Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation.

Valley High Mining Company ("Valley High," "Company," "we" or "us") is a start-up, exploration stage mining company that has not yet generated or realized any revenues from its business operations. As a precious metals mineral exploration company, it has been our intent and objective to obtain a partner or joint venturer with the funding and mining expertise necessary to explore our leased mineral claims located in the Tintic Mining District of Juab County, Utah, directly west of the town of Eureka, Utah (hereinafter "The North Beck Claims" or "mineral claims") for their silver, gold, lead and zinc potential. These mineral claims contain several mines or mining shafts, two of which are relatively deep or extensive. One, called the Sacramento Mine, was dug prior to 1898 and it is 1,000 ft. deep. The other, called the North Beck Mine, is 1,600 ft. deep and was dug between 1917 and 1922. There are several other mines, shafts, holes or "prospecting pits" on our mineral claim property that vary from 50 feet deep to 500 ft. deep.

Our stock trades on the Over-the-Counter Bulletin Board (OTCBB) under the symbol
VHMC.OB.

Having completed Phase One of our business plan and Plan of Operation over 4 years ago, we have since been pursuing Phase Two. This is the phase in which we have been attempting to obtain a joint venture mining exploration partner to explore our patented mining claims acquired by us by lease agreement in 2004 ("the North Beck Claims"). Prior to the acquisition of the North Beck Claims with an affiliated party and the filing of our initial registration statement with the Securities and Exchange Commission on Form 10-SB in March 2005, over 4 years ago, we had been dormant and inactive for over 15 years.

For further information concerning the progress we have made towards fulfilling our overall business plan and Plan of Operation, reference is made to our Plan of Operation discussed in detail below. Reference is also made to our last Annual Report for our fiscal year ended December 31, 2008, on Form 10-K filed in March 2009. Regardless, however, of the progress we have made in this regard, the current state of the economy, among other things, makes the prospect of our completing Phases Two and Three of our business plan and Plan of Operation detailed below look bleak. This is because, due to the current uncertain state of the economy, not to mention uncertainty concerning future corporate tax rates and other cost considerations, large mining companies seem to lack, at this time, the investment capital, resources and other willingness necessary to pursue risky ventures. As a result, we will likely be forced in the near future to take the Company in another direction, the form of which we cannot predict at this time.

Selected Financial Data.

Because we had no exploration or other operational mining-related activities during the quarter that resulted in revenues, selected financial data would not be particularly meaningful. Reference is thus made to our quarterly financial statements included in Item 1 above. All of our activities during the quarter were devoted towards carrying out Phase Two of our business plan and plan of operation, namely, trying to locate a joint venture mineral exploration partner.
See Phase Two of our Plan of Operation discussed below. Since we filed our initial registration statement with the Commission in March 2005, over 4 years ago and having contacted several large and medium-sized mining companies in all that time, we have not been successful in generating much interest in our mineral claims. Given that the price of silver, for example, has dropped from a high of nearly $21 per ounce in early 2008 down to a recent price of approximately $17 per ounce, we can only assume that volatile silver and other precious metals prices has contributed, and will continue to contribute, to the on-going lack of interest in our claims and the Tintic Mining District as a whole.

During our third quarter, our president, Mr. J. Michael Coombs, or entities related to him, advanced us a total of $3,800 to pay outstanding fees owed our "in-house" accountant, our auditors, and our Edgarizer. The cash in our checking account on September 30, 2009, was $115. Since the end of our third quarter, our president has not advanced us any additional funds. As of the date of this report, the cash in our checking account remains $115. At the current time, we have no outstanding bills or payables that we are aware of.

Liquidity and Capital Requirements.

As of the date of this report, we lack the necessary capital to implement a full-fledged mineral exploration program. As stated above, we currently have approximately $115 in our checking account. Since our emergence from the dormant stage on April 19, 2004, our working capital has been funded by personal advances from an officer and director. These advances may someday be converted to equity, though there are no plans to do so at this time. These advances do not require interest payments at the present time and unless or until we become profitable, an event that appears to be highly unlikely at this time, we do not believe that it is at all likely that our agreement with our sole officer and director, Mr. Coombs, would be modified to provide for such. At present, there are no plans to charge interest. In the event we modify our agreement in the future with Mr. Coombs to allow for the charging of interest, we do not believe it would have any material impact on us or our liquidity because both we and Mr. Coombs would not agree to such a modification unless we were profitable.

