Edgar Filing: PATRIOT GOLD CORP

form10q083108.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the Quarterly Period Ended August 31, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from _____________ to _____________

Commission file number 000-32919

PATRIOT GOLD CORP.

(Exact name of registrant as specified in its charter)

3651 Lindell Road, Suite D

Las Vegas, Nevada 89103

(Address of principal executive offices) (Zip Code)

(702) 456-9565

(Registrant's telephone number, including area code)

501-1775 Bellevue Avenue, West Vancouver B.C. V7V 1A9, Canada

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes

[ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 26,224,400 shares of common stock, $0.001 par value, issued and outstanding as of October 13, 2008.

TABLE OF CONTENTS

	Page

PART I - Financial Information	2

Item 1. Financial Statements	2
Balance Sheets August 31, 2008 (unaudited) and May 31, 2008	2
Statements of Operations for the three-month periods ended
August 31, 2008 and 2007, and for the period from inception
of the exploration state on June 1, 2000 to August 31, 2008.	3
Statements of Cash Flows for the three-month periods ended
August 31, 2008 and 2007, and for the period from inception
of the exploration state on June 1, 2000 to August 31, 2008.	4
Notes to the Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation	13
Item 3. Quantitative and Qualitative Disclosure About Market Risk	22
Item 4. Controls and Procedures	22

PART II – Other Information	23

Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3. Defaults Upon Senior Securities	23
Item 4. Submission of Matters to a Vote of Security Holders	23
Item 5. Other Information	23
Item 6. Exhibits

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

PATRIOT GOLD CORP.

(An Exploration State Company)

BALANCE SHEETS

	August 31,			May 31,
	2008			2008
ASSETS:	(Unaudited)
Current Assets:
Cash	$	1,752,957		$	2,115,513

Total Current Assets		1,752,957			2,115,513

Reclamation Deposits		31,155			31,155
Office Equipment, Net		-			352

Total Assets	$	1,784,112		$	2,147,020

LIABILITIES & STOCKHOLDERS’ EQUITY:
Current Liabilities:
Accounts Payable	$	88,201		$	328,762

Stockholders' Equity:
Preferred Stock, Par Value $.001
Authorized 20,000,000 shares,
No shares issued at August 31, 2008 and May 31, 2008		-			-
Common Stock, Par Value $.001
Authorized 100,000,000 shares,
Issued 26,224,400 shares at
August 31, 2008 and May 31, 2008		26,224			26,224
Paid-In Capital		26,381,028			26,382,663
Currency Translation Adjustment		(16,361	)		(16,361	)
Deficit Accumulated Since Inception of Exploration State		(24,653,898	)		(24,553,186	)
Retained Deficit		(41,082	)		(41,082	)

Total Stockholders' Equity		1,695,911			1,818,258

Total Liabilities and Stockholders' Equity	$	1,784,112		$	2,147,020

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

PATRIOT GOLD CORP.

(An Exploration State Company)

STATEMENTS OF OPERATIONS

(Unaudited)

							Cumulative
							Since
							June 1, 2000
	For the Three Months Ended						Inception of
	August 31,						Exploration
	2008			2007			State

Revenues	$	-		$	-		$	-
Cost of Revenues		-			-			-

Gross Margin		-			-			-

Expenses
Mineral claim payments and exploration expenditures		108,254			39,833			3,097,305
General and Administrative		31,456			16,270			21,977,135

Net Loss from Operations		(139,710	)		(56,103	)		(25,074,440	)

Other Income (Expense)
Interest		11,367			30,062			417,370
Currency Exchange		7,631			2,188			3,172
Net Other Income (Expense)		18,998			32,250			420,542

Net Loss	$	(120,712	)	$	(23,853	)	$	(24,653,898	)

Basic & Diluted loss per
Share	$	(0.00	)	$	(0.00	)

Weighted Average Shares Outstanding		26,224,400			26,224,400

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

PATRIOT GOLD CORP.

(An Exploration State Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

							Cumulative
							Since
							June 1, 2000
	For the Three Months Ended						Inception of
	August 31,						Exploration
	2008			2007			State
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(120,712	)	$	(23,853	)	$	(24,653,898	)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Compensation Expense of Stock Options		(1,635	)		(9,514	)		5,002,887
Common Stock Issued for Services		-			-			16,267,500
Depreciation		352			349			4,193

Change in Operating Assets and Liabilities:
(Increase) Decrease in Prepaid Expenses		-			(5,000	)		-
Increase (Decrease) in Accounts Payable		240,561			4,775			81,958

Net Cash Used in Operating Activities		(362,556	)		(33,243	)		(3,297,360	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Office Equipment		-			-			(4,193	)
Reclamation Deposit		-			(900	)		(31,155	)

Net Cash Used in Investing Activities		-			(900	)		(35,348	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock		-			-			5,105,825
Redemption of Common Shares		-			-			(30,000	)
Proceeds from Contributed Capital		-			-			9,840

Net Cash Provided by Financing Activities		-			-			5,085,665

Net (Decrease) Increase in
Cash and Cash Equivalents		(362,556	)		(34,143	)		1,752,957
Cash and Cash Equivalents
at Beginning of Period		2,115,513			3,029,331			-
Cash and Cash Equivalents
at End of Period	$	1,752,957		$	2,995,188		$	1,752,957

PATRIOT GOLD CORP.

(An Exploration State Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

(Continued)

					Cumulative
					Since
					June 1, 2000
	For the Three Months Ended				Inception of
	August 31,				Exploration
	2008		2007		State

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	-	$	-	$	-
Income taxes	$	-	$	-	$	-

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Settlement of Subscription Receivable by the
Cancellation of Common Stock	$	-	$	-	$	79,000

During the year ended May 31, 2006, the Company granted 1,000,000 stock options to various directors and consultants for an exercise price of $0.25 per share. Consulting expense of $86,483 was recorded for the year ended May 31, 2006. The vesting period for some of these options is up to three years. As a result, the unvested portions of the options have been revalued in subsequent periods resulting in an additional option expense of $26,611 at May 31, 2007and a reversal of stock option expense of ($973) at May 31, 2008 due to the amortization of the fair value of the options as determined by the Black-Scholes model between the date of grant and May 31, 2008 and 2007 respectively.

