The following discussion provides information that we believe is relevant to an assessment and understanding of the consolidated results of operations and financial condition of our company. It should be read in conjunction with the Consolidated Financial Statements and accompanying Notes.

Overview

We are a North American precious metals mining company with a fully permitted gold and silver test mine in northern Nevada. Our Company was formed in mid-2003, and we acquired the Plum Comstock Lode property in November 2003. In our relatively short history, we secured permits, built an infrastructure and brought the Plum exploration project into test mining production. Since 2005, we have started acquiring additional properties around in the Comstock Lode District in Nevada, expanding our footprint and creating opportunities for exploration, as well as acquiring rights to other properties through leases. We are an emerging company, looking to build on our success through the acquisition of other mineral properties in the Comstock Lode District with reserves and or exploration potential. The Company's objectives are to optimize production, increase reserves through exploration and acquisitions, expand its footprint in the Comstock, and maximize shareholder value.

In the first quarter of 2007, we temporarily ceased mining activity while we focus on delineating the ore body and exploratory drilling that should lead to a comprehensive mine plan and, ultimately, to more efficient mining in the future.

The Company turned a corner during 2007 with the final settlement of the Parent litigation and settlement of the Degerstrom litigation, both of which had caused a drain of financial and human resources that severely drained Company resources. Given the end of this litigation, change in Board composition and continued challenges in capital raising efforts, the Company's management determined that there is a need to reevaluate the Company's business plan with a view toward the best way to maximize shareholder value and protection of our secured creditors.

In detail, this evaluation is covered the following matters:

o Expanding our footprint in the Comstock Region and other acquisition opportunities

o Further exploration in the Comstock Region to accomplish the above, including a decision to review the geology of the Hartford complex in a more detailed manner

o Completion of the Plum Mine reserve report

o Strategic acquisitions in other areas of North America (subsequently redirected toward the Comstock Lode)

Adjustments to this analysis have been made over the past few months, all with the goal to best utilize the Company's limited financial resources to increase shareholder value and to focus on raising additional capital to reinstate operations.

Post the mine shutdown in the first quarter 2007, the Company focused its attention on ore body delineation, metallurgic testing and exploration. In December 2007 the Company commenced developmental drilling in the Hartford Complex to delineate the ore body in this area. This developmental drilling program is scheduled to be completed in three phases of 100 holes per phase. The goal is to define and map the ore body and to prepare geologic cross sections to be utilized to complete the reserve report, create a mine plan using geostatistics and extensive drill hole data.

There is also ongoing exhaustive metallurgic testing to attempt to maximize recovery of the high grade fraction of the ore and to determine optimum size to continue heap leaching. The Company is also assessing whether a mill could be added to increase overall recovery.

The exploration drilling program, which is heavily dependent on funds availability, commenced in December 2007. The Company is scheduled to continue with the exploration drilling program throughout 2008 and plans to complete the first one hundred hole drilling phase by the end of December 2008.

Assuming sufficient funds are raised in a timely manner, the Company's goal would be to reopen the Mine during the first half of 2009. In order to resume production, the Company must complete a reserve report certified by a qualified third party; complete a comprehensive mine plan; and complete a mining schedule, all of which are dependent upon ability to secure sufficient funds to procure the mining fleet.

There are also risks involved in the fact that one individual and his affiliates, as of June 30, 2008, beneficially own in excess of 21% of our voting stock. Pursuant to financing agreements, this convertible debt holder and his affiliates with a 61 day notice can waive the 4.9% ownership restriction, allowing him to convert 100% of his convertible debt and related interest, which totals $8,507,662 at June 30, 2008, into our common shares. This group, if they waive the ownership restriction and convert all convertible debt and related interest into our voting common stock, may take actions that could conflict with your interests. This includes the election of Company directors, approval of actions generally requiring the approval of the holders of our voting stock, including adopting amendments to our articles of incorporation and bylaws and approving mergers, certain acquisitions or sales of all or substantially all of our assets, which could delay or prevent someone from acquiring or merging with us or limit the ability of our other stockholders to approve transactions that they may deem to be in their best interests.

