- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2009

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

From _______________ to ________________

HuntMountain Resources Ltd.

(Exact name of registrant as specified in its charter)

Washington	001-01428	68-0612191
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1611 N. Molter Road, Ste. 201 Liberty Lake, Washington		99019
(Address of principal executive offices)		(Zip Code)

(509) 892-5287

(Registrant's telephone number, including area code)

(Former name, former address & 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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes T 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 £ (Do not check if a smaller reporting company)	Smaller reporting company T

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

State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date 76,251,362.

HUNTMOUNTAIN RESOURCES LTD.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

PART I

Item 1. Financial Information

HuntMountain Resources Ltd. and Subsidiaries
(An Exploration Stage Enterprise)

Consolidated Balance Sheets

	June 30,			December 31,
	2009			2008
	(unaudited)
Assets

CURRENT ASSETS:
Cash and cash equivalents:
Cash	$	6,758		$	62,162
Short term cash investments - domestic		15,170			14,246
Short-term cash investments - Argentina		94,059			174,076
Total cash and cash equivalents		115,986			250,484

Receivables		131,272			153,135
Prepaid expenses		67,547			77,453
Accrued interest receivable		11,373			5,909
Deposits paid to vendors		584,000			584,000
Total current assets		910,179			1,070,981

PROPERTY AND EQUIPMENT, NET:		575,202			1,323,204

OTHER ASSETS:
Receivable - V.A. tax, Argentina, net		417,036			380,153
Performance bond		139,108			98,927
Property deposits and property purchase option		341,500			341,500
Investments		7,331			7,331
Total other assets		1,614,975			827,911

Total assets	$	3,100,356		$	3,222,095

Liabilities and Stockholders’ Equity (Deficit)

CURRENT LIABILITIES:
Trade accounts payable	$	1,982,170		$	2,376,402
Accrued wages and related taxes		110,338			115,260
Employee expense payable		1,337			3,412
Tax payable, Argentina		80,392			123,290
Shareholder loan, including interest payable		-			1,898,534
Net short term note payable		528,983			-
Accrued interest on note payable		216,049			-
Other payable		-			202,500
Note payable		34,182			-
Total current liabilities		2,953,452			4,719,397

COMMITMENTS & CONTINGENCIES		-			-

STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock – 10,000,000 shares, $0.001 par value, authorized;-0- shares issued and outstanding		-			-
Common stock – 300,000,000 shares, $0.001 par value, authorized;76,251,362 shares issued and outstanding		76,251			76,251
Additional paid-in capital		57,770,373			50,975,578
Retained earnings - prior to exploration stage		90,527			90,527
Deficit accumulated during the exploration stage		(57,639,430	)		(52,448,659	)
Accumulated other comprehensive gain (loss)		(150,817	)		(190,999	)
Total stockholders’ equity (deficit)		146,904			(1,497,302	)

Total liabilities and stockholders’ equity (deficit)	$	3,100,356		$	3,222,095
The accompanying condensed notes are an integral part of these consolidated financial statements.

HuntMountain Resources Ltd. and Subsidiaries
(An Exploration Stage Enterprise)

Consolidated Statements of Operations


	Three months ended June 30,						Six months ended June 30,						From Inception of Development Stage
	2009			2008			2009			2008			July 1, 2005 through
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			June 30, 2009

INCOME:	$	-		$	-		$	-		$	-		$	-

EXPENSES:
Professional fees		179,424			261,848			409,781			427,072			2,039,005
Marketing		158			14,154			1,271			20,653			229,274
Exploration expenses		267,840			1,435,152			586,451			2,263,565			8,461,525
Travel expenses		53,488			69,210			84,746			133,059			641,725
Administrative and office expenses		86,369			125,271			166,078			178,161			912,167
Payroll expenses		221,194			228,138			439,687			418,288			2,302,546
Stock compensation expense		3,500			54,000			7,000			106,500			434,862
Common stock and options issued for services		-			75,000			-			75,000			479,838
Interest expense and banking charges		106,965			92,550			191,955			233,788			716,129
Other expense - Argentina		14,521			-			20,407			-			107,647
Value added tax net present value adjustment		49,606			-			86,810			-			1,040,330
Depreciation expense		22,313			12,819			45,622			15,133			143,269