We will be able to satisfy our cash requirements for at least the next 12 months, in that our sole officer and director has committed himself to advancing what funds are necessary to satisfy our cash requirements and keep us current in our 1934 Exchange Act reporting obligations. We believe that this time period is consistent with the disclosure in our Plan of Operation described below in that we believe that within the next year, we should be able to complete our business plan. If not, we will know by then what it will take to complete it or, we will know that it cannot be completed in its present form based on current regulatory, economic and other conditions in the Tintic Mining District. Management believes that the ability to locate and "sign up" a joint venture partner or mining company partner of some kind may be difficult depending upon a variety of factors such as the price of silver, lead, zinc and gold over the next year, the cost of mining exploration at that time, the ability of a joint venture partner to tie up a large block of ground in the Tintic Mining District, the absence of future EPA clean up plans in the District, the ability of a joint venture partner to satisfy itself that the EPA will not require it to unduly or unfairly undertake clean up of past contamination activities caused or created by others as a result of new or planned exploratory activity, the overall economy, and possibly, interest rates, factors and circumstances that are beyond our control and which cannot be predicted with any certainty. We currently have no specific sources of financing, including bank, private lending sources, or equity capital sources. We also cannot assure anyone that we will be able to develop any joint venture partner sources in the future. At this point, it is starting to look doubtful. Further, we are unable to guarantee that, beyond the next 12 months, that individual members of management will continue to advance us sufficient money to allow us to continue in our reporting obligations. We do not mean to imply, however, that individual members of management will NOT continue to advance us funds beyond the next year, particularly if there is likelihood that we will be able to complete our business plan if we continue beyond the next year. On the other hand, it is also conceivable that we can complete Phase Two of our business plan in less than a year or, we might learn that it cannot be completed within that time frame or longer. If management does not desire to loan or advance sufficient funds to continue beyond the next year for the simple reason that the prospects of our business plan look bleak, we may be required to look at other business opportunities, the form of which we cannot predict at this time as to do so would be highly speculative on our part.

To implement our business plan and engage in an exploratory drilling program on the North Beck Claims, we will need substantial additional funding and expertise from a strategic mining partner or joint venturer. As of the date of this report, and having spoken with several mining companies over the last 4 to 5 years, we have found no company or entity that has communicated an interest in joint venturing with us. See discussion under Phase Two below. Accordingly, given this amount of time with no success in this regard, and even with the enhanced prices of precious metals, no assurance can be given that we can or will enter into a joint venture or other partnership relationship necessary to fund Phase Three of our business plan and Plan of Operation, namely, our proposed drilling exploration plan or program.

We have few assets and limited capital, with no operations and no current sources of income.

It is anticipated that we will require only nominal capital to maintain our corporate viability and the funds necessary for this limited purpose will be provided by officers and directors, hopefully, for at least the next year. However, unless we are able to enter into a partnership or joint venture relationship with an experienced mining entity willing to finance our intended exploration, we will likely not be able to achieve our operational goals. In such event, management, as stated above, will be forced to look at other business opportunities.

PLAN OF OPERATION

We are an exploration stage [mining] company. An exploration stage company is one engaged in the search for mineral deposits or mineralized material (reserves) which are not in either the development or production stage. Mineralized material is defined as a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. We currently have the right to explore the North Beck Claims, a contiguous group of over 45 separate patented mining claims which together comprise slightly over 470 acres of ground located just west of the town of Eureka, in Juab County, Utah. These mineral claims contain several mining shafts or mines, four of which are known as the Sacramento, the North Beck, the Black Warrior and West Cable Mines. According to the director of the Utah Abandoned Mine Reclamation Program with whom we have communicated, there appear to be as many as 24 holes, mines, shafts or "prospecting pits" on our mineral claims. They range in depth from between 50 feet deep to 1,600 feet deep. Nearly all of the deeper holes, mines or shafts on our mineral claims, and for the sake of public safety, have essentially been covered over by the Utah Abandoned Mine Reclamation Program with the exception of a 100 ft. shaft on our Peru Claim which the Utah Abandoned Mine Reclamation Program has yet to cover over. During the quarter, however, our lessor signed a written authorization allowing the Utah Abandoned Mine Reclamation Program to enter onto our property this spring or summer and cover the open shaft or hole on our Peru Claim, something the State of Utah had wanted to do but had been unable to carry out until now.

