BMXI Brookmount Explorations Inc (PK)

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

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements that involve risks and uncertainties.  We use words such as “anticipate,” “believe,” “plan,” “expect,” “future,” “intend” and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements.  Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the Risk Factors section of our annual report on Form 10KSB and 10KSB/A and elsewhere in this quarterly report.

Plan of Operations

Our plan of operations for the twelve months following the date of this quarterly report is to complete initial exploration programs on the Brookmount and Mercedes properties.  We anticipate that the programs on the Rock Creek and Mercedes properties will cost $250,000 and $480,000 respectively.

In addition, we anticipate spending $25,000 on professional fees, $120,000 on salaries and wages, $30,000 on travel costs, $50,000 on promotional expenses and $40,000 on other administrative expenses in the next 12 months.

Total expenditures over the next 12 months are therefore expected to be $995,000 .   We will not be able to proceed with either exploration program, or meet our administrative expense requirements, without additional financing.

On May 25, 2006, the Company entered into an Option Agreement (the “Agreement”) to acquire an option to purchase 100% of the issued share capital of 722161 B.C. Ltd (“BC Ltd”) on the following terms:

1.

The Company must issue 100,000 common shares upon execution of the Agreement (issued);

2.

The Company must make cash payments totaling CAD$250,000 as follows:

(a)

August 15, 2006

$10,000 (paid);

(b)

September 15, 2006

$12,500 (paid);

(c)

November 15, 2006

$12,500; (paid)

(d)

$12,500 (not paid) on or before January 15, 2007, and installment payments of $12,500 quarterly thereafter on or before the 15 ^th day of April, July, October and January of each year until the total of $250,000 has been paid or satisfied;

Although the Company made only $2,976 in cash payments to Aug 31, 2007, in accordance with the Agreement, BC Ltd has not served the Company notice of default of the term of the agreement;

3.

The Company must issue 500,000 common shares in four equal tranches of 125,000 each on or before the 15 ^th day of October in each of 2006(issued), 2007, 2008 and 2009;

4.

The Company must incur exploration expenses of $1,000,000 over a period of five years from the date of the Agreement.

BC 722161 Ltd has a 56% interest in mineral claims located in the Rock Creek area of British Columbia, Canada.

We will not be able to complete the initial exploration programs on our mineral properties without additional financing.  We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock.  We may also seek to obtain short-term loans from our directors, although no such arrangement has been made. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months.  We do not have any arrangements in place for any future equity or equity financing.  

Results of Operations for Three Month Period Ended February 28, 2007

We incurred operating expenses in the amount of $169,016 for the three month period ended May 31, 2007, as compared to $1,839,533 for the comparative period in 2006.

Under instruction from the property vendor, 5,000,000 shares were issued to our directors and officers in the following amounts during the first quarter of 2005:

        Peter Flueck (property vendor)

2,900,000

        Zaf Sungur

1,050,000

        Victor Stillwell

1,050,000

As of August 31, 2007, we had cash on hand of $421.00 and total assets of $1,095.00.  Our liabilities at the same date totaled $554,903.00 and consisted of accounts payable and accrued liabilities of $170,992.00 and $383,911.00 due to related parties.

Effective April 26, 2006, David Jacob Dadon was removed as a director and as Chairman of the Board of the Company for cause.  Mr. Dadon withdrew $150,000 from the Company’s bank account.  Mr. Dadon was not an authorized signatory on the Company’s bank account and had not been granted any such authority to withdraw the funds by the Company’s Board of Directors.  Upon completion of an investigation, the Company determined that Mr. Dadon had not used the funds for corporate purposes.  The Company had worked for several weeks to have Mr. Dadon return the money to the Company on a voluntary basis.  To date, the money has not been returned.   The Company has reported the incident to the proper authorities in Canada and the United States.

Effective May 5, 2006, Mr. Dadon responded to his removal as a director for cause, which response was filed with a Form 8-K, dated May 11, 2006.  We replied to Mr. Dadon’s letter in that same filing by noting that “[t]the Company has endeavored to work with Mr. Dadon for several months to determine why the money was removed from its account and to see that the money is replaced.  The assertions and accusations contained in Mr. Dadon’s letter are outrageous and as such are impossible to respond to.  The Company steadfastly stands by its assertions and the actions that it has taken.”

On December 19, 2005, we filed an 8-K announcing that, among other things, Jay Jeffery Shapiro, represented by Mr. Dadon to us as a close colleague and friend, had been appointed to serve as our Chief Financial Officer.  Mr. Dadon had arranged for a conference call prior to Mr. Shapiro’s appointment to introduce someone whose resume we were provided with, and whom we were led to believe was Mr. Shapiro, ostensibly in order to provide us with an opportunity to interview him prior to his appointment.  On May 9, 2006, we learned that the person represented to us to be Jay Jeffery Shapiro was not, in fact, Mr. Shapiro.  On May 9, 2006, the individual we now know to be the true Mr. Shapiro contacted us to inform us that he had no knowledge of Brookmount, had not been asked to serve as our Chief Financial Officer by Mr. Dadon, had not been the person interviewed by our Chief Operating Officer, and had in fact previously informed Mr. Dadon in writing that he no longer wished to be associated with Mr. Dadon in any venture and that Mr. Dadon was no longer to use his resume in connection with any of his activities.  As a result, on May 11, 2006 we filed a current report on Form 8-K to, among other reasons, assure that all Brookmount shareholders are made aware that individual we now know to be Jay Jeffery Shapiro and whose biography was contained in our annual report on Form 10-KSB and Form 10-KSB/A, never played any role in our company or in any of our disclosures.

Effective May 9, 2006, we appointed Zaf Sungur to serve as our Chief Financial Officer.

On June 29, 2006, a former director of the Company commenced legal action against the Company and its directors. The former director is claiming damages in excess of $5,000,000 for alleged breach of contract, libel, fraud, intentional deceit, wrongful conduct and emotional distress. The Company and directors deny all of these claims, believe they are without merit, and plan to vigorously defend themselves against all of these claims. In addition, the Company is exploring claims of its own against the former director.