		1,005,378			2,368,141			2,039,806			3,871,219			17,508,319

LOSS BEFORE OTHER INCOME		(1,005,378	)		(2,368,141	)		(2,039,806	)		(3,871,219	)		(17,508,319	)

OTHER INCOME/(EXPENSE):
Financing charge		(2,837,295	)		(12,244,341	)		(2,837,295	)		(16,474,287	)		(31,687,292	)
Amortization of debt discount		(528,983	)		(2,254,073	)		(528,983	)		(3,895,284	)		(8,747,468	)
Dividend and interest income		7,655			1,965			9,831			4,000			90,324
Income from partnership interest		-			-			-			-			5,423
Gain on sale of fixed assets		-			-			5			-			2,424
Foreign exchange gain/(loss)		(9,836	)		-			157,007			-			157,007
Accretion of VAT discount, Argentina		16,712			-			48,471			-			48,471
Net other income		-			(6,941	)		-			(6,141	)		-

LOSS BEFORE INCOME TAXES:		(4,357,126	)		(16,871,531	)		(5,190,771	)		(24,242,932	)		(57,639,430	)

Income taxes:		-			-			-			-			-

NET LOSS AFTER TAXES from continued operations	$	(4,357,126	)	$	(16,871,531	)	$	(5,190,771	)	$	(24,242,932	)	$	(57,639,430	)

OTHER COMPREHENSIVE GAIN/(LOSS)		54,853			-			40,183			-			-

COMPREHENSIVE LOSS	$	(4,302,274	)	$	(16,871,531	)	$	(5,150,588	)	$	(24,242,932	)	$	(57,639,430	)


BASIC AND DILUTED COMPREHENSIVE LOSS PER SHARE based on weighted-average shares outstanding	$	(0.06	)	$	(0.32	)	$	(0.07	)	$	(0.58	)


WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED		76,251,362			53,322,212			76,251,362			41,867,969


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

HuntMountain Resources Ltd. and Subsidiaries
(An Exploration Stage Enterprise)

Consolidated Statements of Cash Flows

							From Inception
	Six months ended						of Exploration Stage
	June 30,						July 1, 2005 through
	2009			2008			June 30, 2009
	(unaudited)			(unaudited)			(unaudited)

Increase (Decrease) in Cash and Cash Equivalents

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,190,771	)	$	(24,242,932	)	$	(57,639,430	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense		45,622			15,133			143,269
Stock option compensation expense		7,000			106,500			434,862
Common stock and options issued for services		-			75,000			479,838
Financing charge		2,837,295			16,474,287			31,687,292
Amortization of debt discount		528,983			3,895,284			8,747,468
Gain on sale of precious metal investments		-			-			(15,194	)
Value added tax net present value adjustment		49,606			-			49,606
Accretion of VAT discount		(48,471	)		-			(48,471	)
Decrease (increase) in receivables		(125,419	)		(477,273	)		(658,707	)
Decrease (increase) in prepaid expenses		9,906			10,072			(67,547	)
Decrease (increase) in deposits paid to vendors		-			-			(584,000	)
Accrued interest income		(5,464	)		(23	)		(11,373	)
Increase (decrease) in accounts payable		(444,126	)		394,534			2,014,852
Increase in interest payable, shareholder loan		187,515			-			216,049
Increase in accrued liabilities		(8,390	)		(6,022	)		137,995
Increase (decrease) in other payable		(202,500	)		-			-
Increase in note payable		34,182			-			34,182
Net cash used in operating activities		(2,325,031	)		(3,755,439	)		(15,079,308	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Land purchases		-			-			(710,000	)
Performance bond		-			-			(247,486	)
Property deposits		-			(135,000	)		(271,500	)
Property purchase option		-			-			(70,000	)
Sale of precious metal investments		-			-			28,913
Acquisition of equipment		(4,679	)		(152,738	)		(716,542	)
Net cash used in investing activities		(4,679	)		(287,738	)		(1,986,615	)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from convertible note financing		2,080,500			4,838,442			12,992,062
Proceeds from sale of common stock		-			-			1,132,870
Proceeds from shareholder loan		-			-			1,870,000
Net cash provided by financing activities		2,080,500			4,838,442			15,994,932

