**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 20-F**

 

** ̈ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**** 

**OR**

**** 

**x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**** 

**For fiscal year ended March 31, 2015**

**** 

**OR**

**** 

** ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**** 

**For the transition period from ____ to ______**

**** 

**OR**

**** 

** ̈ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**** 

**Date of event requiring this shell company report:**

 

| **Commission file number: 000-13248** |
|---------------------------------------|

 

 

 

| **LEVON RESOURCES LTD.**                               |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |

 

**Province of British Columbia, Canada**

(Jurisdiction of incorporation or organization)

 

**Suite 500, 666 Burrard Street****Vancouver, British Columbia V6C 2X8, Canada**

(Address of principal executive offices)

 

**Ron Tremblay**

**Suite 500, 666 Burrard Street**

**Vancouver, British Columbia V6C 2X8, Canada**

**Tel: 778-379 0040** 

**Email:****rontremblay@levon.com** 

 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

Securities registered pursuant to Section 12(b) of the Act:**None**

 

Securities registered pursuant to Section 12(g) of the Act: **Common Shares, no par value**

 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: **None**

 

Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual report: **231,564,423****common shares as at March 31, 2015**

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   ̈ No  x

 

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes   ̈ No  x

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  xNo   ̈

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   ̈ No   ̈

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)

 

| Large accelerated filer |  ̈ | Accelerated filer |  ̈ | Non-accelerated filer | x |
|-------------------------|--------|-------------------|--------|-----------------------|---|

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

| U.S. GAAP |  ̈ | International Financial Reporting Standards as issued by the International Accounting Standards Board | x | Other |  ̈ |
|-----------|--------|-------------------------------------------------------------------------------------------------------|---|-------|--------|

 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17   ̈ Item 18   ̈

 

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   ̈ No  x

 

 

 

**TABLE OF CONTENTS**

 

| Introduction                                                                         |                                                                         | 3      |   |
|--------------------------------------------------------------------------------------|------------------------------------------------------------------------------|--------|--------|
| Currency                                                                             |                                                                         |   | 3      |   |
| Cautionary Note Regarding Forward-Looking Statements                                 |                                                                         |   | 3      |   |
| Cautionary Note to United States Investors Concerning Reserve and Resource Estimates |                                                                         |   | 5      |   |
| Explanatory Note Regarding Presentation of Financial Information                     |                                                                         |   | 5      |   |
| Glossary of Mining Terms                                                             |                                                                         |   | 6      |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| **PART I**                                                                           |                                                                         |   | 9      |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| Item 1.                                                                         | Identity of Directors, Senior Management and Advisors                        |   |   | 9 |   |
| Item 2.                                                                         | Offer Statistics and Expected Timetable                                      |   |   | 9 |   |
| Item 3.                                                                         | Key Information                                                              |   |   | 9 |   |
| Item 4.                                                                              | Information on the Company                                                   |   |   | 26 |   |
| Item 5.                                                                              | Operating and Financial Review and Prospects                                 |   |   | 55 |   |
| Item 6.                                                                              | Directors, Senior Management and Employees                                   |   |   | 67 |   |
| Item 7.                                                                              | Major Shareholders and Related Party Transactions                            |   |   | 81 |   |
| Item 8.                                                                              | Financial Information                                                        |   |   | 84 |   |
| Item 9.                                                                              | The Offer and Listing                                                        |   |   | 85 |   |
| Item 10.                                                                             | Additional Information                                                       |   |   | 87 |   |
| Item 11.                                                                             | Quantitative and Qualitative Disclosures about Market Risk                   |   |   | 101 |   |
| Item 12.                                                                             | Description of Securities Other than Equity Securities                       |   |   | 104 |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| **PART II**                                                                          |                                                                         |   | 105    |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| Item 13.                                                                             | Defaults, Dividend Arrearages and Delinquencies                              |   |   | 105 |   |
| Item 14.                                                                             | Material Modifications to the Rights of Security Holders and Use of Proceeds |   |   | 105 |   |
| Item 15.                                                                             | Controls and Procedures                                                      |   |   | 105 |   |
| Item 16.                                                                             | [Reserved]                                                                   |   |   | 106 |   |
| Item 16A.                                                                            | Audit Committee Financial Expert                                             |   |   | 106 |   |
| Item 16B.                                                                            | Code of Ethics                                                               |   |   | 107 |   |
| Item 16C.                                                                            | Principal Accountant Fees and Services                                       |   |   | 107 |   |
| Item 16D.                                                                            | Exemptions from the Listing Standards for Audit Committees                   |   |   | 108 |   |
| Item 16E.                                                                            | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |   |   | 108 |   |
| Item 16F.                                                                       | Changes in Registrants Certifying Accountant                                 |   |   | 108 |   |
| Item 16G.                                                                            | Corporate Governance                                                         |   |   | 108 |   |
| Item 16H.                                                                            | Mine Safety Disclosure                                                       |   |   | 108 |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| **PART III**                                                                         |                                                                         |   | 109    |   |
| ** **                                                                           | ** **                                                                   |        |        |   |  |
| Item 17.                                                                             | Financial Statements                                                         |   |   | 109 |   |
| Item 18.                                                                        | Financial Statements                                                         |   |   | 109 |   |
| Item 19.                                                                             | Exhibits                                                                     |   |   | 111 |   |
| SIGNATURE                                                                            |                                                                         |   | 155    |   |

 

|   |
|--------|
| 2      |
|        |

 

**Introduction**

 

In this annual report on Form 20-F, which we refer to as the "Annual Report", except as otherwise indicated or as the context otherwise requires, the "Company", "we", “our” or "us" or “Levon” refers to Levon Resources Ltd.

 

**Currency**

 

Unless we otherwise indicate in this Annual Report, all references to "Canadian Dollars", "CDN$" or "$" are to the lawful currency of Canada and all references to "U.S. Dollars" or "US $" are to the lawful currency of the United States.

 

**Cautionary Note Regarding Forward-Looking Statements**

 

This Annual Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and within the meaning of applicable Canadian securities regulations. Such forward-looking statements concern the Company’s anticipated results and developments in our operations in future periods, planned exploration and, if warranted, development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.

 

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:  

|   | · | risks related to the reverse takeover transaction with SciVac Ltd. (“SciVac”) and the related change in management of the Company and business focus; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | risks related to the uncertainty regarding our ability to continue as a going concern;                                                                            |
|   | · | risks related to our history of losses and our need to raise additional capital to continue our operations and to mine our properties;                            |
|   | · | risks related to our lack of history of producing metals from our mineral properties;                                                                             |
|   | · | risks related to increased costs affecting our financial condition;                                                                                               |
|   | · | risks related to shortages of equipment and supplies;                                                                                                             |
|   | · | risks related to mining and resource exploration being an inherently dangerous activity;                                                                          |

 

|   |
|--------|
| 3      |
|        |

 

|   | · | risks related to resource estimates;                                                                                            |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   | · | risks related to material changes in resource estimates;                                                                        |
|   | · | risks related to the mining industry being highly speculative and involving substantial risks;                                  |
|   | · | risks related to our properties being in the exploration stage;                                                                 |
|   | · | risks related to fluctuations in the market prices of commodities, including gold;                                              |
|   | · | risks related obtaining necessary permits and licenses;                                                                         |
|   | · | risks related to our activities being subject to governmental, environmental and other regulations;                             |
|   | · | risks related to pending and potential future regulations regarding climate change;                                             |
|   | · | risks related to land reclamation costs;                                                                                        |
|   | · | risks related to our activities being subject to potential political and economic instability and unexpected regulatory change; |
|   | · | risks related to uncertainty regarding claims of title and right of aboriginal people;                                          |
|   | · | risks related to our lack of ownership or interest to a mining claim in the central area of our Cordero project;                |
|   | · | risks related to our lack of insurance coverage for certain activities;                                                         |
|   | · | risks related to potential litigation;                                                                                          |
|   | · | risks related to our acquisition activities;                                                                                    |
|   | · | risks related to competition in the mining industry;                                                                            |
|   | · | risks related to potential conflicts of interest of our management;                                                             |
|   | · | risks related to our dependence on our management;                                                                              |
|   | · | risks related to managing growth;                                                                                               |
|   | · | risks related to foreign currency fluctuations;                                                                                 |
|   | · | risks related to differences in US and Canadian reporting practices for mineral reserve and resource estimates;                 |
|   | · | risks related to potential joint ventures and partnerships;                                                                     |
|   | · | risks related to evolving corporate governance and public disclosure standards;                                                 |
|   | · | risks related to our not having paid dividends to date;                                                                         |
|   | · | risks related to our stock price and volume being volatile; and                                                                 |
|   | · | risks related to our being a foreign private issuer.                                                                            |

  

|   |
|--------|
| 4      |
|        |

 

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading “Item 3. Key Information – D. Risk Factors” below and the risks and uncertainties related to the business of SciVac described under the heading "*Risk Factors*" in Appendix F to the Company’s Management Information Circular dated May 1, 2015 relating to the Special Meeting of Shareholders and Optionholders of Levon on June 3, 2015 (the “Information Circular”) as previously furnished to the SEC as Exhibit 99.2 to our Form 6-K on May 12, 2015 and available on www.sec.gov and www.sedar.com. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements. Investors should consult the Company’s quarterly and annual filings with Canadian securities commissions and the United States Securities and Exchange Commission (the “SEC”) for additional information on risks and uncertainties relating to forward-looking statements. We do not assume responsibility for the accuracy and completeness of these statements.

 

Forward-looking statements are based on our beliefs, opinions and expectations at the time they are made, and the Company does not assume any obligation to update forward-looking statements if those beliefs, opinions, or expectations, or other circumstances, should change, except as required by applicable law.**The Company qualifies all the forward-looking statements contained in this Annual Report by the foregoing cautionary statements.**

 

**Cautionary Note to United States Investors Concerning Reserve and Resource Estimates**

 

As used in this Annual Report, the terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101—Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)—*CIM Definition Standards on Mineral Resources and Mineral Reserves*, adopted by the CIM Council, as amended. These definitions differ from the definitions in the SEC’s Industry Guide 7 (“SEC Industry Guide 7”) under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”). Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

 

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all, or any part, of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

   

Accordingly, information contained in this Annual Report and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

 

**Explanatory Note Regarding Presentation of Financial Information**

 

The annual audited consolidated financial statements for the years ended March 31, 2015, 2014 and 2013 contained in this Annual Report on Form 20-F are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards (‘‘IFRS’’) as issued by the International Accounting Standards Board (“IASB”). Financial statements prepared in accordance with IFRS are not comparable in all respects with financial statements that are prepared in accordance with either Canadian GAAP or with US GAAP.

 

|   |
|--------|
| 5      |
|        |

  

**Glossary of Mining Terms**

 

| ***Au***                              |   | The elemental symbol for gold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ***Anomalous***                       |   | A value, or values, in which the amplitude is statistically between that of a low contrast anomaly and a high contrast anomaly in a given data set.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ***Anomaly***                         |   | Any concentration of metal noticeably above or below the average background concentration.****                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ***Assay***                           |   | An analysis to determine the presence, absence or quantity of one or more components.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ***Breccia***                         |   | A rock in which angular fragments are surrounded by a mass of finer-grained material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ***Chert***                           |   | A rock resembling flint and consisting essentially of crypto-crystalline quartrz or fibrous chalcedony.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ***Cretaceous***                      |   | The geologic period extending from 135 million to 65 million years ago.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ***Cubic meters or m3***              |   | A metric measurement of volume, being a cube one meter in length on each side.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ***Diamond drill***                   |   | A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, two centimeters or more in diameter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ***Fault***                           |   | A fracture in a rock where there has been displacement of the two sides.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ***Grade***                           |   | The concentration of each ore metal in a rock sample, usually given as weight percent. Where extremely low concentrations are involved, the concentration may be given in grams per tonne (g/t or gpt) or ounces per ton (oz/t). The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from throughout the deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ***Hectare or ha***                   |   | An area totaling 10,000 square meters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ***Highly anomalous***                |   | An anomaly which is 50 to 100 times average background, i.e. it is statistically much greater in amplitude.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ***Indicated Mineral Resource***      |   | An “Indicated Mineral Resource‟ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

 

Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Preliminary Feasibility Study which can serve as the basis for major development decisions.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above. |
| ******Inferred Mineral Resource****** |        | An “Inferred Mineral Resource‟ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

 

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above.                                                                                                                                                                                                                                                                         |

 

|   |
|--------|
| 6      |
|        |

 

| ***Intrusive***                 |   | A rock mass formed below earth’s surface from magna which has intruded into a preexisting rock mass.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ***Laterite***                  |   | A residual product of rock decay that is red in color and has a high content in the oxides of iron and hydroxide of aluminum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ***Lode claim***                |   | A mining claim on an area containing a known vein or lode.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ***Measured Mineral Resource*** |   | A “Measured Mineral Resource‟ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

 

Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above.                                                                                                                                                                            |
| ***Mineral Reserve***           |   | A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

 

Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term “Mineral Reserve‟ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above.                                                                       |
| ***Mineral Resource*****   |   | A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

 

The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase “reasonable prospects for economic extraction‟ implies a judgement by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and technical reports.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above. |

 

|   |
|--------|
| 7      |
|        |

 

| ***Mineralization***                                         |   | Usually implies minerals of value occurring in rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ***Net Smelter Royalty***                                    |   | Payment of a percentage of net mining profits after deducting applicable smelter charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ***Ore***                                                    |   | A natural aggregate of one or more minerals which may be mined and sold at a profit, or from which some part may be profitably separated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ***Outcrop***                                                |   | An exposure of rock at the earth’s surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ***Porphyry***                                               |   | Rock type with mixed crystal sizes, i.e. containing larger crystals of one or more minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ***Possible or inferred ore***                               |   | Term used to describe ore where the mineralization is believed to exist on the basis of some geological information, but the size, shape, grade, and tonnage are a matter of speculation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ***Prefeasibility study and preliminary feasibility study*** |   | Each means a comprehensive study of the viability of a mineral project that has******advanced to a stage where mining method, in the case of underground mining, or the pit configuration, in the case of open pit mining, has been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating and economic factors, and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.                                                                                                                                                                                                                                                                                                                          |
| ***Probable mineral reserve***                               |   | A “Probable Mineral Reserve‟ is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above.                                                                                                                                                                                                                                                                                                                                                                                             |
| ***Proven mineral reserve***                                 |   | A “Proven Mineral Reserve” is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.

 

Application of the Proven Mineral Reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability.

 

**Cautionary Note to U.S. Investors:**Please review the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above. |
| ***Pyrite***                                                 |   | Iron sulphide mineral.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ***Quartz***                                                 |   | Silica or SiO2, a common constituent of veins, especially those containing gold and silver mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ***Silification***                                           |   | A process of fossilization whereby the original organic components of an organism are replaced by silica, as quartz chalcedony, or opal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ***Sulfidation***                                            |   | In conditioning a flotation pulp, addition of soluble alkaline sulfides in aqueous solution to produce a sulfide-metal layer on an oxidized ore surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ***Ton***                                                    |   | Imperial measurement of weight equivalent to 2,000 pounds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ***Tonne***                                                  |   | Metric measurement of weight equivalent to 1,000 kilograms (or 2,204.6 pounds).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ***Trench***                                                 |   | A long, narrow excavation dug through overburden, or blasted out of rock, to expose a vein or ore structure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ***Veins***                                                  |   | The mineral deposits that are found filling openings in rocks created by faults or replacing rocks on either side of faults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

|   |
|--------|
| 8      |
|        |

 

**Part I**

 

**Item 1. Identity of Directors, Senior Management and Advisors**

 

Not applicable.

 

**Item 2. Offer Statistics and Expected Timetable**

 

Not applicable.

 

**Item 3. Key Information**

 

**A. Selected Financial Data**

 

The selected financial data and the information of the Company in the following table as at March 31, 2015, 2014, and 2013 and for the years then ended was derived from the audited consolidated financial statements of the Company presented in this Annual Report on Form 20-F, audited by Smythe Ratcliffe, LLP, independent Chartered Accountants, as indicated in their report which is included elsewhere in this Annual Report on Form 20-F. The selected financial data and the information of the Company in the following table as at March 31, 2012 and 2011 and for the years then ended was derived from the audited consolidated financial statements of the Company which are not presented in this Annual Report on Form 20-F.

 

The selected historical consolidated financial information presented below is condensed and may not contain all of the information that you should consider. This selected financial data should be read in conjunction with our annual audited consolidated financial statements, the notes thereto and the sections entitled “Item 3. Key Information – D. Risk Factors” and ‘‘Item 5 — Operating and Financial Review and Prospects.’’

 

The table below sets forth selected consolidated financial data under IFRS as issued by the IASB, which differ in certain respects from the principles the Company would have followed had its consolidated financial statements been prepared in accordance with US GAAP. The information has been derived from our annual audited consolidated financial statements, including as set forth in ‘‘Item 18 — Financial Statements.’’

 

In this Annual Report all dollars are expressed in Canadian dollars unless otherwise stated.

 

|                                                 |   | **March 31,2015** |        |   | **March 31,2014** |   |        | **March 31,2013** |   |   | **March 31,2012** |   |   | **March 31,2011** |        |
|------------------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|-------------|-------------------|--------|--------|-------------------|--------|--------|-------------------|-------------|
| Total Revenues                                       |   | $                 | -           |   |              | $      | -           |              |   | $      | -                 |   |   | $                 | -           |   |   | $ | - |   |
| Loss before other items                              |   |                   | (5,842,837  | )      |              |        | (5,847,718  | (1)               |   |        | (7,508,398        | (1)    |   |                   | (13,581,252 | (1) |   |  | (24,623,095 | (1) |
| Net loss for the Year                                |   |                   | (83,577,981 | )      |              |        | (5,078,398  | )                 |   |        | (6,769,507        | )      |   |                   | (13,124,833 | ) |   |  | (24,642,655 | ) |
| Net Comprehensive Loss for the Year                  |   |                   | (79,228,018 | )      |              |        | (5,079,421  | )                 |   |        | (6,773,240        | )      |   |                   | (13,140,449 | ) |   |  | (24,642,655 | ) |
| Loss per Share, Basic and Diluted                    |   |                   | (0.39       | )      |              |        | (0.03       | )                 |   |        | (0.03             | )      |   |                   | (0.07       | ) |   |  | (0.31 | ) |
| Total Assets                                         |   |              | 102,972,801 |   |              |   | 173,736,186 |              |   |   | 178,681,496       |   |   |              | 184,859,967 |   |   |   | 145,255,935 |   |
| Total Liabilities                                    |   |              | 350,595     |   |              |   | 275,031     |              |   |   | 244,226           |   |   |              | 708,372     |   |   |   | 861,595 |   |
| Working Capital                                      |   |              | 49,758,641  |   |              |   | 41,506,961  |              |   |   | 49,169,844        |   |   |              | 58,048,017  |   |   |   | 19,608,972 |   |
| Share Capital                                        |   |              | 237,731,054 |   |              |   | 230,664,826 |              |   |   | 230,664,826       |   |   |              | 230,608,666 |   |   |   | 169,689,837 |   |
| Total Equity                                         |   |              | 102,622,206 |   |              |   | 173,461,155 |              |   |   | 178,437,270       |   |   |              | 184,151,595 |   |   |   | 144,394,340 |   |
| Weighted Average Number of Common Shares Outstanding |   |              | 213,838,998 |   |              |   | 199,854,423 |              |   |   | 199,810,861       |   |   |              | 194,269,099 |   |   |   | 78,689,400 |   |

________________ 

(1) Restated to exclude foreign exchange gains or losses to conform with presentation for year ended March 31, 2015.

 

|   |
|--------|
| 9      |
|        |

  

**Critical Accounting Estimates and Policies**

 

See “Item 5. Operating and Financial Review and Prospects” for a summary of the critical accounting estimates and policies in relation to the preparation and presentation of the financial data and information presented in the above table.

 

**Exchange Rates**

 

The following tables set out the exchange rates for one United States dollar (“US$”) expressed in terms of Canadian dollars (“Cdn$”) for (i) the average exchange rates (based on the average of the exchange rates on the last day of each month) in each of the fiscal years of March 31, 2011 to 2015 and the low rate in each of those years, and (ii) the range of high and low exchange rates in each of the months December 2014 to May 2015.

 

The following table sets forth, for the periods indicated, the high, low, end of period and average for period noon buying rates as published by the Bank of Canada, as expressed in the amount of one United States Dollar equal to Canadian dollars.

 

| **Year Ended****March 31,** |   | **Average** |   |   | **Period End** |   |   | **High** |   |   | **Low** |   |
|-----------------------------|--------|-------------|--------|--------|----------------|--------|--------|----------|--------|--------|---------|--------|
|                        |   | ****        |   |   |                |   |   |          |   |   |         |   |
| 2011                        |   | $           | 1.0163 |   |           | $      | 0.9718 |     |   | $      | 1.0778  |   |   | $ | 0.9686 |   |
| 2012                        |   | $           | 0.9930 |   |           | $      | 0.9991 |     |   | $      | 1.0604  |   |   | $ | 0.9449 |   |
| 2013                        |   | $           | 1.0013 |   |           | $      | 1.0156 |     |   | $      | 1.0418  |   |   | $ | 0.9710 |   |
| 2014                        |   | $           | 1.0533 |   |           | $      | 1.1053 |     |   | $      | 1.1251  |   |   | $ | 1.0023 |   |
| 2015                        |   | $           | 1.1387 |   |           | $      | 1.2683 |     |   | $      | 1.2803  |   |   | $ | 1.0634 |   |

 

The following table sets forth the high and low exchange rate for the past six months based on the noon buying rate. As of June 18, 2015, the exchange rate was CDN$1.3922 for each US$1.

 

| **Month** |   | **High** |   |   | **Low** |   |
|-----------|--------|----------|--------|--------|---------|--------|
| Dec 2014  |   | $        | 1.1643 |   |    | $      | 1.1344 |   |
| Jan 2015  |   | $        | 1.2717 |   |    | $      | 1.1728 |   |
| Feb 2015  |   | $        | 1.2635 |   |    | $      | 1.2403 |   |
| Mar 2015  |   | $        | 1.2803 |   |    | $      | 1.2440 |   |
| Apr 2015  |   | $        | 1.2612 |   |    | $      | 1.1954 |   |
| May 2015  |   | $        | 1.2485 |   |    | $      | 1.1951 |   |

 

|   |
|--------|
| 10     |
|        |

 

**B. Capitalization and Indebtedness**

 

Not Applicable.

 

**C. Reasons for the Offer and Use of Proceeds**

 

Not Applicable.

 

**D. Risk Factors**

 

On or about June 30, 2015, it is currently anticipated the Company will complete the Arrangement with Sci Vac Ltd. (“SciVac”) as described in “Item 4. Information on the Company – B. Business Overview, Significant Acquisitions and Significant Dispositions”, which will significantly alter the focus of the Company. Pursuant to the SciVac Arrangement, upon completion existing Levon shareholders will both retain a 31.6% shareholding in Levon as well as acquire 100% ownership of Spinco.

 

Pursuant to the SciVac Arrangement Levon will acquire the operations of SciVac and Spinco will retain the mining operations of Levon. Upon completion of the Arrangement the current directors and senior management of the Company will resign their positions in Levon. ***Therefore, in addition to the other information presented in this Annual Report and the risk factors below relating to Levon’s current operations and the SciVac Arrangement, in evaluating the business of Levon, the reader should also consider carefully other information relating to SciVac set out in the Company’s Management Information Circular dated May 1, 2015 relating to the Special Meeting of Shareholders and Option holders of Levon on June 3, 2015 (the “Information Circular”) as previously furnished to the SEC as Exhibit 99.2 to our Form 6-K on May 12, 2015 and available on******www.sec.gov******and www.sedar.com, including the SciVac risk factors set out in “Risk factors” in Appendix F which “Risk Factors” are hereby incorporated by reference.***

 

This Annual Report contains forward-looking statements that involve risk and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Annual Report.

  

**Risk Related to Our Current Operations**

 

***There is uncertainty regarding our ability to continue as a going concern.***

 

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of exploration and evaluation assets and the Company's ability to continue as a going concern is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations or the ability of the Company to raise alternative financing.

 

The Company is currently in the exploration stage of its properties. If the Company determines based on its most recent information that it is feasible to begin operations on its properties, the Company will be required to raise additional capital in order to develop and bring the properties into production. Our ability to raise funds will depend on several factors, including, but not limited to, current economic conditions, our properties, our prospects, metal prices, businesses competing for financing and our financial condition. There can be no assurance that we will be able to raise funds, or to raise funds on commercially reasonable terms.

 

|   |
|--------|
| 11     |
|        |

  

***We have a history of losses and we will be required to raise additional capital to continue our operations and to mine our properties.***

 

We have not been profitable since our inception. For the fiscal year ended March 31, 2015, we had a net loss of $83,577,981 and an accumulated deficit on March 31, 2015 of $156,062,817. We have not generated revenues from operations and do not expect to generate revenues from operations until one or more of our properties are placed in production. All of our properties are in the exploration stage, which means that we have no known mineral reserves on our properties. We currently do not have sufficient funds to fully complete exploration and development work on any of our properties, which means that we will be required to raise additional capital, enter into joint venture relationships or find alternative means to finance placing one or more of our properties into commercial production, if warranted. If the Company fails to raise additional funds it will curtail its activities and may risk being able to maintain its interests in its mineral properties.

 

Failure to obtain sufficient financing may result in the delay or indefinite postponement of exploration, and, development or production on one or more of our properties and any properties we may acquire in the future or even a loss of property interests. This includes our leases over claims covering the principal deposits on our properties, which may expire unless we expend minimum levels of expenditures over the terms of such leases. We cannot be certain that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable or acceptable to us. Future financings may cause dilution to our shareholders.

 

***We have no history of producing metals from our mineral properties.***

 

We have no history of producing metals from any of our properties. Our properties are all exploration stage properties in various stages of exploration. Advancing properties from exploration into the development stage requires significant capital and time and successful commercial production from a property, if any, will be subject to completing feasibility studies, permitting and construction of the mine, processing plants, roads, and other related works and infrastructure. As a result, we are subject to all of the risks associated with developing and establishing new mining operations and business enterprises including:

 

|   | · | completion of feasibility studies to identify reserves and commercial viability, including the ability to find sufficient silver reserves to support a commercial mining operation;     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                    |
|   | · | the timing and cost, which can be considerable, of further exploration, preparing feasibility studies, permitting and construction of infrastructure, mining and processing facilities; |
|   |   |                                                                                                                                                                                    |
|   | · | the availability and costs of drill equipment, exploration personnel, skilled labor and mining and processing equipment, if required;                                                   |
|   |   |                                                                                                                                                                                    |
|   | · | the availability and cost of appropriate smelting and/or refining arrangements, if required;                                                                                            |
|   |   |                                                                                                                                                                                    |
|   | · | compliance with environmental and other governmental approval and permit requirements;                                                                                                  |
|   |   |                                                                                                                                                                                    |
|   | · | the availability of funds to finance exploration, development and construction activities, as warranted;                                                                                |
|   |   |                                                                                                                                                                                    |
|   | · | potential opposition from non-governmental organizations, environmental groups, local groups or local inhabitants which may delay or prevent development activities; and                |
|   |   |                                                                                                                                                                                    |
|   | · | potential increases in exploration, construction and operating costs due to changes in the cost of fuel, power, materials and supplies.                                                 |

 

|   |
|--------|
| 12     |
|        |

  

The costs, timing and complexities of exploration, development and construction activities may be increased by the location of our properties and demand by other mineral exploration and mining companies. It is common in exploration programs to experience unexpected problems and delays during drill programs and, if warranted, development, construction and mine start-up. Accordingly, our activities may not result in profitable mining operations and we may not succeed in establish mining operations or profitably producing metals at any of our properties.

 

***Increased costs could affect our financial condition.***

 

We anticipate that costs at our projects that we may explore or develop, will frequently be subject to variation from one year to the next due to a number of factors, such as changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as fuel, rubber and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in costs at any significant location could have a significant effect on our profitability.

 

***A shortage of equipment and supplies could adversely affect our ability to operate our business.***

 

We are dependent on various supplies and equipment to carry out our mining exploration and, if warranted, development operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost of production.

 

***Mining and resource exploration is inherently dangerous and subject to conditions or events beyond our control, which could have a material adverse effect on our business and plans.***

 

Mining and mineral exploration involves various types of risks and hazards, including:

 

|   | · | environmental hazards;                                                             |
|--------|--------|------------------------------------------------------------------------------------|
|   | · | power outages;                                                                     |
|   | · | metallurgical and other processing problems;                                       |
|   | · | unusual or unexpected geological formations;                                       |
|   | · | personal injury, flooding, fire, explosions, cave-ins, landslides and rock-bursts; |
|   | · | inability to obtain suitable or adequate machinery, equipment, or labor;           |
|   | · | metals losses;                                                                     |
|   | · | fluctuations in exploration, development and production costs;                     |
|   | · | labor disputes;                                                                    |
|   | · | unanticipated variations in grade;                                                 |
|   | · | mechanical equipment failure; and                                                  |
|   | · | periodic interruptions due to inclement or hazardous weather conditions.           |

 

|   |
|--------|
| 13     |
|        |

  

These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, personal injury, environmental damage, delays in mining, increased production costs, monetary losses and possible legal liability. We may not be able to obtain insurance to cover these risks at economically feasible premiums. Insurance against certain environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from production, is not generally available to us or to other companies within the mining industry. We may suffer a material adverse effect on our business if we incur losses related to any significant events that are not covered by our insurance policies.

 

***Any material changes in mineral resource estimates and grades of mineralization will affect the economic viability of placing a property into production and a property’s return on capital.***

 

As we have not completed feasibility studies on any of our properties and have not commenced actual production, mineralization resource estimates may require adjustments or downward revisions. In addition, the grade of ore ultimately mined, if any, may differ from that indicated by our feasibility studies and drill results. Minerals recovered in small scale tests may not be duplicated in large scale tests under on-site conditions or in production scale.

 

The resource estimates contained in this Annual Report have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate. Extended declines in market prices for gold, silver or other commodities may render portions of our mineralization and resource estimates uneconomic and result in reduced reported mineralization or adversely affect the commercial viability determinations we reach. Any material reductions in estimates of mineralization, or of our ability to extract this mineralization, could have a material adverse effect on our share price and the value of our properties.

 

***The mining industry is highly speculative and involves substantial risks*.**

 

The mining industry, from exploration, development and production is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits, which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by us may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in us not receiving an adequate return on investment capital.

 

|   |
|--------|
| 14     |
|        |

  

***Our properties are all at the exploration stage and have no proven reserves**. Our exploration activities on our properties may not be commercially successful, which could lead us to abandon our plans to develop the property and our investments in exploration.***

 

Our long-term success depends on our ability to identify mineral deposits on our existing properties and other properties we may acquire, if any, that we can then develop into commercially viable mining operations. Despite exploration work on our mineral claims, no known bodies of commercial ore or economic deposits have been established on any of our properties. In addition, we are at the exploration stage on all of our properties and substantial additional work will be required in order to determine if any economic deposits occur on our properties. Mineral exploration is highly speculative in nature, involves many risks and is frequently non-productive. These risks include unusual or unexpected geologic formations, and the inability to obtain suitable or adequate machinery, equipment or labor. The success of gold, silver and other commodity exploration is determined in part by the following factors:

 

|   | · | the identification of potential mineralization based on surficial analysis;   |
|--------|--------|-------------------------------------------------------------------------------|
|   | · | availability of government-granted exploration permits;                       |
|   | · | the quality of our management and our geological and technical expertise; and |
|   | · | the capital available for exploration and development work.                   |

  

Substantial expenditures are required to establish proven and probable reserves through drilling and analysis, to develop metallurgical processes to extract metal, and to develop the mining and processing facilities and infrastructure at any site chosen for mining.

 

Even in the event commercial quantities of minerals are discovered, the exploration properties might not be brought into a state of commercial production. Finding mineral deposits is dependent on a number of factors, including the technical skill of exploration personnel involved. Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which fluctuate widely; and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. We may invest significant capital and resources in exploration activities and abandon such investments if we are unable to identify commercially exploitable mineral reserves. The decision to abandon a project may have an adverse effect on the market value of our securities and the ability to raise future financing.

 

***Changes in the market price of gold, silver and other metals, which in the past has fluctuated widely, will affect the profitability of our operations and financial condition.***

 

Our long-term viability and future profitability depend, in large part, upon the market price of gold and other metals and minerals produced from our mineral properties. The market price of gold and other metals is volatile and is impacted by numerous factors beyond our control, including:

 

|   | · | expectations with respect to the rate of inflation;                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | the relative strength of the U.S. dollar and certain other currencies;                                                                    |
|   | · | interest rates;                                                                                                                           |
|   | · | global or regional political or economic conditions;                                                                                      |
|   | · | supply and demand for jewelry and industrial products containing metals;                                                                  |
|   | · | sales by central banks and other holders, speculators and producers of gold and other metals in response to any of the above factors; and |
|   | · | any executive order curtailing the production or sale of gold.                                                                            |

  

|   |
|--------|
| 15     |
|        |

 

The volatility in gold and silver prices is illustrated by the following table, which sets forth, for the periods indicated (calendar year), the average annual market prices in U.S. dollars per ounce of gold and silver, based on the daily London P.M. fix, as shown in the table below:

 

| ***Mineral*** |   | **2014** |       |   | **2013** |   |       | **2012** |   |   | **2011**   |   |   | **2010** |       |
|---------------|--------|----------|------------|--------|----------|--------|------------|----------|--------|--------|------------|--------|--------|----------|------------|
| *Gold*        |   | $        | *1,266.40* |   |     | $      | *1,411.23* |     |   | $      | *1,668.98* |   |   | $        | *1,571.52* |   |   | $ | *1,224.53* |   |
| *Silver*      |   | *$*      | *19.08*    |   |     | *$*    | *23.79*    |     |   | *$*    | *31.15*    |   |   | *$*      | *35.12*    |   |   | *$* | *20.19* |   |

 

The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate. In the event gold prices decline or remain low for prolonged periods of time, we might be unable to develop our properties, which may adversely affect our results of operations, financial performance and cash flows.

 

A decrease in the market price of gold and other metals could affect the commercial viability of our properties and our anticipated development of such properties in the future. Lower gold prices could also adversely affect our ability to finance exploration and development of our properties.

