Summary of GOLD CREST MINES INC

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Form 10-Q, including in "Management's Discussion and Analysis of Financial Condition and Results of Operations", includes forward-looking statements . Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities. We have tried to identify these forward-looking statements by using words such as "may," "will," "expect," "anticipate," "believe," "intend," "feel," "plan," "estimate," "project," "forecast" and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Gold Crest Mines, Inc. or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under Section 21E are unavailable to us.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements included elsewhere in this report, as well as the audited consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

Overview and Plan of Operation

As discussed in "Note 2: Summary of Significant Accounting Policies - Going Concern" to our consolidated financial statements, the Company has had no revenues and incurred an accumulated deficit of $8,400,990 through June 30, 2008. 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 and joint venture agreements that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.

We are in the business of exploration, development, and if warranted the mining of properties containing valuable mineral deposits. We are traded on the over the counter market in the United States and, as is typical with such companies, losses are incurred in the stages of exploration and development, which typically need to be funded through equity or debt financing.

We currently control approximately 92,160 acres of land under State of Alaska jurisdiction after having transferred 15,320 acres into Golden Lynx, LLC as part of our joint venture with Cougar Gold LLC. See "Note 5. Mineral Properties - Golden Lynx, LLC" to our consolidated financial statements for further details.

Additionally, we currently control approximately 46 unpatented federal mill site claims and 185 unpatented federal lode claims in the Stibnite District in Central Idaho covering approximately 3,930 acres. On June 10, 2008, the Company, through its wholly owned subsidiary Niagara, signed a non-binding letter-of-intent with Cougar Gold LLC to enter into a joint venture agreement covering all of the Company's properties in Idaho. See "Note 5. Mineral Properties - Letter of Intent with Cougar" to our consolidated financial statements for further details.

We have been successful in entering into agreements with various unrelated companies under which, we believe, we have the opportunity to implement our business plan. These agreements and the references to further details contained in our consolidated financial statements follow:

On January 24, 2008, we entered into an Option and Royalty Sales Agreement with the heirs of the Estate of J.J. Oberbillig. See "Note 6. Royalty Interest in Mineral Property" to our consolidated financial statements for further details.

On January 24, 2008, we entered into an Option and Real Property Sales Agreement with JJO, LLC, an Idaho limited liability company and personal representative of the Estate of J.J. Oberbillig. See "Note 5. Mineral

Properties - Option and Real Property Sales Agreement with JJO, LLC" to our consolidated financial statements for further details.

On March 31, 2008, we entered into a Mining Lease and Option to Purchase Agreement with the Bradley Mining Company. See "Note 5. Mineral Properties - Mining Lease and Option to Purchase Agreement with Bradley Mining Company" to our consolidated financial statements for further details.

On April 18, 2008, we, through our wholly-owned subsidiary, Kisa, entered into an agreement with Cougar Gold LLC under which the two companies will form the Golden Lynx, LLC. See "Note 5. Mineral Properties - Golden Lynx, LLC" to our consolidated financial statements for further details.

On May 8, 2008, we entered into three separate joint venture agreements with Newmont North America Exploration Limited. See "Note 5. Mineral Properties - Newmont Venture Agreements" to our consolidated financial statements for further details.

On June 10, 2008, we, through our wholly owned subsidiary Niagara, signed a non-binding letter-of-intent with Cougar Gold LLC to enter into a joint venture agreement covering all of our properties in Idaho. See "Note 5. Mineral Properties - Letter of Intent with Cougar" to our consolidated financial statements for further details.

Board of Directors

On April 22, 2008, Gold Crest received a letter of resignation from Gerald Booth as director effective immediately.

On April 24, 2008 Gold Crest received a letter of resignation from Thomas Loucks as director effective immediately. Mr. Loucks also served on the Audit Committee.

On April 28, 2008, the Board of Directors appointed Dan McKinney as a director by unanimous consent to replace Mr. Booth.

On May 30, 2008 Gold Crest received a letter of resignation from Howard Crosby as director and chairman of the board effective immediately.

On June 5, 2008, the Board of Directors reappointed Howard Crosby as a director and chairman of the board by unanimous consent. Also on June 5, 2008, the Board of Directors appointed John Ryan as a director by unanimous consent.