Effect of currency translation on cash		114,712			(73,181	)		79,057


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(134,498	)		722,084			(991,934	)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR/PERIOD		250,484			653,304			1,107,921

CASH AND CASH EQUIVALENTS, END OF YEAR/PERIOD	$	115,986		$	1,375,388		$	115,986

Supplemental Disclosures of Cash Flow Information:

NON-CASH FINANCING ACTIVITIES:
Conversion of note into equity		-			4,840,000			10,313,010
Cashless exercise of options		-			78			188,829
Accrued interest		(187,515	)		(206,579	)		(627,747	)
Conversion of shareholder loan to convertible note		3,760,500			-			-

Income taxes, paid net of refunds:		-			-			-
Interest paid:		-			-			-
The accompanying notes are an integral part of these consolidated financial statements.

HuntMountain Resources Ltd. and Subsidiaries

Condensed Notes to Consolidated Financial Statements (unaudited)

Note 1: Basis of Presentation

HuntMountain Resources Ltd. (the Company), a Washington corporation, was formed in 2005. Metaline Mining and Leasing Company, a Washington corporation since 1927, merged with and into the Company in August 2005. The Company’s business plan is to acquire interests in exploration properties in North and South America. As of the end of 2008, the Company had acquired one exploration property in Nevada, seven properties in the province of Santa Cruz in Argentina, one property in Mexico and an option on two properties in Quebec. The Company continues to actively evaluate additional properties in North and South America.

The unaudited financial statements have been prepared by the management of the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such SEC rules and regulations. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on April 14, 2009. In the opinion of management of the Company, the foregoing statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2009 and its results of operations and cash flows for the three month and six month periods ended June 30, 2009 and June 30, 2008. The interim results reflected in the foregoing financial statements are not considered indicative of the results expected for the full fiscal year.

The accompanying consolidated financial statements include the accounts of HuntMountain Resources Ltd. (“HMR”), a Washington corporation, its wholly-owned Canadian subsidiary HuntMountain Resources LTD (“HMR LTD”), HMR’s wholly owned Mexican subsidiary Cerro Cazador Mexico S.A. De C.V. (“CCM”), HMR’s wholly-owned subsidiary HuntMountain Investments, LLC (“HMI”), and Cerro Cazador S.A. (“CCSA”), an Argentine subsidiary 95% owned by HMR and 5% owned by HMI.

HMR LTD is incorporated in British Columbia and provincially registered in Yukon. HMR LTD was formed for the purpose of holding Canadian exploration properties, should the Company acquire an interest in any such properties. CCM was incorporated to acquire a property package in Chihuahua, Mexico. HMI was incorporated for the specific purpose of holding shares in subsidiary companies. CCSA was formed in Argentina for the purpose of holding Argentine exploration properties and executing agreements in Argentina.

Note 2: Going Concern

As shown in the accompanying financial statements, the Company has had no revenues and has incurred an accumulated deficit from the inception of the development stage of approximately $57,639,430 through June 30, 2009. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.

Historically, the Company has funded its operations with proceeds from related party loans that were converted into shares of its common stock. Should the Company be unsuccessful in raising additional funds through future private placements, its business, and, as a result, its financial position, results of operations and cash flow will likely be materially adversely impacted. As such, substantial doubt as to the Company’s ability to continue as a going concern remains as of the date of these financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. An estimated $3,500,000 is believed necessary to continue operations and increase development through the next twelve months. The timing and amount of capital requirements will depend on a number of factors, including exploration and acquisition expenses and the general operations of the continuing operations of the Company.

Note 3: Summary of Significant Accounting Policies

This summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Accounting Method

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Accounts Receivable

The Company carries its accounts receivable at net realizable value. On a periodic basis, the Company evaluates its accounts receivable and determines if an allowance for doubtful accounts is necessary, based on a history of past write-offs and collections and current credit conditions. At June 30, 2009 the Company’s accounts receivable balance was $131,272 compared to $153,135 at December 31, 2008. The Company’s receivables balance includes no allowance for doubtful accounts based upon management’s expectations and analysis.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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.