 

***We may not be able to obtain all required permits and licenses to place any of our properties into production.***

 

Our operations require licenses and permits from various governmental authorities. We believe that we hold all necessary licenses and permits under applicable laws and regulations and believe that we are presently complying in all material respects with the terms of such licenses and permits. However, such licenses and permits are subject to change in various circumstances. There can be no guarantee that we will be able to obtain or maintain all necessary licenses and permits as are required to explore and develop our properties, commence construction or operation of mining facilities and properties under exploration or development or to maintain continued operations that economically justify the cost.

 

***Our exploration activities are subject to various federal, provincial, state and local laws and regulations.***

 

Laws and regulations govern the exploration, development, mining, production, importing and exporting of minerals; taxes; labor standards; occupational health; waste disposal; protection of the environment; mine safety; toxic substances; and other matters. In many cases, licenses and permits are required to conduct mining operations. Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a substantial adverse impact on us. Applicable laws and regulations will require us to make certain capital and operating expenditures to initiate new operations. Under certain circumstances, we may be required to stop our exploration activities once we are started until a particular problem is remedied or to undertake other remedial actions.

 

|   |
|--------|
| 16     |
|        |

 

***Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.***

 

All phases of our operations are subject to environmental regulation in the jurisdictions in which we operate. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays and may cause material changes or delays in our operations and future activities. It is possible that future changes in these laws or regulations could have a significant adverse impact on our properties or some portion of our business, causing us to re-evaluate those activities at that time.

 

***Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.***

 

A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.

 

***Land reclamation requirements for our properties may be burdensome and expensive.***

 

Although variable depending on location and the governing authority, land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order to minimize long term effects of land disturbance.

 

|   |
|--------|
| 17     |
|        |

 

Reclamation may include requirements to:

 

|   | · | control dispersion of potentially deleterious effluents;           |
|--------|--------|--------------------------------------------------------------------|
|   | · | treat ground and surface water to drinking water standards; and    |
|   | · | reasonably re-establish pre-disturbance land forms and vegetation. |

  

In order to carry out reclamation obligations imposed on us in connection with our potential development activities, we must allocate financial resources that might otherwise be spent on further exploration and development programs. We plan to set up a provision for our reclamation obligations on our properties, as appropriate, but this provision may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.

 

***Our operations are subject to potential political or economic instability and unexpected regulatory change.***

 

Certain of our properties are located in countries, provinces and states more likely to be subject to political and economic instability, or unexpected legislative change, than is usually the case in certain other countries, provinces and states. Our mineral exploration activities could be adversely effected by:

 

|   | · | political instability and violence;                                     |
|--------|--------|-------------------------------------------------------------------------|
|   | · | war and civil disturbances;                                             |
|   | · | expropriation or nationalization;                                       |
|   | · | changing fiscal regimes;                                                |
|   | · | fluctuations in currency exchange rates;                                |
|   | · | high rates of inflation;                                                |
|   | · | underdeveloped industrial and economic infrastructure;                  |
|   | · | changes in the regulatory environment governing mineral properties; and |
|   | · | unenforceability of contractual rights,                                 |

  

any of which may adversely affect our business in that country.

 

|   |
|--------|
| 18     |
|        |

 

***Title to some of our mineral properties may be challenged or defective. Aboriginal groups may raise title disputes in relation to land claims. Any impairment or defect in title could have a negative impact on our results of operations and financial condition.***

 

The acquisition of title to mineral properties is a very detailed and time-consuming process. There is no guarantee that title to any of our properties will not be challenged or impaired. Third parties may have valid claims underlying portions of our interests, including prior unregistered liens; agreements; transfers or claims, including aboriginal land claims; and title may be affected by, among other things, undetected defects. As a result, we may be constrained in our ability to operate our properties or unable to enforce our rights with respect to our properties. An impairment to, or defect in, title to our properties could have a material adverse effect on our business, financial condition or results of operations.

 

***We do not maintain insurance with respect to certain high-risk activities, which exposes us to significant risk of loss.***

 

Mining operations generally involve a high degree of risk. Hazards such as unusual or unexpected formations or other conditions are often encountered. We may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it cannot maintain insurance at commercially reasonable premiums. Any significant claim would have a material adverse effect on our financial position and prospects. We are not currently covered by any form of environmental liability insurance, or political risk insurance, since insurance against such risks (including liability for pollution) may be prohibitively expensive. We may have to suspend operations or take cost interim compliance measures if we are unable to fully fund the cost of remedying an environmental problem, if it occurs.

 

***We may be subject to costly litigation.***

 

Although we are not currently subject to litigation, we may become involved in disputes with other parties in the future, which may result in litigation. Any litigation could be costly and time consuming and could divert our management from our business operations. In addition, if we are unable to resolve any litigation favorably, it may have a material adverse impact on our financial performance, cash flow and results of operations.

 

***Our acquisition activities may expose us to additional risks in the future.***

 

We undertake evaluations of opportunities to acquire additional mining properties. Any resulting acquisitions may be significant in size, may change the scale of our business, and may expose us to new geographic, political, operating, financial and geological risks. Success in our acquisition activities depends on our ability to identify suitable acquisition candidates, acquire them on acceptable terms, and integrate their operations successfully. Any acquisitions would be accompanied by risks, such as a significant decline in the price of gold or silver, the ore body proving to be below expectations, the difficulty of assimilating the operations and personnel of any acquired companies, the potential disruption of our ongoing business, the inability of management to maximize the financial and our strategic position through the successful integration of acquired assets and businesses, the maintenance of uniform standards, controls, procedures and policies, the impairment of relationships with customers and contractors as a result of any integration of new management personnel and the potential unknown liabilities associated with acquired mining properties. In addition, we may need additional capital to finance an acquisition. Historically, we have raised funds through equity financing and the exercise of options and warrants. However, the market prices for natural resources are highly speculative and volatile. Accordingly, instability in prices may affect interest in resource properties and the development of and production from such properties that may adversely affect our ability to raise capital to acquire and explore resource properties. There can be no assurance that we would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.

 

|   |
|--------|
| 19     |
|        |

 

***We operate in a highly competitive industry**.***

 

We compete with other developmental resource companies, which have similar operations, and many competitors have operations, financial resources, and industry experience greater than us. We may encounter increasing competition from other mining companies in our efforts to acquire mineral properties and hire experienced resource industry professionals. Increased competition in our business could adversely affect our ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.

 

There is a limited supply of desirable mineral lands available for acquisition, claim staking or leasing in the areas where we contemplate expanding our operations and conducting exploration activities. Many participants are engaged in the mining business, including large, established mining companies. Accordingly, there can be no assurance that we will be able to compete successfully for new mining properties.

 

***Competition for recruitment and retention of qualified personnel*.**

 

We compete with other exploration companies, many of which have greater financial resources than us or are further in their development, for the recruitment and retention of qualified employees and other personnel. Competition for exploration resources at all levels is currently very intense, particularly affecting the availability of manpower, drill rigs and supplies. If we require and are unsuccessful in acquiring additional personnel or other exploration resources, we will not be able to grow at the rate we desire or at all.

 

***Our directors and officers may have conflicts of interest as a result of their relationships with other companies.***

 

Certain of our directors and officers are officers and/or directors of, or are associated with, other natural resource companies that acquire interests in mineral properties. Such associations may give rise to conflicts of interest from time to time. The directors are required by law, however, to act honestly and in good faith with a view to our best interests and those of our shareholders and to disclose any personal interest which they may have in any material transaction which is proposed to be entered into with us and to abstain from voting as a director for the approval of any such transaction.

 

***We are dependent on our management.***

 

We are dependent on the services of key executives including our President and Chief Executive Officer and other highly skilled and experienced executives and personnel focused on advancing our corporate objectives as well as the identification of new opportunities for growth and funding. Due to our relatively small size, the loss of these persons or our inability to attract and retain additional highly skilled employees required for our activities may have a material adverse effect on our business and financial condition.

 

|   |
|--------|
| 20     |
|        |

 

***We are subject to foreign currency fluctuations*.**

 

We operate in more than one country and our functional currency is the Canadian Dollar. Our offices are located in Canada, and certain of our mining exploration properties are located in Mexico and the United States. The Company’s financial results are reported in Canadian Dollars. Any appreciation in the currency of the United States, Mexico or other countries where we may carryout exploration activities against the Canadian or U.S. Dollar will increase our costs of carrying out operations in such countries. Fluctuations in and among the various currencies in which we operate could have a material effect on our operations and financial results.

 

*** There are differences in U.S. and Canadian practices for reporting reserves and resources.***

 

Our reserve and resource estimates are not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as we generally report reserves and resources in accordance with Canadian practices. These practices are different from the practices used to report reserve and resource estimates in reports and other materials filed with the SEC. It is Canadian practice to report measured, indicated and inferred resources, which are generally not permitted in disclosure filed with the SEC by United States issuers. In the United States, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves.

 

Further, "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC only permits issuers to report "resources" as in place tonnage and grade without reference to unit measures.

 

Accordingly, information concerning descriptions of mineralization, reserves and resources contained in this report, or in the documents incorporated herein by reference, may not be comparable to information made public by other United States companies subject to the reporting and disclosure requirements of the SEC.

 

***Joint ventures and other partnerships may expose us to risks.***

 

In the future, we may enter into joint ventures or other partnership arrangements with other parties in relation to the exploration, development and production of certain of the properties in which we have an interest. Joint ventures can often require unanimous approval of the parties to the joint venture or their representatives for certain fundamental decisions such as an increase or reduction of registered capital, merger, division, dissolution, amendments of constating documents, and the pledge of joint venture assets, which means that each joint venture party may have a veto right with respect to such decisions which could lead to a deadlock in the operations of the joint venture or partnership. Further, we may be unable to exert control over strategic decisions made in respect of such properties. Any failure of such other companies to meet their obligations to us or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and therefore could have a material adverse effect on our results of operations, financial performance, cash flows and the price of our common shares.

 

|   |
|--------|
| 21     |
|        |

 

***Our business is subject to evolving corporate governance and public disclosure regulations that have increased both our compliance costs and the risk of noncompliance, which could have an adverse effect on our stock price.***

 

We are subject to changing rules and regulations promulgated by a number of governmental and self-regulated organizations, including the SEC. These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by Congress, making compliance more difficult and uncertain. For example, on July 21, 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) with increased disclosure obligations for public companies and mining companies in the United States. Our efforts to comply with the Dodd-Frank Act and other new regulations have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

 

**Risks Related to Our Securities**

 

***Our common shares have limited and volatile trading volume.*****

 

Although our common shares are listed on the Toronto Stock Exchange, referred to as the “TSX” and the Frankfurt Stock Exchange, referred to as the “FSE”, and are occasionally traded in the United States on OTC Pink tier of the OTC Link, the volume of trading has been limited and volatile in the past and is likely to continue to be so in the future, reducing the liquidity of an investment in our common shares and making it difficult for investors to readily sell their shares in the open market. Without a liquid market for our common shares, investors may be unable to sell their shares at favorable times and prices and may be required to hold their shares in declining markets or to sell them at unfavorable prices.

 

***Our common shares have experienced volatility in share price.***

 

In recent years, securities markets in Canada have experienced a high level of price volatility. The market price of many resource companies, particularly those, like us, that are considered speculative exploration companies, have experienced wide fluctuations in price, resulting in substantial losses to investors who have sold their shares at a low price point. These fluctuations are based only in part on the level of progress of exploration, and can reflect general economic and market trends, world events or investor sentiment, and may sometimes bear no apparent relation to any objective factors or criteria. During the 2015 fiscal year, our common share fluctuated on the TSX between a low of $0.20 and a high of $0.495. Subsequent to the 2015 fiscal year, our common share price has fluctuated between a low of $0.42 and a high of $0.57. Significant fluctuations in our common share price are likely to continue, and could potentially increase in the future.

 

|   |
|--------|
| 22     |
|        |

 

***U.S. investors may experience difficulty in effecting service of process against us.***

 

We are incorporated under the laws of the Province of British Columbia, Canada. Consequently, it will be difficult for United States investors to affect service of process in the United States upon our directors or officers, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States securities laws. The majority of our directors and officers are residents of Canada. A judgment of a United States court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the United State court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.

 

***We believe that we may be a "passive foreign investment company" for the current taxable year which may result in materially adverse United States federal income tax consequences for United States investors.***

 

 We generally will be designated as a "passive foreign investment company" under the meaning of Section 1297 of the United States Internal Revenue Code of 1986, as amended (a "PFIC") if, for a tax year, (a) 75% or more of our gross income for such year is "passive income" (generally, dividends, interest, rents, royalties, and gains from the disposition of assets producing passive income) or (b) if at least 50% or more of the value of our assets produce, or are held for the production of, passive income, based on the quarterly average of the fair market value of such assets. United States shareholders should be aware that we believe we were classified as a PFIC during its tax year ended March 31, 2015, and may be a PFIC for future taxable years. If we are a PFIC for any taxable year during which a United States person holds our securities, it may result in materially adverse United States federal income tax consequences for such United States person. The potential consequences include, but are not limited to, re-characterization of gain from the sale of our securities as ordinary income and the imposition of an interest charge on such gain and on certain distributions received on our common shares. Certain elections may be available under U.S. tax rules to mitigate some of the adverse consequences of holding shares in a PFIC. See “Taxation – Certain United States Federal Income Tax Consequences – Passive Foreign Investment Company Rules” below. Each United States shareholder should consult its own tax advisor regarding the U.S. and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares, including the application of the PFIC rules.

 

***We do not currently intend to pay cash dividends****.*

 

We have never declared or paid cash dividends on our common shares. We currently intend to retain future earnings to finance the operation, development and expansion of our business. We do not anticipate paying cash dividends on our common shares in the foreseeable future. Payment of future cash dividends, if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that our board of directors considers relevant. Accordingly, investors will only see a return on their investment if the value of our securities appreciates.

 

|   |
|--------|
| 23     |
|        |

 

***As a foreign private issuer, our shareholders may have less complete and timely data.***

 

We are a “foreign private issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our equity securities are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act. Therefore, we are not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders. The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders’ activities in our securities.

 

***Penny stock rules may make it more difficult to trade our common shares.***

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks". Generally, penny stocks are equity securities with a price of less than US$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Since our common shares are traded for less than US$5.00 per share, the shares are subject to the SEC’s penny stock rules. Our common shares will be subject to the penny stock rules until such time as (1) the issuer's net tangible assets exceed US$5,000,000 during the issuer's first three years of continuous operations or US$2,000,000 after the issuer's first three years of continuous operations; or (2) the issuer has had average revenue of at least US$6,000,000 for three years. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prescribed by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must obtain a written acknowledgement from the purchaser that the purchaser has received the disclosure document. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Such rules and regulations may make it difficult for holders to sell our common shares, and they may be forced to hold it indefinitely.

 

***The Company may be subject to risks relating to the global economy.***

 

Recent market events and conditions, including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede the Company’s access to capital or increase the cost of capital. From 2007 to 2009, the United States credit markets began to experience serious disruption due to deterioration in residential property values, defaults and delinquencies in the residential mortgage market and a decline in the credit quality of mortgage-backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These conditions caused a loss of confidence in the broader United States and global credit and financial markets and resulted in the collapse of, and government intervention in, major banks, financial institutions and insurers and created a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions which continued throughout 2012 with continued uncertainty in the European marketplace and continued uncertainty surrounding the “fiscal cliff” and United States government spending cuts. Notwithstanding various actions by the United States and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to deteriorate and stock markets to fluctuate substantially. In addition, general economic indicators have continued to deteriorate, including consumer sentiment, unemployment and economic growth and uncertainty about corporate earnings.

 

|   |
|--------|
| 24     |
|        |

 

These disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies, including junior mining companies. These disruptions could, among other things, make it more difficult for the Company to obtain, or increase its cost of obtaining, capital and financing for its operations. Access to additional capital may not be available to the Company on terms acceptable to it, or at all. Further, as a result of on-going global financial conditions, numerous financial institutions have gone into bankruptcy or have been rescued by government authorities. As such, the Company is subject to the risk of loss of its deposits with financial institutions that hold the Company’s cash.

 

**Risks Associated with the SciVac Arrangement**

 

The risks associated with the SciVac Arrangement include, without limitation:

 

***The Arrangement Agreement may be terminated in certain circumstances, including in the event of a Material Adverse Effect on Levon.***

 

Each of Levon and SciVac has the right to terminate the SciVac arrangement agreement (the “Arrangement Agreement”) in certain circumstances. Accordingly, there is no certainty, nor can Levon provide any assurance, that the Arrangement Agreement will not be terminated by either Levon or SciVac before the completion of the SciVac Arrangement. For example, SciVac has the right, in certain circumstances, to terminate the Arrangement Agreement if any change, effect, event, circumstance or fact occurs that constitutes a Material Adverse Effect (as defined in the Arrangement Agreement) in respect of Levon and its subsidiaries. Although a Material Adverse Effect excludes certain events that are beyond the control of Levon (such as general political, economic or financial conditions or the state of securities and commodities market which do not have a materially disproportionate effect on Levon), there is no assurance that a Material Adverse Effect on Levon will not occur before the completion of the SciVac Arrangement, in which case SciVac could elect to terminate the Arrangement Agreement and the SciVac Arrangement would not proceed.

 

***There can be no certainty that all conditions precedent to the SciVac Arrangement will be satisfied.***

 

The completion of the SciVac Arrangement is subject to a number of conditions precedent, certain of which are outside the control of Levon. There can be no certainty, nor can Levon provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

 

***Levon will incur costs and may have to pay a termination fee.***

 

Certain costs related to the SciVac Arrangement, such as legal and financial advisor fees, must be paid by Levon even if the SciVac Arrangement is not completed. In addition, if the SciVac Arrangement is not completed, Levon may be required to pay SciVac a termination fee of US$1,000,000 under certain circumstances.

 

***Levon's directors and executive officers may have interests in the SciVac Arrangement that are different from those of the Levon security holders.***

 

Levon security holders should be aware that certain members of the Levon Board and management have agreements or arrangements that provide them with interests in the SciVac Arrangement that differ from, or are in addition to, those of Levon shareholders generally.

 

|   |
|--------|
| 25     |
|        |

 

***The market price for Levon Shares may decline if the SciVac Arrangement is not completed.***

 

If the SciVac Arrangement is not completed, the market price of the Levon shares may decline to the extent that the current market price reflects a market assumption that the SciVac Arrangement will not be completed. If the Arrangement is not completed and the Levon Board decides to seek another merger or arrangement, there can be no assurance that it will be able to find a party willing to pay an equivalent or more attractive price than the total consideration to be paid pursuant to the SciVAC Arrangement. Levon will also remain obligated to pay certain costs.

 

***The issue of New Levon Shares under the SciVac Arrangement and their subsequent sale may cause the market price of New Levon Shares to decline.***

 

As of the date of this Annual Report on Form 20-F, 231,564,423 Levon shares were outstanding and an aggregate of 21,597,500 Levon shares were subject to outstanding Levon options. Up to 801,145,325 New Levon Shares may be issued or issuable in connection with the SciVac Arrangement. The issue of these New Levon Shares and their sale and the sale of additional New Levon Shares that may become eligible for sale in the public market from time to time could depress the market price for Levon Shares.

 

***There is currently no market for the Spinco Shares.***

 

There is currently no market through which the Spinco Shares may be sold and Levon security holders may not be able to resell the Spinco Shares acquired under the SciVAc Arrangement. This may affect the price of the Spinco Shares in the secondary market, the transparency and availability of trading prices and the liquidity of the Spinco Shares. Application has been made for the listing of the Spinco Shares on the TSX. Any listing will be subject to meeting the initial listing requirements of the TSX. There can be no assurance as to if, or when, the Spinco Shares will be listed or traded on the TSX or any other stock exchange. It is not a condition of the SciVac Arrangement that the TSX has conditionally approved the listing of the Spinco Shares.

 

**Item 4. Information on the Company**

 

**A. History and Development of the Company**

 

The Company was incorporated by Memorandum of Association under the laws of the Province of British Columbia, Canada on April 9, 1965 under the name Alice Arm Mining Ltd. On January 13, 1975 we changed the name from Alice Arm Mining Ltd. to New Congress Resources, and on January 12, 1983 adopted the name Levon Resources Ltd. The principal executive office of the Company is located at Suite 500, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8 and its phone number is 778 379 0040.

 

The Company is a natural resource company, primarily engaged in the acquisition, exploration and development of natural resource properties. In recent years, the Company’s principal business activities have been the exploration of mineral properties located in Mexico.

 

|   |
|--------|
| 26     |
|        |

 

In addition, the Company has claims in British Columbia, Canada and Nevada, U.S. The Company has completed exploration on these properties but has focused its attention in Mexico in recent years. The British Columbia properties consist of interest in three mineral properties including the Congress, Goldbridge (also known as the “BRX claims”) and Wayside claims. The Nevada properties include interest in three mineral properties, the Eagle Claims, the Norma Sass and the Ruf Claims.

 

On March 20, 2015, the Company announced that it had entered into an arrangement agreement pursuant to which it would acquire by way of a court-approved plan of arrangement 100% of outstanding ordinary shares of SciVac Ltd. (“SciVac”), a commercial-stage biotech leader in protein engineering whose flagship product, Sci-B-Vac, is a next generation hepatitis B vaccine. The transaction is currently expected to closed on or about June 30, 2015. See “Item 4. Information on the Company – B. Business Overview, Significant Acquisitions and Significant Dispositions” for further details.

 

The Company’s common shares are listed on the Toronto Stock Exchange under the symbol “LVN”, and the Frankfurt Stock Exchange under the symbol “L09” and are quoted for trading in the United States on the OTCQX under the symbol “LVNVF”.

 

**B. Business Overview**

 

**Operations and Principal Activities**

 

Levon is a Canadian-based “exploration stage company” focusing on silver and gold exploration. The Company’s most recent activities have been conducted on the Cordero-Sanson Property (“Cordero” or “the Cordero Project”) located near Hidalgo Del Parral, Chihuahua, Mexico. The Cordero mining claims were comprised of claims wholly-owned by Valley High Ventures Ltd. (“Valley High”) by agreement with small local mining companies, and certain other claims that were staked by the Company. In February 2009, the Company signed a Letter of Intent with Valley High, whereby Levon would earn a 51% interest in Valley High’s wholly owned Cordero-Sanson Property. On March 25, 2011, the Company acquired all of the shares of Valley High pursuant to a court-approved plan of arrangement transferring to the Company 100% ownership in the Cordero Project. Cordero is the principal asset of the Company.

 

In prior years, the Company conducted exploration on the wholly owned Congress Property located in the Lillooet Mining Division of British Columbia, Canada, where we also hold an interest in two other mineral properties, more particularly the Goldbridge (also known as the BRX) claims and the Wayside claims.

 

The Company also holds certain interests in three mineral properties located in the Bullion Mining District, Lander County, Nevada, USA, known as the Ruf and Norma Sass claims and the Eagle claims.

 

The Company is an "exploration stage company", as all of its properties are currently in the exploratory stage. The Company has not yet determined whether its mineral properties contain ore reserves that are economically and legally recoverable. There is no assurance that a commercially viable mineral deposit exists on any of its properties. In order to determine if a commercially viable mineral deposit exists further geological and engineering work will need to be done and a final evaluation based upon the results obtained to conclude economic and legal feasibility.

 

|   |
|--------|
| 27     |
|        |

 

**Significant Acquisitions and Significant Dispositions**

 

***Cordero Project***

 

On March 25, 2011, the Company acquired all of the shares of Valley High pursuant to a court-approved plan of arrangement (the “Valley High Arrangement”). Prior to the Valley High Arrangement, Valley High was a Canadian based precious and base metal exploration company with projects located in Mexico, British Columbia and Yukon. Prior to the Valley High Arrangement, Valley High owned 49% of the Cordero Project and the Company held the remaining 51% interest.

 

Under the terms of the Valley High Arrangement, each former Valley High shareholder received 1.0 share of the Company and 0.125 of a share of a new exploration company, Bearing Resources Ltd. ("Bearing"), for each VHV share held. In accordance with their terms, outstanding warrants of Valley High were automatically adjusted so that upon exercise, subsequent to completion of the transaction, for each Valley High share that would previously have been issued, the warrant holder will receive one common share of the Company, and instead of receiving 0.125 of a Bearing share, the exercise price of the warrant will be reduced by the fair value of 0.125 of a Bearing share. As consideration for the acquisition, a total of 73,322,636 common shares were issued to Valley High shareholders at a fair value of $130,514,292 based on the market price of the Company’s common shares on March 25, 2011, and 6,259,550 warrants were issued to replace the old warrants of Valley High on a one-to-one basis at a fair value of $6,599,565 based on the Black-Scholes option pricing model. This transaction has been accounted for as an acquisition of assets. The excess of the consideration given over the fair value of the assets and liabilities acquired has been allocated to exploration and evaluation assets.

 

On August 15, 2013, the Company closed its purchase of a 100% interest in the Aida mining claim, a mining claims located in a central part of the Company’s Cordero Project claim block. The acquisition of the Aida claim consolidated Levon's 100% ownership of all mining claims in the Cordero mining district.

 

***SciVac Arrangement Agreement***

 

On March 20, 2015, the Company, together with SciVac Ltd. (“SciVac”) announced that they had entered into an arrangement agreement pursuant to which the Company will acquire 100% of the issued and outstanding ordinary shares of SciVac by way of a court-approved plan of arrangement (the "SciVac Arrangement"). SciVac is a commercial-stage biotech leader in protein engineering whose flagship product, Sci-B-Vac, is a next generation hepatitis B vaccine. Prior to the completion of the SciVac Arrangement, SciVac is a privately owned company, of which approximately 45% of the shares were owned by OPKO Health, Inc. (NYSE: OPK).

 

Pursuant to the SciVac Arrangement, shareholders of the Company will receive one new common share of the Company (each a "New Levon Share") and 0.5 of a common share (each, a "Spinco Share") of 1027949 BC Ltd., a newly formed exploration company ("Spinco") in exchange for each common share of the Company (each a "Levon Share") held by them. If and when the SciVac Arrangement closes, shareholders of the Company will hold 100% of the issued and outstanding Spinco Shares and 31.6% of the issued and outstanding New Levon Shares, with the former holders of SciVac shares holding the remaining 68.4% of the issued and outstanding New Levon Shares. In addition to acquiring all of the issued and outstanding shares of SciVac, the Company will retain $27 million in cash. All other assets and liabilities of Levon will be transferred to or will be assumed by Spinco.

 

|   |
|--------|
| 28     |
|        |

 

At the closing of the SciVac Arrangement, the Company expects that in addition to holding all of the Company’s mineral properties, including the flagship Cordero Project, Spinco would have approximately $22.2 million in working capital, including approximately $5.0 million in cash, as well as 1,954,366 shares of Pershing Gold Corporation (post-reverse stock split effected on June 18, 2015 at 1-for-18) with a then current estimated value of $14.5 million. Spinco would also hold a $2.7 million Mexican value added tax receivable that the Company expects will be recovered. The total of $22.2 million represents approximately 45% of the Company's working capital as at March 31, 2015.

 

At a special meeting of shareholders of the Company held on June 3, 2015, shareholders voted in favour of the SciVac Arrangement and the transaction is currently expected to complete on or about June 30, 2015. Court approval of the SciVac Arrangement was received on June 4, 2015 and completion is pending receipt of the final approval of the TSX.

 

Further information on the SciVac Arrangement, SciVac, New Levon and Spinco are set out in the Company’s Information Circular as previously furnished to the SEC as Exhibit 99.2 to our Form 6-K on May 12, 2015 and available on www.sec.gov and www.sedar.com. The information set forth under the heading “The Arrangement” beginning on page 27 and ending on page 56 of the Information Circular and the information set forth in Appendices A, B, F, G and H are incorporated herein by reference.

 

**Competition**

 

The mining industry in which we are engaged is highly competitive. Competitors include well capitalized mining companies, independent mining companies and other companies having financial and other resources far greater than those of the Company’s. The Company competes with other mining companies in connection with the acquisition of gold and other precious metal properties. In general, properties with a higher grade of recoverable mineral and/or which are more readily minable afford the owners a competitive advantage in that the cost of production of the final mineral product is lower. Thus, a degree of competition exists between those engaged in the mining industries to acquire the most valuable properties. As a result, the Company may eventually be unable to acquire attractive mining properties.

 

**Dependence on Customers and Suppliers**

 

The Company is not dependent upon a single or few customers or suppliers for revenues or its operations.

 

**Seasonality**

 

Certain of the Company’s operations are conducted in British Columbia. The weather during the colder seasons in these areas can be extreme and can cause interruptions or delays in the Company’s operations. As a result, the preferable time for activities in these regions is the spring and summer when costs are more reasonable and access to the properties is easier. In the summer months, however, if the weather has been unusually hot and dry, access to the Company’s properties may be limited as a result of access restrictions being imposed to monitor the risks of forest fires. In Mexico, where the Company’s principal property is located, access is year round.

 

|   |
|--------|
| 29     |
|        |

 

**Government and Environmental Regulation**

 

The current and anticipated future operations of the Company, including development activities and commencement of production on its properties, require permits from various federal, territorial and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies. The Company believes it is in substantial compliance with all material laws and regulations which currently apply to its activities. There can be no assurance, however, that all permits which the Company may require for construction of mining facilities and conduct of mining operations will be obtainable on reasonable terms or that such laws and regulations, or that new legislation or modifications to existing legislation, would not have an adverse effect on any exploration or mining project which the Company might undertake.

 

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in exploration and mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.

 

The enactment of new laws or amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in the development of new mining properties.

 

**C. Organizational Structure**

 

The Company’s subsidiaries include the British Columbia incorporated wholly-owned Valley High Ventures Ltd., three wholly-owned subsidiaries incorporated under the laws of Mexico, namely Administración de Proyectos Levon en México, S.A. de C.V., Minera Titan, S.A. de C.V. and Minera El Camino, S.A. de C.V. and three wholly owned subsidiaries incorporated under the laws of British Virgin Islands, namely Aphrodite Asset Holdings Ltd., Citrine Investments Limited and Turney Assets Limited.

 

In addition, on February 18, 2015, the Company incorporated 1027949 B.C. Ltd. ("Spinco") pursuant to the British Columbia *Business Corporations Act*. Spinco's sole business focus has been to (i) acquire and operate the Levon Mineral Properties and (ii) make application with a view to obtaining a listing for the Spinco shares on the TSX. To that end, Spinco entered into the SciVac Arrangement Agreement with Levon, its sole shareholder, and SciVac on March 20, 2015. On or about June 30, 2015, it is currently expected the SciVac Arrangement will complete and Spinco will acquire all of the assets and liabilities of the Company with the exception of $27 million in cash retained by the Company.

 

|   |
|--------|
| 30     |
|        |

 

**D. Property, Plants and Equipment**

 

Presently, the Company is an “exploration stage company”, as all of the Company’s properties are currently in the exploratory stage. In order to determine if a commercially and legally viable mineral deposit exists in any of the Company’s properties, further exploration work will need to be done and a final evaluation based upon the results obtained to conclude economic and legal feasibility.

 

Historically, the Company focused its exploration activities on its properties located in British Columbia, Canada. These are located on the north side of Carpenter Lake, 90 kilometers west of the town of Lillooet, British Columbia, Canada and 4 kilometers northeast of the small town of Goldbridge (population 50) in the Lillooet Mining Division, NTS 092J15W. Exploration there has been concluded and the properties are for sale.

 

Since the acquisition of the Cordero Project in 2011, the Company’s focus has been on the exploration of the Cordero Project located in the Chihuahua State of Mexico.

 

***Qualified Person***

 

Vic Chevillon, MA, CPG, AIPG Registered Member #1154, Vice President of Exploration and Director for Levon is a “qualified person” as such term is defined in NI 43-101 of the Canadian Securities Administrators and has reviewed and approved the scientific and technical disclosure contained in this Annual Report on Form 20-F.

 

***Cordero Project, Chihuahua State, Mexico***

 

The information in this Annual Report on 20-F with respect to the Cordero Project is extracted from the technical report dated October 15, 2014 pertaining to the Cordero Project (the "Cordero Report") that was commissioned by and prepared for Levon by Herbert E. Welhener, MMSA-QPM, SME Registered Member #3434330RM, in compliance with NI 43-101. Mr. Welhener is a "Qualified Person" and considered "independent" as both those terms are defined in NI 43-101. A copy of the Cordero Report is available under Levon's corporate profile on SEDAR at www.sedar.com.

 

**Project Description and Location**

 

The Cordero Project is located in the State of Chihuahua in North Central Mexico approximately 180 km south of the city of Chihuahua, and approximately 35 km northeast of the mining town of Hidalgo Del Parral.

 

|   |
|--------|
| 31     |
|        |

 

 

 

The current land use is ranching and some agriculture with corn and sorghum being the principal crops. Shaft entry underground operations mining of narrow (1 m), high grade veins to the water table (50-80 m depths) existed in the district until 2013 when the artisan mining was discontinued due to the transfer of claim ownership to Levon.

 

**Mineral Rights**

 

The Cordero Project consists of approximately 37,000 hectares of contiguous mining claims covering the entire Cordero district and is wholly-owned by Minera Titan, which is a Mexico company wholly-owned by Levon. The claims were mostly acquired by staking (concesionas mineras).

 

In early 2013, Minera Titan exercised two options to purchase agreements for two claim groups covering most historical mine workings and the Cordero mineral resource. Retained royalties on the two options are summarized in the table below.

 

In July 2013, Minera Titan purchased the 15.8 hectare Aida claim located in the central part of the existing Cordero mineral resource (June 2012 Mineral Resource Update Technical Report, IMC (as hereinafter defined)) for a cash payment with no underlying royalties. The Aida claim purchase consolidated 100% Minera Titan ownership of all the Cordero project claims covering the resource discovery area and the entire district.

