GoldON Resources Ltd V.GLD

RE: RE: MD&A ...TEST AGAIN(PARTIAL)

[pastorboy]

During the second quarter of its 2011 fiscal year, the Company had a net loss of $46,673 – a

decrease of $283,326 from the preceding quarter’s net income of $236,653. This decrease was

primarily the result of a $535,282 decrease in non-cash realized and unrealized gains on its

marketable securities, offset somewhat by a non-cash recovery of future income taxes of

$226,069.

The Company’s gains and losses on its marketable securities are the result of changes in the

fair value of the securities received as consideration from the sale and option of certain of its

mineral interests. Fluctuations in the fair value of those securities are outside the control of

management, and the Company may experience significant volatility in these values.

For the first half of the Company’s 2011 financial year, its net income totalled $189,980. This

represents a $426,167 improvement over the $236,187 loss for the same period in 2010. The

improvement was largely the result of a $262,487 increase in realized and unrealized gains on

its marketable securities and a $200,069 increase in recovery of future income taxes mentioned

above. Operating expenses for the first half of the 2011 financial year were essentially

unchanged from the preceding year, although savings in consulting and management and

administrative fees were offset by an increase in travel and promotion expenses as

management refocused its resources on investor communications.

As of the December 31, 2010 quarter-end, the Company had working capital of $1,543,199 as

compared with working capital of $2,016,187 at the end of the preceding quarter – a decrease

of $472,988. During its second fiscal quarter, the Company received $294,000 from the sale of

marketable securities and $331,000 from a flow-through private placement and a non-flowthrough

private placement that closed in January 2011. The Company’s primary uses of cash

were $264,000 for its operating activities and $508,000 for the acquisition and exploration of its

mineral interests. Following is a breakdown of exploration expenditures for the financial year to

date on a property-by-property basis:

Carscallen Pickle Lake Mollie River Totals

Balance, June 30, 2010 $ 58,724 $ 27,884 $ 24,288 $ 110,896

Current expenditures

Drilling 51,100 315,940 - 367,040

Geophysics - 74,305 58,000 132,305

Reporting and analysis - 634 325 959

51,100 390,879 58,325 500,304

Costs recovered from option (58,724) - - (58,724)

Balance, December 31, 2010 $ 51,100 $418,763 $ 82,613 $ 552,476

Exploration expenditures for the 2010 comparative period are summarized in the Company’s

financial statements as of and for the period ended December 31, 2010.

In general, with continuing high gold prices, the Company has witnessed greater interest for its

mineral properties. Many analysts expect gold prices to remain high, at least in the near term,

so the Company plans to continue its strategy of advancing its mineral properties and acquiring

additional properties that would be expected to add shareholder value.

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As of December 31, 2010, the Company had no contractual obligations, such as long term debt,

capital lease obligations, operating leases or purchase obligations, nor did it have commitments

for capital expenditures.

Mineral Exploration Activities

Carscallen Township Property

The Company holds an option to purchase a 100% interest in nine property patents covering

approximately 120 hectares in Carscallen Township adjacent to Highway 101, 21 kilometres

southwest of Timmins, Ontario.

The property is located in the West Timmins district, which is the western extension of the

Timmins gold camp, and is bisected by the Bristol Fault. The Timmins gold camp has been in

production since 1909 and has produced over 70 million ounces of gold. There are several

active mines and advanced exploration and development projects currently underway in the

Timmins camp.

The property is surrounded by Lake Shore Gold Corp.’s 130-square kilometre Timmins West

Gold Mine Complex, which includes its Thunder Creek project and its Timmins Mine, with

reported probable reserves of 3.4 million tonnes bearing 7.52 grams of gold per tonne. The

property is also approximately three kilometres east of Melkior Resources’ Carscallen project

which reported drilling results of 60.27 grams of gold per tonne over 1.8 metres and 19.8 grams

of gold per tonne over 3.3 metres, and approximately 4.5 kilometres northeast of Nebu

Resources’ West Timmins project which reported 98.4 grams of gold per tonne over 4.7 metres,

according to their respective websites. There is no certainty that similar results will be obtained

from the Company’s property.

In April 2010, the Company completed a geophysical survey of the property. The survey

indicated the presence of several strong, well-defined induced polarization and linear magnetic

anomalies.

In May 2010, the Company granted an option to SGX Resources Inc. to purchase a 50%

interest in the Company’s property. To exercise the option, SGX paid the Company $100,000

and issued $75,000 of SGX shares, and assumed the remaining payment obligations under the

Company’s head option agreement (of which $50,000 was paid), except for the issuance of up

to 900,000 Company shares. SGX terminated its option on November 30, 2010.