Cash and Cash Equivalents

Cash and cash equivalents include short-term cash investments that have an initial maturity of 90 days or less. In the normal course of business, 30% of all funds wire transferred from the Company to CCSA are withheld by the Government of Argentina. These withheld amounts are invested in money market instruments until the Government of Argentina approves CCSA’s formal application for release. Funds held in this fashion are included in short-term cash investments.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and it’s wholly and majority-owned subsidiaries after elimination of intercompany accounts and transactions. All of the wholly owned subsidiaries of the Company are named above in Note 1 – Basis of Presentation.

Marketable Securities

The Company accounts for marketable securities in accordance with the provisions of Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS No. 115”). Under SFAS No. 115, debt securities and equity securities that have readily determinable fair values are to be classified in three categories:

Held to Maturity – the positive intent and ability to hold to maturity. Amounts are reported at amortized cost, adjusted for amortization of premiums and accretion of discounts.

Trading Securities – bought principally for purpose of selling them in the near term. Amounts are reported at fair value, with unrealized gains and losses included in earnings.

Available for Sale – not classified in one of the above categories. Amounts are reported at fair value, with unrealized gains and losses excluded from earnings and reported separately as a component of stockholders’ equity.

At this time, the Company holds securities classified as available for sale. See Note 6 - Investments for further details.

Mineral Development Costs

All exploration expenditures are expensed as incurred. Significant property acquisition payments for active exploration properties are capitalized. If no economic ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.

Should a property be abandoned, its capitalized costs are charged to operations. The Company charges to the consolidated statement of operations the allocable portion of capitalized costs attributable to properties sold. Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.

Equipment

The Company evaluates equipment for impairment annually, or when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset grouping, an asset impairment is considered to exist. The related impairment loss is measured by comparing estimated future net cash flows on a discounted basis to the carrying amount of the asset. Changes in significant assumptions underlying future cash flow estimates may have a material effect on the Company’s financial position and results of operations. To date no such impairments have been identified.

Office Equipment and vehicles are stated at cost and is depreciated on the straight-line basis over an estimated useful life of 3 years.

Drilling and excavation equipment is stated at cost on the balance sheet for June 30, 2009. The Company has not begun depreciating drilling and excavation equipment because the equipment has not been placed into service.

Earnings Per Share

The Company has adopted Statement of Financial Accounting Standards No. 128, which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Although there were common stock equivalents outstanding on June 30, 2009, they were not included in the calculation of earnings per share because they would have been considered anti-dilutive.

Basic earnings per share are computed using the weighted average number of shares outstanding during the years (76,251,362 in the second quarter of 2009 and 53,322,212 in the second quarter of 2008).

As of June 30, 2009 and 2008, the Company had outstanding options and warrants for a total of 48,041,248 and 24,127,056, respectively, of additional shares which were considered anti-dilutive.

Deferred Income Tax

Deferred income tax is provided for differences between the bases of assets and liabilities for financial and income tax reporting. A deferred tax asset, subject to a valuation allowance, is recognized for estimated future tax benefits of tax-basis operating losses being carried forward.

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the “more likely than not” standard imposed by SFAS No. 109 to allow recognition of such an asset.

Reclamation and Remediation

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do not contribute to future revenue generations are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation. Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Recent Accounting Pronouncements

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 165, “Subsequent Events,” (“SFAS No. 165”). SFAS 165 establishes 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. SFAS 165 applies to both interim financial statements and annual financial statements. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. SFAS 165 does not have a material impact on our financial statements.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, “Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140,” (“SFAS 166”). SFAS 166 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company will adopt SFAS 166 in fiscal 2010. The Company does not expect that the adoption of SFAS 166 will have a material impact on the financial statements.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R),” (“SFAS 167”). The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS 167 is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt SFAS 167 in fiscal 2010. The Company does not expect that the adoption of SFAS 167 will have a material impact on the financial statements.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” (“SFAS 168”). SFAS 168 replaces FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles”, and establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”). SFAS 168 is effective for interim and annual periods ending after September 15, 2009. The Company will begin to use the new Codification when referring to GAAP in its annual report on Form 10-K for the fiscal year ending December 31, 2009. This will not have an impact on the results of the Company.

Fair Value Measurements

Our financial instruments as defined by Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments,” include cash, short term investments, a performance bond and accrued liabilities. All instruments except the performance bond are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2009 and June 30, 2008. The performance bond was marked to market on June 30, 2009 and June 30, 2008.