The unvested portions of the options have been revalued at August 31, 2008 resulting in a reversal of stock option expense of ($1,635) (2007 – reversal of ($9,514)) due to a reduction in the fair value of the options as determined by the Black-Scholes model between the last revaluation date of May 31, 2008 and August 31, 2008.

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

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of accounting policies for Patriot Gold Corp. (An Exploration State Company) is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Interim Reporting

The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the financial position of Patriot Gold Corp. (the “Company”) and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended May 31, 2008. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended May 31, 2008 has been omitted. The results of operations for the three month period ended August 31, 2008 is not necessary indicative of results for the entire year ending May 31, 2009.

Nature of Operations

The Company has no products or services as of August 31, 2008. The Company operated from November 30, 1998 through approximately May 31, 2000 in the production of ostrich meat. On June 1, 2000, the Company ceased operations.

In June 2003, Management decided to change the direction of the Company and became a natural resource exploration company and will continue to seek opportunities in this field. The Company is currently engaging in the acquisition, exploration, and if warranted and feasible, development of natural resource properties. Since June 1, 2000, the Company has been in the exploration state.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As shown in the accompanying financial statements, the Company has incurred a net loss of $24,653,898 for the period from June 1, 2000 (inception of exploration state) to August 31, 2008, and has no sales. The future of the Company is dependent upon its ability to obtain future financing and upon future profitable operations from the development of its mineral properties. Management is not currently seeking additional capital but will be required to do so in order to continue to operate in the future. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

If the Company were unable to continue as a “going concern”, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used.

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Organization and Basis of Presentation

The Company was incorporated under the laws of the State of Nevada on November 30, 1998. On June 11, 2003, the Company changed its name to Patriot Gold Corp.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Office Equipment

Office equipment is recorded at cost and is depreciated using the straight-line method over its expected useful life, which is estimated at three years. Depreciation expense of $352 was charged to general and administrative expenses during the quarter ended August 31, 2008 (2007 – $349).

Pervasiveness of Estimates

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

Foreign Currency

Prior to the quarter ending August 31, 2003, the Company’s primary functional currency was the Canadian dollar. During the quarter ended August 31, 2003, the Company underwent some significant changes in its operations. Prior to May 31, 2000, the Company was in the business of producing ostrich meat in Canada. Subsequently on June 1, 2000, the Company ceased operations and remained dormant until June 2003, when the Company decided to enter the mining industry in the United States. Due to the change in direction the Company was headed, the majority of its operations and transactions would be located in the United States and the majority of the transaction would be in U.S. dollars. This was considered “a significant change in economic facts and circumstances” per SFAS 52, Appendix A and thus the Company changed its functional currency from the Canadian dollar to the U.S. dollar.

The Company's primary functional currency is the U.S. dollar. However, the Company still has a few transactions with Canadian suppliers. Transaction gains and losses are included in income. For the period ended August 31, 2008 the Company recognized a transaction gain of $7,631 (2007 - $2,188 gain).

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits.

Loss per Share

Net income (loss) per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. The effect of the Company’s common stock equivalents would be anti-dilutive for August 31, 2008 and 2007 and are thus not presented.

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income", which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Consolidated Statement of Operations. Comprehensive income is comprised of net income (loss) and all changes to capital deficit except those resulting from investments by owners and distribution to owners.

Stock Options

Effective June 1, 2006, the company adopted the provisions of SFAS No. 123(R). SFAS No. 123(R) requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award. Prior to June 1, 2006, the company accounted for awards granted to employees under its equity incentive plans under the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and related interpretations, and provided the required pro forma disclosures prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123), as amended. No stock options were granted to employees during the three months ended August 31, 2008 or 2007 and accordingly, no compensation expense was recognized under APB No. 25 for the three months ended August 31, 2008 or 2007. In addition, no compensation expense is required to be recognized under provisions of SFAS No. 123(R) with respect to employees.

Under the modified prospective method of adoption for SFAS No. 123(R), the compensation cost recognized by the company beginning on June 1, 2006 includes (a) compensation cost for all equity incentive awards granted prior to, but not yet vested as of June 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all equity incentive awards granted subsequent to June 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS

No. 123(R). The company uses the straight-line attribution method to recognize share-based compensation costs over the service period of the award. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock units, deferred tax assets for options and restricted stock units with multiple vesting dates are eliminated for each vesting period on a first-in, first-out basis as if each vesting period was a separate award. To calculate the excess tax benefits available for use in offsetting future tax shortfalls as of the date of implementation, the company followed the alternative transition method discussed in FASB Staff Position No. 123(R)-3.

During the three months ended August 31, 2008 and 2007, no stock options were granted to non-employees. Accordingly, no stock-based compensation expense for the grant of new stock options was recognized in the Statement of Operations and Comprehensive Loss at August 31, 2008 and 2007.

Compensation expense for unvested options granted to non-employees in previous periods is revalued at each period end and is being amortized over the vesting period of the options. As a result of revaluing common stock options for unvested options granted in the year ended May 31, 2006, a reversal of ($1,635) in stock-based compensation has been recognized in the Statement of Operations at August 31, 2008 (2007 - reversal of ($9,514)).