 

|   |
|--------|
| 32     |
|        |

 

 

The following table lists the Cordero Project claims owned in 2013 and the related agreement obligations:

 

| **Cl****ai****m****Name****(Lot)**  | **Ti****t****le****Number**  | **Ar****ea**(**hectares)** | O**w****ner****s****h****i****p** | **Ma****i****n****Obligations** | **A****dd****i****t****i****ona****l Notes** |
|-------------------------------------|------------------------------|----------------------------|-----------------------------------|---------------------------------|----------------------------------------------|
| **M****i****n****i****n****gTaxes** | **A****ssessment****Filing** |
| Sansón                         | 230434                       | 7510.8325                  | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | Applications were done by Minera Titan directly. |
| Sansón I                       | 231280                       | 950.0000                   | Minera Titán 100%            | Paid to January 2015            | Complete to May 2015                    |
| Sansón II                      | 231281                       | 400.0000                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Sansón fracción 1    | 228104                       | 0.0763                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Sansón fracción 2         | 228105                       | 0.0906                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Titán                          | 235089                       | 1,700.0000                 | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Titán I                        | 235090                       | 8,150.0000                 | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Titán II                       | 241084                       | 100.0000                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| La Perla                            | 240461                       | 400.0000                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| San Pedro                           | 215161                       | 1.9422                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | San Pedro purchased (100%) from Minera Cordilleras in 2010. Underlying 2 % NSR (only under this lot). Minera Titan has first right of refusal. Assignment agreement is legally registered. |
| Unif.

Cordero                      | 171994                       | 218.8683                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | On February 21, 2013, option was exercised with Jandrina, S. de R. L., Mi. Assignment agreement has been registered. Minera Titan has right to purchase up to 1% at a rate of US$500,000 per each 0.5%. Minera Titan retains first right of refusal on remaining NSR. Assignment agreement is legally registered. |
| Argentina                           | 179438                       | 3.9140                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Catas de

Plateros                  | 177836                       | 2.0000                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Sergio                              | 214655                       | 9.8172                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| El Santo

Job                       | 213841                       | 155.5708                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Todos

Santos                       | 238776                       | 2.5040                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| Josefina                            | 172145                       | 6.0750                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | On February 21, 2013, option was exercised with Mr. Eloy Herrera. Underlying 1% NSR. Titan retains first right of refusal on remaining NSR. Assignment agreement is legally registered. |
| Berta                               | 182264                       | 16.5338                    | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| La Unidad

dos                      | 212981                       | 175.7555                   | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| La Unidad                           | 178498                       | 78.2960                    | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    |
| San Octavio                         | 165481                       | 2.0000                     | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | San Octavio was acquired on May 2, 2012 from Fernando Rascon. Not underlying NSR or other obligations. Assignment agreement is legally registered. |
| Aida                                | 189299                       | 15.8610                    | Minera Titán 100%       | Paid to January 2015            | Complete to May 2015                    | The Aida claim was acquired on July 2, 2013 after five year of negotiation with ten heirs of it. The price agreed two millions of dollars. Not underlying NSR or other obligations. Assignment agreement is legally registered. |
| **TOTAL**                           |                         | **19,900.1372**            |                              |                            |                                         |   |

  

|   |
|--------|
| 33     |
|        |

 

In 2014, Minera Titan staked an additional 17,000 hectares to the west and south of the past 20,000 hectare claim position in order to cover altered and mineralized rocks and the prospective strike extensions of Cordero mineralized belts. The newly staked Minera Titan claims cover ground previously withdrawn from mineral entry by a Mexico Federal Government natural gas claim. Recently the Federal Government reopened portions of the natural gas claim for mineral entry which facilitated Minera Titan staking, which brings the total project claim position to 37,000 hectares.

 

The claims are contiguous, cover the entire Cordero district and are 100% owned by Levon through Minera Titan. Two small third party claims are the only inlying claims not held by Levon and they are located on the perimeter of the Perla Felsic Dome target 5 km to the south of the resource.

 

The following table lists the five new claims staked by Minera Titan:

 

| **N****e****w Continuous Mining Claim Applications** |
|------------------------------------------------------|
| **Cl****a****i****m**                                | **S****t****a****tus** | **Ar****e****a****(****he****c****t****ar****e****s****)** | **Ow****ner** | **P****end****i****n****g** | **Co****m****ments** |
| Ostra                                                | In process | 3,799.7726 | Minera Titán 100% | Not applied until titles have been granted | The applications were submitted on June 25, 2014. The survey works of each application have be submitted on September 12, 2014. The applications are in process according Mining Law. |
| Volcán                                          | In process | 3,755.900 | Minera Titán 100% |
| Oeste                                                | In process | 3,694.7510 | Minera Titán 100% |
| Signos                                               | In process | 5,919.3928 | Minera Titán 100% |

  

If and when the SciVac Arrangement completes, Spinco will own a 100% interest in the Cordero Project through its acquired ownership of Minera Titan.

 

**Surface Exploration Rights**

 

Surface exploration rights for the Cordero Project claims that cover the principle exploration areas are maintained by separate signed agreements between Minera Titan, five private ranches, and the San Juan Ejido. The agreements are transferable. The agreement payment schedules are summarized in the following table and are being renegotiated to adjust to the current market. The agreements include rentals on core storage and field office facilities on the site.

 

|   |
|--------|
| 34     |
|        |

 

| **Agreement/Owner**                                               | **Company in the Agreement**                                             | **SignDate**               | **ExpirationDate**                                     | **Payments**                                             | **Note**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------------------------------------------|--------------------------------------------------------------------------|----------------------------|--------------------------------------------------------|----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Rancho San Luis/Jorge Luis Valles Maldonado                       | Minera Titán, S.A. de C.V.                                          | November 1, 2011           | November 1, 2015                                       | US$1,500 monthly                                         | US$1,500/mo. When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$200.00                                                                                                                                                                                                                                                                                                                                                                                |
| Ejido Rancho Cordero/José Antonio Rivas Ibarra               | Coro Minera de México, S.A. de C.V. /Minera Titán, S.A. de C.V | October 25, 2010           | December, 2014                                         | MXN$5,613.34 monthly, payable bi-monthly (amount update) | MXN$5,613.34 monthly, payable bi-monthly. When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$200.00                                                                                                                                                                                                                                                                                                                                                   |
| Rancho San Julián/Jose Alberto Rico Urbina                   | Minera Titán, S.A. de C.V.                                          | Renewal on January 2, 2014 | The time required to carry out mining exploration work | US$31,192.27 annual. 12 monthly payments of US$ 2,598.27 | 12 monthly payments of US$2,598.27 When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$200.00                                                                                                                                                                                                                                                                                                                                                          |
| "La Perla"/Arturo Alvídrez Grado                             | Minera Titán, S.A. de C.V.                                          | September 1, 2011          | The time required to carry out mining exploration work | US$ 250 (per month payable bimonthly)                    | The agreement is on hold and no monthly fees are currently being paid.

US$250 (per month payable bimonthly) When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$200.00                                                                                                                                                                                                                                                                                |
| "La Perla"/Jesús Francisco Alvídrez Grado               | Minera Titán, S.A. de C.V.                                          | September 1, 2011          | The time required to carry out mining exploration work | US$500 (per month payable bimonthly)                     | The agreement is on hold and no monthly fees are currently being paid.

US$500 (per month payable bimonthly) When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$200.00. There is an agreement of water supply (US$250 per day) and backhoe rental (US$400 for each hour of effective work and US$300 for each eight-hour wait) derived from this agreement executed on May 2, 2012. Validity: The time required to carry out mining exploration work. |
| Fernando Rascón. (Rancho San Juan)                           | Minera Titán, S.A. de C.V.                                          | April 24, 2012             | The time required to carry out mining exploration work | (No payment for access)                                  | (No payment for access) This is a letter in which Mr. Fernando Rascón Chávez (co-owner) authorizes Minera Titán to enter to "Rancho San Juan" When drilling, Titan will pay US$100.00 for each drill hole. In the case that roads are required, the cost will be US$ 200.00                                                                                                                                                                                                                               |
| Fernando Rascón (Lease of the core storage and field office) | Minera Titán, S.A. de C.V.                                          | October 1, 2014            | September 30, 2015                                     | MXN$19,500.00 monthly.                                   | MXN$19,500.00 monthly Core storage and field office facilities renewal. The rent price shall adjust according consumer index prices.                                                                                                                                                                                                                                                                                                                                                                                     |

 

|   |
|--------|
| 35     |
|        |

 

**Accessibility, Climate, Local Resources, Infrastructure and Physiography**

 

The Cordero Project area is located in the southern part of the state of Chihuahua in northern Mexico and is easily accessible by State Highway 24 from Chihuahua or Hidalgo Del Parral. The main project access is by the eastern secondary ranch road located one hundred meters north of the State Highway kilometer marker 150. The access road is currently maintained by Levon and leads 10 km to the Levon field office and core shed near the center of the Cordero Project.

 

If and when the SciVac Arrangement completes, Spinco will retain the Levon field office for its operations.

 

**Topography, Climate and Physiography**

 

The Cordero and Perla topography is gently rolling ranch land with elevations that range from 1,500 to 1,700 m and average 1,600 m.

 

The project area is located in the semiarid climatic zone of northeastern Mexico with an average annual rainfall of about 20cm which mostly falls in the months of July, August and September. Average temperature ranges between 1°C to 21°C in January and 18°C to 35°C in June. Work within the project area can be carried out year round with only occasional four wheel drive vehicles required for access during wet periods of the summer rainy season.

 

**Vegetation**

 

The dominant vegetation consists of xerophytes scrub, with sparse grassland. Cattle ranching is the dominant industry of the region with local areas of corn and sorghum production.

 

**Accessibility**

 

Chihuahua is the nearest metropolitan city which is 3 hours north on Highway 25, and has the closest international airport. Torreon is a city 5 hours southeast and also has an international airport as well as smelting facilities. A well maintained, private airport with a 9,000 ft paved landing strip suitable for jet traffic is located 25 km south of Cordero at Allende along the Parral Jimenez highway.

 

**Local Resources and Infrastructure**

 

Hidalgo Del Parral is the nearest town and logistical center. Parral is one of Mexico's oldest mining towns with a population of 120,000. Parral is a source of both skilled and semiskilled labor force that are mine oriented for exploration and for mining purposes. Additionally, the nearby mining centers of Santa Barbara and San Francisco del Oro provide another source of labor.

 

|   |
|--------|
| 36     |
|        |

 

Until 2013 small scale artisanal underground mining with contract miners were working for owners of the Herrara and Jandrina optioned claims under the Minera Titan option agreements. The artisan scale mines are centered on high grade silver veins about the Cordero felsic volcanic dome in the central resource part of the property. Mining ceased once Levon exercised the options to purchase the claims in 2013.

 

Water is available from wells and abandoned mine shafts within the project area that pierce the water table from depths of 50 m to 80 m. Currently, Levon uses these sources for drill water.

 

A two-tower electric transmission line crosses the southern part of the Cordero Project property and is within 6 km of the Cordero resource. The power is sourced from the Mexico power grid and is the main trunk line for Parral. A second power line along State Highway 24, 10 km to the east of the property, was constructed by the State of Chihuahua in 2010. The CFE, Mexico's power authority, did a study for Levon which concluded that there is sufficient power availability for the Cordero Project from the Mexico power grid.

 

**History and Exploration**

 

Prior to 2009, Valley High had consolidated a core land position in the historic Cordero high grade silver vein mining district and staked additional contiguous claims to cover a 10,000 hectare land position. Levon started exploration at Cordero in February 2009 through a joint venture agreement with Valley High. By August 2009 under Levon's direction as operator, the property was doubled to about 20,000 hectares through claim staking, to cover the Cordero Porphyry Belt and a second belt recognized to the north. Transferable surface access agreements are now in place with key surface owners for the land package. Exploration has been mostly in the central Cordero Porphyry Belt area in the southern tier of the property in the area of the 2009 discovery holes and resource grid drilling. Some initial exploration drill holes have also been completed in the Molina de Viento Caldera Daitreme Complex, the Dos Mil Diez Diatreme of the Cordero Porphyry Belt and in the Porfido Norte Belt 10 km to the north and the Perla Volcanic Center 5 km to the south.

 

In February 2009, Levon signed a Letter of Intent with Valley High, whereby Levon would earn a 51% interest from Valley High by making a cash payment of US$10,000 (CDN$12,513) (paid) and by spending CDN$1,250,000 by the end of February 2013 with a first year commitment of CDN$250,000 to explore and develop their then wholly-owned Cordero Property.

 

In February of 2009, Levon commenced field work on the Cordero Project exploring for large scale, bulk tonnage, porphyry type Ag, Au, Zn, Pb deposits, a number of which have been recently discovered in similar geologic settings in north central Mexico (Penasquito, Pitarrilla, Comino Rojo and others). Levon geologic mapping established the Cordero Porphyry Belt trends northeast and has a 15 km strike length and is 3 to 5 km wide. The belt consists of six mineralized intrusive (porphyry) centers including three newly discovered diatreme breccia complexes that have not been explored for large scale, bulk tonnage Ag, Au, Zn, Pb deposits in the past. The Cordero Felsic Dome and La Ceniza Stock have been explored and developed for high grade Ag, Au, Zn and Pb veins, mined to the water table by shallow underground shaft workings. The only past bulk tonnage deposit exploration had apparently been by Penoles in the past and confined to the northeastern most Sanson Stock intrusive center for Mo and Cu deposits and for skarn deposits in the southwestern most stock in the northern porphyry belt.

 

|   |
|--------|
| 37     |
|        |

 

In Phase 1 exploration, by October 2009, Levon had drilled three discovery core holes, which were separated by 1.3 km. The best discovery hole was in the Pozo de Plata Diatreme, which Levon first recognized early in Phase 1 and the best intercept in the Levon discovery holes was in C09-5 that intersected 152 m grading 80.64 g/T Ag, 0.61 g/T Au, 1.41% Zn and 1.22% Pb in the mineralized Pozo de Plata Diatreme.

 

Four follow up phases of exploration grid drilling were conducted to offset the initial discovery holes. The grid drilling revealed widespread, bulk tonnage mineralization among the discovery holes, which represents a large scale bulk tonnage discovery. The first indicated and inferred resources were calculated by Independent Mining Consultants ("IMC") under the regulations of the NI 43-101 reporting requirements by June 2011 near the end of Phase 3 drilling. M3 Engineering and Technology ("M3") completed a NI 43-101 Preliminary Economic Assessment on the near surface 30% of the initial resource (indicated & inferred) by January 2012 as Phase 4 drilling continued. An updated NI 43-101 resource estimate was completed on Phase 4 results in June 2012. This report was then amended and re-filed in May 2013. An NI 43-101 compliant mineral resource update report for the Cordero Project was filed in October 2014.

 

Concurrently with the resource grid drilling, exploration holes were completed to initially test a series of outlying, targets defined by geologic mapping, sampling and geophysical surveys. The geophysics included 3D induced polarization, air borne magnetic, electromagnetic and radiometric surveys, ground gravity and a high resolution magnetotellurics survey. The outlying drill results locally encountered mineralization that warrants additional exploration follow up in the future.

 

To the date of this Annual Report on Form 20-F, Levon has focused on the central mineral resource of Cordero including 2013 and 2014 exploration grid drilling of the Aida claim located in the center of the resource, which was finally acquired in July of 2013 after about 7 years of negotiations. Levon bought the claim outright for USD$2,000,000 with no underlying royalties. The Aida drill results were better than expected and were included in the updated October 2014 NI 43-101 compliant report prepared by IMC.

 

**Geological Setting and Mineralization**

 

The Cordero discovery is an emerging district centered on high level, Tertiary porphyry style, bulk tonnage, silver, gold, zinc, lead mineralization. Cordero has an ideal mining infrastructure setting, located in rolling cattle country, accessed by state highways with a main electrical power corridor cutting across a southern part of the claims. Cordero is within an emerging Chihuahua-Zactatecas regional trend of similar deposits, which includes Penasquito (Goldcorp Inc.), Camino Rojo (Goldcorp Inc.), Pitarilla (Silver Standard Resources, Inc.) and San Agustin (Silver Standard Resources, Inc.) and others. Cordero includes two porphyry belts and a third mineralized volcanic center to the south (Perla). Cordero is projected to have discovery potential for multiple bulk tonnage deposits. Drilling in 2009 through 2014 totaled 126,916 m in 274 core holes. Initial discovery holes were drilled in 2009 and the holes were subsequently offset by step out drilling on a systematic drill grid that covers the Pozo de Plata Diatreme, Josefina Mine Zone, the southwest portion of the Cordero Porphyry Zone and the La Ceniza Stock in an area that measures about 3 km by 2 km. The drilling indicates the mineralization zones combine into a large scale, bulk tonnage silver, gold, zinc, lead mineral resource.

 

|   |
|--------|
| 38     |
|        |

 

Silver, gold, zinc, lead and locally copper and moly mineralization at Cordero is controlled by a belt of six volcanic and subvolcanic, Tertiary felsic igneous rhyolite, dacite porphyry, and granodiorite porphyry, intrusive complexes, emplaced into a sequence of interbedded Cretaceous limestone, calcareous mudstone, siltstone and sandstone.

 

Geologic mapping, soils and rock chip sampling, and geophysical surveys have expanded the strike length of the mineralized Cordero Porphyry Belt to about 15 km (60% increase) since the 2009 discovery holes of Levon. The Belt is defined by six porphyry centres, all of which are mineralized and encompass targets for bulk tonnage Ag, Au, Zn, Pb type deposits. Recognition of three mineralized diatreme complexes to the southwest of the current resource and active and past mines in the Cordero district significantly expands the untested exploration potential of the belt. The depth of exposure of the six porphyry centers within the Cordero Porphyry Belt vary systematically, from a shallow exposed porphyry stock in the northeast, to progressively deeper intrusive centers toward the southwest. This district scale pattern accounts for the three high levels, poorly exposed diatreme complexes added to the southwest, and the more typical porphyry style mineralization exposed to the northeast. Recognition of this geologically controlled geometry is guiding the systematic district scale exploration.

 

Drill results reveal five types of silver, gold, zinc and lead vein mineralization:

 

|   | · | Type 1 – Narrow, high grade vein zone mineralization of galena, sphalertie and some tetrahedrite;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Type 2 – Diatreme breccia mineralization: clasts, matrix and through going veins hosted by diatreme breccia and mineralized rhyolite and dacite breccia dikes; sphalerite, argentiferous galena, minor silver sulfosalt minerals and pyrite, with rusty weathering carbonate gangue minerals and occasionally rhodocrosite. Diatreme mineralization crops out in the Pozo de Plata Diatreme discovery and is exposed to 500 m depths in the discovery drill grid;                                                                                                                                                                                                                                                                                                     |
|   | · | Type 3 – High grade, massive sulfide replacement type mineralization (mantos) within the contact zones of porphyry intrusives; coarse grained argentiferous galena, sphalerite and lessor pyrite. Type 3 mineralization is exposed only in drill holes in the Pozo de Plata Diatreme and was discovered in hole C10-31. It represents a prime high grade mineralization target type;                                                                                                                                                                                                                                                                                                                                                                                  |
|   | · | Type 4 – Disseminated and stockwork vein mineralization typical of bulk tonnage porphyry deposits: sphalerite, marmotite, argentiferous galena, minor, very fine grained silver bearing galena, pyrite and locally molybdenite, with associated rusty weathering carbonate and minor rhodocrosite gangue and alteration minerals. Porphyry style pervasive and stockwork controlled alteration assembledges, from green argillic, argillic, propyllitic, phyllic and potassic alteration are zoned toward the center of the mineralized system. Pervasive and vein, intergrown alteration minerals including rusty weathering carbonate, rhodacrosite and calcite often substitute for silica within the alteration assembledges in the near surface environment; and |
|   | · | Type 5 – Younger dacite porphyry hosted disseminated and stockwork copper and molyodenite mineralization beneath the porphyry silver, gold, zinc, lead mineralization of the resource in a northeast part of the resource (exposed in hole C11-163).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

|   |
|--------|
| 39     |
|        |

 

**Drilling**

 

The Cordero mineral resource, as set out in the Levon 2014 Tech Report is based exclusively on Levon core drilling data. A majority of the holes were drilled either in a northerly or southerly direction on a drill grid that ranges from 50 m to 200 m drill site spacing depending on the intrusive center being drilled.

 

The core drilling was conducted by HD Drilling S.A de C.V., Mazatlan, Mexico in 2009 through 2013 and Landdrill International S.A. De C.V., Mexico City in 2012, and Oretest Drilling S.A. De C.V., Mazatlan, Mexico in 2013 and 2014. The companies drilled on a contract basis using best drilling industry core drilling equipment, supplies and practices. All holes were collared with HQ diameter core and a few holes in the Cordero Porphyry Zone and the Cordero Felsic Dome had to be reduced to NQ diameter core in areas of bad ground conditions or to increase the depth penetration of the drills.

 

The borehole database was assembled by Levon and provided to IMC for use in calculating the mineral resource estimate for the Levon 2014 Tech Report.

 

**Sample Preparation, Analysis and Security**

 

All Levon drilling was core drilling. During the drilling process, Levon provided the following procedure for handling the core, logging data and preparing samples for shipment to ALS Chemex and Act Labs for sample preparation and assaying:

 

|   | 1.     | The core is drilled. Drillers put wood blocks as a footage marker in the UV resistant, plastic core boxes as they pull the core from the core barrel. Most of the core is HQ diameter (2.50 inches or 63.5 mm) core, but is reduced to NQ (1.775 inches or 45.1 mm) occasionally in rare areas of bad ground, or below 800 m hole depths to extending drilling ranges. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 2.     | The core boxes are transported from the drill rig to the Cordero core shed twice daily and laid out on the ground in the order it was drilled.                                                                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 3.     | The core is washed with a water hose by the geologist and the geology is examined, but the core is not touched.                                                                                                                                                                                                                                                        |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 4.     | The core recovery is measured and recorded using the core blocks for depth reference.                                                                                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 5.     | The core is photographed with a digital camera in the sun when possible, wet and dry.                                                                                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 6.     | The geologist completes a CoreMap (log) of the core generally within 30 minutes of when the core is first laid out and provides the DailyCoreMap for scanning and manual data entry into the MasterDailyCoreMap spreadsheet database.                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 7.     | The geologist then completes a more detailed Quicklog of the core and provides that for scanning and manual data entry into the MasterQuicklog spreadsheet database.                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                                                   |
|   | 8.     | The core is marked by the geologist for sawing and sampling.                                                                                                                                                                                                                                                                                                           |

 

|   |
|--------|
| 40     |
|        |

 

|   | 9.     | The core is sawed along the geologist's marks.                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 10.    | Core is sampled continuously through two meter sample intervals for all core drilled.                                                                                                                                                                                                                                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 11.    | The geologist prepares the Standards and Blanks and Twin list using the CoreMap and Quicklog to insert some of the Blanks (after high grade intervals for example) and standards, which are mostly randomly inserted.                                                                                                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 12.    | The core is sampled. The sample Blanks are inserted in the sample stream with a normal sequence sample number in the Core Shed. Core intervals designated by the geologist and marked for twinning is quarter sawed and each quarter sampled and included in its own separate sample bag in the normal sample sequence for analysis.                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 13.    | The core samples are bagged in rice bags for ALS Chemex (and in the latest drilling ActLabs) pickup at the core shed.                                                                                                                                                                                                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 14.    | ALS Chemex (or in the latest drilling ActLabs) is notified for sample pickup once each hole is completely sampled and there are a sufficient number of holes to fill their sample truck. A rice bag tally sheet for each shipment is prepared for the project records for each shipment by the sampling team.                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 15.    | Once the samples are ready for transfer to the assay lab, a shipment is picked up by the lab and the following procedure completes the assaying of the samples.                                                                                                                                                                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 16.    | The lab takes custody of the samples and drives them to their Chihuahua sample preparation facility for processing. The labs ship the sample pulps to their Vancouver labs for analysis.                                                                                                                                                                                                                                                                        |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 17.    | The ALS Chemex lab in Vancouver contacts Levon when each shipment of sample pulps arrives. Levon inserts the numbered Standards into the sample stream before the pulps are analyzed by ALS Chemex. For the recent ActLab analyses Levon assembled standard, twin and blank QAQC sample numbered envelopes shipped with the core samples. ActLabs then prepared the samples and inserted the Levon QAQC samples in to the sample stream in sample number order. |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 18.    | The labs email the preliminary and final lab results to Levon and the results are compiled into the MasterDH and ALSChemexDH spreadsheet databases and more recently into an Access database for the entire project.                                                                                                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 19.    | The labs email the final signed and scanned assay certificates, which are compiled and archived.                                                                                                                                                                                                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | The Cordero data base assays were run by ALS Chemex and more recently ActLabs (from hole C13-251), which are ISO-certified laboratories. The sample preparation and assaying procedure is:                                                                                                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 20.    | Split core samples were prepared for assaying at the labs in Chihuahua by drying and crushing to 85% minus 10 mesh, followed by riffle-splitting and pulverizing to 95% minus 150 mesh.                                                                                                                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 21.    | Assaying was performed at the ALS Chemex lab (or ActLabs after hole C13-251) in Vancouver, B.C. Gold analyses were performed by 30-gram fire assay with atomic absorption finish. Silver, zinc and lead were analyzed as part of a multi-element inductively coupled argon plasma package using a four-acid digestion with over-limit results reanalyzed using ICP-atomic emission spectroscopy.                                                                |

   

**Mineral Resource Estimates**

 

The Cordero September 2014 mineral resource estimate is based on 245 drill holes completed through April 2014. A total of 274 holes have been drilled at Cordero of which 245 lie within the mineral resource block model volume. The mineral resource presented here is for the currently defined Pozo de Plata Diatreme ("Pozo"), the Cordero Felsic Dome and the adjacent Porphyry Zone to the northeast along the strike of the Cordero Porphyry Belt. Outlying initial exploration drilling has intersected mineralization, but no high grade discovery holes that warrant immediate offset, resource definition drilling.

 

|   |
|--------|
| 41     |
|        |

 

The mineral resource is tabulated within an open pit geometry using an inverse distance estimation block model. The mineral resource is based on 120,239 m of drilling in 245 core holes which is an addition of 19,396 m of drilling in 36 core holes over the drill information used for the June 2012 mineral resource estimate.

 

The mineral resource crops out at the surface. The resource has not been fully delineated by drilling along most of it perimeter nor at depth down the plunge to the northeast. Within the geometry of the modeled open pit containing the resource, rock in largely undrilled areas has been modeled as unmineralized waste rock. The resulting present calculated stripping ratio (modeled waste to ore) is 1.2 to 1.

 

A silver equivalent grade in grams per tonne ("g/t") is calculated for each model block based on the metal grades, estimate of mill recovery from two rounds of metallurgical testing for each metal and the metal prices. A summary of the recoveries and metal prices is as follows:

  

| **Metal** |   | **Mill Recovery** |   |   | **Metal Price** |   |
|-----------|--------|-------------------|--------|--------|-----------------|--------|
| Silver    |   |                   | 85.0   | %      |            | $      | 20.00/oz |   |
| Gold      |   |              | 18.0   | %      |            | $      | 1250/oz |   |
| Zinc      |   |              | 81.0   | %      |            | $      | 0.94/lb |   |
| Lead      |   |              | 80.0   | %      |            | $      | 0.95/lb |   |

  

The use of a silver equivalent ("AgEq") to represent the value of the deposit in the September 2014 resource estimate is a change from the previous mineral resource estimates where a NSR was used. This change is to provide the deposit value in a format consistent with the reporting by other polymetalic resource companies.

 

The September 2014 mineral resource is summarized in the table below at a 15.0 g/t AgEq cutoff grade. The major change from the June 2012 mineral resource is the drilling within the Aida claim which was purchased by Levon subsequent to the June 2012 mineral resource and no mineralization on the Aida claim included in the June 2012 mineral resource estimate. The additional drilling also allowed portions of the previous inferred resource to be re-classified as indicated. The mineral resource is within an open pit geometry based on a standard floatation mill with separate zinc and lead circuits, the mill recoveries, operating costs for process, general and administrative expenses and mining, and the post property costs for concentrate shipping and treatment.

 

| **Class** |   | **ktonnes (metric tonnes X 100)** |    |   | **AgEq, g/t** |   |   | **Ag, g/t** |   |   | **Au, g/t** |   |   | **Zn, %** |   |   | **Pb, %** |   |
|-----------|--------|-----------------------------------|---------|--------|---------------|--------|--------|-------------|--------|--------|-------------|--------|--------|-----------|--------|--------|-----------|--------|
| Indicated |   |                                   | 848,462 |   |          |        | 41.03  |        |   |        | 17.91       |   |   |           | 0.050  |   |      |        | 0.479 |   |   |  | 0.254 |   |
| Inferred  |   |                              | 92,158  |   |          |   | 31.39  |        |   |   | 15.00       |   |   |      | 0.029  |   |      |   | 0.327 |   |   |   | 0.195 |   |

  

| **Contained Metal** |   | **Ag, ounces** |        |   | **Au, ounces** |   |      | **Zn, billionpounds** |   |   | **Pb, billionpounds** |   |
|---------------------|--------|----------------|-------------|--------|----------------|--------|-----------|-----------------------|--------|--------|-----------------------|--------|
| Indicated           |   |                | 448,494,796 |   |           |        | 1,366,129 |                  |   |        | 8.953                 |   |   |  | 4.742 |   |
| Inferred            |   |           | 44,448,039  |   |           |   | 84,746    |                  |   |   | 0.663                 |   |   |   | 0.397 |   |

 

*Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to the Indicated or Measured mineral resource category.*

 

|   |
|--------|
| 42     |
|        |

 

***Cautionary Note to U.S. Investors:****Mineral resources in the categories reported in the table above are not recognized by SEC Industry Guide 7. The Cordero Project does not have any known Guide 7 compliant mineral reserves. Investors should not assume that any minerals in these categories will ever be upgraded to reserves. See “Cautionary Note to United States Investors Concerning Reserve and Resource Estimates” above.*

 

***Exploration Costs***

 

Exploration expenditures to date total about $32 million. The Company has completed 126,916 metres of core drilling in 274 core drill holes in four Phases of exploration to date. Phase 4 exploration also includes advancing the engineering studies of the project including water and power supplies, metallurgy, preliminary mine design and a current resource update study by Independent Mining Consultants (IMC) in collaboration with M3 Engineering and Technology (M3) both in Tucson, Arizona.

 

***Proposed Exploration***

 

At Cordero, the latest 2014 mineral resource remains open to expansion since it has not yet been fully delineated with step out drill holes. The Company expects to follow the recommendation of the 2014 updated Cordero resource report for additional metallurgical testing and economic modelling in the future.

 

***Exploration Potential***

 

Cordero Project geology, metal assemblages and scale of the porphyry controlled mineralized centers recognized by Levon appear to be most analogous with the Penasquito mine of Goldcorp. The Company believes Cordero Project geology, mineralization and exploration results to date support and extend this geologic analogy. The initial Levon Cordero Project discovery was (hole C09-5) centered on a diatreme breccia (news release of November 3, 2009) directly analogous with the Penasquito open pit deposits.

 

Levon recognition of porphyry controlled Ag, Au, Zn, Pb mineralization 1 km to the northeast (hole C09-8) (news release of November 3, 2009) lead to the application of porphyry exploration model, well known around the world, to guide Cordero Project exploration. The resource grid drilling defines a bulk tonnage mineralized zone about 3 km long and 2 km wide to maximum depths of 1.2 km. The mineralization is largely open to expansion by drilling on strike and at depth.

 

Geologically important, younger porphyry style copper and molybdenite mineralization has been intersected in a northeast part of the Cordero resource at depth (in hole C11-163 from 900 to1,200 m) and also possible zinc porphyry, and replacement mineralization beneath the Pozo de Plata Diatreme. Both these geologic occurrences will require future deep exploration follow up.

 

Outlying Cordero exploration away from the resource encountered mineralization that requires future exploration drilling to fully evaluate the significance. Cordero geology, metal assemblages and scale of the porphyry controlled mineralized centers appear to be most analogous with the geology of the Penasquito mine of GoldCorp. We believe Cordero geology, mineralization and exploration results to date support this analogy and point to this scale of upside discovery potential at Cordero. Cordero is in the advanced resource delineation stage in and around the September 2014 published resource and the early exploration stage at depth beneath the resource and in outlying targets within the porphyry belts and the Perla mineralized volcanic centre.

 

|   |
|--------|
| 43     |
|        |

 

***Environmental Liabilities***

 

The Company is not aware of any environmental liabilities at the Cordero Project. M3 was contracted to complete an environmental audit and to handle exploration permitting for the drilling, which it successfully completed. Drilling disturbances have all been reclaimed to meet permitting requirements.

 

***Risks***

 

The following risk issues have been identified for the Cordero Project:

 

|   | 1) | Cordero as currently understood is a low grade, bulk tonnage deposit which will need complete reserve definition, the indicated favorable metal recoveries, favorable metal prices and low operating costs to be developed. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

  

***Norma Sass and Ruf Claims, Nevada, USA***

 

 

 

The Company does not currently consider this property to be a material property of the Company. This property is an exploration stage property and is without known reserves, as defined in SEC Industry Guide 7.

 

***Ownership***

 

In 2003, the Company acquired a 33.33% interest in 59 mineral claims known as the Norma Sass and Ruf Claims from Coral Gold Resources Ltd. (“Coral”) a public company related by common directors. The property consists of 36 mining claims (the Norma Sass claims) and 23 claims (the Ruf claims) and is located in the state of Nevada.

 

|   |
|--------|
| 44     |
|        |

 

***Location & Access***

 

 Access to the property from Elko, Nevada, is via Highways 80 and 306, a distance of approximately 102 kilometers to the community of Crescent Valley and then 19 kilometers south on highway 306 to the Ruf and approximately 25 kilometers south on highway 306 to Norma Sass. A four-wheel drive vehicle is usually necessary to access all roads on the property. There is no underground or surface plant or equipment located on the Norma Sass or the Ruf claims.

 

***History & Exploration***

 

During fiscal year 2005, Coral and Levon (collectively, the “Companies”) entered into an Agreement with Agnico-Eagle Mines Ltd. (“Agnico”) wherein the Companies granted Agnico an option to purchase 100% interest in the property subject to a 2.5% royalty to the Companies in consideration of minimum advance royalty payments (in US dollars) and minimum work commitments. During fiscal year 2006, Agnico completed the first 13,000 feet of drilling. The program included six vertical drill holes varying in depth from 1,665 to 1,975 feet. All six holes encountered alterations, silification and sulfidation in Lower Plate rocks, and two holes intersected gold. While the results were considered positive, in February 2007, Agnico notified the Company that it would not be continuing its option on the Company’s Norma Sass property because of other corporate priorities.