Effective January 1, 2008, the Company adopted Financial Accounting Standards Board (FASB) SFAS No. 157, Fair Value Measurements (SFAS 157). The provisions of SFAS 157 are applicable to all of the Company’s assets and liabilities that are measured and recorded at fair value. SFAS 157 establishes a new framework for measuring fair value and expands related disclosures. SFAS 157 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. SFAS 157 establishes a fair value hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy defined by SFAS 157 are described below.

Level 1: Quoted prices are available in active markets for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3: Pricing inputs include significant inputs that are generally unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Level 3 instruments include those that may be more structured or otherwise tailored to the Company’s needs.

As required by SFAS No. 157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

The following table discloses by level within the fair value hierarchy the Company’s assets and liabilities measured and reported on the Consolidated Balance Sheets as of June 30, 2009, at fair value on a recurring basis:

	Total		Level I		Level II		Level III
Assets:
Performance bond	$	139,108	$	139,108	$	0	$	0
Receivable – V.A. Tax		417,036		0		0		417,036
Total:	$	556,144	$	139,108	$	0	$	417,036

The performance bond, required to secure the Company’s rights to explore the La Josefina property, is a step-up coupon US dollar bond issued by the Government of Argentina with a face value of $600,000 and a maturity date of 2035. The bond was originally purchased for $251,613 and had a value of $139,108 on June 30, 2009.

The Receivable - V.A. Tax accrued due to the payment of valued added tax on certain transactions in Argentina. The Company will realize this credit as an offset against V.A. taxes due on future revenues. This asset is reported at net present value based upon the Company’s estimate of an expected benefit period of 7 years and a discount rate of 18.6% based upon the average Argentine interest rates.

Concentration of Credit Risk

The Company maintains its cash and cash equivalents in multiple financial institutions. Balances in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per institution. Balances on deposit may occasionally exceed FDIC insured amounts. All of the Company’s cash in U.S. bank accounts was FDIC insured at June 30, 2009. The Company also maintains cash in an Argentine bank. The Argentine accounts, which had a U.S. dollar balance of $98,453 at June 30, 2009, are considered uninsured.

Foreign Currency Translation

Our international operations use the US Dollar as their functional currency. The financial statements of international subsidiaries are translated to their U.S. dollar equivalents at end-of-period currency exchange rates for monetary assets and liabilities and at average currency exchange rates for revenues and expenses. Translation adjustments for international subsidiaries are recorded as a loss in the accompanying Consolidated Statements of Operations. Transaction gains and losses resulting from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized as incurred in the accompanying Consolidated Statements of Operations, except for certain inter-company balances designated as long-term investments.

Other Comprehensive Income

The Company has adopted SFAS 130, “Reporting of Comprehensive Income,” which establishes guidelines for the reporting and display of comprehensive income (loss) and its components in financial statements. Comprehensive income (loss) includes the accrued gain or loss on the performance bond. (discussed in Note 5 – Performance Bond).

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” (hereinafter “SFAS No. 133”) as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB No. 133,” and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities” and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the consolidated balance sheet and measure those instruments at fair value. In February 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments, an Amendment of FASB Standards No. 133 and 140.” See Recent Accounting Pronouncements.

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

Historically, the Company has not entered into derivative contracts to hedge existing risks.

Compensated Absences

The Company has not accrued for compensated absences because the amounts are deemed to be immaterial.

Reclassifications

Certain prior year amounts in the accompanying financial statements have been reclassified to conform to the fiscal 2008 presentation. These reclassifications have resulted in no changes to the Company’s accumulated deficit or the net loss presented.

Beneficial Conversion Feature of Convertible Notes

Following the guidance provided by EITF 00-27 the Company allocated proceeds first to the warrants issuable upon conversion of the note. The value of the warrants was recorded on the balance sheet as debt discounts and increases to shareholder’s equity. The debt discounts are being amortized over the remaining life of the convertible note. The value of warrants in excess of the actual debt advance amounts were expensed as financing fees.

Once the Company allocated proceeds of convertible note advances to the warrant values, the embedded conversion feature of shares issuable on conversion of the notes was recognized. All amounts relating to the share values were expensed as financing fees.