Exploration and Development Costs

On June 1, 2000, the Company ceased operations and until June 2003 conducted minimal administrative activities. The Company has been in the exploration state since that time and has not yet realized any revenue from its planned operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Mineral exploration costs and payments related to the acquisition of the mineral rights are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 2 RECLAMATION DEPOSITS

The Company has been granted an exploration permit from the State of Nevada for its Vernal property. As part of the application process, the Company is required to pay a refundable deposit to the State as surety for the estimated reclamation costs associated with the planned exploration program. In addition, as part of the Company’s acquisition of the Margarita and Imperial Properties the reclamation bonds for these respective properties were transferred to the Company. Upon completion of required reclamation the Company will receive a refund of the deposits.

NOTE 3 - INCOME TAXES

As of May 31, 2008, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $7,700,000 that may be offset against future taxable income through 2027. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount.

NOTE 4 - EXPLORATION STATE COMPANY/ GOING CONCERN

The Company has not begun principal operations and as is common with a company in the exploration state, the Company has had recurring losses. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year.

NOTE 5 - RELATED PARTY TRANSACTIONS

As of August 31, 2008, all activities of the Company have been conducted by corporate officers from either their homes or business offices. There are no commitments for future use of the facilities.

On November 1, 2005, the Company signed a service agreement with its President, Robert Coale. Pursuant to the agreement the Company agreed to pay Robert Coale, beginning November 2005, $2,500 per month for his expertise to identify and acquire certain exploration style properties that fit the parameters of the Company’s business plan, oversee and manage, as directed by the Company, the Company’s exploration programs that will be undertaken from time-to-time, and perform all of the duties normally associated with serving as the President and Chief Executive Officer of a publicly traded mineral exploration company. The service agreement shall be for an indefinite term, cancelable in writing by either party with 30 days written notice. Effective July 1, 2008, Mr. Coale agreed to indefinitely suspend payments under the agreement. For the three months ended August 31, 2008, the Company paid $2,500 (2007 - $7,500) pursuant to this agreement.

On September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company. Mr. Duerr is also an Officer of MinQuest Inc (“MinQuest”). All of the Company’s mineral properties have either been directly or indirectly optioned from MinQuest. All exploration work undertaken on any of the Company’s properties will be at the direction and discretion of the Company. For the quarter ended August 31, 2008, the Company made total property payments of $20,000 to MinQuest related to a property option payment for the Imperial Property. Included in the net loss for three months ended August 31, 2008 is an amount of $6,750 with respect to fees paid to Mr. Duerr for geological services rendered to the Company.

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 6 - STOCK OPTIONS / WARRANTS

Pursuant to the 2005 and 2003 Stock Option Plans, grants of shares can be made to employees, officers, directors, consultants and independent contractors of non-qualified stock options as well as for the grant of stock options to employees that qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986 (“Code”) or as non-qualified stock options. The Plan is administered by the Option Committee of the Board of Directors (the “Committee”), which has, subject to specified limitations, the full authority to grant options and establish the terms and conditions for vesting and exercise thereof. Currently the entire Board functions as the Committee.

In order to exercise an option granted under the Plan, the optionee must pay the full exercise price of the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the discretion of the Committee, by delivering shares of common stock already owned by the optionee that have a fair market value equal to the applicable exercise price; or (iii) with the approval of the Committee, with monies borrowed from us.

Subject to the foregoing, the Committee has broad discretion to describe the terms and conditions applicable to options granted under the Plan. The Committee may at any time discontinue granting options under the Plan or otherwise suspend, amend or terminate the Plan and may, with the consent of an optionee, make such modification of the terms and conditions of such optionee’s option as the Committee shall deem advisable.

On May 26, 2003, the Board of Directors approved a stock option plan whereby 2,546,000 common shares have been set aside for employees and consultants to be distributed at the discretion of the Board of Directors. On September 22, 2003, the Board of Directors amended the stock option plan to allow 3,000,000 additional options. As of August 31, 2008, 5,040,000 stock options had been granted to various directors and consultants for an exercise price ranging from $.05 to $1.50 per share. An additional 506,000 remain available to be granted under the 2003 plan.

On November 18, 2005, the Board of Directors approved the 2005 stock option plan whereby 2,000,000 common shares have been set aside for employees and consultants to be distributed at the discretion of the Board of Directors. As of August 31, 2008, 1,000,000 stock options had been granted to various directors and consultants for an exercise price of $0.25 per share. An additional 1,000,000 remain available to be granted under the 2005 plan.

No stock options were granted under either plan during the three months ended August 31, 2008 or 2007. The following table sets forth the options outstanding under the 2003 Plan as of August 31, 2008:

	Available for Grant		Options Outstanding		Weighted Average Exercise Price
Balance, May 31, 2008		506,000		385,000	$	0.26
Options granted		-		-		-
Options cancelled		-		-	$	-
Options exercised		-		-		-
Balance, August 31, 2008		506,000		385,000	$	0.26

The following table sets forth the options outstanding under the 2005 Plan as of August 31, 2008:

	Available for Grant		Options Outstanding		Weighted Average Exercise Price
Balance, May 31, 2008		1,000,000		1,000,000	$	0.25
Options granted		-		-		-
Options forfeited		-		-		-
Options exercised		-		-		-
Balance, August 31, 2008		1,000,000		1,000,000	$	0.25

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 6 – STOCK OPTIONS/WARRANTS (continued)

The following table summarizes information concerning outstanding and exercisable common stock options under the 2003 and 2005 Plans at August 31, 2008:

Exercise Prices		Options Outstanding		Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number of Options Currently Exercisable		Weighted Average Exercise Price
$	0.05		300,000		4.83	$	0.05		300,000	$	0.05
$	0.25		1,000,000		7.50	$	0.25		833,333	$	0.25
$	0.80		5,000		4.92	$	0.80		5,000	$	0.80
$	1.03		80,000		4.92	$	1.03		80,000	$	1.03

			1,385,000			$	0.25		1,218,333	$	0.25

The aggregate intrinsic value of stock options outstanding at August 31, 2008 was $4,500 and the aggregate intrinsic value of stock options exercisable at August 31, 2008 was also $4,500. No stock options were exercised during the quarter ended August 31, 2008.