Comparison of the Three and Six Months Ended June 30, 2008 and June 30, 2007:


Results of Operations

The following tables set forth certain information regarding the components of
our Consolidated Statements of Operations for the three- and six-months ended
June 30, 2008 compared with the three- and six-months ended June 30, 2007. These
tables are provided to assist in assessing differences in our overall
performance:

                                         Three Months Ended
                                       June 30,     June 30,
                                         2008         2007       $ Change    % Change

   REVENUES                          $         - $           - $         - $     0.0%
   OPERATING EXPENSES:
      Exploration expenditures            62,733       662,102   (599,369)     -90.5%
     Settlement of drilling contract     161,814             -     161,814     100.0%
      Legal and accounting expenses       58,408        59,378       (970)      -1.6%
      Directors' fees                     40,000       106,000    (66,000)     -62.3%
      General and administrative         214,370       211,674       2,696       1.3%
       TOTAL OPERATING EXPENSES          537,325     1,039,154   (501,829)     -48.3%
    LOSS FROM OPERATIONS               (537,325)   (1,039,154)     501,829     -48.3%
      Interest income                      2,027        23,204    (21,177)     -91.3%
      Interest expense                         -             -           -       0.0%
        TOTAL OTHER INCOME (EXPENSE)       2,027        23,204    (21,177)     -91.3%
    LOSS BEFORE TAXES                $ (535,298) $ (1,015,950) $   480,652 $   -47.3%

                                          Six Months Ended
                                       June 30,     June 30,
                                         2008         2007       $ Change    % Change

   REVENUES                          $         - $           - $         - $     0.0%
   OPERATING EXPENSES:
      Exploration expenditures           139,171       982,810   (843,639)     -85.8%
     Settlement of drilling contract     161,814             -     161,814     100.0%
      Legal and accounting expenses      104,585       111,610     (7,025)      -6.3%
      Directors' fees                     40,000       214,000   (174,000)     -81.3%
      General and administrative         505,927       352,745     153,182      43.4%
       TOTAL OPERATING EXPENSES          951,497     1,661,165   (709,668)     -42.7%
    LOSS FROM OPERATIONS               (951,497)   (1,661,165)     709,668     -42.7%
      Interest income                      5,474        42,035    (36,561)     -87.0%
      Interest expense                   (7,787)             -     (7,787)     100.0%
        TOTAL OTHER INCOME (EXPENSE)     (2,313)        42,035    (44,348)    -105.5%
    LOSS BEFORE TAXES                $ (953,810) $ (1,619,130) $   665,320 $   -41.1%

Overview of Operating Results

Operating Expenses

The decrease in operating expenses during both the 2008 second quarter and first six months compared with the same periods in the prior year was primarily the result of our entrance into two separate joint venture agreements. Our partners in these joint venture agreements are conducting exploration activities on our behalf as part of the agreements' "earn-in" provisions.

Also contributing to the decrease in operating expenses during both the 2008 second quarter and first six months, although to a significantly lesser extent, was a decrease in directors' fees. During the 2008 second quarter we issued 400,000 shares of common stock to two new directors at a price of $0.10 per share. During the 2007 second quarter we issued 200,000 shares of common stock to one new director at a price of $0.53 per share. During the 2007 first quarter we issued an additional 200,000 to a new director at a price of $0.54 per share.

Partially offsetting these positive impacts during the first six months of 2008 compared with the same period last year was an increase in officer compensation related to amortization of options granted during 2008 and incremental compensation expense related to the hiring of three additional employees since the end of the 2007 first quarter.

Overview of Financial Position

At June 30, 2008, Gold Crest had cash of $218,459 and total liabilities of $183,910. During the first six months of 2008, we received proceeds of $106,500 from the pay off of promissory notes associated with the November 2007 private placement and net proceeds of $90,000 from the exercise of 300,000 warrants by three investors. The proceeds from the payoff of the promissory notes were primarily utilized to fund daily operations. The proceeds from the exercise of the warrants were used to complete the mining lease and option to purchase agreement with the Bradley Mining Company for $75,000 and the remainder was utilized to fund daily operations.