Note 4: Stock option plan

The Company’s 2005 Stock Plan permits the granting of up to 3,000,000 non-qualified stock options, incentive stock options, and restricted shares of common stock to employees, directors, and consultants. At June 30, 2009, there were 2,395,000 stock options granted to directors, employees, or consultants of which 2,270,000 options were vested as of June 30, 2009. The fair value of each option is estimated on the vesting date using the Black-Scholes option pricing model.

There were 25,000 options that vested during the quarter ended June 30, 2009; therefore, the Company’s total stock option expense for the quarter was $3,500. Expenses for the remaining options will be recorded as they vest through 2012.

For purposes of calculating the fair value of options, volatility for the two years presented is based on the historical volatility of the Company’s common stock over its public trading life. The Company currently does not foresee the payment of dividends in the near term. The fair value for these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three month periods ended
	June 30,2009	June 30, 2008
Weighted average risk free rate:	0.19%	1.86%
Weighted average volatility:	105.06%	82.8%
Expected dividend yield:	0%	0%
Weighted average life (years):	5.0	5.0

The following table summarizes the terms of the options outstanding at June 30, 2009:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Number of Exercisable Options at June 30, 2009

		90,000	$	0.20		2.64		90,000
		700,000	$	0.25		2.11		700,000
		100,000	$	0.30		2.34		100,000
		10,000	$	0.34		1.08		10,000
		50,000	$	0.38		4.09		50,000
		650,000	$	0.45		3.06		650,000
		5,000	$	0.55		2.01		5,000
		55,000	$	0.60		3.494		55,000
		150,000	$	0.63		2.84		150,000
		100,000	$	0.64		4.20		100,000
		100,000	$	0.67		4.80		50,000
		385,000	$	0.76		4.15		310,000

TOTALS		2,395,000	$	0.456		3.04		2,270,000

Note 5: Performance bond

During the quarter ended March 31, 2007, the Company's wholly-owned subsidiary, Cerro Cazador S.A., was required to purchase a performance bond as a condition of the exploration agreement on the La Josefina property in Argentina. The bond was originally purchased for $251,613 and had a value of $214,762 at December 31, 2007. As of the quarter ended June 30, 2009, the value of the bond decreased to $139,108. The decline in value is presented on our balance sheet as Other Comprehensive Income (Loss). The bond has a face value of $600,000, or 10% of our required investment under the terms of the agreement.

Note 6: Investments

The Company holds an interest in two units of Pondera Partners, Ltd., a producing oil project located in Teton County, Montana. This investment was valued at cost on the Company’s balance sheet at $7,331 on June 30, 2009.

Note 7: Convertible Note

On June 2, 2009, pursuant to approval from its board of directors, the Company obtained an unsecured loan for multiple advances up to $5,000,000 (“the June 2009 Note”) from Hunt Family Limited Partnership (“HFLP”). The June 2009 Loan supersedes and replaces the shareholder loan owed to HFLP that had a balance of $3,198,510 on March 31, 2009.

The June 2009 Note, which matures on December 31, 2009, bears interest at a rate of eleven percent (11%) per annum. All principal and accrued interest balances due pursuant to the June 2009 Note are convertible at the option of the holder into units of the Company’s common stock, at a conversion price of $0.10 per unit, where each unit consists of one share and one warrant to purchase a common share. Each warrant issued pursuant to conversion of the June 2009 Note shall have an exercise price of $0.10 per share and a seven (7) year expiration from the date of issuance.

In addition, concurrently and in consideration for the issuance of the June 2009 Note, all warrants previously issued to HFLP pursuant to the conversion of Notes shall be cancelled and an equal number of warrants to acquire common shares at an exercise price of $0.10 and a maturity date of April 22, 2016 shall be issued. On June 2, 2009 the Company recognized a financing fee expense of $2,837,295 to reflect the difference in the Black-Scholes valuation of the new warrants and the cancelled warrants.

Concurrently and in consideration for the issuance of the June 2009 Note the Company granted to HFLP a 3% Net Smelter Royalty (“NSR”) on all of the Company’s resource properties in Mexico, past, present and future. The Company also granted an additional 2,000,000 warrants with a $0.10 exercise price and a seven year term in conjunction with the inception of the June Note structure.