Results of Operations and Operational Plan

Our Comstock Lode Mine, which is located in Storey County, Nevada, went into test mining production in late third quarter 2004. We have not established reserves on this exploration project. Therefore, all of our activities on this property are considered test mining or exploratory in nature. In November 2005, we retained mining engineer Jim Golden, who became our COO in 2006, to conduct a comprehensive review of all aspects of the Comstock Lode Mine operation, including the overall mine plan, with the objective of further improving efficiency, increasing production, and reducing costs. Furthermore, TechBase of Colorado, with the help of our consultants, is expected to complete a detailed mine plan and an initial 43-101 reserve report for the Comstock Lode mine in the third quarter 2008. We believe that these steps coupled with our exploratory drilling of the Hartford Complex will improve our overall performance at the Comstock Lode Mine.

We had planned to commence our exploratory drilling program in mid 2007 if capital resources allowed; however, due to insufficient funds, this was delayed until the December 2007. In late 2007, we retained Dwight Juras, Ph. D. geologist, to assist in overseeing our exploration program at the Comstock Lode Mine and in the Comstock Lode district. Mr. Juras has over thirty years of diverse geological and exploration experience in the mining industry. He has worked for several major mining companies. We have allocated a budget of $2,000,000 to explore and develop our claims at the Comstock Lode Mine. Exploratory drilling started in late 2007 and is scheduled to continue throughout 2008. Initial drilling has been in the Hartford Complex, and drilling consists of surface mine drilling down to a depth of 400 feet and covers approximately 40 acres. We intend to target our exploration toward expanding our mineralized material inventory at our Hartford Complex property in the Comstock Lode District and toward developing new mineral properties in the Comstock. The successful location of additional mineralized material on the existing property would allow us to expand the size and the lifespan of the Comstock Lode mining project, exclusive of new property acquisitions. It is our belief that we possess an advantage with our status as likely the only heap leach gold mining permit holder in the area. This permit is relatively difficult to obtain, and it is one that we can expand to include new areas in the event we locate and wish to process new deposits.

Among the exploration and business development activities that are in process:

· Ore body delineation

· Reserve definition

· Completion of reserve report

· Development of comprehensive mine plan from exploration results

· Increase of ore reserves

· Augment ability to mine and operate at more efficient levels

· Intent to resume mine operations after completion of the initial 43-101 reserve report and the comprehensive mine plan.

· Expansion of existing footprint in the Comstock region

Expansion of team of experts to study geology and metallurgy, as well as develop mine plan, define reserves and complete initial 43-101 reserve report

Secure funds to commence drilling

The Company hired Orbit Garant Drilling to perform exploration and developmental drilling at the Comstock project, and four holes were drilled by the end of December, with third party laboratory testing yielding encouraging ore grades from samples tested from the first four holes. The Company also hired two mining engineers and a Ph. D. geologist as consultants to its team to further augment its expertise in all facets of mining, including metallurgy. In order to fund its exploration efforts, the Company, since early December 2007, has raised in excess of $4,500,000 (of which $1,820,000 has been funded to date) in capital to finance the exploratory drilling.

First Six Months of 2008 Developments

The Company has drilled a total of 57 holes in its 100 hole Phase 1exploratory program through July 2008 at the Hartford Complex,. The purpose of this program is to define the boundaries of the ore bodies and to produce a comprehensive reserve report and mine plan by the end of the 2008 calendar year. The total estimated cost of this plan is $2,000,000 of which $1,000,000 has been expended to date. With the total $2.5 million committed by a related party in new loans to us through the end of 2008 (of which $1,000,000 has already been funded), no additional funds should be needed to complete Phase 1.