As of August 31, 2008, there was a total of $514 in unrecognized compensation cost related to all options granted and outstanding. This unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 0.50 years.

A summary of status of the Company’s unvested stock options as of August 31, 2008 under all plans is presented below:

	Number of Options		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value

Unvested at May 31, 2008		166,667		0.25		0.21
Granted		-		-		-
Vested		-		-		-
Cancelled		-		-		-

Unvested at August 31, 2008		166,667	$	0.25	$	0.21

The following table sets forth common share purchase warrants outstanding as of August 31, 2008:

	Warrants Outstanding
Balance, May 31, 2008		3,456,000
Warrants granted		-
Warrants exercised		-
Balance, August 31, 2008		3,456,000

PATRIOT GOLD CORP.

(An Exploration State Company)

NOTES TO FINANCIAL STATEMENTS

(Continued)

NOTE 6 – STOCK OPTIONS/WARRANTS (continued)

The following table lists the common share warrants outstanding at August 31, 2008. Each warrant is exchangeable for one common share.

Number Outstanding	Exercise Price	Weighted Average Contractual Remaining Life (years)	Number Currently Exercisable	Exercise Price
864,000	$ 1.40	1.25	864,000	$ 1.40
864,000	$ 1.45	1.25	864,000	$ 1.45
864,000	$ 1.50	1.25	864,000	$ 1.50
864,000	$ 1.55	1.25	864,000	$ 1.55
3,456,000			3,456,000

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

The following discussion should be read in conjunction with the financial statements of Patriot Gold Corp. (the “Company”), which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and the products it expects to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by or with the approval of the Company, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the Form 10-K for the year ended May 31, 2008 filed by the Company with the Securities and Exchange Commission.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

General

The Company was incorporated under the laws of the State of Nevada on November 30, 1998. The Company operated from incorporation through approximately May 31, 2000 in the production of ostrich meat. On June 1, 2000, the Company ceased operations. On June 11, 2003, the Company changed its name to Patriot Gold Corp. and become a natural resource exploration company and will seek opportunities in this field. The Company is currently engaged in the acquisition, exploration, and if warranted and feasible, development of natural resource properties. Since June 1, 2000, the Company has been in the exploration state. Upon location of a commercial minable reserve, the Company expects to actively pursue development alternatives.

Financing over the next twelve months

Over the next twelve months, the Company intends to explore various properties to determine whether they contain commercially exploitable reserves of gold and silver or other metals. The Company does not intend to hire any employees or to make any purchases of equipment over the next twelve months, as it intends to rely upon outside consultants to provide all the tools needed for the exploratory work being conducted.

Current cash on hand is sufficient for all of the Company’s commitments for the next 12 months. We anticipate that the additional funding that we require in the future will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund additional phases of the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing

Notwithstanding, we cannot be certain that any required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures.

Overview

We are a natural resource exploration company with an objective of acquiring, exploring, and if warranted and feasible, exploiting natural resource properties. Our primary focus in the natural resource sector is gold. We do not consider ourselves a “blank check” company required to comply with Rule 419 of the Securities and Exchange Commission, because we were not organized for the purpose of effecting, and our business plan is not to effect, a merger with or acquisition of an unidentified company or companies, or other entity or person. We do not intend to merge with or acquire another company in the next 12 months.

Though we have the expertise on our board of directors to take a resource property that hosts a viable ore deposit into mining production, the costs and time frame for doing so are considerable, and the subsequent return on investment for our shareholders would be very long term indeed. We therefore anticipate optioning or selling any ore bodies that we may discover to a major mining company. Most major mining companies obtain their ore reserves through the purchase of ore bodies found by junior exploration companies. Although these major mining companies do some exploration work themselves, many of them rely on the junior resource exploration companies to provide them with future deposits for them to mine. By optioning or selling a deposit found by us to these major mining companies, it would provide an immediate return to our shareholders without the long time frame and cost of putting a mine into operation ourselves, and it would also provide future capital for the company to continue operations.

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

Natural resource exploration and development requires significant capital and our assets and resources are limited. Therefore, we anticipate participating in the natural resource industry through the purchase or option of early stage properties. To date we have acquired several properties and we have several properties under option. We have already conducted various kinds of exploration on these properties, including mapping, sampling, surveying and drilling, and we expect to conduct further exploration of these properties. There has been no indication as yet that any mineral deposits exist on these properties, and there is no assurance that a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined.

In the following discussion, there are references to “patented” mining claims and “unpatented” mining claims. A patented mining claim is one for which the U.S. government has passed its title to the claimant, giving that person title to the land as well as the minerals and other resources above and below the surface. The patented claim is then treated like any other private land and is subject to local property taxes. An unpatented mining claim on U.S. government lands establishes a claim to the locatable minerals (also referred to as stakeable minerals) on the land and the right of possession solely for mining purposes. No title to the land passes to the claimant. If a proven economic mineral deposit is developed, provisions of federal mining laws permit owners of unpatented mining claims to patent (to obtain title to) the claim. If you purchase an unpatented mining claim that is later declared invalid by the U.S. government, you could be evicted.

Exploration Programs

Bruner and Vernal Agreement

Pursuant to a Property Option Agreement, dated as of July 25, 2003, with MinQuest, Inc. (“MinQuest”), a Nevada corporation, we have the option to earn a 100% interest in the Bruner and Vernal mineral exploration properties located in Nevada. Together, these two properties consist of 28 mining claims on a total of 560 acres in the northwest trending Walker Lane located in western Nevada.