 

In September 2008, the Company and Coral’s wholly-owned U.S. subsidiary, Coral Resources, Inc. (“CRI”) entered into an exploration, development and mine operating agreement (the “Agreement”) with Barrick Gold Exploration Inc. (“Barrick”), wherein Barrick is granted the option to acquire up to a 75% interest in CRI’s and the Company’s interests in the Norma Sass Property, Nevada, consisting of 36 unpatented mining claims.

 

Barrick may earn a 60% interest by incurring total exploration expenditures of at least US $3 million in annual installments by December 31, 2014. Barrick may earn an additional 10% (for an aggregate interest of 70%) by incurring an additional US $1.5 million by December 31, 2015. Barrick may earn an additional 5% (for an aggregate interest of 75%) by carrying CRI and the Company through to commercial production. Alternatively, at the time of earning either its 60% or 70% interest, Barrick may be given the option to buy-out CRI’s and the Company’s joint interest by paying US $6 million and granting them a 2% net smelter returns royalty.

 

During 2009, Barrick announced that plans were underway to do target delineation work in the second quarter followed by deep drilling in the third quarter on the Norma Sass property. The proposed drilling has target depths in the order of approximately 1,800 to 2,000 feet to test structural and geochemical targets in the Lower Plate carbonate sequence, with the potential to go deeper as the rock dictates.

 

In October 2009, Barrick commenced drilling hole NS 09-01 targeting the lower plate carbonate sequence. This hole was drilled at 70 degree dip on a northwesterly azimuth across a SW-NE striking fault which trends into Barrick’s Gold Acres pit one mile to the northeast and is thought to be related to mineralization at Gold Acres. The hole was started using a reverse circulation drill which encountered recovery problems at a depth of 1,680 feet and was replaced by a core drill which completed the hole to a final depth of 2,586 feet. The lower plate and Wenban Limestone were intersected starting at a depth of 1,330 feet and Roberts Mountain Formation was encountered from 1,830 feet to the bottom of the hole. These formations are the major host rocks for the gold deposits at the Pipeline, Gold Acres and Cortez Hills mines.

 

|   |
|--------|
| 45     |
|        |

 

In September 2010, Barrick elected to terminate the agreement.

 

The Company intends to return ownership of the claims to Coral Gold.

 

***Mineral Reserves***

 

As at the date of this report, the Norma Sass and Ruf Claims are without known Mineral Reserves, nor any known body of commercial ore and any activities carried out on the claims are exploration in nature.

 

***Eagle Claims, Nevada, USA***

 

 

 

The Company does not currently consider this property to be a material property of the Company. This property is an exploration stage property and is without known reserves, as defined in SEC Industry Guide 7.

 

***Ownership***

 

The Company holds a 50% interest in the Eagle Claims, subject to a 3% net smelter royalty. The property consists of 45 lode claims (approximately 646 acres), known as the Eagle 15 to 50 and Eagle 53 to 61.

 

***Location & Access***

 

The Norma Sass, RUF and Eagle claims are located in Corral Canyon, in Lander County, Nevada. Access to the property is through Elko, Nevada, a regional mining supply center, via Highways 80 and 306, a distance of approximately 90 kilometers and then an additional 13 kilometers on a gravel access road from the community of Crescent Valley. A four-wheel drive vehicle is usually necessary to access all roads on the property. There is no underground or surface plant or equipment on the property.

 

|   |
|--------|
| 46     |
|        |

 

***History & Exploration***

 

The Company has not conducted exploration on the Eagle property since 1997 when a surface geophysical exploration program was conducted. In 2002, when the Company decided not to conduct further work on the property, the property was written down to a nominal value of $1 by a charge to operations of $232,170. Although the Company has no further plans to explore the property it keeps the claims in good standing by paying its 50% of the cost (approximately US $3,500 annually) in holding fees and taxes with the intent of selling the property, if and, when the opportunity presents itself.

 

***Mineral Reserves***

 

As at the date of this report, the Eagle Claims are without known Mineral Reserves, nor any known body of commercial ore and any activities carried out on the property are exploration in nature.

 

***Congress, BRX and Wayside Properties***

 

***Introduction***

 

The Company owns eight Crown Granted mineral claims, three mining leases, and 25 mineral title claim units covering a total area of approximately 4,584.5 hectares (11,328.5 acres) in the Lillooet Mining Division, British Columbia, Canada. There are three project areas within the claim group: Congress, BRX and Wayside. The mining leases cover an area of 185.5 hectares (458.4 acres). The mineral claims consist of 3 four-post, 7 two-post with a total area of 525 hectares and 15 converted cell titles, consisting of 199 cells with a total area of 4399 hectares (1,870.2 acres).

 

Crown Granted mineral claims may have surface, water and timber rights attached, in addition to the precious and base mineral rights. They are treated as fee simple, similar to patented mineral claims in other jurisdictions. Crown Granted mineral claims are kept in good standing by payment of mineral land or rural land taxes due annually on July 1. There is no work requirement.

 

Mining leases are maintained by the payment of annual rental fees of $20 per hectare per year. The annual rental requirement for the three mining leases is $3,709.60

 

Mineral claims are kept in good standing by carrying out and documenting work programs or paying cash in lieu. Recording work or paying in lieu must be completed prior to the anniversary date of the claim units. Work requirements and cash in lieu of work is rated a scale that groups titles into 2 year segments; i.e. years 1-2 work requirement is $5 per hectare, years 3-4 work requirement is $10 per hectare, years 5-6 work requirement is $15 per hectare, year 7 and above is $20 per hectare. Cash in lieu of work is twice the annual work requirement and can only be paid for a minimum of six months or a maximum of twelve months. Reverted Crown Granted claims are treated the same as mineral claims.

 

All of the properties are contiguous and in good standing.

 

|   |
|--------|
| 47     |
|        |

 

***Congress Property, British Columbia, Canada***

 

 

 

The Company does not currently consider this property to be a material property of the Company. This property is an exploration stage property and is without known reserves, as defined in SEC Industry Guide 7.

 

***Ownership***

 

The Company owns a 50% interest in 10 mineral claims, three mineral leases, one reverted Crown Granted mineral claim and eight Crown Granted mineral claims in the Lillooet Mining Division, British Columbia, covering approximately 2,077.1 hectares (5,132.6 acres). The registered owner of the properties is Levon Resources Ltd. District Lot 7237 Stibnite No. 2 holds the surface rights in addition to mineral rights. The mineral claims were purchased from a company with common directors. Six of the claims are in good standing until December 25, 2022 and the remainder are due December 25, 2017. All of the claims are contiguous.

 

The Congress claims are subject to a Joint Venture Agreement dated February 25, 1983 between the Company and Veronex Resources Ltd. (“Veronex”). In 1983 Veronex earned a 50% net interest in the claims (net of a 5% net smelter royalty) held by the Company, by expending $1,000,000 on the property. Under the terms of the Joint Venture Agreement each party is equally responsible for expenses of the joint ventures. In the event that a party is unable to pay its portion of expenses, such party’s interest in the joint venture will be diluted. Exploration under the Joint Venture ceased in 1989. During recent fiscal years, with funding made available through equity financing, exploration activities have recommenced with the Company incurring 100% of expenditures.

 

The Company is seeking buyers to purchase the claims.

 

|   |
|--------|
| 48     |
|        |

 

***Location & Access***

 

Located on the north side of Carpenter Lake British Columbia’s historic gold producing Bridge River region, the Congress Property is a long standing mining property that supported past high grade gold vein production from three portal entry underground workings. The property is easily available by road.

 

***Geological Setting***

 

The property covers Mississippian to Middle Jurassic rocks of the Bridge River Complex, mainly submarine basalt and andesite, with minor chert, argillite and mafic intrusives. These rocks are cut by northwest trending regional scale structures, some with contained Tertiary feldspar porphyry dacite dykes, sub-parallel to the Ferguson and Cadwallader Structures, which bound the historic Bralorne/Pioneer mines. The structures on the property are roughly the same distance from the Upper Cretaceous-Tertiary granitic Bendor Intrusions as the Bralorne/Pioneer mines. The Bendor Intrusions are the same age as the mineralization in the Bralorne/Pioneer mines and are a postulated source for the gold mineralization at these mines and on the Congress Property.

 

***Deposit Types and Mineral***

 

The deposits on the Company’s property are members of a well-recognized group of deposits referred to as mesothermal, orogenic or greenstone hosted quartz-carbonate gold vein deposits. These deposits include the Mother Lode and Grass Valley districts in California and most of the greenstone hosted gold deposits in the Canadian shield, including the Timmins-Val d’Or, Red Lake and Hemlo camps. These deposits are quartz carbonate veins in moderately to steeply dipping brittle-ductile shear zones and, locally, in shallow dipping extensional fractures.

 

Mineralization in the Howard Zones consists of quartz-carbonate veins or stringer zones one to 1.5 meters wide, with altered, mineralized selvages (pyrite, siderite) up to 10 meters total width hosted in basalt and gabbro. The zones strike north to a few degrees west of north and dip steeply to the west. The Howard Zones contain the largest and highest grade resource on the property, with over 100,000 ounces of gold contained in all resource categories totaling more than 300,000 tonnes greater than 10 grams per tonne gold. These resources are refractory and would require oxidation of sulphides to recover the gold.

 

Mineralized areas in the Lou Zone are stockwork quartz carbonate stringers and silicified zones on the flank of a feldspar porphyry dyke hosted in mafic volcanics. The zone strikes north and dips steeply west. The better mineralized zones are 1.5 to 4.0 meters wide and grade 5 to 11 grams gold/tonne and contain abundant stibnite. The Lou Zone has been oxidized for 2 to 5 meters below surface near the decline portal where a small open pit resource has been outlined.

 

|   |
|--------|
| 49     |
|        |

 

The better mineralized areas in the Congress Zone, including the 2004 trenches, are massive stibnite veins, 1.25 to 1.5 meters wide, grading 6 to 8 grams gold per tonne hosted in argillite, chert and very sheared mafic volcanic rocks and again, striking north and dipping steeply west. These showings are considered exploration targets for possible future work.

 

***Permitting***

 

The Company holds a Free Miners Certificate (“FMC”) #115631, expired effective February 27, 2015. The Company can renew this FMC at any time when further work is planned. Claim holdings can be renewed either by filing assessment reports or paying the cash in lieu fees, as described above under Property Description and Location. Any exploration work utilizing mechanical disturbance, such as drilling or trenching, requires a permit and posting a reclamation bond. The Company currently has $32,629 in bonds held with the provincial government against existing reclamation liabilities.

 

The Company believes that it holds all necessary licenses and permits under applicable laws and regulations and believes that it is presently complying in all material respects with the terms of such licenses and permits. There can be no guarantee that the Company will be able to obtain or maintain all necessary licenses and permits as are required to explore and develop its properties, commence construction or operation of mining facilities and properties under exploration or development or to maintain continued operations that economically justify the cost.

 

***History and Exploration*********

 

These mineral claims were subject to a Joint Venture Agreement dated February 25, 1983 between Levon and Veronex Resources Ltd. (“Veronex”). Exploration under the Joint Venture ceased in early 1989 when Veronex ceased to contribute to the joint venture’s expenses. During recent fiscal years, with funding made available through equity financing, exploration activities have recommenced with the Company incurring 100% of expenditures.

 

The Congress Zone was discovered in 1913 and has been explored and mined intermittently since then. Significant periods of activity occurred in 1933, when a 1,000 ton bulk sample was mined for metallurgical tests, and 1945-1950, when the vein was developed on 5 underground levels and some mineralized material stopped.

 

The Howard Zone was discovered in 1959 and explored by Bralorne-Pioneer Mines Ltd. who put in approximately half of the Lower Howard workings between 1960 and 1964. The Company carried out surface and underground drilling and drifting between 1976 and 1988 when the rest of the Lower Howard and the Upper Howard workings were excavated.

 

The Lou Zone was discovered following up on soil geochemical anomalies and VLF-em geophysical anomalies in 1984. Extensive surface drilling was carried out from 1984 to 1988 and a 300 metre trackless decline was driven in the footwall of the zone in 1989. Significant work was suspended until 2004 because of low gold prices. A mechanized trenching program on the northern extensions of the Lou and Congress zones was carried out in the fall of 2004. A diamond drill program was carried out on the Howard Zone in December 2004 and January 2005.

 

|   |
|--------|
| 50     |
|        |

 

Since May 2007, Levon has undertaken three phases of surface exploration to locate new gold bearing structures on its Congress property situated in the Bridge River Gold Camp. The three phases include prospecting, MMI soil grids, trenching by hand and with an excavator. Prospecting has been successful with the relocation of three previously known showings that have received little exploration work in the past and has also led to several other new discoveries. Most of the relocated target zones are found along the south side of the Gun Creek Canyon, on the north central portion of the Congress Property, and are contained in an area 100m wide by 600m long. The zones found in this area have a general east west trend as opposed to the Congress, Lou and the Howard Zones, that have a north-south trend. Detailed geological mapping will be conducted to determine where diamond drill holes should be placed to test the gold bearing structures found in this area of Gun Creek.

 

In November 2007, the Company announced the approval of a 16-hole (5,000 metres) diamond drill program by the BC Ministry of Mines. The drill program was designed to offset high grade surface gold showings discovered in September 2007, test the size potential of newly recognized porphyry gold controls on high grade stockwork vein zones in Gun Creek Canyon in a northern part of the property and test the northern strike projection of the high grade Lou Gold Zone toward Gun Creek.

 

****During 2008, the Company announced that the first three holes of a 16-hole (5000 m) drill program, proposed in October, 2007 were drilled, logged, split and sampled. The drilling campaign was designed to test the strike and dip projections of high grade gold showings discovered in 2007 by rock chip sampling and hand trenching on the north slopes of Gun Creek canyon in a north part of the property.

 

Drill holes in the campaign were laid out to test for bulk tonnage type gold deposits within the Gun Creek intrusive complex mapped in Gun Creek canyon.

 

The first three holes cut altered rocks of the intrusive complex and its host rocks. The intrusives, particularly in their contact zones with host rocks, are occasionally veined and contain sparse, coarse to very fine grained stibnite, an antimony sulfide mineral. Surface rock chips generally show a good correlation of Au with stibnite, but vein controlled pyrite also accounts for some of the high grade gold samples at surface. On this basis and since most of the intrusive rocks drilled are altered with abundant disseminated pyrite and at least some sparse pyrite-rich veining, the entire holes have been sampled for assay. No wide stockwork or vein zones (>10m) were cut by the early holes.

 

In September 2008, the Company released the Congress Property, B.C. Drilling Summary Report including the 3m wide intercept grading of 0.395 ounces per ton Au. The drill holes tested part of the newly recognized Gun Creek dacite stock mapped in a northern part of the property for bulk tonnage gold deposits. Three angle core holes (1,048m total) confirm the presence of Au beneath gold showings prospected at the surface, which are associated with veins and veined zones. Such vein zones have been explored and mined at the Congress and Howard mines in the past. The holes confirm that the surface stockwork vein mineralized zones in the dacite porphyry dikes and sills, narrow down dip and along strike in the vicinity of the holes. The 2008 Program was suspended at 3 holes.

 

|   |
|--------|
| 51     |
|        |

 

***Proposed Exploration***

 

The Company has no plans to carry out exploration activities on the Congress property in the future and the property is for sale.****

 

***Environmental Liabilities***

 

The Company is not aware of any environmental liabilities.

 

***Goldbridge Claims (also known as the BRX claims), British Columbia, Canada***

 

** **

 

The Company does not currently consider this property to be a material property of the Company. This property is an exploration stage property and is without known reserves, as defined in SEC Industry Guide 7.

 

***Ownership***

 

The Company held a 100% interest in the Goldbridge Property, also known as the BRX claims, until fiscal 2002 when Mill Bay Ventures Inc. (“Mill Bay”), a public company related by common directors, earned a 50% interest in the property by incurring $300,000 in exploration expenditures on the property and issuing to Levon 300,000 common shares. Mill Bay Ventures underwent a corporate reorganization and change of name to Great Thunder Gold Corp in 2013 and its interest in the BRX property was transferred accordingly.

 

The BRX property consists of nine mineral claims, including eight legacy ground-staked units and one converted cell claim. All units are contiguous and in good standing.

 

|   |
|--------|
| 52     |
|        |

 

***Location**& Access***

 

The BRX property lies south of Gold Bridge, centered at approximately latitude 50°50' N, longitude 122° 50' W and encompasses nine claims of which one converted cell claim covers reverted crown grants and eight legacy claims.**These claims form one contiguous parcel and cover an area of approximately 1,814.5 hectares (4,550.4 acres). The claims are accessible via Highway 99 North from Vancouver through Squamish and Whistler to Pemberton. From May to November, access can be obtained by turning left through Pemberton, then right along the Pemberton Meadows Road for 23 km to the Hurley River Road, which passes the Outdoor School and is followed for 50 km to Highway 40, approximately 0.25 km west of Gold Bridge. In winter continue on Highway 99 past Pemberton to Lillooet, then 110 km west along the Carpenter Lake Road (Highway 40) to Gold Bridge.

 

***History***

 

Between 1984, when the property was acquired, and 1986, the Company carried out a re-evaluation involving line cutting, soil sampling, geological mapping, VLF-EM surveys and back-hoe trenching followed by underground sampling and mapping at the *California*2 level and *Why Not*adits and in 1987, drilled 518 m over six short holes on the Rand zone. In addition two holes of 307 m aggregate were drilled on a quartz vein in the Hurley river bed, about 350 m south of the *Arizona*portal. In late 1994 trenching and drilling on targets located in 1985 found that the gold was generally low grade.

 

Levon owns a 50% interest in 74 mineral claims. During fiscal 2005, the option was satisfied and Levon’s interest in the property was reduced to 50%. During 2007 and 2008, Mill Bay incurred $67,198 and $25,016, respectively of deferred expenditures on the BRX claims, which were not proportionately funded by Levon. Mill Bay waived the requirement of proportionate funding by Levon on these specific expenditures; notwithstanding this waiver, the terms of the Joint Venture Agreement were ratified by Mill Bay and Levon to remain in effect. During 2008, the Company reopened the Arizona portal to the Goldbridge Property to sample the adit for tungsten to determine future exploration.

 

The Company obtained a permit number MX-4503 dated June 27, 2003 and amended March 24, 2004 for which underground development is approved for exploration on vein for a total of 60 m. A permit issued in 1994 for trenching and drilling on the property is still extant and for which a reclamation bond of $3,500 remains with the provincial government.

 

***Proposed Exploration***

 

******The Company has no plans to carry out exploration activities on the BRX in the next fiscal year. The cell claim is in good standing until December 25, 2017 and the two-post mineral claims are in good standing to December 25, 2022.

 

As at the date of this report, the Goldbridge Claims (BRX) is without known Mineral Reserves, and any activities carried out on the property are exploration in nature.

 

***Environmental Liabilities***

 

The Company is not aware of any environmental liabilities.

 

|   |
|--------|
| 53     |
|        |

 

***Wayside Property, British Columbia, Canada***

 

 

 

The Company does not currently consider this property to be a material property of the Company. This property is an exploration stage property and is without known reserves, as defined in SEC Industry Guide 7.

 

***Ownership***

 

In 1997 the Company acquired a 100% interest 27 mineral claims, converted into three cells, known as the Wayside claims for $5,000. There has been no exploration activity on the claims nor are there future plans to conduct exploration at this time. The claims are considered of merit and we will continue to maintain them in good standing. The Company wrote the claims down in fiscal 2002 to $1 by a charge to operations of $37,079. Subsequently in 2007, the Company incurred exploration expenditures in the amount of $9,088.

 

***Location & Access***

 

Located on the north side of Carpenter Lake British Columbia’s historic gold producing Bridge River region. The property is easily available by road.

 

***Proposed Exploration***

 

As at the date of this report, the Wayside Property is without known Mineral Reserves, and any activities carried out on the property are exploratory in nature.

 

|   |
|--------|
| 54     |
|        |

 

**Item 4A. Unresolved Staff Comments**

 

Not Applicable.

 

**Item 5. Operating and Financial Review and Prospects**

 

**Critical Accounting Estimates and Policies**

 

Some of our critical accounting policies are as follows. See Note 3 to the March 31, 2015 consolidated financial statements for a detailed description of our accounting policies.

 

**Exploration and evaluation assets**

 

The Company is in the exploration stage with respect to its mineral properties. The Company capitalizes all costs relating to the acquisition of mineral claims, and expenses all costs relating to the exploration and evaluation of mineral claims.

 

All exploration and evaluation expenditures are expensed until properties are determined to contain economically viable reserves. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the subsequent costs incurred for the development of that project will be capitalized as mining properties, a component of property and equipment.

 

**Impairment**

 

At each reporting date, the carrying amounts of the Company’s exploration and evaluation assets and property and equipment are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an orderly transaction between market participants. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

 

|   |
|--------|
| 55     |
|        |

 

**Provisions**

 

Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to the passage of time is recognized as accretion expense.

 

**Reclamation provision**

 

The Company records the present value of estimated costs of legal and constructive obligations required to restore mineral properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation and re-vegetation of affected areas.

 

The fair value of the liability for a rehabilitation provision is recorded when it is incurred. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related exploration and evaluation assets. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability, which is accreted over time through periodic charges to profit or loss. Additional disturbances or changes in rehabilitation costs will be recognized as additions or charges to the corresponding assets and rehabilitation liability when they occur.

 

**Accounting for equity units**

 

Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated based on their relative fair values, calculated using the Black-Scholes option pricing model for warrants and the market price for common shares.

 

**Significant accounting judgements and estimates**

 

The preparation of financial statements requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. In particular, significant judgments made by management in the application of IFRS during the preparation of the consolidated financial statements and estimates with a risk of material adjustment are:

 

***Critical accounting judgments***

 

*(a) Realization of exploration and evaluation assets and impairment*

 

The investment in exploration and evaluation assets on the Cordero Project comprise a significant portion of the Company’s assets. Realization of the Company’s investment in the exploration and evaluation assets is dependent upon the Company obtaining permits, the satisfaction of local governmental requirements, obtaining drill results that support an economically viable mining operation, the attainment of successful production from the properties, or from the proceeds upon disposal of the Company’s properties. Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines.

 

|   |
|--------|
| 56     |
|        |

 

At each financial position reporting date, the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit (“CGU”) to which the asset belongs.

 

At March 31, 2015, there were indicators that suggest that the Company’s investment in exploration and evaluation assets on the Cordero Project is impaired, and as such, the Company recognized an impairment (See “Item 5. Operating and Financial Review and Prospects – A. Operating Results” for further details).

 

*(b)**Functional currency*

 

The determination of the functional currency for the Company and each of its subsidiaries was based on management's judgment of the underlying transactions, events and conditions relevant to each entity.

 

***Critical accounting estimates***

 

*(c)**Estimated recoverable value of exploration and evaluation assets*

 

The recoverable amount is the higher of fair value less costs to sell and value in use. The Company estimated the recoverable value on Cordero based on key assumptions of the fair value less costs to sell as described below. Should the key assumptions change, it will have a material impact to the amount of impairment recognized and the carrying value of Cordero.

 

Subsequent to the year ended March 31, 2015, the Company obtained an opinion of value on Cordero. It was determined that the recoverable value of the Project based on fair value less costs to sell is approximately $50,000,000 using a median of three valuation methods, including adjusted appraised value based on historical costs, comparables approach based on resource value and attributed share of market capitalization as secondary corroboration. Key assumptions in the adjusted appraised value include the amount that historical expenditures have added to the project value and the market to book value ratio estimate. Key assumptions in the comparables approach include the percentage taken of published median metal prices of deposits with contained metal reflecting Cordero’s resource estimates and grades.

 

*(d)**Valuation of derivative financial instruments*

 

The valuation of the Company’s derivative financial instruments involves estimation and judgment by management. In determining these amounts, the Company uses option pricing models or other valuation techniques. Changes in these assumptions and estimates can have an impact to the relevant charge to the consolidated statement of comprehensive income (loss). The Company estimated a value of $nil for the option to convert the convertible senior secured debenture into common shares.

 

|   |
|--------|
| 57     |
|        |

 

*(e)**Environmental*

 

The Company assesses its provisions for environmental rehabilitation on an annual basis or when new material information becomes available. Provisions for environmental rehabilitation require management to make estimates of the future costs of the work required to comply with legal or constructive obligations. Actual costs incurred may differ from those amounts estimated. Future changes to environmental laws and regulations could increase the extent of work required to be performed, which could materially impact the amounts charged to operations for provisions for environmental rehabilitation.

 

At March 31, 2015 and 2014, the Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company.

 

*(f)**Impairment of marketable securities*

 

Management assesses at the end of each reporting period whether there had been any other-than-temporary impairment on its investments, using objective evidence to determine if the marketable securities are impaired. Listed prices on public stock exchanges are used to determine if the fair value is at a significant and prolonged decline below the historical cost of the marketable securities.

 

At March 31, 2015 and 2014, there are no indications that suggest that the Company’s marketable securities are impaired.

 

*(g)**Recoverability of amounts receivable*

 

The balance in amounts receivable includes value added taxes to be recovered in Mexico. At each financial position reporting date, the carrying amounts of the Company’s amounts receivable are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

 

The Company is corresponding with the Mexican government to recover the Mexican value added tax and the estimate is based on the amount of eligible expenditures calculated by management. Actual amount receivable from the government may be lower. At March 31, 2015 and 2014, there are no indications that suggest that the Company’s Mexican value added tax is not recoverable.

 

|   |
|--------|
| 58     |
|        |

 

*(h)**Valuation of share-based payments*

 

The fair value of share-based payments is subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate.

 

*(i)**Income taxes*

 

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. The Company is subject to assessments by various taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. The Company provides for such differences where known based on management’s best estimate of the probable outcome of these matters

 

While management believes that these judgments and estimates are reasonable, actual results could differ from those estimates and could impact future results of comprehensive income (loss) and cash flows. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant changes in estimates during the fourth quarter of the year ended March 31, 2015 relate to the impairments to exploration and evaluation assets and the convertible debenture and are discussed in Note 4 and Note 8 of the Financial Statements.

 

**Operating Results**

 

The following discussion is intended to supplement the audited consolidated financial statements of the Company for the years ended March 31, 2015, 2014 and 2013, and the related notes thereto, which have been prepared in accordance with IFRS as issued by the IASB. This discussion should be read in conjunction with the audited consolidated financial statements contained in this Annual Report on Form 20-F. This contains forward-looking statements that are subject to risk factors set out under the heading “Item 3. Key Information – D. Risk Factors”. See “Cautionary Note Regarding Forward-Looking Statements” above.

 

|   |
|--------|
| 59     |
|        |

 

**Year ended March 31, 2015 compared with the year ended March 31, 2014**

 

| **Expenses**                                         |   | **2015** |        |   | **2014** |   |
|------------------------------------------------------|--------|----------|-------------|--------|----------|--------|
| Consulting and management fees                       |   | $        | 948,819     |   |     | $      | 732,234 |   |
| Depreciation                                         |   |     | 15,077      |   |     |   | 20,792 |   |
| Directors’ fees                                |   |     | 160,500     |   |     |   | 97,500 |   |
| Exploration                                          |   |     | 1,089,241   |   |     |   | 3,946,833 |   |
| General exploration                                  |   |     | 368,039     |   |     |   | - |   |
| Listing and filing fees                              |   |     | 112,652     |   |     |   | 95,448 |   |
| Office, occupancy and miscellaneous                  |   |     | 190,408     |   |     |   | 173,735 |   |
| Professional fees                                    |   |     | 245,784     |   |     |   | 155,866 |   |
| Salaries and benefits                                |   |     | 208,557     |   |     |   | 236,828 |   |
| Share-based payments                                 |   |     | 1,334,525   |   |     |   | 103,306 |   |
| Shareholder relations and promotion                  |   |     | 299,202     |   |     |   | 217,133 |   |
| Transaction costs                                    |   |     | 597,656     |   |     |   | - |   |
| Travel                                               |   |     | 272,376     |   |     |   | 68,043 |   |
|                                                 |   |     |        |   |     |   |   |   |
| **Loss before other items**                          |   |     | (5,842,837  | )      |     |   | (5,847,718 | ) |
|                                                 |   |     |        |   |     |   |   |   |
| **Other items**                                      |   |     |        |   |     |   |   |   |
| Impairment of exploration and evaluation assets |   |     | (78,763,649 | )      |     |   | - |   |
| Impairment of convertible debenture                  |   |     | (1,084,589  | )      |     |   | - |   |
| Gain on disposal of investment                       |   |     | -           |   |     |   | 1,882 |   |
| Interest income                                      |   |     | 628,952     |   |     |   | 609,773 |   |
| Foreign exchange gain                                |   |     | 842,482     |   |     |   | 157,665 |   |
|                                                 |   |     |        |   |     |   |   |   |
| **Loss Before Income Taxes**                         |   |     | (84,219,641 | )      |     |   | (5,078,398 | ) |
|                                                 |   |     |        |   |     |   |   |   |
| Deferred income tax recovery                         |   |     | 641,660     |   |     |   | - |   |
|                                                 |   |     |        |   |     |   |   |   |
| **Net Loss for Year**                                |   | $        | (83,577,981 | )      |     | $      | (5,078,398 | ) |

 

During the year ended March 31, 2015, the Company’s net loss increased by $78,499,583 from a net loss of $5,078,398 for the year ended March 31, 2014 to a net loss of $83,577,981 for the year ended March 31, 2015. The overall increase in the net loss as compared to the prior year was due to the more significant factors discussed below:

 

|   |
|--------|
| 60     |
|        |

 

***Consulting and management fees***

 

Consulting and management fees increased by $216,585 during the year from $732,234 during the year ended March 31, 2014 to $948,819 during the year ended March 31, 2015. The increase in consulting fees is mainly attributed to the addition of a New York firm to conduct public relations consulting services commencing in February 2014, the direct engagement of the former CFO as a consultant commencing in October 2014 and the foreign exchange impact on the CEO’s remuneration, which was denominated in US dollars commencing on April 1, 2014.

 

***Directors’ fees***

 

Directors’ fees increased by $63,000 during the year from $97,500 for the year ended March 31, 2014 to $160,500 for the year ended March 31, 2015. The increase during the during the year is substantially attributable to $15,000 payments made to each of five members that comprised a special committee created to evaluate business transactions presented to Levon, including the SciVac Arrangement, which is partly offset by the effect of fees no longer paid to one director who resigned late in the year, and catch up payments to a director relating to the prior year.

 

***Exploration expenditures***

 

Exploration expenditures decreased by $2,857,592 during the year from $3,946,833 for the year ended March 31, 2014 to $1,089,421 during for the year ended March 31, 2015. The decrease reflects the impact of the prior year’s expenditures attributable to the drilling program on the Aida claim amounting to $1,930,792, and a general reduction in overall exploration activity in the current year consistent with the Company’s efforts in overall cost control.

 

***General exploration expenditures***

 

General exploration expenditures of $368,039 in during the current year relates to consulting, travel, and due diligence expenditures incurred in connection with the Company’s efforts to identify and evaluate mining projects for potential investment or acquisition.

 

***Professional fees***

 

Professional fees increased by $89,918 during the year from $155,866 for the year ended March 31, 2014 to $245,784 for the year ended March 31, 2015. The higher level of fees incurred in the current year is mainly attributable to legal fees incurred in connection with legal fees the purchase of 35,178,572 shares of Pershing Gold Corporation (OTCQX: PGLC), representing a 9.9% interest in the Company at that time. On June 18, 2015, Pershing Gold effected a reverse stock split at a ratio of 1-for-18, following which the Company holds 1,954,366 shares, and now currently represents a 9.0% interest in Pershing Gold.

 

***Share-based payments***

 

Share-based payments increased by $1,231,219 from $103,306 for the year ended March 31, 2014 to $1,334,525 for the year ended March 31, 2015. The current year’s expense reflects the partial vesting of 4,075,000 options granted during the year, as well as the impact of 4,785,000 options granted late in the prior fiscal year on March 10, 2014 with a larger proportion of vesting in the current fiscal year.

 

|   |
|--------|
| 61     |
|        |

 

***Shareholder relations and promotion***

 

Shareholder relations and promotion increased by $82,069 from $217,133 during the year ended March 31, 2014 to $299,202 during the year ended March 31, 2015. In May 2014, the Company entered into an agreement with a US firm for it to act as the principal American liaison in connection with the Company’s listing on the OTCQX. The Company pays the US firm $7,500 USD per month in connection with its services.

 

***Travel***

 

Travel expense increased by $204,333 from $68,043 during the year ended March 31, 2015 to $272,376 during the year ended March 31, 2014. Overall increase is attributed to increased travel activities to promote the Cordero project and to evaluate potential investments and acquisitions, including the SciVac Assignment.

 

***Transaction costs***

 

During the year the Company incurred legal and related costs amounting to $597,656 relating to the SciVac Arrangement.

 

***Impairments***

 

At March 31, 2015, the Company determined that the recoverable value of the Codero Project based on fair value less costs to sell was approximately $50,000,000, and recorded an impairment of $78,763,649. The recoverable value of the Company’s exploration and evaluation assets was supported by a valuation report prepared by an independent company specializing in valuations of mining companies and mineral resource projects. In addition, as at March 31, 2015, the Company determined that there was insufficient information available to support a reliable estimate of a recoverable amount of the convertible debenture and therefore recorded in profit and loss an impairment against the full balance of the convertible debenture amounting to $1,084,589.

 

***Foreign exchange***

 

The Company recorded a foreign exchange gain during the year ended March 31, 2015 of $842,482 as compared with a foreign exchange gain of $157,665 during the year ended March 31, 2014. The increase in the foreign exchange gain of $684,817 substantially reflects the impact of significant appreciation over the year of the US dollar against the Canadian dollar on the value of the Company’s US dollar cash balances.

 

|   |
|--------|
| 62     |
|        |

 

***Other Comprehensive Income (Loss)***

 

In addition, the Company recorded in other comprehensive income (loss) an unrealized gain on investments during the year ended March 31, 2015 of $4,991,623 as compared to an unrealized loss on investments of $1,023 during the year ended March 31, 2014. The unrealized investment gain in fiscal 2015 was attributable to an increase in the fair value of the Company’s 9.9% investment in Pershing Gold as at March 31, 2015, based on the increase in its share price since the date of the acquisition earlier in fiscal 2015, and a related foreign exchange gain on the US dollar investments. The unrealized gain on investments gives rise to the deferred income tax recovery of $641,660 and corresponding deferred income tax expense reported in other comprehensive income (loss).