In accordance with EITF 00-27, the Company recognized the beneficial conversion feature associated with the June Note’s convertibility into shares and warrants. The total value of the shares was determined based on the trading price of the Company’s shares at the time of the draw on the June Note. The total value of warrants was determined using the Black Scholes option pricing model. In employing this model, the Company used the actual three month T-Bill rate on the advance dates for the risk-free rate. Similarly, the actual share price on advance dates was used in the calculation. The Company assumed expected volatility of 105.06%, no dividends and a five year horizon in all Black Scholes option pricing calculations.

In the second quarter of 2009, the total value of warrants from issuances of the October Note was $9,772,250 and the total value of shares was $10,938,400. Since the value of beneficial conversion feature of the June Note exceeded the amount borrowed, the Company recognized a debt discount to completely offset the amount borrowed.

Note 8: Commitments and Contingencies

On June 24, 2009 the Company entered into a Letter of Intent with a Canadian Capital Pool Company (“the CPC”) pursuant to which the CPC intends to acquire all of the issued and outstanding shares of Cerro Cazador S.A. (“CCSA”), the Company’s Argentine subsidiary, in a reverse takeover transaction (“RTO”). In conjunction with this proposed transaction, the CPC intends to raise funds through the issuance of common shares. All of the funds raised pursuant to this share issuance will be used for CCSA’s ongoing operations.

Note 9: Subsequent events

Subsequent to June 30, 2009 the Company borrowed an additional $362,500 pursuant to the June Note.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This form 10-Q and other documents we file with the Securities and Exchange Commission (“SEC”) contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. All statements other than statements of historical facts are forward-looking statements, including any statements of the plans and objectives of management for future operations, projections of revenue earnings or other financial items, any statements regarding future economic conditions or performance, and any statement of assumptions underlying any of the foregoing. Some of these forward-looking statements may be identified by the use of words in the statements such as “anticipate,” “estimate,” “could,” “would,” “expect,” “project,” “intend,” “plan,” “believe,” “seek,” “should,” “may,” “assume,” “continue,” variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. We caution you that our performance and results could differ materially from what is expressed, implied, or forecast by our forward-looking statements due to general financial, economic, regulatory and political conditions affecting the economy and markets, as well as more specific risks and uncertainties affecting the Company. The Company operates in a rapidly changing environment that involves a number of risks, some of which are beyond the Company’s control. Future operating results and the Company’s stock price may be affected by a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “ITEM 1. BUSINESS,” and all subsections therein, including, without limitation, the subsection entitled, “FACTORS THAT MAY AFFECT THE COMPANY,” and the section entitled “MARKET FOR REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS,” all contained in our Annual Report on Form 10-K for the year ended December 31, 2007. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such forward-looking statements. Furthermore, we do not intend (and we are not obligated) to update publicly any forward-looking statements. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the Securities and Exchange Commission.

Overview

We are engaged in the business of acquiring, exploring and developing mineral properties, primarily those containing gold, silver and associated base metals. Through our Latin American subsidiaries we hold mining claims in Santa Cruz province, Argentina and the state of Chihuahua, Mexico. Additionally, we hold an option to acquire a 100% interest in two properties in the province of Quebec, Canada and a 10 year lease on a mining property in the state of Nevada.

The Company is currently evaluating other exploration and development properties in North and South America.

On June 24, 2009 the Company announced that it had entered into a Letter of Intent with Sinomar Capital Corp. (“Sinomar”), a Canadian Capital Pool Corporation, pursuant to which Sinomar will acquire all of the issued and outsuandting shares of CCSA in a reverse takeover (“RTO”) transaction. This transaction is intended to be Sinomar’s Qualifying Transaction pursuant to Policy 2.4 of the TSX Venture Exchange and is therefore subject to regulatory approval. Upon completion of the RTO, the Company would own 68.8% of Sinomar’s issued and outstanding common shares and 100% of Sinomar’s non-voting convertible preferred shares. The company’s post-RTO fully diluted equity ownership of Sinomar is 79.1%.

In conjunction with the RTO, Sinomar and the Company engaged Wovlerton Securities to raise a minimum of CDN$2,000,000 and a maximum of CDN$3,000,000 via short form offering document and private placement.