Initial report results are encouraging. The initial resource report released in June after obtaining 3rd party assays on 38 drill holes completed to date indicated a resource of 4,926,000 tons grading 0.080 ounces per ton gold containing 392,000 ounces at a cutoff grade of 0.030 ounces per ton. The resource is highlighted by 930,000 tons grading 0.209 ounces per ton gold containing 194,000 ounces of gold using a 0.100 ounces per ton gold cutoff grade. A 43-101 reserve report is expected to be completed during the third quarter of 2008. The Company intends to expand the exploration program beyond the Hartford Complex in the second half of 2008.

Summary Exploratory Drilling Results Table

The chart below details the results of the assay testing, which was conducted by
an independent third-party laboratory. The encouraging assay results received
from the drilling program have expanded the surface area and the depth of the
identified body of mineralized material in the Hartford Complex. To date, the
Company's drilling program results at the Hartford Complex since December 2007
are summarized in the table below.

                                   Gold Grade
Drill Hole                       (ounces per ton      Silver Grade
  Number     Intercept in Feet         Au)         (ounces per ton Ag)
48                0'-90'              0.041               0.86
47                0'-85'              0.040               0.81
                  0'-15'              0.012               0.50
                 105'-115'            0.019               0.06
                 220'-305'            0.058               0.46
46               325'-350             0.031               0.07
                  90'-95'             0.257               1.64
                 165'-255'            0.012               0.08
45               255'-345'            0.077               0.82
                 215'-275'            0.172               1.19
                 230'-235'            1.559               6.35
                 345'-430'            0.064               0.06
44               355'-370'            0.242               0.20
43               335'-410'            0.010               0.43
42               615'-715         Low grade ore       Low grade ore
                  10'-25'             0.030               0.17
                 135'-155'            0.137               0.61
                 185'-270'            0.015               0.04
                 295'-405'            0.037               0.61
41               540'-560'            0.025               0.31
                 210'-260'            0.238               0.16
                 235'-240'            1.937               0.70
40               325'-340'            0.043               0.68
                  0'-120'             0.031               0.43
                 120'-170'            0.009               0.37
39               170'-210'            0.04                1.00
                  0'-20'              0.087               0.83
                 60'-170'             0.025               0.38
                 190'-235'            0.031               0.73
38               400'-425'            0.021               0.35
37                0'-155'             0.032               0.53
                 95'-110'             0.191               0.18
                 175'-195'            0.019               0.20
                 205'-255             0.044               0.31
                 285'-315'            0.025               0.08
                 330'-400'            0.025               0.09
                 410'-520'            0.173               1.08
36               585'-625'            0.010               0.04
                  0'-15'              0.030               0.63
                 170'-190'            0.033               0.16
                 320'-380'            0.026               0.16
                 400'-420'            0.016               0.35
35               465'-560'            0.014               0.52

      0'-10'     0.055   0.95
     195'-205'   0.025   0.12
     305'-335'   0.021   0.41
     365'-420'   0.029   0.58
34   540'-550'   0.020   0.44
      0'-15'     0.019   0.16
      30'-40'    0.05    0.21
     160'-170'   0.025   0.72
     240'-250'   0.045   0.08
     310'-325'   0.015   0.50
     365'-380'   0.025   0.02
33   395'-420'   0.025   0.02
      0'-60'     0.039   0.27
     195'-265'   0.026   0.33
     295'-315'   0.019   0.25
     420'-460'   0.020   0.15
32   555'-585'   0.017   0.74
      0'-15'     0.053   1.67
     225'-370'   0.041   0.12
     390'-420'   0.014   0.06
31   575'-635'   0.080   0.52
      0'-55'     0.037   0.63
     280'-350'   0.017   0.31
     375'-410'   0.060   0.22
30   570'-630'   0.020   0.89
      0'-15'     0.040   0.63
     405'-485'   0.113   2.09
     495'-570'   0.017   0.19
29   600'-640'   0.078   0.32
      0'-15'     0.023   0.78
     65'-210'    0.083   0.63
     255'-290'   0.051   0.60
28   310'-410    0.020   0.65
      0'-20'     0.044   0.94
     140'-150'   0.063   0.56
     175'-255'   0.044   0.38
27   315'-495'   0.040   1.13
      0'-25'     0.025   0.88
     240'-375'   0.065   0.41
26   395'-435'   0.029   0.69
      0'-60'     0.033   0.80
     135'-150'   0.034   0.06
     165'-230'   0.029   0.50
     315'-330'   0.014   0.09
25   525'-595'   0.015   0.14
      0'-25'     0.052   0.64
     150'-235'   0.103   0.54
24   285'-420'   0.022   1.03
     75'-235'    0.058   0.78
23   260'-300'   0.030   1.04
      0'-20'     0.012   0.24
      30'-40'    0.134   1.57
22    70'-140    0.040   0.43
21   210'-305'   0.046   0.61
      70'-75'    0.013   0.04
20   390'-395'   0.015   0.04