 

**Year ended March 31, 2014 compared with the year ended March 31, 2013**

 

| **Expenses**                        |   | **2014** |       |   | **2013** |   |
|-------------------------------------|--------|----------|------------|--------|----------|--------|
| Consulting and management fees      |   | $        | 732,234    |   |     | $      | 679,691 |   |
| Depreciation                        |   |     | 20,792     |   |     |   | 35,487 |   |
| Directors’ fees               |   |     | 97,500     |   |     |   | 101,000 |   |
| Exploration                         |   |     | 3,946,833  |   |     |   | 4,718,354 |   |
| Listing and filing fees             |   |     | 95,448     |   |     |   | 82,773 |   |
| Office, occupancy and miscellaneous |   |     | 173,735    |   |     |   | 128,714 |   |
| Professional fees                   |   |     | 155,866    |   |     |   | 87,965 |   |
| Salaries and benefits               |   |     | 236,828    |   |     |   | 239,799 |   |
| Share-based payments                |   |     | 103,306    |   |     |   | 1,023,915 |   |
| Shareholder relations and promotion |   |     | 217,133    |   |     |   | 217,157 |   |
| Travel                              |   |     | 68,043     |   |     |   | 193,507 |   |
|                                |   |     |       |   |     |   |   |   |
| **Loss before other items**         |   |     | (5,847,718 | )      |     |   | (7,508,362 | ) |
|                                |   |     |       |   |     |   |   |   |
| **Other items**                     |   |     |       |   |     |   |   |   |
| Gain on disposal of investment      |   |     | 1,882      |   |     |   | - |   |
| Interest income                     |   |     | 609,773    |   |     |   | 473,526 |   |
| Foreign exchange gain               |   |     | 157,665    |   |     |   | 265,329 |   |
|                                |   |     |       |   |     |   |   |   |
| **Net Loss for Year**               |   | $        | (5,078,398 | )      |     | $      | (6,769,507 | ) |

 

During the year ended March 31, 2014, the Company’s net loss decreased by $1,691,109 from a net loss of $6,769,507 for the year ended March 31, 2013 to a net loss of $5,078,398 for the year ended March 31, 2014. The overall decrease in the net loss as compared to the prior year was due to the factors discussed below:

 

***Consulting and management fees***

 

Consulting fees increased by $52,543 during the year from $679,691 during the year ended March 31, 2013 to $732,234 during the year ended March 31, 2014. The increase in consulting fees is mainly attributed to increased consultants. During the year, the Company had entered into a consulting agreement for investor relation services for $8,000 per month. The consulting agreement was terminated in March 2014.

 

|   |
|--------|
| 63     |
|        |

 

***Exploration expenditures***

 

Exploration expenditures decreased by $771,521 during the year from $4,718,354 for the year ended March 31, 2013 to $3,946,833 for the year ended March 31, 2014. The decrease is mainly attributed to the Company’s efforts in overall cost control.

 

***Professional fees***

 

Professional fees increased by $67,901 during the year from $87,965 for the year ended March 31, 2013 to $155,866 for the year ended March 31, 2014. Prior year’s lower balance is attributed to a lower accrued amount in prior year.

 

***Share-based payments***

 

Share-based payments decreased by $920,609 from $1,023,915 for the year ended March 31, 2013 to $103,306 for the year ended March 31, 2014. Prior year’s higher balance is mainly attributed to the modification of the exercise price of certain stock options resulting in additional share-based benefit recognized. During the year ended March 31, 2014, 4,885,000 stock options were granted compared to 1,350,000 stock options granted during the year ended March 31, 2013. Although more stock options were granted in the current year, the overall share-based payment expense is lower as 4,785,000 options were granted in March 10, 2014 which vest over a one-year period. Since the grant date is near the year-end, it results in a lower pro-rata amount of share-based payment expense.

 

***Travel***

 

Travel decreased by $125,464 from $193,507 for the year ended March 31, 2013 to $68,043 for the year ended March 31, 2014. Current year’s lower balance is attributed to travel expenditures incurred relating to the Cordero property has been reclassified to exploration expense in the current year.

 

**B. Liquidity and Capital Resources**

 

The Company has financed its operations to date through the issuance of common shares. Currently the Company has sufficient capital to conduct further exploration on its existing properties. However, if and when the SciVac Arrangement closes the focus of the Company’s operations will be significantly changed and the Company will no longer be focused on the exploration and development of mining properties (see “Item 4. Information on the Company – B. Business Overview, Significant Acquisitions and Significant Dispositions”). The consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company’s ability to continue as a going concern are dependent upon the continued support from its shareholders, the discovery of economically recoverable reserves, the ability of the Company to obtain the financing necessary to complete development and achieve profitable operations in the future. The outcome of these matters cannot be predicted at this time.

 

|   |
|--------|
| 64     |
|        |

 

As at March 31, 2015 the Company had working capital of $50,843,230 compared to working capital of $41,506,961 at March 31, 2014.

 

| **Year Ended**  |   | **March 31,2015** |        |   | **March 31,2014** |   |       | **March 31,2013** |   |
|-----------------|--------|-------------------|-------------|--------|-------------------|--------|------------|-------------------|--------|
| Working Capital |   | $                 | 49,758,641  |   |              | $      | 41,506,961 |              |   | $ | 49,169,844 |   |
| Deficit         |   | $                 | 156,062,817 |   |              | $      | 72,675,558 |              |   | $ | 68,445,141 |   |

 

Working capital increased by $8,251,680 from $41,506,961 as at March 31, 2014 to $49,758,641 as at March 31, 2015. The increase is mainly attributed to net proceeds raised of $7,054,554 from private placements and option exercises, unrealized gains of $4,991,623 on investments and a foreign exchange gain of $842,482 on cash balances which offset cash used in operating activities and investment activities and the impairment to the convertible debenture.

 

Working capital decreased by $7,662,883 from $49,169,844 as at March 31, 2014 to $41,506,961 as at March 31, 2013. The decrease is mainly attributed to a reduction in the cash balance of $7,626,138. Of the decrease of $7,626,138 in cash, $5,445,391 is used in operating activities, and $2,161,690 is used in the acquisition of the Aida claims. Acquisition of the Aida claim consolidated Levon’s 100% ownership of all mining claims in the Cordero mining district.

 

The increase in deficit from March 31, 2014 to March 31, 2015 is substantially attributable to the impairment charge to exploration and evaluation assets of $78,763,649 recorded at March 31, 2015.

 

The increase in deficit from March 31, 2013 to March 31, 2014 is mainly attributed to exploration expenditures of $3,946,833 incurred during the year.

 

Currently the Company has sufficient capital to meet its ongoing obligations on the Cordero resource for the next twelve months. However, if and when the SciVac Arrangement closes the focus of the Company’s operations will be significantly changed and the Company will no longer be focused on the exploration and development of mining properties (see “Item 4. Information on the Company – B. Business Overview, Significant Acquisitions and Significant Dispositions”).

 

The Company is in the exploration stage. The investment in and expenditures on the mineral property comprise substantially all of the Company’s assets. The recoverability of amounts shown for its mineral property interest and related deferred costs and the Company’s ability to continue as a going concern is dependent upon the continued support from its directors, the discovery of economically recoverable reserves, and the ability of the Company to obtain the financing necessary to complete development and achieve profitable operations in the future. The outcome of these matters cannot be predicted at this time.

 

Mineral exploration and development is capital intensive and in order to maintain its interest the Company will be required to raise new equity capital in the future. Based on the Company’s current financial position, its plans for equity financing and its exploration plans for the upcoming fiscal year, the Company will be able to meet its financial obligations through the next fiscal year. There is no assurance that the Company will be successful in raising additional new equity capital.

 

|   |
|--------|
| 65     |
|        |

 

**C. Research and Development, Patents and Licenses, etc.**

 

None.

 

**D. Trend Information**

 

While the Company does not have any producing mines it is directly affected by trends in the metal industry. At the present time global metal prices are extremely volatile. Base metal prices and, in particular, gold prices, driven by rising global demand, climbed dramatically and approached near historic highs over the past several years but have since fallen off of those highs. See “Item 3.D. Risk Factors - Changes in the market price of gold, silver and other metals, which in the past has fluctuated widely, will affect the profitability of our operations and financial condition” for more information regarding fluctuations in gold and silver prices.

 

Overall market prices for securities in the mineral resource sector and factors affecting such prices, including base metal prices, political trends in the countries such companies operate, and general economic conditions, may have an effect on the terms on which financing is available to the Company, if at all.

 

Except as disclosed, the Company does not know of any trends, demand, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, its liquidity either materially increasing or decreasing at present or in the foreseeable future. Material increases or decreases in liquidity are substantially determined by the success or failure of the Company’s exploration programs. The Company currently does not and also does not expect to engage in currency hedging to offset any risk of currency fluctuations.

 

**E. Off-balance sheet arrangements**

 

The Company has no off-balance sheet arrangements.

 

**F. Tabular disclosure of contractual obligations**

 

As of March 31, 2015, the Company had the following contractual obligations:

 

|                              |   | **Payment due by period** |      |
|-----------------------------------|--------|---------------------------|-----------|
|                              |   | **Total**                 |      |   | **1 year** |   |   | **2-3 Years** |   |   | **4-5 years** |   |   | **More than 5 years** |   |
| Trade payables and other payables |   | $                         | 290,822   |   |   | $ | 290,822 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Due to related parties            |   |                      | 59,773    |   |   |   | 59,773 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consulting payments               |   |                      | 2,606,357 |   |   |   | 780,005 |   |   |   | 1,217,568 |   |   |   | 608,784 |   |   |   | - |   |
| Operating Leases                  |   |                      | 16,045    |   |   |   | 16,045 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   |                      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                             |   | $                         | 2,972,997 |   |   | $ | 1,146,645 |   |   | $ | 1,217,568 |   |   | $ | 608,784 |   |   | $ | - |   |

 

|   |
|--------|
| 66     |
|        |

 

**G. Safe Harbor**

 

The Company seeks safe harbor for our forward-looking statements contained in Items 5.E and F. See the heading “Cautionary Note Regarding Forward-Looking Statements” above.

 

**Item 6. Directors, Senior Management and Employees**

 

**A. Directors and Senior Management**

 

The following is a list of the Company’s directors and senior management as at June 18, 2015. The directors of the Company were elected by the Shareholders on September 18, 2014 and are elected for a term of one year, which term expires at the election of the directors at the next annual meeting of shareholders.

 

Each of the Directors and officers of the Company will resign from the Company if and when the SciVac Arrangement is completed.

 

| **Name and Present Position with the Company**                |   | **Principal Occupation** |                                                                                                                                                                         |   | **Director/Officer Since** |   |
|---------------------------------------------------------------|--------|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|
| William Glasier

Director                                     |   |                     | Mining executive; Director of Bralorne Gold Mines Ltd. and Great Thunder Gold Corp.                                                                                     |   |                       |   | May 22, 1990 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Gary Robertson

Director                                      |   |                     | Certified Financial Planner; director of Bralorne Gold Mines Ltd., Coral Gold Resources Ltd, Great Thunder Gold Corp., Avino Silver & Gold Mines Ltd. and Sage Gold Inc. |   |                       |   | August 3, 2005 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Ron Tremblay

Director, Chief Executive Officer and President |   |                     | President & CEO of Levon Resources Ltd.                                                                                                                                  |   |                       |   | September 7, 2006 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Victor Chevillon

Director and V.P. Exploration               |   |                     | Certified Professional Geologist; President of Chevillon Exploration Consulting.                                                                                             |   |                       |   | September 6, 2007 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Ron Barbaro

Director and Chairman                            |   |                     | Member of the Order of Ontario; Director of The Brick Group, Trans Global Life Insurance Company and Trans Global Insurance.                                                 |   |                       |   | July 9, 2010 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Carlos H Fernandez Mazzi

Director                            |   |                     | Director of Standard Tolling Corp.                                                                                                                                           |   |                       |   | May 15, 2012 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Nigel Kirkwood

Chief Financial Officer                       |   |                     | President NK Financial Services Ltd.; Chief Financial Officer of Baja Mining Corp.                                                                                           |   |                       |   | May 14, 2015 |   |
|                                                          |   |                     |                                                                                                                                                                         |   |                       |   |   |   |
| Christina Boddy

Corporate Secretary                          |   |                     | Corporate Secretary of Nevada Sunrise Gold Corporation; Alexander Nubia International Inc. and PNG Gold Corporation.                                                         |   |                       |   | March 31, 2015 |   |

 

|   |
|--------|
| 67     |
|        |

 

***Family Relationships***

 

There are no family relationships between any directors or executive officers of the Company.

 

***Arrangements***

 

There are no known arrangements or understandings with any major shareholders, customers, suppliers or others, pursuant to which any of the Company’s officers or directors was selected as an officer or director of the Company.

 

***Conflicts of Interest***

 

There are no existing or potential conflicts of interest among the Company, its directors, officers or promoters as a result of their outside business interests with the exception that certain of the Company’s directors, officers and promoters serve as directors, officers and promoters of other companies, as set out below, and, therefore, it is possible that a conflict may arise between their duties as a director, officer or promoter of the Company and their duties as a director or officer of such other companies.

 

The directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and the Company will rely upon such laws in respect of any directors’ and officers’ conflicts of interest or in respect of any breaches of duty by any of its directors or officers. All such conflicts will be disclosed by such directors or officers in accordance with the British Columbia Business Corporations Act, and they will govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

 

All of the Company’s directors are also directors, officers or shareholders of other companies that are engaged in the business of acquiring, developing and exploiting natural resource properties including properties in countries where the Company is conducting its operations. Such associations may give rise to conflicts of interest from time to time. Such a conflict poses the risk that the Company may enter into a transaction on terms which place the Company in a worse position than if no conflict existed. The directors of the Company are required by law to act honestly and in good faith with a view to the best interest of the Company and to disclose any interest which they may have in any project or opportunity of the Company. However, each director has a similar obligation to other companies for which such director serves as an officer or director. The Company has no specific internal policy governing conflicts of interest.

 

Several of our senior officers divide their professional time between service for the Company and service for other companies in the industry. See “Item 3. Key Information – D. Risk Factors – *Conflict of Interest*.” In this regard, Ron Tremblay, the Company’s Chief Executive Officer and President, devotes approximately 98% of his professional time to the business of the Company; Victor Chevillon, the Company’s V.P. Exploration, devotes approximately 95% of his professional time to the business of the Company; Annie Chan, the Company’s former Chief Financial Officer, devoted approximately 50% of her professional time to the business of the Company and Dorothy Chin, the former Company’s Corporate Secretary, devoted approximately 35% of her professional time to the business of the Company.

 

|   |
|--------|
| 68     |
|        |

 

**B. Compensation**

 

During the last completed fiscal year of the Company, the Company had three executive officers (“NEOs”), namely, its Chief Executive Officer (“CEO”) and President, Ron Tremblay, its Vice President Exploration, Victor Chevillon, and its former Chief Financial Officer (“CFO”), Annie Chan.

 

***1) Compensation Discussion and Analysis***

 

The Company does not have a compensation program other than paying base management fees, incentive bonuses, and granting incentive stock options to the NEOs. The Company recognizes the need to provide a compensation package that will attract and retain qualified and experienced executives, as well as align the compensation level of each executive to that executive’s level of responsibility. The three components of the compensation package are included to enable the Company to meet different objectives. The objectives of base management fees are to recognize market pay, and acknowledge the competencies and skills of individuals. The objective of incentive bonuses (paid in the form of cash payments) is to add a variable component of compensation to recognize corporate and individual performances for executive officers and employees. The objectives of stock option awards are to reward achievement of long-term financial and operating performance and focus on key activities and achievements critical to the ongoing success of the Company. Implementation of new incentive stock option plans and amendments to the existing stock option plan are the responsibility of the Company’s Compensation Committee.

 

The compensation of the NEOs is reviewed and recommended for Board approval by the Company’s Compensation Committee. Although the Board has not formally evaluated the risks associated with the Company’s compensation policies and practices, the Board has no reason to believe that any risks that arise from the Company’s compensation policies and practices are reasonably likely to have a material impact on the Company.

 

The members of the Compensation Committee are Gary Robertson (Chair), William Glasier and, until his resignation as a director on March 13, 2015, Robert Roberts, all of whom are independent directors pursuant to applicable laws in Canada.

 

The general objectives of the Company’s compensation strategy are to:

 

|   | (a)    | compensate management in a manner that encourages and rewards a high level of performance and outstanding results with a view to increasing long term shareholder value;                                                                                                                                                                                                                                                            |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (b)    | align management’s interests with the long term interests of shareholders;                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (c)    | provide a compensation package that is commensurate with other comparable companies to enable the Company to attract and retain talent; and                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (d)    | ensure that the total compensation package is designed in a manner that takes into account the Company’s present stage of development and its available financial resources. The Company’s compensation packages have been designed to provide a blend of a non-cash stock option component and a reasonable salary. In addition, extraordinary efforts which enhance shareholder value are rewarded with cash bonuses. |

 

|    |
|----|
| 69 |
|    |

 

The Company has no other forms of compensation, although payments may be made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services are paid for by the Company at competitive industry rates for work of a similar nature by reputable arm’s length services providers.

 

Actual compensation will vary based on the performance of the executives relative to the achievement of goals and the price of the Company’s securities.

 

| **Compensation Element**              |   | **Description**                                                                                                                    |   | **Compensation Objectives**                                                                                          |   |
|---------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|
| Annual Base Management Fee (all NEOs) |   | Management Fee is market-competitive, fixed level of compensation                                                                  |   | Retain qualified leaders, motivate strong business performance                                                       |   |
| Incentive Bonuses                     |   | Discretionary cash payment                                                                                                         |   | Reward individual performance in achieving corporate goals                                                           |   |
| Incentive Stock Option (all NEOs)     |   | Equity grants are made in the form of stock options. The amount of grant will be dependent on individual and corporate performance |   | Reward long-term financial and operating performance and align interests of key employees with those of shareholders |   |

 

The Company relies on the discretion and judgment of the directors in establishing and amending contracts for all forms of compensation, including stock options to be granted to the CEO and the directors, and for reviewing the CEO’s recommendations respecting compensation of the other officers of the Company, to ensure such arrangements reflect the responsibilities and risks associated with each position. There is no formal process using objectives, criteria, or analysis, for determining compensation. When determining the compensation of its officers, the Compensation Committee and the Board are guided by the general objectives of the Company’s compensation strategy as set out above.

 

***2) Summary Compensation Table***

 

The following table sets forth particulars concerning the compensation paid or accrued for services rendered to the Company by its NEOs in all capacities during the last three most recently completed financial years ended March 31:

 

| **Name and principal position** |   | **Year** |   |   | **Salary($)** |    | **Share-based awards($)1** |   | **Option-based awards($)2** |   | **Non-equity incentive plan compensation($)3** |   | **Pension value($)4** |   | **All other compensation($)** |   |   | **Total compensation($)** |   |
|---------------------------------|--------|----------|--------|--------|---------------|---------|----------------------------|--------|-----------------------------|--------|------------------------------------------------|--------|-----------------------|--------|-------------------------------|--------|--------|---------------------------|--------|
| Ron Tremblay*                   |   | 2013     |   |   | $             | 300,000 |                       | NIL    |                        | $      | 399,329                                        |   | NIL                   |   | NIL                           |   | $      | 200,000                   |   |   | $ | 899,329 |   |
| Director, President & CEO   |   | 2014     |   |   | $             | 300,000 |                       | NIL    |                        | $      | 25,324                                         |   |  NIL             |   | NIL                           |   | $      | 200,000                   |   |   | $ | 525,324 |   |
|                            |   | 2015     |   |   | $             | 342,674 |                       | NIL    |                        | $      | 456,955                                        |   | NIL                   |   | NIL                           |   | $      | 211,895                   |   |   | $ | 1,101,524 |   |
|                            |   |     |   |   |          |    |                       |   |                        |   |                                           |   |                  |   |                          |   |   |                      |   |   |   |   |   |
| Annie Chan                      |   | 2013     |   |   | $             | 52,608  |                       | NIL    |                        | $      | 20,410                                         |   | NIL                   |   | NIL                           |   |   |  NIL                 |   |   | $ | 73,018 |   |
| CFO**                           |   | 2014     |   |   | $             | 56,216  |                       | NIL    |                        | $      | 1,630                                          |   | NIL                   |   | NIL                           |   |   |  NIL                 |   |   | $ | 57,846 |   |
|                            |   | 2015     |   |   | $             | 84,670  |                       | NIL    |                        | $      | 14,909                                         |   |  NIL             |   | NIL                           |   |   | NIL                       |   |   | $ | 99,579 |   |
|                            |   |     |   |   |          |    |                       |   |                        |   |                                           |   |                  |   |                          |   |   |                      |   |   |   |   |   |
| Victor Chevillon***             |   | 2013     |   |   | $             | 179,805 |                       | NIL    |                        | $      | 159,732                                        |   | NIL                   |   | NIL                           |   |   | NIL                       |   |   | $ | 339,537 |   |
| Director & VP Exploration   |   | 2014     |   |   | $             | 189,265 |                       | NIL    |                        | $      | 12,662                                         |   | NIL                   |   | NIL                           |   |   |  NIL                 |   |   | $ | 201,927 |   |
|                            |   | 2015     |   |   | $             | 201,121 |                       | NIL    |                        | $      | 228,478                                        |   | NIL                   |   | NIL                           |   |   | NIL                       |   |   | $ | 429,599 |   |

_____________

| (1)  | The Company does not currently have any share-based award plans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | The methodology used to calculate the fair value of a stock option on the grant date is based on the Black-Scholes Option Pricing Model.  The Black-Scholes Option Pricing Model is the model accepted under International Financial Reporting Standards in computing the fair value of stock options granted and is commonly used by public companies.  The Company used the following weighted average assumptions in the model to determine the awards recorded above for 2015: Dividend Yield – Nil; Expected Life – 4.93 years; Volatility – 87.76%; Risk Free Interest Rate – 1.47%. |

 

|   |
|--------|
| 70     |
|        |

 

| (3) | The Company does not have a non-equity incentive plan.                                                                                                                                                                                  |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | The Company does not have any pension plans.                                                                                                                                                                                            |
| (5) | Discretionary cash payment of incentive bonuses. Other than as set out above, perquisites have not been included as they do not reach the prescribed threshold of the lesser of $50,000 and 10% of total salary for the financial year. |

* Mr. Tremblay is a director of the Company and has served as its President since November 29, 2006 and as its CEO since September 11, 2009.  None of the compensation received by Mr. Tremblay relates to his role as director.

** Ms. Chan resigned her position as CFO effective on April 30, 2015. 

*** Mr. Chevillon is a director of the Company and has served as its VP Exploration since February 24, 2009**. **None of the compensation received by Mr. Chevillon relates to his role as director. 

  

Base Salary for the NEOs are determined by the Board upon the recommendation of the Compensation Committee and its recommendations are reached primarily by informal comparison with the remuneration paid by other reporting issuers with the same size and industry and with publicly available information on remuneration that the Compensation Committee feels is suitable.

 

The annual base salary paid to NEOs is, for the purpose of establishing appropriate increases, reviewed annually by the Board upon the recommendation of the Compensation Committee as part of the annual review of executive officers. The decision on whether to grant an increase to the executive’s base salary and the amount of any such increase is in the sole discretion of the Board and the Compensation Committee.

 

***Non-Equity Incentive Plan Compensation***

 

One of the three components of the Company’s compensation package is a discretionary annual cash bonus, paid to recognize individual performance in attaining corporate goals and objectives. The Company does not have a long-term incentive plan.

 

***Option Based Award***

 

An Option Based Award is in the form of an incentive stock option plan. The objective of the incentive stock option is to reward NEOs, employees’ and directors’ individual performance at the discretion of the Board upon the recommendation of the Compensation Committee.

 

The Company currently maintains a formal stock option plan, under which stock options have been granted and may be granted to purchase shares equal to 10% of the Company’s issued capital from time to time. For details of the stock option please refer to “Particulars of Matters to be Acted Upon – Stock Option Plan” in the Information Circular.

 

The stock option plan is administered by the Compensation Committee. The process the Company uses to grant option based awards is upon the recommendations of the Compensation Committee. The role of the Compensation Committee is to recommend to the Board the compensation of the Company’s directors and NEOs which the Compensation Committee feels is suitable. All previous grants of option-based awards are taken into account when considering new grants.

 

|   |
|--------|
| 71     |
|        |

 

***3) Incentive Plan Awards***

 

*Outstanding share-based awards and option-based awards*

 

The following table sets forth the options granted to the NEOs to purchase or acquire securities of the Company outstanding at the end of the most recently completed financial year ended March 31, 2015:

 

|                          |   | **Option-based Awards**                                   |      | **Share-based Awards** |                       |
|-------------------------------|--------|-----------------------------------------------------------|-----------|------------------------|----------------------------|
| **Name**                      |   | **Number of securities underlying unexercisedoptions(#)** |      |                   | **Optionexerciseprice($)** |   | **Option****expiration date** |   | **Value of unexercised in-the-money options($)(1)** |   | **Number of shares or units of shares that have not vested(#)** |   | **Market or payout value of share-based awards that have not vested($)** |   | **Market or payout value of vested share-based awards not paid out or distributed($)** |   |
| RON TREMBLAY                  |   |                                                      | 1,500,000 |                   |                       | $ | 1.00 |   | Sep 3, 2015 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
| Director, President & CEO |   |                                                      | 5,000,000 |                   |                       | $ | 0.75 |   | Mar 25, 2016 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 2,000,000 |                   |                       | $ | 0.40 |   | Mar 10, 2019 |   | $ | 120,000 |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 1,000,000 |                   |                       | $ | 0.28 |   | Oct 21, 2019 |   | $ | 180,000 |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      |      |                   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ANNIE CHAN                    |   |                                                      | 50,000    |                   |                       | $ | 1.00 |   | Jun 7, 2017 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
| CFO                           |   |                                                      | 50,000    |                   |                       | $ | 0.40 |   | Mar 10, 2019 |   | $ | 3,000 |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 50,000    |                   |                       | $ | 0.28 |   | Oct 21, 2019 |   | $ | 9,000 |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      |      |                   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| VICTOR CHEVILLON              |   |                                                      | 200,000   |                   |                       | $ | 0.70 |   | Jan 28, 2015 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
| Director & VP Exploration |   |                                                      | 500,000   |                   |                       | $ | 1.00 |   | Sep 3, 2015 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 2,000,000 |                   |                       | $ | 0.75 |   | Mar 25, 2016 |   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 1,000,000 |                   |                       | $ | 0.40 |   | Mar 10, 2019 |   | $ | 60,000 |   | Nil |   | Nil |   | Nil |   |
|                          |   |                                                      | 500,000   |                   |                       | $ | 0.28 |   | Oct 21, 2019 |   | $ | 90,000 |   | Nil |   | Nil |   | Nil |   |

____________  

(1) In-the-Money Options is the difference between the market value of the underlying securities at March 31, 2015 and the exercise price of the option. The closing market price of the Company's common shares as at March 31, 2015 was $0.46 per common share.

 

*Incentive plan awards – value vested or earned during the year*

 

An “incentive plan” is any plan providing compensation that depends on achieving certain performance goals or similar conditions within a specific period. An “incentive plan award” means compensation awarded, earned, paid or payable under an incentive plan.

 

The following table sets forth the value vested or earned during the year of option-based awards, share-based awards and non-equity incentive plan compensation paid to NEOs during the most recently completed financial year ended March 31, 2015:

 

| **Name**                                        |   | **Option-based awards – Value vested during the year($)(1)** |    |   | **Share-based awards – Value vested during the year($)** |   |   | **Non-equity incentive plan compensation – Value earned during the year($)** |   |
|-------------------------------------------------|--------|--------------------------------------------------------------------|---------|--------|----------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|
| Ron Tremblay

Director, President & CEO     |   |                                                               | 456,955 |   |                                                           |   | NIL    |                                                                               |   |   | NIL |   |
|                                            |   |                                                               |    |   |                                                           |   |   |                                                                               |   |   |   |   |
| Annie Chan

CFO                                 |   |                                                               | 14,909  |   |                                                           |   | NIL    |                                                                               |   |   | NIL |   |
|                                            |   |                                                               |    |   |                                                           |   |   |                                                                               |   |   |   |   |
| Victor Chevillon

Director & VP Exploration |   |                                                               | 228,478 |   |                                                           |   | NIL    |                                                                               |   |   | NIL |   |

___________  

(1) Based on the Black-Scholes Option Pricing Model.

 

|   |
|--------|
| 72     |
|        |

 

***4) Pension Plan Benefits***

 

No pension plan or retirement benefit plans have been instituted by the Company and none are proposed at this time.

 

***Use of Financial Instruments***

 

The Company does not have in place policies which restrict the ability of directors or NEOs to purchase financial instruments, such as prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by a director or NEO. Any such purchases would be subject to applicable insider reporting requirements.

 

***5) Termination and Change of Control Benefits***

 

The Company entered into a separate consulting agreement between Stone’s Throw (Barbados) Ltd., a company wholly owned by Ron Tremblay, and Chevillon Exploration Consulting, a company wholly owned by Vic Chevillon, and on April 1, 2014, the Company renewed these consulting agreements for a period of five (5) years under which there are specified provisions for termination of employment or change of control.

 

Each agreement can be terminated at any time prior to the expiry of the term, as follows:

 

a) by the consultant giving the Company not less than 3 months prior notice of such termination;

 

b) by the Company giving the consultant 3 months prior notice of such termination along with a termination payment of US$1.5 million to Stone’s Throw (Barbados) Ltd., and US$750,000 to Chevillon Exploration Consulting;

 

c) at any time during the term of contract, should a change of control (as defined below) event occur the consultant will be entitled to a severance payment immediately.

 

A “change of control” shall be deemed to have occurred when any person, entity or group becomes the beneficial owner of 50.1% or more of the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or completion of the sale or other disposition by the Company of all or substantially all of the Company’s assets or a reorganization or merger or consolidation of the Company with any other entity or corporation, at which time the severance payment becomes due and payable on closing of the transaction, other than:

 

|   | (i)    | a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50.1% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation; or |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (ii)   | a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor.                                                                                                                                                                                     |

 

|   |
|--------|
| 73     |
|        |

 

The SciVac Arrangement will constitute a change of control and the following amounts will be if and when the SciVac Arrangement is completed:

 

| ***1.*** | Stone’s Throw (Barbados) Ltd.: the consultant will be entitled to a severance payment of US$1.5 million immediately; and |
|----------|--------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                           |
| ***2.*** | Chevillon Exploration Consulting: the consultant will be entitled to a severance payment of US$750,000 immediately.            |

 

***6) Director Compensation***

 

The following table sets forth the value of all compensation paid to the directors, excluding Ron Tremblay and Victor Chevillon who are each paid as an officer and not as a director, in their capacity as directors for the year ended March 31, 2015:

 

**Director Compensation Table**

 

| **Name**                |   | **Feesearned($)** |   |   | **Share-basedawards($)1** |   |   | **Option-based awards($)2** |   |   | **Non-equity incentive plan compensation($)3** |   |   | **Pensionvalue($)4** |   |   | **All other compensation($)5** |   |   | **Total($)** |   |
|-------------------------|--------|-------------------|--------|--------|---------------------------|--------|--------|-----------------------------|--------|--------|------------------------------------------------|--------|--------|----------------------|--------|--------|--------------------------------|--------|--------|--------------|--------|
| William Glasier*        |   |              | 33,000 |   |                      |   | NIL    |                        |   |   | 43,758                                         |   |   |                 | NIL    |   |                           |   | NIL    |         |   |   | NIL |   |   |   | 108,898 |   |
| Gary Robertson*         |   |              | 33,000 |   |                      |   | NIL    |                        |   |   | 59,636                                         |   |   |                 | NIL    |   |                           |   | NIL    |         |   |   | NIL |   |   |   | 133,977 |   |
| Carlos Fernandez Mazzi* |   |              | 33,000 |   |                      |   | NIL    |                        |   |   | 43,759                                         |   |   |                 | NIL    |   |                           |   | NIL    |         |   |   | NIL |   |   |   | 108,898 |   |
| Robert Roberts*(6)      |   |              | 28,500 |   |                      |   | NIL    |                        |   |   | 59,636                                         |   |   |                 | NIL    |   |                           |   | NIL    |         |   |   | NIL |   |   |   | 129,477 |   |
| Ron Barbaro*            |   |              | 33,000 |   |                      |   | NIL    |                        |   |   | 59,636                                         |   |   |                 | NIL    |   |                           |   | NIL    |         |   |   | NIL |   |   |   | 133,977 |   |

__________  

| * | Independent & Non-Employee Directors.                        |
|---|------------------------------------------------------------------|
| 1 | The Company does not currently have any share-based award plans. |
| 2 | Based on the Black-Scholes Option Pricing Model.                 |
| 3 | The Company does not have a non-equity incentive plan.           |
| 4 | The Company does not have any pension plans.                     |
| 5 | Discretionary cash payment of incentive bonuses.                 |
| 6 | Robert Roberts resigned as a director on March 13, 2015          |

 

Except as disclosed below, no director of the Company who is not a Named Executive Officer has received, during the most recently completed financial year, compensation pursuant to:

 

|   | (a)    | any standard arrangement for the compensation of directors for their services in their capacity as Directors, including any additional amounts payable for committee participation or special assignments; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                       |
|   | (b)    | any other arrangement, in addition to, or in lieu of, any standard arrangement, for the compensation of Directors in their capacity as Directors except for the granting of stock options; or              |
|        |   |                                                                                                                                                                                                       |
|   | (c)    | any arrangement for the compensation of directors for services as consultants or experts.                                                                                                                  |

 

|   |
|--------|
| 74     |
|        |

 

The Company may grant incentive stock options to Directors of the Company from time to time pursuant to the stock option plan of the Company and in accordance with the policies of the Toronto Stock Exchange (the "TSX").

 

On May 14, 2012, Carlos Fernandez Mazzi, a director of the Company, entered into a Consulting Agreement with the Company to provide management and project development advisory services to advance the Cordero Project for $2,500 per month for a period of one year.