Upon review and interpretation of all the data accumulated by the Company, a significant

through-going structure – the Bristol Fault Zone – indicated by ground magnetics was identified.

This structure is believed to be highly prospective to host gold mineralization. Drilling in 2010 by

SGX Resources Inc. did not test the Bristol Fault Zone, but successfully identified a parallel,

strongly anomalous gold-bearing zone in drill holes NC-10-07 and NC-10-01 approximately 300

metres north of the interpreted Bristol Fault Zone.

In January 2011, the Company initiated a new exploration program to follow up on the recently

discovered gold bearing trend, drill a series of 250-metre holes to test the numerous targets

along the Bristol Fault Zone, and target untested IP anomalies defined in the previous

exploration.

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Pickle Lake Property

The Company owns a 100% interest in 18 mineral claims covering approximately 3,408

hectares in the Patricia Mining Division of northwestern Ontario and holds four options to

purchase a 100% interest in 53 additional mineral claims and patents covering approximately

7,715 hectares. The property is located in the Pickle Lake Greenstone Belt where over 2.2

million ounces of gold were extracted from three mines between 1934 and 1996.

Aeromagnetic Gradient VLF-EM Survey

In October 2010, the Company carried out a helicopter-towed aeromagnetic gradient and VLFEM

survey over its Pickle Lake Property. A total of 1,110 line kilometres of data were

collected. The lines were flown at an azimuth of 137 degrees over a 75-metre line spacing. The

survey was undertaken to provide detailed information on the complex structures on the

property. The iron formation is highly magnetic and easily traced by the survey; crosscutting

offsets, folds and other structures are apparent. These types of structures provide an optimum

environment for the emplacement of mineralization, as the brittle nature of the rock causes

brecciation and other less catastrophic fracturing providing conduits for the flow of mineralizing

fluids. Data from the survey is presently being interpreted and studied to identify any structural

similarities between Newcastle’s property and known gold-bearing structures in the area to

assist in future drill hole selection.

Historical Data Compilation

A first-time compilation of available historical records was also undertaken in late 2010 to assist

management in focusing its exploration efforts. The area encompassed by the Pickle Lake

Property has seen significant activity over the years, most recently in 2004. Sufficient detailed

information is available for parts of the property to model the mineralization, which will further

assist management’s planning. Compilation work to date has identified the following assay

values in the area of current drilling:

Hole # Description Sample # From To Length (ft.) g/T

PL-07 Southwest Powderhouse Zone 701150 345 350 5 5.778

PL-08 Southwest Powderhouse Zone 111 119 8 6.97

Incl. 6414 111 113 2 2.88

Incl. Sample 6433 never released 6433 113 115 1.5 22.389

Incl. 6434 115 115.5 0.5 6.96

Incl. 6409 115.5 117.5 2 6.343

Incl. 6410 117.5 119 1.5 0.206

PL-14 Southwest Powderhouse Zone 701512 23 25 2 4.903

PL-14 Southwest Powderhouse Zone 701537 243 245 2 6

PL-17 Southwest Powderhouse Zone 247 253 6 3.52

PL-17 701676 247 249 2 9.394

PL-17 701677 249 251 2 0.103

PL-17 701678 251 253 2 1.063

PL-22 Southwest Powderhouse Zone 140 158 18 3.825

incl. 701352 140 142.5 2.5 3.429

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Hole # Description Sample # From To Length (ft.) g/T

incl. 701353 142.5 145 2.5 3.943

incl. 701354 145 147.5 2.5 3.36

incl. New sampling C365567 147.5 153 5.5 5.96

incl. New sampling C365568 153 158 5 1.85

PL-22 Southwest Powderhouse Zone 500 529 29 5.48

PL-22 New sampling C365622 500 505 5 2.59

PL-22 New sampling C365623 505 510 5 1.39

PL-22 New sampling C365624 510 515 5 18.2

PL-22 New sampling C365625 515 519.5 4.5 0.05

PL-22 New sampling C365626 519.5 524 4.5 5.24

PL-22 New sampling C365627 524 529 5 4.86

The data identified in the table as “never released” and “new sampling” were not previously

reported, while the other data were extracted from 2004 press releases of King’s Bay Gold

Corporation and verified by crosscheck of drill logs and assay certificates. The “new sampling”

was obtained in the field by Billiken Management Services Inc., bagged, tagged and delivered to

ALS Chemex in Thunder Bay. The samples underwent ME ICP 41 and Au-ICP21 for gold and

multi-element.

Diamond Drilling Program