Having long ago obtained a final geology report from our consulting geologist, our overall business methodology and plans have been to (1) contact prospective joint venturer mining companies and other prospective partners to finance and carry out the planned or proposed exploration program that we have now developed or devised, and (2) upon accomplishing that milestone, commence carrying out our mineral exploration program as disclosed in detail below. We characterize these two coordinated, phased efforts as Phases Two and Three, respectively, of our overall business plan and plan of operation. The following is a summary of these Phases. Phase One was completed in that during March 2006, we obtained a final geology report from our consulting geologist, Mr. O. Jay Gatten, a report that contains the proposed drilling exploration program summarized below.

Phase Two is our current stage of operations. In this stage, we are searching out and contacting possible exploration joint venturers or partners for the purpose of implementing an actual mineral exploration drilling program on our mineral claims.

Phase Three cannot be commenced until Phase Two is complete, that is, until we have located and contracted in some fashion with a joint venture mining partner willing to finance the exploration of our mineral claims. Phase Three contains actual drilling targets, projected timelines involved, and the projected or estimated costs thereof. We can give no assurance that the projected or estimated costs of our drilling exploration program would be the ultimate cost of this project. These are merely good faith estimates based on the best knowledge available to us at the time we prepared such cost estimates. Such estimates do not currently take into consideration increased costs or inflation that have occurred since March 2006.

In Phase Two, we are in the process of distributing our mineral/geology report to interested parties, conducting mineral claim tours, and otherwise actively seeking out and investigating potential partnerships, joint venture and other funding arrangements with various known and unknown mining companies with the intention of getting such entities to provide the funding and expertise necessary to implement a serious and bona fide drilling exploration program on the North Beck Mining Claims. What we have recently accomplished, or tried to accomplish, in this regard is set forth in our discussion of Phase Two below and also, more comprehensively, in the Phase Two discussion contained in our last Annual Report on Form 10-K.

PHASE ONE

This Phase involved two sequences or milestones. The first was to locate and collect all existing or known data previously compiled on our mineral claims. This milestone was achieved in October and November of 2005 and all information we were able to amass and collect was turned over to our consulting geologist. The second sequence or milestone of this Phase was to obtain a final geology report on our mineral claims in order to generate investor interest. This was accomplished during March 2006. This completes Phase One. We now have several physical copies of our geology report, plus, our consulting geologist has given us this report in CD or electronic disk form, which we can copy and distribute at our own convenience. This enables us to furnish the report either by physically mailing or delivering a copy of the report (with all maps included) or, by providing the entire report in disk format, or both.

What data and information we were able to collect and compile on our mineral claims going back to the 1800's is interesting and in the interest of non-duplication, and because this Phase is now complete, we will not repeat it here. However, any person interested in what we did and what we discovered in order to complete this Phase, reference is made to our fifth amended registration statement on Form 10-SB/A filed on March 10, 2006 and our Annual Report for our fiscal year ended December 31, 2005, filed on March 30, 2006. Both documents are available on Edgar, the Commission's database. Reference is made to www.sec.gov.

PHASE TWO

Having long ago completed Phase One of our business plan and Plan of Operation, we have since focused on the following three (3) additional work sequences or milestones in order to carry out and complete Phase Two.

Work Sequence or Milestone No. 1.

To contact as many mining companies as possible that we can target and whom we believe might be interested in partnering or joint venturing with us to engage in an exploratory drilling program on the North Beck Claims. Our efforts to achieve this are something we have detailed and elaborated upon in a subsection below titled "Means of Completing PHASE TWO and Locating an Exploration Program Joint Venturer or Partner." We have also included a proposed or planned "phased" exploration plan or program for any such joint venture or partner to consider. This is a very important part of our Plan of Operation and it is summarized in the section below titled "PHASE THREE: OUR PLANNED OR PROPOSED 'PHASED' DRILLING EXPLORATION PROGRAM THAT WE SEEK TO IMPLEMENT." We cannot make an estimate of how long it will take to get a partner or joint venturer interested in our claims, assuming we can, nor can we make ANY positive assurance whatsoever that we can. It may take a year from now or longer. It may take less. This is a task that we will undertake in the ordinary course of our business. And this work sequence or milestone will be on-going. There is no particular cost associated with this sequence. This is because our consulting geologist's final report is available to be shipped out, in disk format, including all exhibits associated with it. The only costs that we envision at this time are long distance (if applicable) telephone call costs, all of which our sole officer and director has agreed to advance. There will therefore be little out-of-pocket costs associated with this work sequence. We do NOT believe that the cost associated with carrying out this work sequence or milestone is significant.