In order to earn a 100% interest in these two properties, the Company must pay MinQuest and incur expenditures relating to mining operations in accordance with the following schedule: (i) on or before July 25, 2004, $20,000 to MinQuest and $75,000 in expenditures; (ii) on or before July 25, 2005, $20,000 to MinQuest and an additional $100,000 in expenditures; (iii) on or before July 25, 2006, $20,000 to MinQuest and an additional $100,000 in expenditures; (iv) on or before July 25, 2007, $20,000 to MinQuest and an additional $100,000 in expenditures; and (v) on or before July 25, 2008, an additional $125,000 in expenditures. If the Company has not incurred the requisite expenditures to maintain the option in good standing, the Company has a 60-day period subsequent to July 25th to make such payment along with such amount which shall be deemed to have been an expenditure incurred by us during such period. Since the payment obligations are non-refundable, if the Company does not make any payments, it will lose any payments made and all our rights to the properties. If all said payments are made, then the Company will acquire all mining interests in the properties, subject to MinQuest retaining a 3% royalty of the aggregate proceeds. The Company has the right at any time to discontinue making the payments if the exploration is determined to be unfeasible.

To August 31, 2008 the Company has made all of its property option payments with the payment on July 25, 2007 being the final payment due under the property option agreement for the Bruner and Vernal properties. By July 25, 2008, the Company was to have incurred $500,000 on exploration. To August 31, 2008 the Company has incurred approximately $437,000 on exploration of the two properties. The Company intends to complete the additional required expenditures of $63,000 during fiscal 2009.

An overview of our activities and obligations with respect to these properties are set forth below.

BRUNER PROJECT

The property is located approximately 130 miles east-southeast of Reno, Nevada at the northern end of the Paradise Range. Access from Fallon, the closest town of any size, is by 50 miles of paved highway and 16 miles of gravel roads. We hold the property via 16 unpatented mining claims (320 acres).

In addition to our drilling programs noted below, our exploration program to date at Bruner has included:

·	geologic mapping (producing a plan map of the rock types, structure and alteration),

·	rock chip geochemical sampling (sample of soil, rock, silt, water or vegetation analyzed to detect the presence of valuable metals or other metals which may accompany them (e.g., Arsenic may indicate the presence of gold),

·	a ground magnetic survey, and

·	a Controlled Source Magneto Telluric survey (recording variations in a generated electrical field using sophisticated survey methods).

In October 2004, we received the approval of a Notice of Intent for Exploration Drilling, and an environmental bond filed with the Nevada office of the Bureau of Land Management. A total of 18 drill sites were located to target both extensions of the gold intercepts in previous drilling and in geophysical anomalies found by a CSMT survey. A CSMT survey is an electromagnetic method used to map the variation of the Earth’s resistance to conduct electricity by measuring naturally occurring electric and magnetic fields at the Earth’s surface. With the proper approvals in place, we began drilling on the Bruner property on December 20, 2004. This drilling program was completed in March 2005 at a total cost of approximately $153,800, with a total of 3,200 feet of reverse circulation (RC) drilling in 7 holes. The depths of the holes ranged from 300 to 750 feet. We have received assays for all holes and the results were encouraging enough that additional drilling was conducted.

Because of the favorable drilling results from the drilling program we began on December 20, 2004, we decided to conduct additional drill testing on the Bruner property, including both reverse circulation and core drilling. In April 2005, we filed an amended drilling plan with the Bureau of Land Management that allowed three fences of drill holes with the fences spaced 400 feet apart along the apparent trend of the mineralization. This program was completed in the fall of 2005 with 11 holes totaling 4,205 feet being drilled.

The Board of Directors approved a 2007 exploration budget of approximately $120,000 for the Bruner Property. In November 2007, the Company drilled three holes at Bruner to test deeper targets within the gold-bearing tuffaceous host rocks. The holes were drilled using an RC drill rig and totaled 3,240 feet. The holes were spaced roughly 400 feet apart on a line running east-northeast. All holes were angled steeply to the north to cut projected, south-dipping shear zones. Drill hole B-18 and B-19 were drilled to a depth of 1,000 and B-20 was drilled 1,240 feet deep. All three holes contained intermittent gold at various depths.

The results show a distinct increase in gold grade from the southwest (B-18) to the northeast (B-20). Only hole B-20 contained significant grade gold over any significant width. Further drilling north and east of B-20 may be warranted to vector in on the strongest part of the gold system. The drill program confirmed that gold mineralization continues at depth and is hosted by tuffaceous rocks. The Company is currently evaluating these results and will determine the course of action for the Bruner property in the coming months.

VERNAL PROJECT

The property is located approximately 140 miles east-southeast of Reno, Nevada on the west side of the Shoshone Mountains. Access from Fallon, the closest town of any size, is by 50 miles of paved highway and 30 miles of gravel roads. We hold the property via 12 unpatented mining claims (240 acres).

In July 2003, members of our Board of Directors and geology team made an onsite inspection of Vernal. At the Vernal property, mapping (the process of laying out a grid on the land for area identification where samples are taken) and sampling (the process of taking small quantities of soil and rock for analysis) have been completed. In March 2005, we initiated the process to secure the proper permits for trenching and geochemical sampling from the U.S. Forest Service. As a result of the Company not having immediate plans to conduct drilling on the Vernal property in 2005, the Company stopped the permitting process before receiving drilling permits for the Vernal property.

Our exploration of the Vernal property to date has consisted of geologic mapping and rock chip geochemical sampling. The Board of Directors has approved a budget of approximately $55,000 (including the refundable bond of $900) for the Vernal property. The program is to include trenching and mapping. The Company is currently re-evaluating its plans for the Vernal property as the Company may choose to make additional expenditures on the Bruner property rather than the Vernal property.