 

***Outstanding share-based awards and option-based awards***

 

The following table sets forth the options granted to the directors to purchase or acquire securities of the Company outstanding at March 31, 2015:

 

|                   |   | **Option-based Awards**                                    |    |   | **Share-based Awards**      |   |
|------------------------|--------|------------------------------------------------------------|---------|--------|-----------------------------|--------|
| **Name**               |   | **Number of securities underlying unexercised options(#)** |    |   | **Optionexercise price($)** |   |   | **Optionexpiration date** |   |   | **Value of unexercised in-the-money options($)(2)** |   |   | **Number of shares or units of shares that have not vested(#)** |   |   | **Market or payout value of share-based awards that have not vested($)(2)** |   |   | **Market or payout value of vested share-based awards not paid out or distributed($)** |   |
| William Glasier        |   |                                                       | 100,000 |   |                        | $      | 1.00 |   |   |   | Sept 3, 2015 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 150,000 |   |                        | $      | 0.75 |   |   |   | Mar 25, 2016 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 100,000 |   |                        | $      | 0.40 |   |   |   | Mar 10, 2019 |   |   | $ | 6,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 100,000 |   |                        | $      | 0.28 |   |   |   | Oct 21, 2019 |   |   | $ | 18,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gary Robertson         |   |                                                       | 200,000 |   |                        | $      | 0.65 |   |   |   | July 20, 2015 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.75 |   |   |   | Mar 25, 2016 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.40 |   |   |   | Mar 10, 2019 |   |   | $ | 12,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.28 |   |   |   | Oct 21, 2019 |   |   | $ | 36,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Carlos Fernandez Mazzi |   |                                                       | 500,000 |   |                        | $      | 1.00 |   |   |   | May 15, 2017 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 100,000 |   |                        | $      | 0.40 |   |   |   | Mar 10, 2019 |   |   | $ | 6,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 100,000 |   |                        | $      | 0.28 |   |   |   | Oct 21, 2019 |   |   | $ | 18,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ron Barbaro            |   |                                                       | 200,000 |   |                        | $      | 0.65 |   |   |   | July 20, 2015 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 300,000 |   |                        | $      | 0.75 |   |   |   | Mar 25, 2016 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.40 |   |   |   | Mar 10, 2019 |   |   | $ | 12,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.28 |   |   |   | Oct 21, 2019 |   |   | $ | 36,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert Roberts*        |   |                                                       | 200,000 |   |                        | $      | 0.75 |   |   |   | Oct 3, 2016 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.40 |   |   |   | Mar 10, 2019 |   |   | $ | 12,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |
|                   |   |                                                       | 200,000 |   |                        | $      | 0.28 |   |   |   | Oct 21, 2019 |   |   | $ | 36,000 |   |   |   | Nil |   |   |   | Nil |   |   |   | Nil |   |

___________ 

| (1) | For the compensation of Ron Tremblay and Victor Chevillon who are NEOs of the Company, see “Incentive Plan Awards” above.                                                                                                                                                                                                                                                                                                                                                                             |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | In-the-Money Options is the difference between the market value of the underlying securities at March 31, 2014 and the exercise price of the option. The closing market price of the Company's common shares as at March 31, 2015 was $0.46 per common share.* Robert Roberts resigned as a director on March 13, 2015 and 100,000 unvested $0.40 options and 150,000 $0.28 options were cancelled. On June 13, 2015, 90 days from the date of his resignation, the remaining vested options expired unexercised. |

 

|   |
|--------|
| 75     |
|        |

 

***Incentive plan awards – value vested or earned during the year***

 

An “incentive plan” is any plan providing compensation that depends on achieving certain performance goals or similar conditions within a specific period. An “incentive plan award” means compensation awarded, earned, paid or payable under an incentive plan.

 

The following table sets forth the value vested or earned during the year of option-based awards, share-based awards and non-equity incentive plan compensation paid to directors during the year ended March 31, 2015:

 

| **Name(1)**            |   | **Option-based awards – Value vested duringthe year($) (2)** |   |   | **Share-based awards – Value vested during the year($)** |   |   | **Non-equity incentive plan compensation – Value earned during the year($)** |   |
|------------------------|--------|--------------------------------------------------------------------|--------|--------|----------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|
| William Glasier        |   |                                                               | 43,758 |   |                                                           |   | Nil    |                                                                               |   |   | Nil |   |
| Gary Robertson         |   |                                                               | 59,636 |   |                                                           |   | Nil    |                                                                               |   |   | Nil |   |
| Carlos Fernandez Mazzi |   |                                                               | 43,758 |   |                                                           |   | Nil    |                                                                               |   |   | Nil |   |
| Ron Barbaro            |   |                                                               | 59,636 |   |                                                           |   | Nil    |                                                                               |   |   | Nil |   |
| Robert Roberts         |   |                                                               | 59,636 |   |                                                           |   | Nil    |                                                                               |   |   | Nil |   |

____________

| (1) | For the compensation of Ron Tremblay and Victor Chevillon who are NEOs of the Company, see “Incentive Plan Awards” above. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Based on the Black-Scholes Option Pricing Model.                                                                                      |

 

**C. Board Practices**

 

The Board is currently comprised of six directors. The size and experience of the Board is important for providing the Company with effective governance in the mining industry. The Board’s mandate and responsibilities can be effectively and efficiently administered at its current size. The chairman of the Board is no longer a member of management. The Board has functioned, and is of the view that it can continue to function, independently of management as required. Directors are elected for a term of one year at the annual general meeting. At the Annual General Meeting, held on September 18, 2014, the shareholders elected Messrs. Barbaro, Chevillon, Glasier, Fernandez Mazzi, Roberts, Robertson, and Tremblay as directors. Mr. Roberts resigned as a director of the Company on March 13, 2015.

 

The Board has considered the relationship of each director to the Company and currently considers three of the six directors to be “unrelated” (Messrs. Barbaro, Glasier and Robertson). “Unrelated director” means a director who is independent of management and free from any interest and any business or other relationship which could reasonably be perceived to materially interfere with the director’s ability to act with a view to the best interest of the Company, other than interests and relationships arising solely from shareholdings.

 

|   |
|--------|
| 76     |
|        |

 

Procedures are in place to allow the Board to function independently. At the present time, the Board has experienced directors that have made a significant contribution to the Company’s success, and are satisfied that it is not constrained in its access to information, in its deliberations or in its ability to satisfy the mandate established by law to supervise the business and affairs of the Company. Committees meet independent of management and other directors.

  

*Mandate of the Board of Directors, its Committees and Management*

 

The role of the Board is to oversee the conduct of the Company’s business, including the supervision of management, and determining the Company’s strategy. Management is responsible for the Company’s day to day operations, including proposing its strategic direction and presenting budgets and business plans to the Board for consideration and approval. The strategic plan takes into account, among other things, the opportunities and risks of the Company’s business. Management provides the Board with periodic assessments as to those risks and the implementation of the Company’s systems to manage those risks. The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management. Management is responsible for the training and development of personnel. The Board assesses how effectively the Company communicates with shareholders, but has not adopted a formal communications policy. Through the Audit Committee, and in conjunction with its auditors, the Board assesses the adequacy of the Company’s internal control and management information systems. The Board looks to management to keep it informed of all significant developments relating to or effecting the Company’s operations. Major financings, acquisitions, dispositions and investments are subject to Board approval. A formal mandate for the Board, the Chief Executive Officer and the Chief Financial Officer has not been considered necessary since the relative allocation of responsibility is well understood by both management and the Board. The Board meets as required. The Board and committees may take action at these meetings or at a meeting by conference call or by written consent.

 

**Committees**

 

*Audit Committee*

 

The Company’s Board of Directors has a separately-designated standing Audit Committee established for the purpose of overseeing the accounting and financial reporting processes of the Company and audits of the Company’s annual financial statements in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee assists the Board in its oversight of the Company’s consolidated financial statements and other related public disclosures, the Company’s compliance with legal and regulatory requirements relating to financial reporting, the external auditors, qualifications and independence and the performance of the internal audit function and the external auditors. The Audit Committee has direct communications channels with the Company’s auditors. The Audit Committee reviews the Company’s financial statements and related management’s discussion and analysis of financial and operating results. The Audit Committee can retain legal, accounting or other advisors.

 

The Audit Committee is normally comprised of three directors. The Audit Committee was comprised of Gary Robertson, Ron Barbaro and, until his resignation on March 13, 2015, Robert Roberts. On March 14, 2015, William Glasier was appointed to replace Mr. Roberts on the Audit Committee. All of the members are unrelated, financially literate and at least one member has accounting or related financial expertise. “Financially literate” means the ability to read and understand statements of financial position, statements of operations and comprehensive loss, statements of shareholders’ equity, statements of cash flow and notes to financial statements. “Accounting or related financial expertise” means the ability to analyze and interpret a full set of financial statements, including the notes attached thereto.

 

|   |
|--------|
| 77     |
|        |

 

The Board has adopted a charter for the Audit Committee which is reviewed annually and sets out the role and oversight responsibilities of the Audit Committee with respect to:

 

|   | · | its relationship with and expectation of the external auditors, including the establishment of the independence of the external auditor and the approval of any non-audit mandates of the external auditor; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | determination of which non-audit services the external auditor is prohibited from providing;                                                                                                                |
|   | · | the engagement, evaluation, remuneration, and termination of the external auditors;                                                                                                                         |
|   | · | appropriate funding for the payment of the auditor’s compensation and for any advisors retained by the audit committee;                                                                               |
|   | · | its relationship with and expectation of the internal auditor;                                                                                                                                              |
|   | · | its oversight of internal control;                                                                                                                                                                          |
|   | · | disclosure of financial and related information; and                                                                                                                                                        |
|   | · | any other matter that the audit committee feels is important to its mandate or that which the board chooses to delegate to it.                                                                              |

 

*Compensation Committee*

 

The Compensation Committee recommends to the Board the compensation of the Company’s Directors and the Chief Executive Officer which the Compensation Committee feels is suitable. Its recommendations are reached primarily by comparison of the remuneration paid by the Company with publicly available information on remuneration paid by other reporting issuers that the Compensation Committee feels are similarly placed within the same business of the Company.

 

The Compensation Committee consists of three unrelated directors (Messrs. Robertson, Glasier and, until his resignation on March 13, 2015, Robert Roberts). Upon completion of the SciVac Arrangement, a new Compensation Committee will be appointed.

 

The Compensation Committee has adopted the “Terms of Reference” to ensure that independent non-executive directors determine and review the compensation of executive on behalf of the Board and design the compensation policies and packages so as to attract, retain, and motivate quality employees while not exceeding market rates.

 

|   |
|--------|
| 78     |
|        |

 

*Governance and Nominating Committee*

 

The Governance and Nominating Committee (the “Committee”) shall act in an advisory capacity only to the board of directors with respect to the governance and nominating matters. The Committee has established a Committee Charter to:

 

|   | ·       | manage the corporate governance system for the Board;                                                                                                                                    |
|--------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ·       | assist the Board to fulfill its duty to meet the applicable legal, regulatory and (self-regulatory) business principles and 'codes of best practice' of corporate behaviour and conduct; |
|   | ·       | assist in the creation of a corporate culture and environment of integrity and accountability;                                                                                           |
|   | ·       | monitor the quality of the relationship between the Board and management of the Company;                                                                                                 |
|   | ·       | review the Chief Executive Officer's succession plan;                                                                                                                                    |
|   | ·       | recommend to the Board nominees for appointment of the Board;                                                                                                                            |
|   | ·  | lead the Board's annual review of the Chief Executive Officer's performance; and                                                                                                         |
|   | ·       | annually review and set an agenda of the Board on an ongoing basis.                                                                                                                      |

 

The Corporate Governance Committee currently consists of three directors (Messrs. Barbaro, Glasier and Roberts). All of the members are unrelated directors.

 

**D. Employees**

 

As at June 18, 2015, the Company has 8 employees at the Cordero Project. At the height of Cordero grid drilling in 2011 and 2012 there were 35 employees at the project. Senior management and administrative staff are contracted by the Company through their companies or, until March 31, 2015, through the Company’s cost sharing agreement for overhead and corporate services with Oniva International Services Corp.

 

**E. Share Ownership**

 

The following table sets forth the share ownership of our directors and officers as of June 18, 2015:

 

| **Name of Beneficial Owner** |   | **Number ofShares** |       |   | **Percent** |   |
|------------------------------|--------|---------------------|------------|--------|-------------|--------|
| Victor Chevillon             |   |                | 1,410,750  |   |        |   | * |   |
| William Glasier              |   |                | 389,516    |   |        |   | * |   |
| Gary Robertson               |   |                | 1,750,836  |   |        |   | * |   |
| Ron Tremblay                 |   |                | 18,806,000 |   |        |   | 9.4 | % |
| Robert Roberts               |   |                | 411,000    |   |        |   | * |   |
| Ron Barbaro                  |   |                | 840,000    |   |        |   | * |   |
| Carlos H Fernandez Mazzi     |   |                | 340,000    |   |        |   | * |   |
| Nigel Kirkwood               |   |                | Nil        |   |        |   | N/A |   |
| Christina Boddy              |   |                | 1          |   |        |   | N/A |   |

___________  

*Less than one percent

 

|   |
|--------|
| 79     |
|        |

 

*Outstanding Options*

 

The following information, as of June 18, 2015, reflects outstanding options held by the individuals referred to in “Compensation”:

 

|                          |   | **No. ofShares** |      |   | **Date ofGrant** |             |   | **ExercisePrice** |   |   | **ExpirationDate** |   |
|-------------------------------|--------|------------------|-----------|--------|------------------|------------------|--------|-------------------|--------|--------|--------------------|--------|
| Ron Tremblay                  |   |             | 1,500,000 |   |             | Sept. 3, 2010    |   |              | $      | 1.00   |               |   | Sept. 3, 2015 |   |
| Director, President & CEO |   |             | 5,000,000 |   |             | March 25, 2011   |   |              | $      | 0.75   |               |   | March 25, 2016 |   |
|                          |   |             | 2,000,000 |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 1,000,000 |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Annie Chan*                   |   |             | 50,000    |   |             | June 7, 2012     |   |              | $      | 1.00   |               |   | July 29, 2015 |   |
| CFO                           |   |             | 25,000    |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | July 29, 2015 |   |
|                          |   |             | 25,000    |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | July 29, 2015 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Gary Robertson                |   |             | 200,000   |   |             | July 20, 2010    |   |              | $      | 0.65   |               |   | July 20, 2015 |   |
| Director                      |   |             | 200,000   |   |             | March 25, 2011   |   |              | $      | 0.75   |               |   | March 25, 2016 |   |
|                          |   |             | 200,000   |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 200,000   |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Victor Chevillon              |   |             | 200,000   |   |             | Jan 28, 2010     |   |              | $      | 0.70   |               |   | Jan 28, 2015 |   |
| Director & VP Exploration |   |             | 500,000   |   |             | Sept 3, 2010     |   |              | $      | 1.00   |               |   | Sept 3, 2015 |   |
|                          |   |             | 2,000,000 |   |             | March 25, 2011   |   |              | $      | 0.75   |               |   | March 25, 2016 |   |
|                          |   |             | 1,000,000 |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 500,000   |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| William Glasier               |   |             | 100,000   |   |             | Sept 3, 2010     |   |              | $      | 1.00   |               |   | Sept 3, 2015 |   |
| Director                      |   |             | 150,000   |   |             | March 25, 2011   |   |              | $      | 0.75   |               |   | March 25, 2016 |   |
|                          |   |             | 100,000   |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 100,000   |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Ron Barbaro                   |   |             | 200,000   |   |             | July 20, 2010    |   |              | $      | 0.65   |               |   | July 20, 2015 |   |
| Director & Chairman       |   |             | 300,000   |   |             | March 25, 2011   |   |              | $      | 0.75   |               |   | March 25, 2016 |   |
|                          |   |             | 200,000   |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 200,000   |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Robert Roberts**              |   |             | 200,000   |   |             | Oct 3, 2011      |   |              | $      | 0.75   |               |   | June 13, 2015 |   |
| Director                      |   |             | 100,000   |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | June 13, 2015 |   |
|                          |   |             | 50,000    |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | June 13, 2015 |   |
|                          |   |             |      |   |             |             |   |              |   |   |               |   |   |   |
| Carlos H Fernandez Mazzi      |   |             | 500,000   |   |             | May 15, 2012     |   |              | $      | 1.00   |               |   | May 15, 2017 |   |
| Director                      |   |             | 100,000   |   |             | March 10, 2014   |   |              | $      | 0.40   |               |   | March 10, 2019 |   |
|                          |   |             | 100,000   |   |             | October 21, 2014 |   |              | $      | 0.28   |               |   | October 21, 2019 |   |

______________

| *  | Annie Chan resigned as CFO on April 30, 2015 and 25,000 unvested $0.40 options and 25,000 $0.28 options were cancelled. Any unexercised options will be cancelled on July 29, 2015, 90 days from the date of resignation.                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **      | Robert Roberts resigned as a director on March 13, 2015 and 100,000 unvested $0.40 options and 150,000 $0.28 options were cancelled. On June 13, 2015, 90 days from the date of his resignation, the remaining vested options expired unexercised. |

 

|   |
|--------|
| 80     |
|        |

 

**Item 7. Major Shareholders and Related Party Transactions**

 

**A. Major Shareholders**

 

As far as it is known to the Company, other than identified below, it is not directly or indirectly owned or controlled by any other corporation or by the Canadian Government, or any foreign government, or by any other natural or legal person.

 

To the knowledge of the Company’s directors and senior officers, the following table sets forth certain information as at June 18, 2015 concerning the ownership of the Company’s common shares as to each person known by the directors and senior officers, based solely upon public records and filings, to be the direct and/or indirect owner of more than five (5%) percent of the Company’s common shares, who owned more than five percent of the outstanding shares of each class of the Company’s voting securities.

 

| **Name**     |   | **Number of Shares of**

**Common Stock Owned** |   | **Percent ofClass** |   |
|--------------|--------|-------------------------------------------------|--------|---------------------|--------|
| Ron Tremblay |   | 18,806,000                                      | *      |                | 9.4    | % |

______________ 

| * | These shares are held by Ron Tremblay indirectly through Stone's Throw (Barbados) Ltd., a company of which he is the sole shareholder. |
|---|----------------------------------------------------------------------------------------------------------------------------------------|

 

Changes in ownership by major shareholders

 

To the best of the Company’s knowledge there have been no changes in the ownership of the Company’s shares other than disclosed herein.

 

***Voting Rights***

 

The Company’s major shareholders do not have different voting rights.

 

***Shares Held in the United States***

 

As of June 18, 2015, there were approximately 453 registered holders of the Company’s shares in the United States, with combined holdings of 70,384,067 common shares.

 

|   |
|--------|
| 81     |
|        |

 

***Change of Control***

 

On March 20, 2015, the Company, together with SciVac Ltd. (“SciVac”) announced that they had entered into an arrangement agreement pursuant to which the Company will acquire 100% of the issued and outstanding ordinary shares of SciVac by way of a court-approved plan of arrangement.

  

Pursuant to the SciVac Arrangement, shareholders of the Company will receive one new common share of the Company (each a "New Levon Share") and 0.5 of a common share (each, a "Spinco Share") of 1027949 BC Ltd., a newly formed exploration company ("Spinco") in exchange for each common share of the Company (each a "Levon Share") held by them. If and when the SciVac Arrangement closes, shareholders of the Company will hold 100% of the issued and outstanding Spinco Shares and 31.6% of the issued and outstanding New Levon Shares, with the former holders of SciVac shares holding the remaining 68.4% of the issued and outstanding New Levon Shares. In addition to acquiring all of the issued and outstanding shares of SciVac, the Company will retain $27 million in cash. All other assets and liabilities of Levon will be transferred to or will be assumed by Spinco.

 

For further information regarding the SciVac Arrangement See “Item 4. Information on the Company – B. Business Overview, Significant Acquisitions and Significant Dispositions”.

 

As of June 18, 2015, there were no other arrangements known to the Company which may, at a subsequent date, result in a change of control of the Company.

 

***Control by Others***

 

To the best of the Company’s knowledge, the Company is not directly or indirectly owned or controlled by another corporation, any foreign government, or any other natural or legal person, severally or jointly.

 

**B. Related Party Transactions**

 

During the year ended March 31, 2015, $320,386 (2014 - $372,154) was charged to the Company for office, occupancy and miscellaneous costs; shareholder relations and promotion; travel; and salaries and benefits paid on behalf of the Company by Oniva International Services Corp. (“Oniva”), a private company related by way of common management and directors. The Company holds 16.67% of Oniva as part of a cost sharing arrangement with five other reporting issuers owned by the Company and five other reporting issuers having common directors. Under the agreement, the Company reimburses Oniva a variable percentage of its overhead expenses, pays 100% of its out-of-pocket expenses incurred on behalf of the Company, and pays a percentage fee based on the total overhead and corporate expenses. The agreement may be terminated with one month’s notice by either party, and was terminated by the Company as at March 31, 2015 and subsequent to March 31, 2015, the Company is no longer a shareholder of Oniva.

 

|   |
|--------|
| 82     |
|        |

 

**Management transactions**

 

The Company has identified its directors and certain senior officers (CEO, VP Exploration, CFO and corporate secretary) as its key management personnel. The compensation costs for key management personnel for the years ended March 31, 2015 and 2014 are as follows:

 

|                           |   | **2015** |      |   | **2014** |   |
|--------------------------------|--------|----------|-----------|--------|----------|--------|
| Salaries and benefits          |   | $        | 84,264    |   |     | $      | 98,308 |   |
| Consulting and management fees |   |     | 809,190   |   |     |   | 680,000 |   |
| Share-based payments           |   |     | 1,032,042 |   |     |   | 49,381 |   |
| Directors’ fees          |   |     | 160,500   |   |     |   | 97,500 |   |
|                           |   | $        | 2,085,996 |   |     | $      | 925,189 |   |

 

During the year ended March 31, 2015, share-based payments paid to management personnel increased by $992,426 from $39,616 during the year ended March 31, 2014 to $1,032,042 during the year ended March 31, 2015. The increased share-based payments in the current year reflects stock options granted to key management during the year on October 21, 2014 vesting over one year, as well as the impact of stock options granted late in the prior year on March 10, 2014, to key management vesting over two years.

 

The Company also has commitments related to change in control provisions to the CEO and VP Exploration (see ““Item 6. Directors, Senior Management, Employees – B. Compensation, 5) Termination and Change of Control Benefits”).

 

Due to related parties consists of the following:

 

|                                         |   | **March 31,2015** |   |   | **March 31,2014** |   |
|----------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Chevillion Exploration (i)                   |   | $                 | -      |   |              | $      | 3,579 |   |
| Coral Gold Resources Ltd. (ii)               |   |              | 58,774 |   |              |   | 43,582 |   |
| Great Thunder Gold Corp. (ii)                |   |              | 999    |   |              |   | 787 |   |
| Oniva International Services Corp.(iii) |   |              | -      |   |              |   | 33,718 |   |
|                                         |   | $                 | 59,733 |   |              | $      | 81,666 |   |

___________

| (i)   | Chevillion Exploration is a private company controlled by a director and officer of the Company.                                                                                                                                                                    |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | Coral Gold Resources Ltd. and Great Thunder Gold Corp. are public companies related by way of common directors. The increase to the amount payable held in USD as at March 31, 2015 as compared with March 31, 2014 is due to changes in the foreign exchange rate. |
| (iii) | Oniva is a private company related by way of common management and directors.                                                                                                                                                                                       |

 

|   |
|--------|
| 83     |
|        |

 

Related party transactions are measured at the estimated fair values of the services provided or goods received. Amounts owing to related parties are unsecured, without interest or stated terms of repayment.

 

**C. Interests of Experts and Counsel**

 

Not Applicable.

 

**Item 8. Financial Information**

 

**A. Consolidated Statements and Other Financial Information**

 

The following financial statements of the Company are attached to this Annual Report:

 

|   | · | Auditors’ Report;                                                                                                                                             |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Consolidated Statements of Financial Position as at March 31, 2015 and March 31, 2014;                                                                              |
|   | · | Consolidated Statement of Operations and Comprehensive Loss, change in shareholders’ equity and cash flows for the years ended March 31, 2015, 2014 and 2013; |
|   | · | Notes to Financial Statements for the years ended March 31, 2015, 2014 and 2013.                                                                                    |

 

The following financials statements of SciVac are incorporated herein by reference to Schedule 1 Appendix F (pages F-74 through F-105) of the Company’s Information Circular as previously furnished to the SEC as Exhibit 99.2 to our Form 6-K on May 12, 2015:

 

|   | · | Auditors’ Report;                                                                                         |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|
|   | · | Consolidated Statements of Financial Position as at December 31, 2014 and 2013                                  |
|   | · | Consolidated Statements of Profit or Loss and Other Comprehensive Income as at December 31, 2014, 2013 and 2012 |
|   | · | Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012               |
|   | · | Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and                 |
|   | · | Notes to the Consolidated Financial Statements for the years ended December 31, 2014, 2013 and 2012.            |

 

The financial statements of SciVac have been prepared in accordance with IFRS as issued by the IASB which differ in certain respects from the principles SciVac would have followed had its consolidated financial statements been prepared in accordance with US GAAP. All amounts presented in the SciVac financial statements are in U.S. dollars.

 

|   |
|--------|
| 84     |
|        |

 

The following unaudited *pro forma*financial statements of the Company and SciVac:

 

|   | · | Unaudited Pro Forma Consolidated Statement of Financial Position as at March 31, 2015   |
|--------|--------|-----------------------------------------------------------------------------------------|
|   | · | Unaudited Pro Forma Consolidated Statement of Income for the year ended March 31, 2015; |
|   | · | Notes to the unaudited pro forma consolidated financial statements                      |

 

The unaudited pro forma consolidated statement of financial position has been prepared assuming the SciVac Arrangement had occurred on March 31, 2015 and the unaudited pro forma consolidated statements of income has been prepared assuming the SciVac Arrangement had occurred at April 1, 2014.

 

The unaudited pro forma consolidated financial statements have been prepared in accordance with the Company’s and SciVac’s accounting policies. There are no material differences in accounting policies between SciVac and Levon.

 

***Legal Proceedings***

 

The Company is not involved in any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or had in the recent past, significant effects on the Company’s financial position or profitability, including governmental proceedings pending or known to be contemplated.

 

***Dividend Policy***

 

The Company has never paid any dividends and does not intend to in the near future.

 

**B. Significant Changes**

 

None.

 

**Item 9. The Offer and Listing**

 

**A. Price History of Stock**

 

The common shares of Levon are listed on the Toronto Stock Exchange under the symbol "LVN", and the Frankfurt Stock Exchange under the symbol “L09” and are quoted for trading in the United States on the OTCQX. Levon commenced quotations on OTCQX under the ticker “LVNVF” on May 15, 2014.

 

As of June 18, 2015, there were 453 holders of record in the United States holding 70,384,067 of the Company’s common shares representing 54.78% of the total number of shareholders, and approximately 30.38% of the total number of common shares issued. The common shares are issued in registered form and the percentage of shares reported to be held by record holders in the United States is taken from the records of the Valiant Trust Company in the City of Vancouver, the registrar and transfer agent for our common shares.

 

|   |
|--------|
| 85     |
|        |

 

The following table sets forth the high and low prices expressed in Canadian dollars on the Toronto Stock Exchange and TSX Venture Exchange in Canada and in United States dollars on the over-the-counter markets and OTCQX in the United States for the Company’s common shares for the past five years, for each quarter for the last two fiscal years, and for the last six months.

 

|                                    |   | **TSX-V/TSX (Canadian Dollars)** |   |   | **OTC/OTCQX (United States Dollars)** |   |
|-----------------------------------------|--------|----------------------------------|--------|--------|---------------------------------------|--------|
| **Last Five Fiscal Years**              |   | **High**                         |   |   | **Low**                               |   |   | **High** |   |   | **Low** |   |
| 2015                                    |   |                             | 0.495  |   |                                  |   | 0.20 |   |   |   | 0.401 |   |   |   | 0.176 |   |
| 2014                                    |   |                             | 0.44   |   |                                  |   | 0.17 |   |   |   | 0.415 |   |   |   | 0.1655 |   |
| 2013                                    |   |                             | 0.72   |   |                                  |   | 0.31 |   |   |   | 0.707 |   |   |   | 0.301 |   |
| 2012                                    |   |                             | 2.38   | *      |                                  |   | 0.66 | * |   |   | 2.48 |   |   |   | 0.66 |   |
| 2011                                    |   |                             | 2.08   |   |                                  |   | 0.50 |   |   |   | 2.10 |   |   |   | 0.52 |   |
|                                    |   |                             |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| **2014- 2015**                          |   | **High**                         |   |   | **Low**                               |   |   | **High** |   |   | **Low** |   |
| Fourth Quarter ended March 31, 2015     |   |                             | 0.495  |   |                                  |   | 0.24 |   |   |   | 0.401 |   |   |   | 0.20 |   |
| Third Quarter ended December 31, 2014   |   |                             | 0.325  |   |                                  |   | 0.20 |   |   |   | 0.285 |   |   |   | 0.176 |   |
| Second Quarter ended September 30, 2014 |   |                             | 0.46   |   |                                  |   | 0.21 |   |   |   | 0.40 |   |   |   | 0.1874 |   |
| First Quarter ended June 30, 2014       |   |                             | 0.295  |   |                                  |   | 0.215 |   |   |   | 0.27 |   |   |   | 0.192 |   |
|                                    |   |                             |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| **2013- 2014**                          |   | **High**                         |   |   | **Low**                               |   |   | **High** |   |   | **Low** |   |
| Fourth Quarter ended March 31, 2014     |   |                             | 0.41   |   |                                  |   | 0.245 |   |   |   | 0.367 |   |   |   | 0.226 |   |
| Third Quarter ended December 31, 2013   |   |                             | 0.33   |   |                                  |   | 0.17 |   |   |   | 0.324 |   |   |   | 0.1655 |   |
| Second Quarter ended September 30, 2013 |   |                             | 0.44   |   |                                  |   | 0.23 |   |   |   | 0.415 |   |   |   | 0.214 |   |
| First Quarter ended June 30, 2013       |   |                             | 0.38   |   |                                  |   | 0.215 |   |   |   | 0.37 |   |   |   | 0.213 |   |
|                                    |   |                             |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| **Last Six Months**                     |   | **High**                         |   |   | **Low**                               |   |   | **High** |   |   | **Low** |   |
| June 2015 (through June 18, 2015)       |   |                             | 0.53   |   |                                  |   | 0.48 |   |   |   | 0.438 |   |   |   | 0.3906 |   |
| May 2015                                |   |                             | 0.495  |   |                                  |   | 0.42 |   |   |   | 0.42 |   |   |   | 0.3487 |   |
| April 2015                              |   |                             | 0.57   |   |                                  |   | 0.44 |   |   |   | 0.45 |   |   |   | 0.37 |   |
| March 2015                              |   |                             | 0.495  |   |                                  |   | 0.395 |   |   |   | 0.401 |   |   |   | 0.309 |   |
| February 2015                           |   |                             | 0.44   |   |                                  |   | 0.28 |   |   |   | 0.346 |   |   |   | 0.2261 |   |
| January 2015                            |   |                             | 0.305  |   |                                  |   | 0.24 |   |   |   | 0.255 |   |   |   | 0.20 |   |
| December 2014                           |   |                             | 0.28   |   |                                  |   | 0.27 |   |   |   | 0.25 |   |   |   | 0.197 |   |

____________

| *  | The Company listed on the Toronto Stock Exchange on February 23, 2012 under the symbol “LVN” |
|----|----------------------------------------------------------------------------------------------------------|
| ** | The Company listed on the OTCQX on May 15, 2014 under the symbol “LVNVF”                |

 

The above quotations related to the OTC market and OTCQX in the United States reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions. The volume of trading has been limited and volatile in the past and is likely to continue to be so in the future, reducing the liquidity of an investment in our common shares and making it difficult for investors to readily sell their shares in the open market. See the section entitled “Item 3. Key Information – D. Risk Factors” above.

 

|   |
|--------|
| 86     |
|        |

 

**B. Plan of Distribution**

 

Not Applicable.

 

**C. Markets**

 

The common shares of Levon are listed on the Toronto Stock Exchange under the symbol "LVN", the Frankfurt Stock Exchange under the symbol “L09” and are quoted for trading in the United States on the OTCQX under the symbol "LVNVF".

 

**D. Selling Shareholders**

 

Not Applicable.

 

**E. Dilution**

 

Not Applicable.

 

**F. Expenses of the Issue**

 

Not Applicable.

 

**Item 10. Additional Information**

 

**A. Share Capital**

 

Not Applicable.

 

**B. Memorandum and Articles of Association**

 

**Common Shares**

 

All issued and outstanding common shares are fully paid and non-assessable. Each holder of record of common shares is entitled to one vote for each common share so held on all matters requiring a vote of shareholders, including the election of directors. The holders of common shares will be entitled to dividends on a pro-rata basis, if and when as declared by the board of directors. There are no preferences, conversion rights, preemptive rights, subscription rights, or restrictions or transfers attached to the common shares. In the event of liquidation, dissolution, or winding up of the Company, the holders of common shares are entitled to participate in the assets of the Company available for distribution after satisfaction of the claims of creditors.

 

|   |
|--------|
| 87     |
|        |

 

**Powers and Duties of Directors**

 

The directors shall manage or supervise the management of the affairs and business of the Company and shall have authority to exercise all such powers of the Company as are not, by the *Company Act*or by the Memorandum or the Articles, required to be exercised by the Company in a general meeting.

 

Directors will serve as such until the next annual meeting. In general, a director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with the Company whereby a duty or interest might be created to conflict with his duty or interest as a director, shall declare the nature and extent of his interest in such contract or transaction or the conflict or potential conflict with his duty and interest as a director. Such director shall not vote in respect of any such contract or transaction with the Company in which he is interested and if he shall do so, his vote shall note be counted, but he shall be counted in the quorum present at the meeting at which such vote is taken. However, notwithstanding the foregoing, directors shall have the right to vote on determining the remuneration of the directors.

 

The directors may from time to time on behalf of the Company: (a) borrow money in such manner and amount from such sources and upon such terms and conditions as they think fit; (b) issue bonds, debentures and other debt obligations; and (c) mortgage, charge or give other security on the whole or any part of the property and assets of the Company.