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Work Sequence or Milestone No. 2.

To conduct mineral claim tours with interested parties with the intent of leading to a suitable minerals agreement to explore our claims. This work sequence or milestone is self-explanatory and is something we will do, and have done, with any interested party upon request. The cost associated with this sequence will be gas money to travel the 100 plus miles south of Salt Lake City to conduct such tours, the time it takes to do so, and possibly, paying our consulting geologist to accompany us and meet prospective partnership candidates when we undertake any such mineral claim tours.

Work Sequence or Milestone No. 3.

To keep abreast of ongoing EPA and Utah Department of Oil, Gas & Mining (DOGM) response activities in the District. This is something we can accomplish in the ordinary course of our business and if nothing else, by monitoring DOGM's website. There is no particular cost associated with this work sequence. This is not to ignore that since the Eureka, Utah, area was designated as a Superfund Site by the EPA in July 2002, our lessor is on their mailing list and receives notice from the EPA with regard to important environmental events or issues relating to the North Beck Claims. Our lessor has not received any notices in a long time from the EPA. We also intend to rely on our consulting geologist to some degree with regard to this work sequence in that he is in a better position than we are to become aware of environmental concerns and issues pertaining to the District. This is because our consulting geologist also does exploration permitting for clients and therefore, he and his company are in a position to know and be aware of any significant changes in EPA or DOGM rules or regulations or other response activities in the District.

What We Have Done to Pursue and Complete Phase Two.

In late 2006, our president participated in a tour of certain other mining claims located in nearby Mammoth, Utah, about 3 miles away from The North Beck Claims. This tour occurred with a project manager of a large U.S. mining company whose stock is listed on the New York Stock Exchange. This individual lacked the time that day to tour our specific mineral claims (even though we did drive by them) but did at that time indicate that he would like to return to Eureka for such purpose, probably with additional associates. This individual did request a copy of our geology report, which we provided him in electronic disk format later on. We have since confirmed that he received it. We believe and have since learned that mining companies who might be interested in our properties will likely be interested in tying up surrounding properties in the overall area. This means that getting involved in a drilling exploration program on our claims is an expensive undertaking, as it involves substantial legal and landman costs of researching and then tying up surrounding properties in addition to that of drilling the property itself.

During January of our first quarter of 2007, a principal of a large Canadian mining company whose stock trades on the American Stock Exchange (AMEX) also spent time touring the Tintic Mining District and meeting with at least one large property owner. We had brief conversations with this principal at that time. We subsequently provided this company with a copy of our geology report.
During the end of 2007, we learned, however, that this company had abandoned its interest in the District for reasons, we are told, unrelated to the District's mining potential. Specifically, we were told that, among other reasons, the company was unable to get adequate assurances from the EPA that they wouldn't be liable for past contamination caused by another operator if they were to do exploratory work or engage in mining operations, particularly in the Mammoth, Utah, area, an area NOT within the EPA's current Superfund designation. As a result, this company has decided, for now, that it would be unduly expensive and difficult to engage in exploration activity in the District. It could be that this company was also unable to negotiate with other property owners in the District whose property they wanted to acquire or lock up in some fashion. Unfortunately, we are not privy to all the reasons or details.
This latter reality, that is, the inability to tie up a lot of ground, may unfortunately hamper our ability to attract a suitable joint venture mining exploration partner in the near future. In short, if the reason that this particular mining company lost interest in the District is because it felt that it couldn't tie up a sufficient amount of property or otherwise work with the EPA and/or other landowners, this could unfortunately mean that Phase Two of our Plan of Operation will be very difficult, if not impossible, to accomplish in the near future.