MOSS PROPERTY

The Moss Property is located in Mohave County, Arizona in the historic Oatman District, and is located some 5 miles northwest of the town of Oatman, with Kingman, Arizona to the east, Laughlin, Nevada to the west and Las Vegas, Nevada to the north. Access is via gravel roads from Bullhead City. We hold the property in the Moss Mine region via 63 unpatented mining claims and 15 patented claims. The Company acquired these claims in a series of transactions during fiscal 2004 and 2005.

Gintoff Claim

On November 14, 2003 the Company entered into a letter of intent to acquire a single patented claim from Gregory Gintoff. The total purchase price of $50,000 was made in one installment of $10,000 in December 2003 and one installment of $40,000 in February 2004.

MinQuest Claims

We hold the MinQuest claims via 63 unpatented mining claims that were acquired from MinQuest. On March 4, 2004, we signed the agreement to acquire a 100 percent interest in these claims by paying MinQuest a one-time lease fee of $50,000. The fee of $50,000 was paid on July 7, 2004. A three percent NSR production royalty is retained by MinQuest.

Williams Property

The property is comprised of six patented claims which, as a group, we call the Williams Property. These claims were held collectively by as many as 23 owners within an extended family who were represented by Barbara Williams, a realtor, and a member of this extended family, who put together the letter of intent and arranged for the signing of the agreement by the numerous owners. None of these owners, including Barbara Williams, has or has had any relationship or affiliation with us prior to the agreement for the Williams Property.

In October 2003, our former director Robert Sibthorpe (who is a geologist by training) had evaluated the proposal for the purchase of the Williams Property. His recommendation was to visit the site, and if the visual inspection supported the information presented in the proposal, then an offer to purchase should be drawn up. In November 2003 we executed a letter of intent to purchase a 100% interest in Williams Property owned by the extended family. This property is unrelated to and separate from the MinQuest Claims. The sellers delivered to us all information in their possession regarding the Williams Property. During the six-month period after the signing of the letter of intent we had the right to conduct our due diligence on the Williams Property and if we decided not to proceed we had to give the sellers and escrow agent notice no less than 10 days prior to the six-month anniversary of our intention not to close. During this period we could not perform mining or remove any ore from the property. We were responsible for all costs and expenses associated with the purchase of the Williams Property, including escrow fees, cost of feasibility study, charges resulting from any tests, environmental assessments reports or surveys, and any exploration activity costs. Once we had concluded our analysis and had determined that it is feasible to close on the purchase of the Williams Property, doing so would give us full rights to begin mining operations.

At the recommendation of Mr. Sibthorpe, in January, 2004, Mr. Robert Coale (P.E.), another one of our directors, visited the site to see the overall geological setting and occurrence of mineralization and evaluated the drilling program proposed by MinQuest, the company that we would contract to co-ordinate any work programs undertaken. At that time, the metallurgical data and reports that had been collected from the sellers were reviewed. Mr. Coale’s analysis revealed that reagent (liquid chemicals used for leaching) consumptions are acceptable and deleterious compounds (things present in the ore that would be difficult to work with) were not apparent. He recommended bulk sampling at a selected location in the future once the definition of the ore body was further advanced through drilling. On January 31, 2004 Robert Sibthorpe wrote a report with a summary of the property, a review of the draft budget supplied by Richard Kern, our work program contractor, and a layout of the drilling program planned for the property.

The drilling was conducted throughout the spring and early summer of 2004, and in June 2004 Mr. Sibthorpe wrote a report incorporating the results of the drill program which encouraged us to pursue the project. Also in June 2004, Mr. Kern sent a memo to the Company regarding the potential at the Williams property. Mr. Kern’s recommendation was that we should proceed with the purchase of the Williams Property.

On February 19, 2004, we executed a formal agreement to purchase the Williams Property for $350,000. On February 27, 2004 we deposited $25,000 with the title company, which was acting as escrow agent, and three months after signing, on June 14, 2004, we deposited an additional $25,000. When the title company, acting as escrow agent, received the signature pages from the various sellers, the initial $25,000 deposit was to be delivered to the sellers. On the three-month anniversary after we signed the definitive agreement, the second $25,000 was to be delivered to the sellers. By mid-July, 2004, the escrow agent had received 19 of the 23 signatures, which under Arizona law was enough to complete the transaction, and on July 24, 2004, the first and second deposits of $25,000 each were released to the sellers. On or before the 6-month anniversary after we signed the definitive agreement, the balance of $300,000 was due to the sellers. As a result of our due diligence, we decided to complete the purchase of the Williams Property. On August 27, 2004 we paid the final $300,000 to the escrow agent for the closing of the sale. On November 11, 2004, the escrow agent released the $300,000 to the sellers for the closing of the sale, and, as a result, we now own 100% interest in the Williams Property.

Greenwood Claim

On January 18, 2005 the Company completed the acquisition of a single patented claim from an individual for $150,000.

Martinez Claims

The Company acquired five patented claims from Ramon and Edna Martinez for a total of $150,000. The Company made one payment of $75,000 on November 8, 2004 and made the final payment of $75,000 on February 14, 2005.

Ruth and Rattan Claims

On January 18, 2005, the Company made a single payment of $25,000 to acquire two patented claims known as the Ruth and Rattan claims.

Exploration Programs

Our exploration of the Moss Property has consisted of geologic mapping, vein geochemical sampling and drill testing of the identified veins. The Moss Property contains the site of the former Moss Mine. The most significant historic mining at Moss Mine occurred on narrow veins that trend sub-parallel to the Moss Mine vein and dip steeply northerly. These veins should intersect the Moss Mine vein at depth. The deepest vein intercepts at Moss are less than 400 feet. The Ruth vein should intersect the Moss Mine vein at 800-900 feet below the surface. If the Moss Mine vein is the feeder for the Ruth vein it should contain similar gold values at that level. The Moss Mine vein needs drill testing to a depth of 900 feet to determine its potential to contain high-grade gold mineralization.