 

The directors of the Company must be persons of the full age of 18 years. There is no minimum share ownership to be a director. No person shall be a director of the Company who is not capable of managing their own affairs, is an undischarged bankrupt, convicted of an offense in connection with the promotion, formation or management of a corporation or involved in fraud within the last five years, or a person that has had a registration in any capacity under the "British Columbia *Securities Act*" or the "British Columbia *Mortgage Brokers Act*" canceled within the last five years.

 

**Shareholders**

 

An annual general meeting is held once in every calendar year at such time and place as may be determined by the directors. A quorum at an annual general meeting and special meeting shall be two shareholders or one or more proxy holders representing two shareholders, or one shareholder and a proxy holder representing another shareholder. There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote the common shares, other than as provided in the *Investment Canada Act* (the “Investment Act”) discussed below under “Item 10. Additional Information, D. Exchange Controls.”

 

In accordance with British Columbia law, directors shall be elected by an “ordinary resolution” which means: (a) a resolution passed by the shareholders of the Company at a general meeting by a simple majority of the votes cast in person or by proxy; or (b) a resolution that has been submitted to the shareholders of the Company who would have been entitled to vote on it in person or by proxy at a general meeting of the Company and that has been consented to in writing by such shareholders of the Company holding shares carrying not less than 3⁄4 of the votes entitled to be cast on it.

 

Under British Columbia law certain items such as an amendment to the Company’s articles or entering into a merger requires approval by a special resolution which means: (a) a resolution passed by a majority of not less than 3⁄4 of the votes cast by the shareholders of the Company who, being entitled to do so, vote in person or by proxy at a general meeting of the Company; or (b) a resolution consented to in writing by every shareholder of the Company who would have been entitled to vote in person or by proxy at a general meeting of the Company, and a resolution so consented to is deemed to be a special resolution passed at a general meeting of the Company.

 

|   |
|--------|
| 88     |
|        |

 

**C. Material Contracts**

 

Except for contracts made in the ordinary course of business, the only material contract of the Company is the Arrangement Agreement relating to the Arrangement as described under “Item 4. Information on the Company, B. Business Overview, Significant Acquisitions and Significant Dispositions”.

 

**D. Exchange Controls**

 

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Issuer’s securities, except as discussed below under “Item 10. Additional Information, E. Taxation.”

 

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of “control” of the Company by a “non-Canadian”. The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. “Non-Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

 

**E. Taxation**

 

**Canadian Federal Income Tax Consequences**

 

The following summarizes the principal Canadian federal income tax consequences applicable to the holding and disposition of common shares in the capital of the Company by a United States resident, and who holds common shares solely as capital property, referred to as a "U.S. Holder". This summary is based on the current provisions of the *Income Tax Act* (Canada), referred to as the "Tax Act", the regulations thereunder, all amendments thereto publicly proposed by the government of Canada, the published administrative practices of Revenue Canada, Customs, Excise and Taxation, and the current provisions of the *Canada-United States Income Tax Convention, 1980*, as amended, referred to as the "Treaty". Except as otherwise expressly provided, this summary does not take into account any provincial, territorial or foreign (including without limitation, any United States) tax law or treaty. It has been assumed that all currently proposed amendments will be enacted substantially as proposed and that there is no other relevant change in any governing law or practice, although no assurance can be given in these respects.

 

**Each U.S. Holder is advised to obtain tax and legal advice applicable to such U.S. Holder’s particular circumstances.**

 

Every U.S. Holder is liable to pay a Canadian withholding tax on every dividend that is or is deemed to be paid or credited to the U.S. Holder on the U.S. Holder’s common shares. The statutory rate of withholding tax is 25% of the gross amount of the dividend paid. The Treaty reduces the statutory rate with respect to dividends paid to a U.S. Holder, if that U.S. Holder is eligible for benefits under the Treaty. Where applicable, the general rate of withholding tax under the Treaty is 15% of the gross amount of the dividend, but if the U.S. Holder is a company that owns at least 10% of the voting stock of the Company and beneficially owns the dividend, the rate of withholding tax is 5% for dividends paid or credited to such corporate U.S. Holder. The Company is required to withhold the applicable tax from the dividend payable to the U.S. Holder, and to remit the tax to the Receiver General of Canada for the account of the U. S. Holder.

 

|   |
|--------|
| 89     |
|        |

 

A non-resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a common share unless the common share constitutes “taxable Canadian property” of the U.S. Holder for purposes of the Tax Act and the gain is not exempt from tax pursuant to the terms of the Treaty.

 

Provided that the common shares are listed on a “designated stock exchange” for purposes of the Tax Act (which currently includes the TSX) at the time of disposition, the common shares generally will not constitute “taxable Canadian property” of a U.S. Holder, unless at any time during the 60 month period immediately preceding the disposition: (i) the U.S. Holder, persons with whom the U.S. Holder did not deal at “arm’s length” for the purposes of the Tax Act, or the U.S. Holder together with all such persons, owned 25% or more of the issued shares of any class of the Company and; (ii) more than 50% of the fair market value of the common shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Tax Act), “timber resource properties” (as defined in the Tax Act), or options in respect of, or interests in, or for civil law rights in, such property whether or not such property exists.

 

Certain withholding and reporting obligations will also generally apply in connection with the disposition of common shares by a U.S. Holder that constitutes, or are deemed to constitute, “taxable Canadian property” (and are not “treaty-protected property” as defined in the Tax Act).

 

U.S. Holders who may hold common shares as “taxable Canadian property” should consult their own tax advisors.

 

**Certain United States Federal Income Tax Consequences**

 

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares of the Company.

 

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. Except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares.

 

|   |
|--------|
| 90     |
|        |

 

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

 

**Scope of this Summary**

 

Authorities

 

This summary is based on the Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended, or the Canada-U.S. Tax Convention, and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

 

U.S. Holders

 

For purposes of this summary, the term “U.S. Holder” means a beneficial owner of common shares that is for U.S. federal income tax purposes:

  

|   | · | an individual who is a citizen or resident of the U.S.;                                                                                                                                                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia;                                                                                            |
|   | · | an estate whose income is subject to U.S. federal income taxation regardless of its source; or                                                                                                                                                                                |
|   | · | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.  |

 

|   |
|--------|
| 91     |
|        |

 

Non-U.S. Holders

 

For purposes of this summary, a “non-U.S. Holder” is a beneficial owner of common shares that is not a U.S. Holder. This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common shares. Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.

 

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

 

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) U.S. Holders that own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute “taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and non-U.S. tax consequences relating to the acquisition, ownership and disposition of common shares.

 

If an entity or arrangement that is classified as a partnership (or “pass-through” entity) for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such partnership and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners (or owners). This summary does not address the tax consequences to any such partnership or partner. Partners of entities or arrangements that are classified as partnerships for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.

 

|   |
|--------|
| 92     |
|        |

 

**Passive Foreign Investment Company Rules**

 

If the Company were to constitute a “passive foreign investment company” under the meaning of Section 1297 of the Code, or a PFIC, as defined below, for any year during a U.S. Holder’s holding period, then certain different and potentially adverse rules will affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition of common shares. In addition, in any year in which the Company is classified as a PFIC, such holder will be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621.

 

PFIC Status of the Company

 

The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the “income test”) or (b) 50% or more of the value of the Company’s assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the “asset test”). “Gross income” generally includes all sales revenues less the cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

 

Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s commodities are stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business and certain other requirements are satisfied.

 

For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset test described above, and assuming certain other requirements are met, “passive income” does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain “related persons” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.

 

In addition, under certain attribution rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of the stock of any subsidiary of the Company that is also a PFIC, or a Subsidiary PFIC, and will be subject to U.S. federal income tax on their proportionate share of (a) a distribution on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC.

 

The Company believes that it was classified as a PFIC during the tax year ended March 31, 2015, and may be a PFIC in future tax years. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or a Subsidiary PFIC) concerning its PFIC status. Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the Company and any Subsidiary PFIC.

 

|   |
|--------|
| 93     |
|        |

 

Default PFIC Rules Under Section 1291 of the Code

 

If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a “qualified electing fund” or “QEF” under Section 1295 of the Code, or a QEF Election, or a mark-to-market election under Section 1296 of the Code, or a Mark-to-Market Election. A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”

 

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and (b) any excess distribution received on our common shares. A distribution generally will be an “excess distribution” to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for our common shares, if shorter).

 

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any “excess distribution” received on common shares, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective common shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,” which is not deductible.

 

If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such common shares were sold on the last day of the last tax year for which the Company was a PFIC.

 

QEF Election

 

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which its holding period of its common shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,” which is not deductible.

 

|   |
|--------|
| 94     |
|        |

 

A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder’s tax basis in our common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.

 

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding period for our common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder’s holding period for our common shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder also makes a “purging” election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold for their fair market value on the day the QEF Election is effective.

 

A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.

 

U.S. Holders should be aware that there can be no assurance that the Company will satisfy record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders require to report under the QEF rules, in event that the Company is a PFIC and a U.S. Holder wishes to make a QEF Election. Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a QEF Election.

 

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company does not provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules of Section 1291 of the Code discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.

 

Mark-to-Market Election

 

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock. Our common shares generally will be “marketable stock” if our common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange ensure active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter.

 

|   |
|--------|
| 95     |
|        |

 

A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holding period for our common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, our common shares.

 

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of our common shares, as of the close of such tax year over (b) such U.S. Holder’s tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in our common shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

 

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder’s tax basis in our common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years).

 

A U.S. Holder makes a Mark-to-Market Election by attaching a completed IRS Form 8621 to a timely filed United States federal income tax return. A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless our common shares cease to be “marketable stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election.

 

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to our common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to eliminate the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or distributions from a Subsidiary PFIC.

  

Other PFIC Rules

 

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred.

 

|   |
|--------|
| 96     |
|        |

 

Certain additional adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

 

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with their own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

 

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

 

**Ownership and Disposition of common shares**

 

The following discussion is subject to the rules described above under the heading “Passive Foreign Investment Company Rules.”

 

Distributions on common shares

 

Subject to the PFIC rules discussed above, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to an Offered Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in our common shares and thereafter as gain from the sale or exchange of such common shares. (See “Sale or Other Taxable Disposition of common shares” below). However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to our common shares will constitute ordinary dividend income. Dividends received on common shares generally will not be eligible for the “dividends received deduction”. Subject to applicable limitations and provided the Company is eligible for the benefits of the Canada-U.S. Tax Convention, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

 

|   |
|--------|
| 97     |
|        |

 

Sale or Other Taxable Disposition of common shares

 

Subject to the PFIC rules discussed above, upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of. Subject to the PFIC rules discussed above, gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, our common shares have been held for more than one year.

 

Preferential tax rates apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

 

**Additional Considerations**

 

Additional Tax on Passive Income

 

Certain U.S. Holders that are individuals, estates or trusts (other than trusts that are exempt from tax) will be subject to a 3.8% tax on all or a portion of their “net investment income,” which includes dividends on the common shares and net gains from the disposition of the common shares. Further, excess distributions treated as dividends, gains treated as excess distributions under the PFIC rules discussed above, and mark-to-market inclusions and deductions are all included in the calculation of net investment income.

 

Treasury Regulations provide, subject to the election described in the following paragraph, that solely for purposes of this additional tax, that distributions of previously taxed income will be treated as dividends and included in net investment income subject to the additional 3.8% tax. Additionally, to determine the amount of any capital gain from the sale or other taxable disposition of common shares that will be subject to the additional tax on net investment income, a U.S. Holder who has made a QEF Election will be required to recalculate its basis in the common shares excluding QEF basis adjustments.

 

Alternatively, a U.S. Holder may make an election which will be effective with respect to all interests in a PFIC for which a QEF Election has been made and which is held in that year or acquired in future years. Under this election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions and on gains calculated after giving effect to related tax basis adjustments. U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of this tax to any of their income or gains in respect of the common shares.

 

|   |
|--------|
| 98     |
|        |

 

Receipt of Foreign Currency

 

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. U.S. Holders who use the accrual method are subject to different rules. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

 

Foreign Tax Credit

 

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on our common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

 

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to our common shares that is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.

 

Backup Withholding and Information Reporting

 

Under U.S. federal income tax law and Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

 

|   |
|--------|
| 99     |
|        |

 

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares will generally be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

 

**F. Dividends and Paying Agents**

 

Not Applicable.

 

**G. Statement by Experts**

 

Not Applicable.

 

**H. Documents on Display**

 

We are subject to the informational requirements of the Exchange Act and file reports and other information with the SEC. You may read and copy any of our reports and other information at, and obtain copies upon payment of prescribed fees from, the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

 

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") (www.sedar.com), the Canadian equivalent of the SEC's electronic document gathering and retrieval system.

 

|   |
|--------|
| 100    |
|        |

 

We "incorporate by reference" information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this Form 20-F and more recent information automatically updates and supersedes more dated information contained or incorporated by reference in this Form 20-F.

 

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders.

 

We will provide without charge to each person, including any beneficial owner, to whom a copy of this annual report has been delivered, on the written or oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this annual report (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to us at the following address: Suite 500, 666 Burrard Street, Vancouver, British Columbia, V6C 2X8. The Company is required to file financial statements and other information with the Securities Commission in each of the Provinces of Canada, except Quebec, electronically through SEDAR which can be viewed at www.sedar.com.

 

The Company files annual reports and furnishes other information with the SEC. You may read and copy any document that we file at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 or by accessing the Commission’s website (http://www.sec.gov).

 

**I. Subsidiary Information**

 

Not Applicable.

 

**Item 11. Quantitative and Qualitative Disclosures about Market Risk**

 

(a)  **Credit risk**

 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and cash equivalents is exposed to credit risk.

 

|   |
|--------|
| 101    |
|        |

 

The Company manages credit risk, in respect of cash, by maintaining the majority of cash and cash equivalents at high credit rated Canadian financial institutions. Concentration of credit risk exists with respect to the Company’s cash, cash and cash equivalents and reclamation deposits as the majority of the amounts are held with a Canadian and a Mexican financial institution. The Company’s concentration of credit risk and maximum exposure thereto, is as follows:

 

|                                                           |   | **March 31,2015** |       |   | **March 31,****2014** |   |
|----------------------------------------------------------------|--------|-------------------|------------|--------|-----------------------|--------|
|                                                           |   | ****              |       |   | ****                  |   |
| Cash and cash equivalents held at major financial institutions |   | ****              |       |   | ****                  |   |
| Canada                                                         |   | $                 | 33,857,365 |   |                  | $      | 41,644,257 |   |
| Mexico                                                         |   |              | 68,955     |   |                  |   | 41,519 |   |
|                                                                |   |              |       |   |                  |   |   |   |
|                                                                |   |              | 33,926,320 |   |                  |   | 41,685,776 |   |
| Reclamation deposits held at a major financial institution     |   |              |       |   |                  |   |   |   |
| Canada                                                         |   |              | 32,629     |   |                  |   | 32,629 |   |
| Total                                                          |   | $                 | 33,958,949 |   |                  | $      | 41,718,405 |   |

 

(b)  **Liquidity risk**

 

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due.

 

The Company manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities. The Company has sufficient current assets to meet short-term business requirements. At March 31, 2015, the Company had current liabilities of $350,595 (2014 - $275,031). Accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms. Advances payable to related parties are without interest or stated terms of repayment.

 

(c)  **Market risk**

 

Market risk consists of interest rate risk and foreign currency risk and other price risk. The Company is exposed to interest rate risk and foreign currency risk.

 

*Interest rate risk*

 

Interest rate risk consists of two components:

 

|   | (i)    | To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                         |
|   | (ii)   | To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.                              |

 

|   |
|--------|
| 102    |
|        |

 

The Company’s cash and cash equivalents consist of cash held in bank accounts, fixed income investments and GICs that earn interest at variable interest rates. Due to the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values as of March 31, 2015 or 2014. Future cash flows from interest income on cash will be affected by interest rate fluctuations. The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of capital and liquidity.

 

*Foreign currency risk*

 

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk on monetary assets and liabilities are denominated in foreign currency.

 

The Company is exposed to foreign currency fluctuation related to its cash and cash equivalents, amounts receivable, accounts payable and amounts due to related parties in US dollar balances and Mexican pesos (“MXN”). A significant change in the exchange rate between the Canadian dollar relative to the US dollar or Mexican peso could have an effect on the Company’s financial position, results of operations and cash flows, as follows:

 

|                                     |   | **March 31, 2015********** |       |   | **March 31, 2014********** |   |
|------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|
|                                     |   | **MXN Pesos**              |       |   | **USD**                    |   |   | **MXN Pesos** |   |   | **USD** |   |
| Cash and cash equivalents                |   | $                          | 80,797     |   |                       | $      | 5,642,745 |   |   | $ | 443,193 |   |   | $ | 201,872 |   |
| Investments                              |   |                       |       |   |                       |   | 12,664,286 |   |   |   |   |   |   |   | - |   |
| Accounts payable and accrued liabilities |   |                            | (2,250,007 | )      |                       |        | (47,129 | ) |   |  | (20,862,833 | ) |   |   | - |   |
| Amounts due to related parties           |   |                       | -          |   |                       |   | - |   |   |   | - |   |   |  | (39,423 | ) |
| Net exposure                             |   | $                          | (1,469,210 | )      |                       | $      | 18,259,902 |   |   | $ | 20,419,640 |   |   | $ | 162,449 |   |
| Canadian dollar equivalent               |   | $                          | (122,224   | )      |                       | $      | 23,159,034 |   |   | $ | (1,728,523 | ) |   | $ | 179,555 |   |

 

Based on the net US dollar denominated asset and liability exposures as at March 31, 2015, a 6% (2014 - 6%) fluctuation in the Canadian/US exchange rates will impact the Company’s losses by approximately $425,000 (2014 - $11,000) and other comprehensive income by approximately $963,727 (2014 - $nil).

 

Based on the net Mexican peso denominated asset and liability exposures as at March 31, 2015, a 8% (2014 - 8%) fluctuation in the Canadian/MXN exchange rates will impact the Company’s losses by approximately $10,000 (2014 - $138,000).

 

|   |
|--------|
| 103    |
|        |

 

(d)  **Other price risk**

 

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is exposed to other price risk with respect to its investment securities as they are carried at fair value based on quoted market prices. A 5% fluctuation in market prices will impact other comprehensive income by $633,214 (2014 – immaterial).

 

The Company’s ability to raise capital to fund mineral resource exploration is subject to risks associated with fluctuations in mineral resource prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

 

**Item 12. Description of Securities Other than Equity Securities**

 

**A.****to C.**

 

Not Applicable.

 

**D. American Depository Receipts**

 

The Company does not have securities registered as American Depository Receipts.

 

|   |
|--------|
| 104    |
|        |

 

**Part II**

 

**Item 13. Defaults, Dividend Arrearages and Delinquencies**

 

None.

 

**Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds**

 

**A. to D.**

 

None.

 

**E. Use of Proceeds**

 

Not Applicable.

 

**Item 15. Controls and Procedures**

 

**A. Disclosure Controls and Procedures**

 

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(b) and 15d-15(b) of the Exchange Act as of March 31, 2015. Based on their evaluation, the Company’s CEO and CFO have concluded that the disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

**B. Management’s Annual Report on Internal Control Over Financial Reporting**

 

The Company’s management, including the Company’s Chief Executive Officer (the “CEO”) and the Company’s Chief Financial Officer (the “CFO”) is responsible for establishing and maintaining adequate internal control over the Company’s internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with IFRS. The Company’s internal control over financial reporting includes policies and procedures that: pertain to the maintenance of records that, in reasonable detail accurately and fairly reflect the transactions and disposition of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with IFRS and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements.

 

|   |
|--------|
| 105    |
|        |

 

Because of their inherent limitations, internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company’s management, (with the participation of the CEO and the CFO), conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2015. This evaluation was based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013 framework) in Internal Control-Integrated Framework. Based on its assessment, management has concluded that the Company’s internal control over financial reporting was effective as at March 31, 2015, and management’s assessment did not identify any material weaknesses.

 

**C. Attestation Report of the Registered Public Accounting Firm**

 

Not applicable. As at March 31, 2015, the Company exited accelerated filer status and is a non-accelerated filer exempt from obtaining auditor attestation on internal controls over financial reporting.

 

**D. Changes in Internal Control Over Financial Reporting**

 

During the year ended March 31, 2015 and subsequent to that date, the Company experienced certain changes of personnel operating in financial reporting. However, based upon their evaluation of our controls, our CEO and CFO have concluded that there were no significant changes in our internal control over financial reporting or in other factors during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

**Item 16. [Reserved]**

 

**Item 16A. Audit Committee Financial Expert**

 

The Board determined that Mr. Gary Robertson, Mr. William Glasier and Mr. Ron Barbaro are qualified as Audit Committee Financial Experts and all members are independent as determined by the NASDAQ listing rules.

 

|   |
|--------|
| 106    |
|        |

 

**Item 16B. Code of Ethics**

 

The Company has adopted a Code of Business Practice and Conduct (the “Code”) and requires its directors, officers and employees to maintain the highest level of integrity in their dealings with each other and with the public on behalf of the Company. This Code is intended to document some of the specific principles of conduct and ethics which will be followed by our directors, officers and employees in the performance of their responsibilities with respect to the Company's business. It is intended to:

 

|   | · | promote honest and ethical conduct and manage conflicts that may arise;                                                                                                                   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | promote full, fair, accurate, timely and understandable disclosure to the public including our periodic reports required to be filed with the Canadian securities regulatory authorities; |
|   | · | promote compliance with applicable governmental rules and regulations;                                                                                                                    |
|   | · | provide guidance to directors, officers and employees of the Company to help them recognize and deal with ethical issues;                                                                 |
|   | · | provide a mechanism to report unethical conduct; and                                                                                                                                      |
|   | · | help foster a culture of honesty and accountability.                                                                                                                                      |

 

Our directors have committed that they will comply at all times with the principles set forth in this Code and they expect each of our officers and employees to do likewise. The Company has posted the Code on its website at www.levon.com. There were no amendments to or waivers granted from any provision of the Code during the fiscal year ended March 31, 2015.

 

**Item 16C. Principal Accountant Fees and Services**

 

The independent auditor for the years ended March 31, 2015, 2014 and 2013 was Smythe Ratcliffe LLP, Chartered Accountants.

 

**Audit Fees**

 

The aggregate fees billed by Smythe Ratcliffe LLP for the audit of the Company’s year ended March 31, 2015 was $47,250 (March 31, 2014: $55,000)**.**

 

**Audit-Related Fees**

 

The aggregate fees billed for audit-related fees by Smythe Ratcliffe LLP for the year ended March 31, 2015 were $20,000 at the date of this Annual Report (March 31, 2014: $Nil) relating to the audit of a subsidiary and review of the Company’s interim and pro forma financial statements prepared for regulatory filings in connection with the SciVac Arrangement.

 

**Tax Fees**

 

The aggregate fees billed for tax compliance and tax advice rendered by Smythe Ratcliffe LLP during the fiscal year ended March 31, 2015 was $6,000 at the date of this Annual Report (March 31, 2014: $5,000). The services comprising these fees include compliance service with respect to Canadian tax filings.

 

|   |
|--------|
| 107    |
|        |

 

**All Other Fees**

 

Other than referred to above, the aggregate fees billed for any other professional services rendered by Smythe Ratcliffe LLP for the year ended March 31, 2015 was $Nil (March 31, 2014: $Nil; March 31, 2013: $Nil).

 

The Audit Committee approved 100% of the fees paid to the principal accountant for audit-related, tax and other fees in the fiscal year 2015. The Audit Committee pre-approves all non-audit services to be performed by the auditor in accordance with the Audit Committee Charter. There were no hours expended on the principal accountant's engagement to audit the Company's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

 

**Item 16D. Exemptions from the Listing Standards for Audit Committees**

 

Not applicable.

 

**Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

 

None.

 

**Item 16F. Changes in Registrants Certifying Accountant**

 

None.

 

**Item 16G. Corporate Governance**

 

Not applicable.

 

**Item 16H. Mine Safety Disclosure.**

 

******Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities with respect to mining operations and properties in the United States that are subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). During the year ended March 31, 2015, our U.S. exploration properties were not subject to regulation by the MSHA under the Mine Act.

 

|   |
|--------|
| 108    |
|        |

 

**Part III**

 

**Item 17. Financial Statements**

 

Not Applicable.

 

**Item 18. Financial Statements**

 

The Company’s financial statements are stated in Canadian Dollars and are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

The following Financial Statements pertaining to the Company are filed as part of this Annual Report:

 

| Reports of Independent Registered Public Accounting Firm         |   | 113    |   |
|------------------------------------------------------------------|--------|--------|--------|
| Consolidated Statements of Financial Position                    |   |        | 114    |   |
| Consolidated Statements of Operations and Comprehensive Loss     |   |   | 115    |   |
| Consolidated Statements of Changes In Shareholders’ Equity |   |   | 116    |   |
| Consolidated Statements of Cash Flow                             |   |   | 119    |   |
| Notes to Consolidated Financial Statements                       |   |   | 120    |   |

 

The following financials statements of SciVac are filed as a part of this Annual Report by being incorporated herein by reference to Schedule 1 Appendix F (pages F-74 through F-105) of the Company’s Information Circular as previously furnished to the SEC as Exhibit 99.2 to our Form 6-K on May 12, 2015:

 

Auditors’ Report;

 

Consolidated Statements of Financial Position as at December 31, 2014 and 2013

 

Consolidated Statements of Profit or Loss and Other Comprehensive Income as at December 31, 2014, 2013 and 2012

 

Consolidated Statements of Changes in Equity for the years ended December 31, 2014, 2013 and 2012

 

Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and

 

Notes to the Consolidated Financial Statements for the years ended December 31, 2014, 2013 and 2012.

 

|   |
|--------|
| 109    |
|        |

 

The financial statements of SciVac have been prepared in accordance with IFRS as issued by the IASB which differ in certain respects from the principles SciVac would have followed had its consolidated financial statements been prepared in accordance with US GAAP. All amounts presented in the SciVac financials statements are in U.S. dollars.

 

The following unaudited pro forma financial statements of the Company and SciVac are filed as a part of this Annual Report:

 

| Unaudited Pro Forma Consolidated Statement of Financial Position   |   | 149    |   |
|--------------------------------------------------------------------|--------|--------|--------|
|                                                               |   | ****   |   |
| Unaudited Pro Forma Consolidated Statement of Income               |   |   | 150    |   |
|                                                               |   |   |   |   |
| Notes to the unaudited pro forma consolidated financial statements |   |   | 151    |   |

 

The unaudited pro forma consolidated statement of financial position has been prepared assuming the SciVac Arrangement had occurred on March 31, 2015 and the unaudited pro forma consolidated statements of income has been prepared assuming the SciVac Arrangement had occurred at April 1, 2014.

 

The unaudited pro forma consolidated financial statements have been prepared in accordance with the Company’s and SciVac’s accounting policies. There are no material differences in accounting policies between SciVac and Levon

 

|   |
|--------|
| 110    |
|        |

 

**Item 19. Exhibits**

 

| **Exhibit Number** | ** ** | **Name**                                                                                                                                                                                                                                                                                                                                 |
|--------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 1.1                |       | Notice of Articles of Levon Resources Ltd.(1)                                                                                                                                                                                                                                                                                            |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 1.2                |       | Articles of Levon Resources Ltd. (2)                                                                                                                                                                                                                                                                                                     |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 4.1                |       | Arrangement Agreement (3)                                                                                                                                                                                                                                                                                                                |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 8.1                |       | List of Subsidiaries                                                                                                                                                                                                                                                                                                                     |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 12.1               |       | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)                                                                                                                                                                                                                                                              |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 12.2               |       | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)                                                                                                                                                                                                                                                              |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 13.1               |       | Certificate of Principal Executive Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                                                            |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 13.2               |       | Certificate of Principal Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                                                                                                                                            |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 15.1               |       | All information under the section heading “The Arrangement” on pages 27-56 of the Company’s Management Information Circular dated May 1, 2015 relating to the Special Meeting of Shareholders and Optionholders of Levon on June 3, 2015 which is incorporated in this Annual Report by reference (4)                  |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 15.2               |       | Appendices A, B, F, G and H to the Company’s Management Information Circular dated May 1, 2015 relating to the Special Meeting of Shareholders and Optionholders of Levon on June 3, 2015 which are incorporated in this Annual Report by reference (4)                                                                            |
|               |       |                                                                                                                                                                                                                                                                                                                                     |
| 15.3               |       | The financials statements of SciVac Ltd. contained in Schedule 1 Appendix F (pages F-74 through F-105) of the Company’s Management Information Circular dated May 1, 2015 relating to the Special Meeting of Shareholders and Optionholders of Levon on June 3, 2015 which are incorporated in this Annual Report by reference (4) |

_______________

(1) Previously filed as an exhibit to the Registrant’s annual report on Form 20-F on July 5, 2012

 

(2) Previously filed as an exhibit to the Registrant’s annual report on Form 20-F on November 4, 2005

 

(3) Previously furnished as Exhibit 99.1 on the Registrant’s Form 6-K on June 9, 2015.

 

(4) Previously furnished as a part of Exhibit 99.2 on the Registrant’s Form 6-K on May 12, 2015

 

|   |
|--------|
| 111    |
|        |

 

**LEVON RESOURCES LTD.**

**(An Exploration Stage Company)**

 

**Consolidated Financial Statements**

**For the years ended March 31, 2015, 2014 and 2013**

**(Expressed in Canadian Dollars)**

 

| **Index**                                                        |   | **Page** |   |
|------------------------------------------------------------------|--------|----------|--------|
|                                                             |   | ****     |   |
| **Report of Independent Registered Public Accounting Firm**      |   | 113      |   |
|                                                             |   | ****     |   |
| **Consolidated****Financial Statements**                         |   | ****     |   |
|                                                             |   | ****     |   |
| Consolidated Statements of Financial Position                    |   |          | 114    |   |
|                                                                  |   |     |   |   |
| Consolidated Statements of Operations and Comprehensive Loss     |   |     | 115    |   |
|                                                                  |   |     |   |   |
| Consolidated Statements of Changes in Shareholders’ Equity |   |     | 116    |   |
|                                                                  |   |     |   |   |
| Consolidated Statements of Cash Flows                            |   |     | 119    |   |
|                                                                  |   |     |   |   |
| Notes to Consolidated Financial Statements                       |   |     | 120    |   |

  

|   |
|--------|
| 112    |
|        |

 

 

 

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

**TO THE****SHAREHOLDERS****OF****LEVON RESOURCES LTD.**

 

We have audited the accompanying financial statements of Levon Resource Ltd., which comprise the consolidated as at March 31, 2015 and 2014, and the consolidated statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows for the years ended March 31, 2015, 2014 and 2013, and a summary of significant accounting policies and other explanatory information.

 

*Management's Responsibility for the Consolidated****Financial Statements*

 

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

*Auditors’ Responsibility*

 

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

 

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

 

*Opinion*

 

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Levon Resources Ltd. as at March 31, 2015 and 2014, and its financial performance and cash flows for the years ended March 31, 2015, 2014 and 2013 in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.

 

*Emphasis of Matter*

 

Note 18 to the consolidated financial statements describes the restructuring of the Company approved by the shareholders subsequent to March 31, 2015. As a result, the Company’s business will change and the interest held by Levon Resources Ltd. shareholders will result in each shareholder owning shares of two separate entities.