       0'-45'      0.010   0.13
      140'-180'    0.045   0.63
19    205'-230'    0.013   0.56
       0'-40'      0.010   0.29
18    260'-265'    0.022   1.63
17    60'-130'     0.031   0.50
16    290'-300'    0.088   0.07
      385'-535     0.047   0.07
      555'-755'    0.032   0.25
15     10'-25'     0.054   1.74
      115'-320'    0.118   1.32
      325'-365'    0.029   3.53
14    10'- 40'     0.034   0.72
       55'-80'     0.109   0.75
      210'-225'    0.082   0.08
      290'-330     0.091   0.23
13     0'-70'      0.025   0.34
12     0'-60'      0.012   0.18
      445'-460'    0.062   0.14
11    175'-265'    0.043   0.47
      285'-350'    0.076   1.28
10    20'-400'     0.109   0.66
09     10'-25'     0.054   1.74
      115'-320'    0.118   1.32
      325'-350'    0.030   0.02
08     40'-55'     0.037   0.17
      85'-150'     0.060   1.04
07   15' - 185'    0.068   1.5
06     35'-55'     0.029   1.27
      120'-130'    0.164   1.19
      135'-215'    0.033   0.29
      245'-275'    0.037   1.29
      275'-325'    0.003   1.71
05     30'-65'     0.038   0.90
      120'-265'    0.045   1.27
04     50'-60'     0.006   0.09
03     55'-90'     0.031   0.81
02   160' - 275'   0.074   0.69
01   65' - 135'    0.052   0.64

All of the assays referenced herein and the data derived there from have been performed and analyzed by American Assay of Reno, Nevada, a laboratory independent of GoldSpring, utilizing industry standard analytical methods.

In addition to the drilling program, the Company is continuing to work on the completion of a comprehensive mine plan. The results of the drilling program, combined with the mine plan, will form the basis for a 43-101 report. The Company hopes to complete its initial 43-101 report in the third quarter 2008. Completing the mine plan and the initial 43-101 report and obtaining the required funding are the key elements in the Company's plan to return to production in the first half of 2009. In determining the optimum time to resume production, the Company will seek advice from its team of mining industry experts.

The Company continued to expand its footprint in the Comstock Lode in the first half of 2008. During the six month period, the company acquired or staked approximately 70 new claims, bringing its total claims in the area to approximately 250. The average claim covers an area of 20 acres. The Company intends to acquire additional properties and claims in the Comstock Lode region through the remainder of 2008 if suitable financing can be arranged.

With the appointment of two new directors in the first quarter of 2008 (Rob Faber, the Company's CEO, and Scott Jolcover, a former Company employee with significant mining experience in the region), the Company has commenced the task of rebuilding its Board, which lost several independent Directors in early 2007. The Company looks to continue expanding its Board during 2008 to include independent directors. In early March 2008, the Company appointed a new metallurgical team with resources and expertise geared toward efficiency maximization in anticipation of recommencement of production, which was scheduled for the second half of 2008 and due to funding delays, which have been remedied, will commence in the first half of 2009. The Company secured $1,500,000 in the first quarter of 2008 for further drilling and general corporate expenses and $2,500,000 in the second quarter of which $1,000,000 has been funded with the balance being funded by the end of calendar year 2008.