Results of Operations

Three month period ended June 30, 2009 compared to June 30, 2008

We had no revenues from operations during the recently completed quarter. Our only income has been derived from interest and dividends on our cash and cash investments. Interest and dividend income for the three-month period ended June 30, 2009 increased to $9,831 from $4,000 for the same period ended June 30, 2008. This increase was due to higher interest income during the quarter ended June 30, 2009 relative to the quarter ended June 30, 2008.

We had a comprehensive loss of $4,302,274 during the three-month period ended June 30, 2009. This compares to a comprehensive loss of $16,871,531 during the three-month period ended June 30, 2008. The decrease in our comprehensive loss was due to significantly lower financing charges and amortization of debt discount expense relating to the Company’s convertible notes and lower exploration expenditures.

During this most recently completed quarter, the Company primarily focused its exploration expenditures in Argentina.

We anticipate continuing net losses until such time as we sufficiently develop properties for production or subsequent acquisition by another company. Our ongoing expenses consist of exploration expenses on properties that we have acquired; payroll; investor relations and marketing; travel, administrative and office expenses; accounting, legal, and consulting expenses related to complying with reporting requirements of the Securities Exchange Act of 1934; and expenses incurred in the search for exploration properties that meet our acquisition criteria.

Working Capital, Cash and Cash Equivalents

The Company’s working capital deficit for the six month period ending June 30, 2009 was $(2,043,272) compared to $(3,648,416) on December 31, 2008. The ratio of current assets to current liabilities was 0.31 to 1 at June 30, 2009 compared to 0.23 to 1 at December 31, 2008. Working capital decreased during the six month period ended June 30, 2009 compared to the same period in 2008 due primarily to the Company’s shareholder loan balance and a reduction in short term investments.

Net cash used in operating activities was $2,325,031 for the six month period in 2009 compared with $3,755,439 used in operating activities in the same period during 2008. The decrease is the result of a reduction in net loss during the six months ended June 30, 2009.

During the period ending June 30, 2009, investing activities used $4,679 compared with $287,738 during that same period in 2008. The decrease relates to a reduction in capital expenditures in the six month period ended June 30, 2009.

Cash flow from financing activities was $2,080,500 during the three month period ended June 30, 2009 compared to $4,838,442 during that same period in 2008. The decrease is due to a reduction of convertible note financing in the three month period ended June 30, 2009.

As a result, cash and cash equivalents decreased by $134,498 during the six month period ended June 30, 2009. This compares to an increase in cash and cash equivalents of $722,084 in the six month period ended June 30, 2008. The Company has cash and cash equivalents of $115,986 as of June 30, 2009. It will be necessary for the Company to raise additional capital to continue the Company's business activities.

Trade accounts payable decreased to $1,982,170 from $2,376,402 on December 31, 2008 as a result of decreased exploration activity in Argentina.

Item 3. Quantitative & Qualitative Disclosures about Market Risk

Not Applicable.

Item 4. Controls and Procedures

In connection with the preparation of this Form 10-Q, an evaluation was carried out by the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on such evaluation, and in light of the previously identified material weakness in internal control over financial reporting, as of June 30, 2009, relating to the lack of appropriate accounting policies and related procedures described in the Company’s annual report on Form 10-K for the year ended December 31, 2008, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2009, the Company’s disclosure controls and procedures were ineffective.

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2009, 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

None

ITEM 1A.

RISK FACTORS

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

ITEM 2.

RECENT SALES OF 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

Not applicable

ITEM 5.

OTHER INFORMATION

None

Item 6.

Exhibits

31.1 --

Certification required by Rule 13a-14(a) or Rule 15d-14(a). Tim Hunt

31.2 --

Certification required by Rule 13a-14(a) or Rule 15d-14(a). Bryn Harman

32.1 --

Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Tim Hunt

32.2 --

Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Bryn Harman

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HUNTMOUNTAIN RESOURCES LTD.

BY:	TIM HUNT	DATE: August 19, 2009
	TIM HUNT, CHAIRMAN, PRESIDENT & CHIEF EXECUTIVE OFFICER



BY:	BRYN HARMAN	DATE: August 19, 2009
	BRYN HARMAN, CHIEF FINANCIAL OFFICER