Phase 1 drilling has been completed at the Moss Property. A total of 36 holes were drilled totaling 8,807 feet. Thirty holes were drilled on the Gintoff Claim on the Moss Property, and six holes were drilled on one of the adjacent parcels of land. The easternmost section of the Property, which was mostly untested by drilling, was drilled with thirty reverse circulation holes. This allowed accurate cross-sections to be made for this area. The coverage on this section is generally two or three holes on 100 foot sections testing grades and widths from 50-250 feet down dip. In the western area, limited confirmation drilling was carried out and the results obtained were generally in line with the values obtained by previous operators. Geological information obtained may now provide a structural explanation for the lack of success obtained here to date by previous operators.

A study of all drilling results at the Moss Property indicates a tendency for total gold content to increase with intercept depth. Roughly 60% of the deeper holes have better intercepts than shallow holes. An example from our drilling tests the vein over a vertical extent of 300 feet. In this example the gold content nearly doubles between AR-5 and AR-23.

An expanded program of drilling began in April 2005, and was expected to be completed by May 2006. Approximately 12,000 feet of reverse circulation (RC) drilling was planned to be done to test for possible high-grade (0.30 ounces per ton or above) down-dip extensions of the Moss vein. We planned to drill 10 to 15 holes. The depths of these holes were to have ranged from 500 to 1,300 feet. The program budget for this program was $643,700.

The first portion of this expanded drilling program was expected to be completed by the fall of 2005. However, after eight holes were attempted, drilling was halted because of difficulty in drilling through the granite, because the drilling rig that we contracted to use was too light to penetrate the rock. We had sought to contract a heavier rig to continue the program, which we had expected to happen by December 2005. The remainder of the program was completed when the Company completed 6 core holes from November 2006 to February 2007 for a total amount drilled of 3,917 feet. The exploration program failed to find higher grades but it did show that the vein system continues to at least 800 feet below the surface and appears to be thickening.

In the spring of 2008, the Company submitted core samples to a laboratory where leach testing was conducted. Leaching was conducted in both bench scale (Bottle rolls) and in columns using crushed ore as the feed sample. Three column leach tests at 3 different crush sizes were completed on the Moss drilling samples. They were leached for 120 days. The fine crush of ¼ inch had 66% of the gold and 42% of the silver recovered in 120 days. The recovery curve is still not flat at the end of 120 days indicating additional gold/silver could be recovered. The recoveries are already near the 70% gold and 50% silver that is average for the industry. The 1 inch crush column recovered 39% of the gold and 14% of the silver after 120 days, but the leach curve again indicates no significant decrease in % recovery by month indicating that greater recoveries may be obtained over longer periods of time.

Using the column leach data obtained from the testing program completed in April 2008 as well as additional information, the Company may engage an outside firm to conduct a preliminary economic analysis that will evaluate the overall value of the property considering metallurgical recovery, volume and gold grade of mineralized rock, capital and operating costs, and other factors. This information will be used to define additional work needed to enhance the value of the property.

WHISKEY, NK, and WHEEPAH PROPERTIES

On March 15, 2008, the Company executed three separate property option agreements (the “Agreements”) with MinQuest granting the Company the right to acquire 100% of the mining interests of three Nevada mineral exploration properties currently controlled by MinQuest, a natural resource exploration company.

The properties consist of the Whiskey Property (“Whiskey”), NK Property (“NK”), and the Weepah Property (“Weepah”) (collectively the “Properties”). Each of the Agreements is a separate agreement that can be terminated irrespective of the status of any of the other Agreements.

The Properties are located in Nevada with the Whiskey and NK being in Mineral County while the Weepah is located in Esmeralda County. The Whiskey Property currently consists of 83 unpatented mining claims, the NK Property currently consists of 24 unpatented mining claims, and the Weepah Property currently consists of 14 unpatented claims.

Annual option payments and minimum annual exploration expenditures under the Whiskey Property are as noted below:

Whiskey Property
	Property		Work
	Payments		Expenditures
	$USD		$USD
Upon Execution of the Agreement	$	50,000	$	-
By March 15, 2009		50,000		50,000
By March 15, 2010		50,000		150,000
By March 15, 2011		65,000		200,000
By March 15, 2012		80,000		350,000
By March 15, 2013		100,000		200,000
By March 15, 2014		100,000		200,000
By March 15, 2015		100,000		200,000
By March 15, 2016		100,000		200,000
By March 15, 2017		100,000		200,000
By March 15, 2018		250,000		750,000

	$	1,045,000	$	2,500,000

The NK and Wheepah Properties each have the same annual property option payments and annual minimum property work expenditures and are as noted below:


	Property		Work
	Payments		Expenditures
	$USD		$USD
Upon Execution of the Agreement	$	20,000	$	-
By March 15, 2009		20,000		50,000
By March 15, 2010		20,000		75,000
By March 15, 2011		35,000		100,000
By March 15, 2012		45,000		250,000
By March 15, 2013		50,000		100,000
By March 15, 2014		50,000		100,000
By March 15, 2015		50,000		100,000
By March 15, 2016		50,000		100,000
By March 15, 2017		50,000		100,000
By March 15, 2018		100,000		250,000

	$	490,000	$	1,225,000

Upon execution of the Agreements, the Company paid MinQuest a total of $90,000 in relation to the three Agreements. Since the payment obligations are non-refundable, if any payments under any of the Agreements are not made, the Company will lose any previous payments made and all its rights to the respective property. If all said payments under any of the Agreements are made, then the Company will acquire all mining interests in the respective property. If the Company fails to make any payment when due, each of the Agreements gives the Company a 60-day grace period to pay the amount of the deficiency. MinQuest retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the Properties, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties.