Also during the first six months ended June 30, 2008, the Company issued 1,666,667 and 3,000,000 shares of restricted common stock for gross proceeds of $250,000 and $300,000, respectively. See "Note 5. Mineral Properties - Golden Lynx, LLC" and "Note 5. Mineral Properties - Letter of Intent with Cougar" to our consolidated financial statements for further details.

Royalty interest in mineral property

During the six months ending June 30, 2008, the Company purchased an option and royalty sales agreement for $400,000 which accounts for the entire increase in Royalty Interest in mineral property from December 31, 2007. See "Note 6. Royalty Interest in Mineral Property" to our consolidated financial statements for further details.

Mineral Properties

The increase in mineral properties of $145,425 during the first six months of 2008 was due to the purchase of an option and real property sales agreement with the Oberbillig estate for $125,000. Also contributing to this increase was the purchase of a mining lease and option to purchase agreement with the Bradley Mining Company for $75,000. The increase was offset by $54,575 due to the agreement entered into with Cougar Gold. See "Note 5. Mineral Properties - Option and Real Property Sales Agreement with JJO, LLC", "Note 5. Mineral Properties - Mining Lease and Option to Purchase Agreement with Bradley Mining company" and "Note 5. Mineral Properties - Golden Lynx, LLC" to our consolidated financial statements for further details.

Accounts Payable and Accrued Liabilities

The decrease in accounts payable and accrued liabilities of $158,020 during the first six months of 2008 was primarily due to our paying off $171,170 worth of invoices that related to the 2007 drilling season which we were unable to pay by the year ending 2007.

Prepaid Expenses

During the first six months of 2008, the balance in the "Prepaid Expenses" caption on the Company's financial statements decreased by $69,981. Of this decrease, $40,000 related to amortization of the "Prepaid Exploration Costs" associated with the note receivable from Diamond Drilling. The $40,000 consisted of $18,000 of amortization recorded in the normal course of business during the first six months of 2008. The remaining $22,000 was written off in connection with Diamond Drilling "Settlement Agreement". See "Note 4. Note Receivable".

The remaining decrease of $28,981 in "Prepaid Expenses" was composed of the following:

$10,187 decrease related to a refund of $6,000 and amortization of $4,187 in connection with prepaid transportation costs;

$13,279 related to the amortization of prepaid annual claim rentals; and

$5,515 related to the amortization of prepaid liability and director and officer insurance.

Common Stock Subscribed

The change in common stock subscribed during the first six months of 2008 was due to the receipt of installment payments of $106,500 owed on promissory notes by investors who participated in the November 2007 private placement. See "Note
8. Common Stock Subscribed" to our consolidated financial statements for further details.

Additional Paid-In Capital

The increase in additional paid-in capital during the six months ending June 30, 2008, was primarily due to the following:

stock based compensation of $93,786 related to the vesting of stock options;

the issuance of 300,000 shares of restricted common stock upon the exercise of 300,000 warrants and received gross proceeds in the amount of $90,000;

the issuance of 100,000 shares of restricted common stock for $10,000 worth of services performed;

the issuance of 400,000 shares of common stock to two newly appointed directors valued at $40,000; and

the issuance of 1,666,667 and 3,000,000 shares of restricted common stock for gross proceeds of $250,000 and $300,000, respectively. See "Note 5. Mineral Properties - Golden Lynx, LLC" and "Note 5. Mineral Properties - Letter of Intent with Cougar" to our consolidated financial statements for further details.

Liquidity and Capital Resources

We have limited capital resources and thus have had to rely upon the sale of equity securities for the cash required for exploration and development purposes, for acquisitions and to fund our administration. Since we do not expect to generate any revenues in the near future, we must continue to rely upon the sale of our equity securities to raise capital. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any period or, if available, that it can be obtained on terms satisfactory to us.

Based on our current financial position, we are currently in the process of conducting a private placement to generate up to $500,000. The securities sold in this offering will not be and have not been registered under the Securities Act and may

not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. If we are unable to raise enough money in this placement we may be forced to relinquish our Alaska properties that are not currently placed in a joint venture. We are currently evaluating our future personnel requirements and we currently intend to rely upon the use of outside consultants to provide certain services to the Company. These plans could change depending upon the timing and nature of any additional acquisitions of mineral exploration properties (none of which are under consideration at this time).