(579,748)

 

Cash used for operating activities under US GAAP

$  (2,087,024)

(4,577,433)


(1,346,636)

     
 

Cash flows from financing activities

   
 

Under Canadian and US GAAP

$                  -

$         45,000

$   6,989,055

     
 

Cash flows from investing activities

   
 

Under Canadian GAAP

$      771,074

$       800,834

$  (6,172,221)

 

Mineral exploration expenditures

1,365,900

3,566,852

579,748

 

Cash from (used in) investing activities under US GAAP

$   2,136,974

$    4,367,686


$  (5,592,473)



93





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)


a)   Acquisition of Mineral Properties and Capitalized Exploration Costs


Under Canadian GAAP both acquisition and exploration expenditures are capitalized. Under US GAAP in accordance with Emerging Issues Task Force (“EITF”) No. 04-02 – “Whether Mineral Rights are Tangible or Intangible Assets”, mineral property acquisition costs are capitalized and mineral property exploration expenditures are expensed for periods ending after April 1, 2004. For US GAAP, the Company has expensed all mineral property acquisition and exploration expenditures.


b)   Cumulative Since Inception Disclosure


The Company is not required and has opted to not report such information for Canadian reporting and for US GAAP purposes; the Company is considered an exploration stage company.  Statement of Financial Accounting Standards No. 7 – “Accounting and Reporting by Development Stage Enterprises” requires the disclosure of cumulative-to-date information for each line item on the statements of operations and cash flow plus annual summaries of each component of shareholders’ equity since inception.  Under Canadian GAAP, Accounting Guideline “AcG 11 – Enterprises in the Development Stage”, issued by the Canadian Institute of Chartered Accountants, does not require reporting of this information.  Had the consolidated financial statements been prepared in accordance with US GAAP such information would have been disclosed.


c)

Financial Instruments and Other Comprehensive Income


Effective September 1, 2007, the Company adopted CICA accounting standards related to Comprehensive Income and Financial Instruments.  These accounting statements have been adopted on a prospective basis and prior periods have not been restated.  The adoption of these standards in Canada eliminated previous US GAAP reconciliations with respect to the recognition and measurement of financial instruments.




94



GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)


d)   Recent United States Accounting Pronouncements


In June 2009, the Financial Accounting Standards Board ("FASB") issued new accounting standards related to its accounting standards codification of the hierarchy of generally accepted accounting principles. The new standard is the sole source of authoritative generally accepted accounting principles of the United States (“U.S. GAAP”) to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification superseded non-SEC accounting and reporting standards. All accounting literature that is not in the Codification, not issued by the SEC and not otherwise grandfathered is non-authoritative. The new standard is effective for the Company’s interim quarterly period beginning September 1, 2009.  


In June 2009, the FASB issued new accounting standards to address the elimination of the concept of a qualifying special purpose entity which also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, this standard provides more timely and useful information about an enterprise’s involvement with a variable interest entity. The standard will become effective in the first quarter of the Company’s fiscal 2010. We are currently evaluating the impact of this standard on our consolidated financial statements.


In May 2009, FASB issued new accounting standards on subsequent events that established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, it provides (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The new standard is effective for interim or annual periods ending after June 15, 2009.  The Company has evaluated all subsequent events through December 22, 2009. The adoption of this standard did not have a material effect on the Company’s financial statements.




95





GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


AUGUST 31, 2009 AND 2008

(Expressed in Canadian Dollars)



14. SUBSEQUENT EVENT


On December 14, 2009, the Company announced an amendment to a private placement previously announced October 5, 2009.  The total number of units was increased from 20,000,000 to 25,000,000 units at a price of $0.15 per unit.  Each unit will consist of one common share and one half of one share purchase with each whole warrant entitling the holder to purchase one additional common share for a period of two years at a price of $0.25.  

 

Once resale restrictions on the shares have expired and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice (in writing to warrant holders and via a news release).  The proceeds will be primarily used to expand the mineral resource at the Company’s Las Bolas property and to work on the new Filo do Oro zone on the east side of the Las Bolas property.


Finder’s fees of 8% cash and 8% warrants having the same terms as the warrants under the units may be paid. The financing is subject to regulatory approval.




96







SIGNATURE PAGE




Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.



Golden Goliath Resources Ltd.; SEC File Number 0-31204

Registrant







Dated: March 4, 2010

By /s/ J. Paul Sorbara____________________________

J. Paul Sorbara, President/Director










97


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