Not long ago and based on the referral of another local mining exploration company like ours, we attempted to contact a principal of a large U.S. mining company located in Coeur d'Alene, Idaho, about our company and our property's potential. We offered to follow up by further providing a copy of our geology report on electronic disk. We were subsequently told by the same local mining exploration company that had initially told us to contact them, that this particular company actually had no interest in the Tintic Mining District after all. This explains why our communications were deleted or ignored.

As indicated above, over the 2 years, we have not conducted any additional property tours with any additional mining company prospects.

In mid-September 2008, approximately a year ago, we learned that a major internationally diversified mining company headquartered in the United Kingdom known as Anglo American PLC, purchased some mining claim interests in the Tintic Mining District from Chief Consolidated Mining Co., a former operator in the district. The news reports are skimpy but it appears that the company seeks to explore, and if justified, to then develop a porphyry copper-gold-molybdenum target located at the northern end of the District towards Provo, Utah, not Eureka, where our claims our located. Our claims, by contrast, are considered to be comprised of mostly silver, lead and iron, if anything, not copper, gold or molybdenum. Upon learning this news, we endeavored to contact Anglo American to see if they would be interested in our claims and, in particular, in getting a copy of our geology report, but, to date, we have heard nothing back.

As we disclosed in our Annual and Quarterly Reports over the last couple of years, we have had serious difficulty attracting interest in our mining claims.
We have come to believe that, in addition to the current state of the economy, this is due to the fact that the land ownership in the Tintic Mining District is very fragmented, meaning that ownership is held in the names of numerous, numerous corporations and individuals, many possibly having conflicting or overlapping ownership rights and interests. At the same time, we believe that a serious mining company or joint venture mining partner would want to be able to tie up an extended or large area or block of land. Fragmented land ownership therefore means that a mining company or joint venture partner would have to spend a lot of time and energy on land and title work and, when all is said and done, may not be able to lock up or amass a large block of land. Accordingly, extensive land and title work in the overall area of our mineral claims would likely be a significant expense and cost that a prospective joint venture mining partner may not be willing to assume.

We also believe that the significant EPA presence in the Eureka, Utah, area, while it completes its Superfund clean up operations, may also have a negative effect or impact on a potential mining company or a joint venture mining partner, simply because they may fear that the EPA might require them to do remediation of other operators' contamination that they wouldn't otherwise be required to do if the EPA were not highly present and active in the area. These are the two basic reasons, we believe, why we have not yet attracted a joint venture mining exploration partner.

Finally, given that silver has dropped in price from a high of approximately $21 per ounce in 2008 to a recent price of approximately $17 per ounce, not to mention the serious economic problems our country, and perhaps the world, now faces, we do not believe that these factors bode well for the likelihood of our completing Phase Two of our Plan of Operation at any time soon. We say this regardless of whether a large international mining company now has a new and limited presence in the District.

Funding of Our Planned Work Sequences.

We do NOT at this time anticipate needing any outside funding to complete Phase Two. It is possible that this could change, but, at this time, we find it highly unlikely. We do need, however, and will need, substantial funding and other resources from an exploration partner or joint venturer to implement our planned or proposed drilling exploration program. See the discussion below titled PHASE THREE.

Form of Agreement with Prospective Exploration Partner/Joint Venturer Unknown at This Time.

In the event that we find a joint venture/partnership candidate, one who is serious about working with us, we do not know what form any such joint venture or partnership agreement would take. We believe that we would likely have to give up control of the claims in some fashion and possibly a good portion of our stock in escrow, perhaps a majority of it. Much of this would depend upon what a partner or joint venture candidate is willing to do in regard to actually exploring the North Beck Claims. Accordingly, the fact is that, at this time, it is difficult to predict or know what form any such agreement would take and, because we are not negotiating with anyone at this time, we do not believe it is appropriate for us to further speculate in this regard.

Anticipated Sources of Funding If We Are Unable to Attract a Joint Venture Mineral Exploration Partner.

As stated elsewhere herein, our anticipated sources of funding are through a prospective joint venture mineral exploration partner(s). We have no other sources of funding at this time to undertake and implement our mineral exploration program or plan, which, if carried out in full and to completion as detailed below, is anticipated or projected to cost over $900,000. In the event that we are unable to attract and enter into a business relationship with a joint venture mining partner to explore our claims, we do not, at this time, know what we would do to obtain alternative funding, if any. We have considered the possibility of some type of debt financing; however, current stock market . . .