The Company has the one time right exercisable for 90 days following completion of a bankable feasibility study to buy up to one half (50%) of MinQuest’s royalty interest (i.e. an amount equal to 1.5% of the royalty interest) for $2,250,000. The right to purchase the said royalty interest shall be exercised by the Company by providing the MinQuest with notice of the purchase accompanied by payment in the amount of USD $2,250,000.

The Company has received recommendations from MinQuest regarding an exploration programs for each of the Whiskey, NK, and Wheepah Properties. However, as the properties were only acquired by the Company in March 2008, the Company has not hey determined a budget or work programs for the properties.

IMPERIAL PROPERTY

On May 30, 2008, the Company entered into an Assignment and Assumption Agreement (the “Agreement”) with American Goldfields Inc., a Nevada corporation (“American Goldfields”), to acquire the exclusive option to an undivided right, title and interest in 22 unpatented Federal mining claims located in Esmeralda County, Nevada (the “Property”). American Goldfields had originally acquired its exclusive option on the Property on June 30, 2004, when it entered into a Property Option Agreement (the “Property Agreement”) with MinQuest, the owner of the Property.

Pursuant to the Agreement, the Company assumed the rights, and agreed to perform all of the duties and obligations, of American Goldfields arising under the Property Agreement. Simultaneous with the execution and delivery of the Agreement, the Company paid American Goldfields $250,000, which amount represents the full payment and satisfaction for the assignment by American Goldfields to the Company of the Property Agreement and all rights and obligations with respect thereto. Included in the assignment were, without limitation, all sums incurred by American Goldfields in connection with the Property, specifically (i) the refunding of the reclamation bond previously paid by American Goldfields to the Bureau of Land Management in Nevada in the amount of $13,255; (ii) the approximately $277,000 of expenditures incurred by American Goldfields prior to the Agreement; and (iii) the $120,000 paid to MinQuest as option payments under the Property Agreement.

On July 1, 2008 the Company made the $20,000 Imperial property option payment. The payment was the final property option payment due under the property option agreement with MinQuest. The Company has an additional $225,000 in work program expenditures remaining under the property option agreement. The Company is currently evaluating the drill locations and results of the programs completed by Goldfields in order to determine the next phase of exploration for the Imperial Property.

Results of Operations

We did not earn any revenues during the three months ended August 31, 2008 or 2007. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.

During the three months ended August 31, 2008, we incurred a net loss of $120,712 compared to a net loss of $23,853 for the comparative period in 2007. Our year to date net loss for 2008 has increased over 2007 largely due to higher exploration costs and administrative expenses. Property option payments were $20,000 for both quarters. However, in 2008 the $20,000 payment related to the Imperial Property while in 2007 the payment related to the Bruner/Vernal properties. The 2007 payment on the Bruner/Vernal properties was the final option payment under that agreement. No significant exploration was performed during the quarter ended August 31, 2007. For 2008, the Company incurred the final expenses on the Margarita drill program and began initial mapping and planning for the Whiskey, NK, and Wheepah exploration programs. Also, with the addition of the Imperial, Margarita, Whiskey, NK, and Wheepah Properties, the Company’s annual claim filing fees have increased from 2007.

General and administrative costs increased to $31,456 in the three months ended August 31, 2008 from $16,270 in the comparative period in 2007. A portion of the increase is due to a larger reversal of stock-based compensation in 2007 compared to 2008. Stock options granted in the year ended May 31, 2006 have been revalued at August 31, 2008 and 2007. For both periods, the fair value of the options granted has decreased from the previous measurement date resulting in a reversal of stock-based compensation. The amount of the reversal was $1,635 in 2008 compared to $9,514 in 2007. The balance of the increase relates to additional consulting expenses due to web site maintenance and office administration. Interest income has decreased to $11,367 in the three months ended August 31, 2008 from $30,062 in the comparative period in 2007 due to lower average cash balances.

Liquidity and Capital Resources

We had cash of $1,752,957 as of August 31, 2008. We anticipate that we will incur the following expenses through the next twelve months:

·	$457,000 in property option payments, exploration expenditures and annual claim payments for the Company’s properties; and

·	$119,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934.

Net cash used in operating activities during the three months ended August 31, 2008 was $362,556 compared to $33,243 during the three months ended August 31, 2007. The increase was due to a larger net loss in the three months ended August 31, 2008 of $120,712 compared to the net loss of $23,853 in the three months ended August 31, 2007. Also, in the three months ended August 31, 2008 the Company paid down accounts payable resulting in a cash outflow of $240,561 compared to a cash inflow of $4,775 in the three months ended August 31, 2007 related to an increase in accounts payable. The effect of stock-based compensation was not significant. Stock options granted in the year ended May 31, 2006 have been revalued at August 31, 2008 and 2007. For both periods, the fair value of the options granted has decreased from the previous measurement date resulting in a reversal of stock-based compensation. The amount of the reversal was $1,635 in 2008 compared to $9,514 in 2007. There were no financing activities for either the three months ended August 31, 2008 or 2007.

Going Concern Consideration

As shown in the accompanying financial statements, the Company has incurred a net loss of $24,653,898 for the period from June 1, 2000 (inception of exploration state) to August 31, 2008, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

There is substantial doubt about our ability to continue as a going concern. Accordingly, our independent auditors included an explanatory paragraph in their report on the May 31, 2007 financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Smaller reporting companies are not required to provide the information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer and Chief Financial Officer have reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report and have concluded that our disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this Item.

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

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Submission of Matters to a vote of Security Holders.

None.

Item 5. Other information.

The Company does not have any procedures by which security holders can recommend nominees to the Board of Directors.

Item 6. Exhibits.

Exhibit 31.1 - Certification of Principal Executive and Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 – Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 13, 2008

PATRIOT GOLD CORP.

By: /s/ Herb Duerr

Herb Duerr

President, Chief Executive

Officer, Secretary and Treasurer

(Principal Executive, Financial, and Accounting Officer)