 

 

Chartered Accountants

 

Vancouver, British Columbia, Canada 

June 18, 2015

 

  

 

|   |
|--------|
| 113    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**

**Consolidated Statements of Financial Position**

**(Expressed in Canadian Dollars)**

**March 31** 

----

 

|                                                 |   | **2015** |         |   | **2014** |   |
|------------------------------------------------------|--------|----------|--------------|--------|----------|--------|
|                                                 |   | ****     |         |   | ****     |   |
| **ASSETS**                                           |
| **Current**                                          |   | ****     |         |   | ****     |   |
| Cash and cash equivalents                            |   | $        | 33,926,320   |   |     | $      | 41,685,776 |   |
| Amounts receivable                                   |   |     | 53,509       |   |     |   | 43,511 |   |
| Prepaid expenses                                     |   |     | 67,059       |   |     |   | 52,414 |   |
| Investments (Note 5)                            |   |     | 16,062,348   |   |     |   | 291 |   |
|                                                      |   |     | 50,109,236   |   |     |   | 41,781,992 |   |
| **Non-current assets**                               |   |     |         |   |     |   |   |   |
| Reclamation deposits (Note 6)                   |   |     | 32,629       |   |     |   | 32,629 |   |
| Amounts receivable (Note 7)                     |   |     | 2,751,086    |   |     |   | 3,051,668 |   |
| Exploration and evaluation assets (Note 8)      |   |     | 50,000,000   |   |     |   | 128,763,649 |   |
| Property and equipment (Note 9)                 |   |     | 79,850       |   |     |   | 106,248 |   |
| **Total Assets**                                     |   | $        | 102,972,801  |   |     | $      | 173,736,186 |   |
|                                                      |   |     |         |   |     |   |   |   |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**       |
| **Current**                                          |   |     |         |   |     |   |   |   |
| Accounts payable and accrued liabilities             |   | $        | 290,822      |   |     | $      | 193,365 |   |
| Due to related parties (Note 12)                |   |     | 59,773       |   |     |   | 81,666 |   |
|                                                      |   |     |         |   |     |   |   |   |
| **Total Liabilities**                                |   |     | 350,595      |   |     |   | 275,031 |   |
|                                                      |   |     |         |   |     |   |   |   |
| **SHAREHOLDERS’ EQUITY**                       |   |     |         |   |     |   |   |   |
| Share capital (Note 10)                         |   |     | 237,731,054  |   |     |   | 230,664,826 |   |
| Reserves (Note 11)                              |   |     | 16,630,525   |   |     |   | 15,498,406 |   |
| Accumulated other comprehensive income (loss)        |   |     | 4,323,444    |   |     |        | (26,519 | ) |
| Deficit                                              |   |          | (156,062,817 | )      |     |        | (72,675,558 | ) |
|                                                      |   |     |         |   |     |   |   |   |
| **Total Equity**                                     |   |     | 102,622,206  |   |     |   | 173,461,155 |   |
|                                                      |   |     |         |   |     |   |   |   |
| **Total Liabilities and Shareholders’ Equity** |   | $        | 102,972,801  |   |     | $      | 173,736,186 |   |

 

| Approved on behalf of the Board: |                                |
|----------------------------------|-------------------------------------|
|                             |                                |   |
| By:                              | */s/**“Gary Robertson”* |   |
|                             | Gary Robertson                      |   |
|                             | Director                            |   |
|                             |                                |   |
|                                  | */s/ “Ron Tremblay”*    |  |
|                                  | Ron Tremblay                        |  |
|                                  | Director                            |  |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 114    |
|        |

 

**LEVON RESOURCES LTD.**

**(An Exploration Stage Company)**

**Consolidated Statements of Operations and Comprehensive Loss**

**(Expressed in Canadian Dollars)**

**Years ended March 31** 

----

 

|                                                          |   | **2015** |        |   | **2014** |   |        | **2013** |   |
|---------------------------------------------------------------|--------|----------|-------------|--------|----------|--------|-------------|----------|--------|
|                                                          |   | ****     |        |   | ****     |   |        | ****     |   |
| **Expenses**                                                  |   | ****     |        |   | ****     |   |        | ****     |   |
| Consulting and management fees (Note 12)                 |   | $        | 948,819     |   |     | $      | 732,234     |     |   | $ | 679,691 |   |
| Depreciation (Note 9)                                    |   |     | 15,077      |   |     |   | 20,792      |     |   |   | 35,487 |   |
| Directors' fees (Note 12)                                |   |     | 160,500     |   |     |   | 97,500      |     |   |   | 101,000 |   |
| Exploration (Note 8)                                     |   |     | 1,089,241   |   |     |   | 3,946,833   |     |   |   | 4,718,354 |   |
| General exploration (Note 8e)                            |   |     | 368,039     |   |     |   | -           |     |   |   | - |   |
| Listing and filing fees                                       |   |     | 112,652     |   |     |   | 95,448      |     |   |   | 82,773 |   |
| Office, occupancy and miscellaneous                           |   |     | 190,409     |   |     |   | 173,735     |     |   |   | 128,714 |   |
| Professional fees                                             |   |     | 245,784     |   |     |   | 155,866     |     |   |   | 87,965 |   |
| Salaries and benefits (Note 12)                          |   |     | 208,557     |   |     |   | 236,828     |     |   |   | 239,799 |   |
| Share-based payments (Notes 11 and 12)                   |   |     | 1,334,525   |   |     |   | 103,306     |     |   |   | 1,023,915 |   |
| Shareholder relations and promotion                           |   |     | 299,202     |   |     |   | 217,133     |     |   |   | 217,157 |   |
| Transaction costs (Note 18)                              |   |     | 597,656     |   |     |   | -           |     |   |   | - |   |
| Travel                                                        |   |     | 272,376     |   |     |   | 68,043      |     |   |   | 193,507 |   |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
|                                                               |   |          | (5,842,837  | )      |     |        | (5,847,718  | )        |   |  | (7,508,362 | ) |
| Impairment of exploration and evaluation assets (Note 8) |   |          | (78,763,649 | )      |     |   | -           |     |   |   | - |   |
| Impairment of convertible debenture (Note 4)                  |   |          | (1,084,589  | )      |     |   | -           |     |   |   | - |   |
| Gain on disposal of investment                                |   |     | -           |   |     |   | 1,882       |     |   |   | - |   |
| Interest income                                               |   |     | 628,952     |   |     |   | 609,773     |     |   |   | 473,526 |   |
| Foreign exchange gain                                         |   |     | 842,482     |   |     |   | 157,665     |     |   |   | 265,329 |   |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Loss Before Income Taxes**                                  |   |          | (84,219,641 | )      |     |        | (5,078,398  | )        |   |  | (6,769,507 | ) |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Deferred Income Tax Recovery**(Note 15)                |   |     | 641,660     |   |     |   | -           |     |   |   | - |   |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Net Loss for Year**                                         |   |          | (83,577,981 | )      |     |        | (5,078,398  | )        |   |  | (6,769,507 | ) |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Other Comprehensive Loss**                                  |   |     |        |   |     |   |        |     |   |   |   |   |
| **Items that will be reclassified to net loss**               |   |     |        |   |     |   |        |     |   |   |   |   |
| Unrealized gain (loss) on investments (Note 5)           |   |     | 4,991,623   |   |     |        | (1,023      | )        |   |  | (3,733 | ) |
| Deferred income tax expense (Note 15)                    |   |          | (641,660    | )      |     |   | -           |     |   |   | - |   |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Total Comprehensive Loss for Year**                         |   | $        | (79,228,018 | )      |     | $      | (5,079,421  | )        |   | $ | (6,773,240 | ) |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Loss Per Share, Basic and Diluted**                         |   | $        | (0.39       | )      |     | $      | (0.03       | )        |   | $ | (0.03 | ) |
|                                                               |   |     |        |   |     |   |        |     |   |   |   |   |
| **Weighted Average Number of Common Shares Outstanding**      |   |     | 213,838,998 |   |     |   | 199,854,423 |     |   |   | 199,810,861 |   |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 115    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**

**Consolidated Statements of Changes in Shareholders’ Equity**

**(Expressed in Canadian Dollars)** 

----

 

|                                                   |   | **Number of Common Shares** |            |   | **ShareCapital** |      |                | **Reserve for Options** |   |   | **Reserve for Warrants** |   |   | **Total Reserves** |            |   | **Accumulated Other Comprehensive Loss** |      |               | **Deficit** |   |   | **Total Shareholders’ Equity** |   |
|--------------------------------------------------------|--------|-----------------------------|-----------------|--------|------------------|-----------|---------------------|-------------------------|--------|--------|--------------------------|--------|--------|--------------------|-----------------|--------|------------------------------------------|-----------|--------------------|-------------|--------|--------|--------------------------------------|--------|
|                                                   |   | ****                        |            |   | ****             |      |                | ****                    |   |   | ****                     |   |   | ****               |            |   | ****                                     |      |               | ****        |   |   | ****                                 |   |
| **Balance,****March 31, 2012**                         |   |                             | **199,754,423** |   |             | ******$** | ******230,608,666** |                    |   | **$**  | **15,513,249**           |   |   | ******$**          | ******950,766** |   |                                     | ******$** | ******16,464,015** |        |   | **$**  | **(21,763**                          | **)**  |   | **$** | **(62,899,323** | **)** |   | **$** | **184,151,595** |   |
|                                                        |   |                        |            |   |             |      |                |                    |   |   |                     |   |   |               |            |   |                                     |      |               |        |   |   |                                 |   |   |   |   |   |   |   |   |   |
| Common shares issued for cash:                         |   |                        |            |   |             |      |                |                    |   |   |                     |   |   |               |            |   |                                     |      |               |        |   |   |                                 |   |   |   |   |   |   |   |   |   |
| Exercise of options                                    |   |                        | 100,000         |   |             |      | 35,000              |                    |   |   | -                        |   |   |               | -               |   |                                     |      | -                  |        |   |   | -                                    |   |   |   | - |   |   |   | 35,000 |   |
| Transfer of reserves on exercise of options            |   |                        | -               |   |             |      | 21,160              |                    |   |        | (21,160                  | )      |   |               | -               |   |                                     |           | (21,160            | )           |   |   | -                                    |   |   |   | - |   |   |   | - |   |
| Transfer of reserves on expiry of warrants and options |   |                        | -               |   |             |      | -                   |                    |   |        | (272,923                 | )      |   |                    | (950,766        | )      |                                     |           | (1,223,689         | )           |   |   | -                                    |   |   |   | 1,223,689 |   |   |   | - |   |
| Share-based payments                                   |   |                        | -               |   |             |      | -                   |                    |   |   | 1,023,915                |   |   |               | -               |   |                                     |      | 1,023,915          |        |   |   | -                                    |   |   |   | - |   |   |   | 1,023,915 |   |
| Net loss for the year                                  |   |                        | -               |   |             |      | -                   |                    |   |   | -                        |   |   |               | -               |   |                                     |      | -                  |        |   |   | -                                    |   |   |  | (6,769,507 | ) |   |  | (6,769,507 | ) |
| Unrealized loss on investments                         |   |                        | -               |   |             |      | -                   |                    |   |   | -                        |   |   |               | -               |   |                                     |      | -                  |        |   |        | (3,733                               | )      |   |   | - |   |   |  | (3,733 | ) |
| **Balance, March 31, 2013**                            |   |                        | **199,854,423** |   |             | ******$** | ******230,664,826** |                    |   | **$**  | **16,243,081**           |   |   | $                  | **-**           |   |                                     | **$**     | **16,243,081**     |        |   | **$**  | **(25,496**                          | **)**  |   | **$** | **(68,445,141** | **)** |   | **$** | **178,437,270** |   |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 116    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Consolidated Statements of Changes in Shareholders’ Equity** 

**(Expressed in Canadian Dollars)** 

----

 

|                                      |   | **Number of Common Shares** |            |   | **ShareCapital** |      |                | **Reserve for Options** |   |   | **Accumulated Other Comprehensive Loss** |   |   | **Deficit** |        |   | **Total Shareholders’ Equity** |   |
|-------------------------------------------|--------|-----------------------------|-----------------|--------|------------------|-----------|---------------------|-------------------------|--------|--------|------------------------------------------|--------|--------|-------------|-------------|--------|--------------------------------------|--------|
|                                      |   | ****                        |            |   | ****             |      |                | ****                    |   |   | ****                                     |   |   | ****        |        |   | ****                                 |   |
| **Balance,****March 31, 2013**            |   |                             | **199,854,423** |   |             | ******$** | ******230,664,826** |                    |   | **$**  | **16,243,081**                           |   |   | **$**       | **(25,496** | **)**  |                                 | **$**  | **(68,445,141** | **)** |   | **$** | **178,437,270** |   |
|                                           |   |                        |            |   |             |      |                |                    |   |   |                                     |   |   |        |        |   |                                 |   |   |   |   |   |   |   |
| Transfer of reserves on expiry of options |   |                        | -               |   |             |      | -                   |                    |   |        | (847,981                                 | )      |   |        | -           |   |                                 |   | 847,981 |   |   |   | - |   |
| Share-based payments                      |   |                        | -               |   |             |      | -                   |                    |   |   | 103,306                                  |   |   |        | -           |   |                                 |   | - |   |   |   | 103,306 |   |
| Net loss for the year                     |   |                        | -               |   |             |      | -                   |                    |   |   | -                                        |   |   |        | -           |   |                                 |        | (5,078,398 | ) |   |  | (5,078,398 | ) |
| Unrealized loss on investments            |   |                        | -               |   |             |      | -                   |                    |   |   | -                                        |   |   |             | (1,023      | )      |                                 |   | - |   |   |  | (1,023 | ) |
| **Balance, March 31, 2014**               |   |                        | **199,854,423** |   |             | ******$** | ******230,664,826** |                    |   | **$**  | **15,498,406**                           |   |   | **$**       | **(26,519** | **)**  |                                 | **$**  | **(72,675,558** | **)** |   | **$** | **173,461,155** |   |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 117    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Consolidated Statements of Changes in Shareholders’ Equity**

**(Expressed in Canadian Dollars)**

----

 

|                           |   | **Number of Common Shares** |            |   | **ShareCapital** |   |            | **Reserve for options** |   |   | **Accumulated Other Comprehensive Income (Loss)** |   |   | **Deficit** |          |   | **Total Shareholders’ Equity** |   |
|--------------------------------|--------|-----------------------------|-----------------|--------|------------------|--------|-----------------|-------------------------|--------|--------|---------------------------------------------------|--------|--------|-------------|---------------|--------|--------------------------------------|--------|
|                           |   | ****                        |            |   | ****             |   |            | ****                    |   |   | ****                                              |   |   | ****        |          |   | ****                                 |   |
| **Balance, March 31, 2014**    |   |                             | **199,854,423** |   |             | **$**  | **230,664,826** |                    |   | **$**  | **15,498,406**                                    |   |   | **$**       | **(26,519**   | **)**  |                                 | **$**  | **(72,675,558** | **)** |   | **$** | **173,461,155** |   |
|                                |   |                        |            |   |             |   |            |                    |   |   |                                              |   |   |        |          |   |                                 |   |   |   |   |   |   |   |
| Common shares issued for cash: |   |                        |            |   |             |   |            |                    |   |   |                                              |   |   |        |          |   |                                 |   |   |   |   |   |   |   |
| Private placement              |   |                        | 31,400,000      |   |             |   | 7,040,000       |                    |   |   | -                                                 |   |   |        | -             |   |                                 |   | - |   |   |   | 7,040,000 |   |
| Share issuance costs           |   |                        | 110,000         |   |             |        | (47,284         | )                       |   |   | 11,828                                            |   |   |        | -             |   |                                 |   | - |   |   |  | (35,456 | ) |
| Exercise of stock options      |   |                        | 200,000         |   |             |   | 50,000          |                    |   |   | -                                                 |   |   |        | -             |   |                                 |   | - |   |   |   | 50,000 |   |
| Transfer of cancelled warrants |   |                        | -               |   |             |   | -               |                    |   |        | (11,828                                           | )      |   |        | -             |   |                                 |   | 11,828 |   |   |   | - |   |
| Transfer of exercised options  |   |                        | -               |   |             |   | 23,512          |                    |   |        | (23,512                                           | )      |   |        | -             |   |                                 |   | - |   |   |   | - |   |
| Transfer of expired options    |   |                        | -               |   |             |   | -               |                    |   |        | (178,894                                          | )      |   |        | -             |   |                                 |   | 178,894 |   |   |   | - |   |
| Share-based compensation       |   |                        | -               |   |             |   | -               |                    |   |   | 1,334,525                                         |   |   |        | -             |   |                                 |   | - |   |   |   | 1,334,525 |   |
| Net loss for the year          |   |                        | -               |   |             |   | -               |                    |   |   | -                                                 |   |   |        | -             |   |                                 |        | (83,577,981 | ) |   |  | (83,577,981 | ) |
| Deferred income tax expense    |   |                        | -               |   |             |   | -               |                    |   |   | -                                                 |   |   |             | (641,660      | )      |                                 |   | - |   |   |  | (641,660 | ) |
| Unrealized gain on investments |   |                        | -               |   |             |   | -               |                    |   |   | -                                                 |   |   |        | 4,991,623     |   |                                 |   | - |   |   |   | 4,991,623 |   |
| **Balance, March 31, 2015**    |   |                        | **231,564,423** |   |             | **$**  | **237,731,054** |                    |   | **$**  | **16,630,525**                                    |   |   | **$**       | **4,323,444** |   |                                 | **$**  | **(156,062,817** | **)** |   | **$** | **102,622,206** |   |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 118    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**

**Consolidated Statements of Cash Flows** 

**(Expressed in Canadian Dollars)** 

**Years ended March 31** 

----

 

|                                                   |   | **2015** |        |   | **2014** |   |       | **2013** |   |
|--------------------------------------------------------|--------|----------|-------------|--------|----------|--------|------------|----------|--------|
|                                                   |   | ****     |        |   | ****     |   |       | ****     |   |
| **Operating Activities**                               |   | ****     |        |   | ****     |   |       | ****     |   |
| Net loss                                               |   | $        | (83,577,981 | )      |     | $      | (5,078,398 | )        |   | $ | (6,769,507 | ) |
| Items not involving cash:                              |   |     |        |   |     |   |       |     |   |   |   |   |
| Depreciation                                           |   |     | 29,939      |   |     |   | 33,674     |     |   |   | 36,469 |   |
| Unrealized foreign exchange loss (gain)                |   |          | (488,102    | )      |     |   | 18,108     |     |   |   | 82,257 |   |
| Share-based payments                                   |   |     | 1,334,525   |   |     |   | 103,306    |     |   |   | 1,023,915 |   |
| Gain on disposal of investments                        |   |     | -           |   |     |        | (1,882     | )        |   |   | - |   |
| Interest income accrued                                |   |          | (308,250    | )      |     |   | -          |     |   |   | - |   |
| Impairment of exploration and evaluation assets        |   |     | 78,763,649  |   |     |   | -          |     |   |   | - |   |
| Impairment of convertible debenture                    |   |     | 1,084,589   |   |     |   | -          |     |   |   | - |   |
| Deferred income tax recovery                           |   |          | (641,660    | )      |     |   | -          |     |   |   | - |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| Changes in non-cash working capital items:             |   |     |        |   |     |   |       |     |   |   |   |   |
| Amounts receivable and prepaid expenses                |   |     | 275,939     |   |     |        | (556,569   | )        |   |  | (484,768 | ) |
| Accounts payable and accrued liabilities               |   |     | 46,995      |   |     |   | 30,680     |     |   |  | (225,967 | ) |
| Due to related parties                                 |   |     | 28,569      |   |     |   | 5,690      |     |   |  | (238,179 | ) |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Cash Used in Operating Activities**                  |   |          | (3,451,788  | )      |     |        | (5,445,391 | )        |   |  | (6,575,780 | ) |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Investing Activities**                               |   |     |        |   |     |   |       |     |   |   |   |   |
| Acquisition of exploration and evaluation assets       |   |     | -           |   |     |        | (2,161,690 | )        |   |  | (2,041,998 | ) |
| Equipment acquisitions                                 |   |          | (3,541      | )      |     |        | (5,493     | )        |   |  | (75,040 | ) |
| Purchase of convertible debenture                      |   |          | (1,000,000  | )      |     |   | -          |     |   |   | - |   |
| Proceeds on disposition of investment                  |   |     | -           |   |     |   | 4,544      |     |   |   | - |   |
| Purchase of investment                                 |   |          | (11,097,010 | )      |     |   | -          |     |   |   | - |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Cash Used In Investing Activities**                  |   |          | (12,100,551 | )      |     |        | (2,162,639 | )        |   |  | (2,117,038 | ) |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Financing Activity**                                 |   |     |        |   |     |   |       |     |   |   |   |   |
| Issue of share capital for cash, net of issuance costs |   |     | 7,054,544   |   |     |   | -          |     |   |   | 35,000 |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Cash Provided by Financing Activity**                |   |     | 7,054,544   |   |     |   | -          |     |   |   | 35,000 |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Foreign Exchange Effect on Cash**                    |   |     | 738,339     |   |     |        | (18,108    | )        |   |  | (82,257 | ) |
| **Outflow of Cash and Cash Equivalents**               |   |          | (7,759,456  | )      |     |        | (7,626,138 | )        |   |  | (8,740,075 | ) |
| **Cash and Cash Equivalents, Beginning of Year**       |   |     | 41,685,776  |   |     |   | 49,311,914 |     |   |   | 58,051,989 |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Cash and Cash Equivalents, End of Year**             |   | $        | 33,926,320  |   |     | $      | 41,685,776 |     |   | $ | 49,311,914 |   |
|                                                        |   |     |        |   |     |   |       |     |   |   |   |   |
| **Cash and Cash Equivalents Consists of:**             |   |     |        |   |     |   |       |     |   |   |   |   |
| Cash                                                   |   | $        | 4,206,389   |   |     | $      | 3,502,385  |     |   | $ | 23,266,236 |   |
| Term deposits                                          |   |     | 29,719,931  |   |     |   | 38,183,391 |     |   |   | 26,045,678 |   |
|                                                        |   | $        | 33,926,320  |   |     | $      | 41,685,776 |     |   | $ | 49,311,914 |   |
| **Supplemental Cash Flow Information**                 |   |     |        |   |     |   |       |     |   |   |   |   |
| Interest received                                      |   | $        | 286,139     |   |     | $      | 458,242    |     |   | $ | 412,121 |   |
| Interest paid                                          |   | $        | -           |   |     | $      | -          |     |   | $ | - |   |
| Income taxes paid                                      |   | $        | -           |   |     | $      | -          |     |   | $ | - |   |

 

The accompanying notes are an integral part of these consolidated financial statements

 

|   |
|--------|
| 119    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**

**Years ended March 31, 2015 and 2014**

----

 

| **1.** | **NATURE AND CONTINUANCE OF OPERATIONS** |
|--------|------------------------------------------|

 

Levon Resources Ltd. (the “Company” or “Levon”) was incorporated under the laws of British Columbia on April 9, 1965. The Company is an exploration stage public company whose principal business activities are the exploration for and development of exploration and evaluation properties in Mexico. There have been no significant revenues generated from these activities to date. The address of the Company’s registered office is Suite 500 – 666 Burrard Street, Vancouver, British Columbia, V6C 2X8.

 

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of exploration and evaluation assets and the Company's ability to continue as a going concern is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations or the ability of the Company to raise alternative financing.

 

On March 20, 2015, the Company, together with SciVac Ltd. (“SciVac”) announced that they had entered into an arrangement agreement pursuant to which the Company will acquire 100% of the issued and outstanding ordinary shares of SciVac by way of a court-approved plan of arrangement (the "SciVac Arrangement"). SciVac is a commercial-stage biotech leader in protein engineering whose flagship product, Sci-B-Vac, is a next generation hepatitis B vaccine (Note 18).

 

| **2.** | **BASIS OF PRESENTATION** |
|--------|---------------------------|

 

**Statement of compliance**

 

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

 

**Basis of presentation**

 

These consolidated financial statements are expressed in Canadian dollars, the Company’s functional currency, and have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting with the exception of cash flow information. The accounting policies set out in Note 3 have been applied consistently to all years presented in these consolidated financial statements as if the policies have always been in effect.

 

**Approval of the consolidated financial statements**

 

These consolidated financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on June 18, 2015.

 

**Foreign****currency****transactions**

 

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the consolidated statement of financial position. Non-monetary assets and liabilities that are denominated in foreign currencies are translated at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities.

 

|   |
|--------|
| 120    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **2.** | **BASIS OF PRESENTATION (Continued)** |
|--------|---------------------------------------|

 

**Significant accounting judgments and estimates**

 

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. In particular, significant judgments made by management in the application of IFRS during the preparation of the consolidated financial statements and estimates with a risk of material adjustment are as follows.

 

*Critical accounting judgments*

 

|   | (a)    | *Realization of exploration and evaluation assets and impairment*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | The investment in exploration and evaluation assets on the Cordero Sanson Property (“Cordero”) comprise a significant portion of the Company’s assets. Realization of the Company’s investment in the exploration and evaluation assets is dependent upon the Company obtaining permits, the satisfaction of local governmental requirements, obtaining drill results that support an economically viable mining operation, the attainment of successful production from the properties or from the proceeds upon disposal of the Company’s properties. Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | At each financial position reporting date, the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit (“CGU”) to which the asset belongs.                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | At March 31, 2015, there were indicators that suggest that the Company’s investment in exploration and evaluation assets on the Cordero project is impaired, and as such, the Company recognized an impairment (Note 8).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | (b)    | *Functional currency*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | The determination of the functional currency for the Company and each of its subsidiaries was based on management's judgment of the underlying transactions, events and conditions relevant to each entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

 

|   |
|--------|
| 121    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **2.** | **BASIS OF PRESENTATION (Continued)** |
|--------|---------------------------------------|

 

**Significant accounting judgments and estimates (Continued)**

 

*Critical accounting estimates***

 

|   | (c)    | *Valuation of derivative financial instruments*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | The valuation of the Company’s derivative financial instruments involves estimation and judgment by management. In determining these amounts, the Company uses option pricing models or other valuation techniques. Changes in these assumptions and estimates can have an impact to the relevant charge to the consolidated statements of operations and comprehensive loss. The Company estimated a value of $nil for the option to convert the convertible senior secured debenture into common shares (Note 4).                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (d)    | *Environmental*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | The Company assesses its provisions for environmental rehabilitation on an annual basis or when new material information becomes available. Provisions for environmental rehabilitation require management to make estimates of the future costs of the work required to comply with legal or constructive obligations. Actual costs incurred may differ from those amounts estimated. Future changes to environmental laws and regulations could increase the extent of work required to be performed, which could materially impact the amounts charged to operations for provisions for environmental rehabilitation. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | At March 31, 2015 and 2014, the Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (e)    | *Impairment of marketable securities*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Management assesses at the end of each reporting period whether there had been any other-than-temporary impairment on its investments, using objective evidence to determine if the marketable securities are impaired. Listed prices on public stock exchanges are used to determine if the fair value is at a significant and prolonged decline below the historical cost of the marketable securities.                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | At March 31, 2015 and 2014, there are no indications that suggest that the Company’s marketable securities are impaired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (f)    | *Recoverability of amounts receivable*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | The balance in amounts receivable includes value added taxes to be recovered in Mexico. At each financial position reporting date, the carrying amounts of the Company’s amounts receivable are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | The Company is corresponding with the Mexican government to recover the Mexican value added tax and the estimate is based on the amount of eligible expenditures calculated by management. Actual amount receivable from the government may be lower. At March 31, 2015 and 2014, there are no indications that suggest that the Company’s Mexican value added tax is not recoverable.                                                                                                                                                                                                                             |

 

|   |
|--------|
| 122    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **2.** | **BASIS OF PRESENTATION (Continued)**                          |
|--------|----------------------------------------------------------------|
|   |                                                           |
|   | **Significant accounting judgments and estimates (Continued)** |

 

*Critical accounting estimates**(Continued)*

 

|   | (g)    | *Valuation of share-based payments*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | The fair value of share-based payments is subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate.                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | (h)    | *Income taxes*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. The Company is subject to assessments by various taxation authorities, which may interpret legislation differently. These differences may affect the final amount or the timing of the payment of taxes. The Company provides for such differences where known based on management’s best estimate of the probable outcome of these matters |

 

While management believes that these judgments and estimates are reasonable, actual results could differ from those estimates and could impact future results of comprehensive income (loss) and cash flows. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant changes in estimates during the fourth quarter of the year ended March 31, 2015 are discussed in Notes 4 and 8.

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES** |
|--------|-------------------------------------|

 

**Basis of consolidation**

 

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The functional currency of the Company’s subsidiaries is the Canadian dollar.

 

|                                                     | **Jurisdiction**         | **Nature of Operations**          |
|----------------------------------------------------------|--------------------------|-----------------------------------|
| Valley High Ventures Ltd. (“VHV”)            | British Columbia, Canada | Holding Company                   |
| Citrine Investment Holdings Limited                      | British Virgin Islands   | Holding Company                   |
| Minera Titan S.A. de C.V                                 | Mexico                   | Exploration Company               |
| Aphrodite Asset Holdings Ltd                             | British Virgin Islands   | Holding Company                   |
| Turney Assets Limited                                    | British Virgin Islands   | Holding Company                   |
| Mineral El Camino S.A. de C.V.                           | Mexico                   | Holding Company                   |
| Administracion de Projectos Levon en Mexico S.A. de C.V. | Mexico                   | Mexican operations administration |
| 1027949 BC Ltd.                                          | Canada                   | Holding Company                   |

 

Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.

 

|   |
|--------|
| 123    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**Financial instruments**

 

All financial assets are initially recorded at fair value and classified into one of four categories: held-to-maturity, available-for-sale, loans and receivables or fair value through profit or loss (“FVTPL”). All financial liabilities are initially recorded at fair value and classified as either FVTPL or other financial liabilities.

 

Financial assets and financial liabilities are recognized on the consolidated statements of financial position when the Company becomes a party to the contractual provisions of the financial instrument.

 

**Financial assets**

 

The Company classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Company's accounting policy for each category is as follows:

 

*Fair value through profit or loss –*This category comprises derivatives, or financial assets acquired or incurred principally for the purpose of selling or repurchasing in the near term. They are carried in the consolidated statements of financial position at fair value with changes in fair value recognized in the consolidated statements of operations and comprehensive loss.

 

*Loans and receivables –*These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non-current assets based on their maturity dates. They are initially recognized at fair value and subsequently carried at amortized cost less any provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default.

 

*Held-to-maturity investments*– These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company's management has the positive intention and ability to hold to maturity. These assets are initially recognized at fair value and subsequently are measured at amortized cost using the effective interest rate method. If there is objective evidence that the investment is impaired, determined by reference to external credit ratings and other relevant indicators, the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses, are recognized in the consolidated statements of operations and comprehensive loss.

 

*Available-for-sale*– Non-derivative financial assets not included in the above categories are classified as available-for-sale. They are carried at fair value with changes in fair value recognized directly in other comprehensive income, within equity. Where a decline in the fair value of an available-for-sale financial asset constitutes objective evidence of impairment, the amount of the loss is removed from equity and recognized in the consolidated statements of operations and comprehensive loss.

 

Transactions costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.

 

|   |
|--------|
| 124    |
|        |

 

**LEVON RESOURCES LTD. ** 

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**Financial assets****(Continued)**

 

All financial assets, except for those at FVTPL, are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described above.

 

**Financial liabilities**

 

The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the asset was acquired. The Company's accounting policy for each category is as follows:

 

*Fair value through profit or loss*– This category comprises derivatives, or liabilities acquired or incurred principally for the purpose of selling or repurchasing in the near term. They are carried in the consolidated statements of financial position at fair value with changes in fair value recognized in the consolidated statements of operations and comprehensive loss.

 

*Other financial liabilitie*s – Liabilities in this category are initially recognized at fair value, net of transaction costs, and are subsequently stated at amortized cost.

 

**Fair value hierarchy**

 

Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significant inputs in making the measurements. The levels of the fair value hierarchy are defined as follows:

 

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

 

Level 3 – Inputs for the asset or liability that are not based on observable market data.

 

**Cash and cash equivalents**

 

Cash and cash equivalents are comprised of cash, bank deposits, cashable guaranteed investment certificates (“GIC”) and short-term investments that are readily convertible to known amounts of cash with original maturities of three months or less.

 

**Exploration and evaluation assets**

 

The Company is in the exploration stage with respect to its mineral properties. The Company capitalizes all costs relating to the acquisition of mineral claims, and expenses all costs relating to the exploration and evaluation of mineral claims.

 

All exploration and evaluation expenditures are expensed until properties are determined to contain economically viable reserves. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the subsequent costs incurred for the development of that project will be capitalized as mining properties, a component of property and equipment.

 

|   |
|--------|
| 125    |
|        |

 

**LEVON RESOURCES LTD. ** 

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**Property and equipment**

 

Property and equipment are recorded at historical cost less accumulated depreciation. Historical costs include expenditures that are directly attributable to bringing the asset to a location and condition necessary to operate in a manner intended by management. Such costs are accumulated as construction-in-progress until the asset is available for use, at which point the asset is classified as property and equipment. Once commercial production has commenced, mine, mill, machinery, plant facilities and certain equipment will be depreciated using the units of production method if sufficient reserve information is available, or the straight-line method over their estimated useful lives, not to exceed the life of the mine to which the assets relate.

 

Depreciation is calculated on a declining-balance basis at the following annual rates:

 

| Computer equipment      |   | 30     | %  |
|-------------------------|--------|--------|----|
| Furniture and equipment |   |   | 20 | % |
| Vehicles                |   |   | 30 | % |
| Machinery equipment     |   |   | 30 | % |

 

**Impairment**

 

At each reporting date, the carrying amounts of the Company’s exploration and evaluation assets and property and equipment are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the CGU to which the asset belongs.

 

An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an orderly transaction between market participants. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

 

**Provisions**

 

Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to the passage of time is recognized as accretion expense.

 

|   |
|--------|
| 126    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**Reclamation provision**

 

The Company records the present value of estimated costs of legal and constructive obligations required to restore mineral properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation and revegetation of affected areas.

 

The fair value of the liability for a rehabilitation provision is recorded when it is incurred. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related exploration and evaluation assets. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability, which is accreted over time through periodic charges to profit or loss. Additional disturbances or changes in rehabilitation costs will be recognized as additions or charges to the corresponding assets and rehabilitation liability when they occur.

 

**Accounting for equity units**

 

Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated based on their relative fair values, calculated using the Black-Scholes option pricing model for warrants and the market price for common shares.

 

**Share-based payments**

 

The stock option plan described in Note 10 allows the Company's directors, employees and consultants to acquire shares of the Company. The fair value of options granted is recognized as a share-based payment expense with a corresponding increase in reserves. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.

 

The fair value of employee options is measured at the option’s grant date, and the fair value of non-employee options is measured at the date or over the period during which goods or services are received. The fair value of each tranche of options granted, which do not vest immediately on grant, is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. At each reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

 

Share-based payments are credited to the reserve for options. If the options are later exercised, their fair value is transferred from the reserve to share capital. If the options expire unexercised or are forfeited or cancelled subsequent to vesting, the initial fair value is transferred from the reserve to deficit.

 

**Loss per share**

 

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of shares outstanding during the period. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of shares outstanding for the effects of all dilutive potential common shares. In the Company's case, diluted loss per share is the same as basic loss per share, as the effects of including all outstanding options and warrants would be anti-dilutive.

 

|   |
|--------|
| 127    |
|        |

 

**LEVON RESOURCES LTD. ** 

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**Income taxes**

 

Income tax on the profit or loss for the years presented comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized directly in equity, in which case it is recognized as equity.

 

Deferred tax is provided using the asset and liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the consolidated statement of financial position date.

 

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is reduced.****

 

**Accounting policies adopted**

 

Effective April 1, 2014, the Company adopted the amendment to IAS 36 *Impairment of Assets*, which requires additional disclosure on the recoverable amounts of an impaired CGU. The adoption of this amendment is reflected in the disclosure in the consolidated financial statements for the year ended March 31, 2015.

 

**New accounting standards and interpretations not yet adopted**

 

The following new standards, interpretations and amendments to existing standards have been issued by the IASB, but are not effective for the year ended March 31, 2015. All of the new and revised standards described below may be early-adopted. Some updates that are not applicable or are not consequential to the Company have been excluded from the list below. The Company is currently assessing the impact, if any, of the standards on its consolidated financial statements and have not early-adopted any of the new requirements.

 

|   |
|--------|
| 128    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES (Continued)** |
|--------|-------------------------------------------------|

 

**New accounting standards and interpretations not yet adopted (Continued)**

 

**IFRS 9 *Financial Instruments***

 

IFRS 9 *Financial Instruments* (2014) is the finalized version of IFRS 9, which contains accounting requirements for financial instruments, replacing IAS 39 *Financial Instruments: Recognition and Measurement*. The standard contains requirements in the following areas:

 

|   | · | Classification and measurement. Financial assets are classified by reference to the business model within which they are held and their contractual cash flow characteristics.                                                                                                                                                      |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | The 2014 version of IFRS 9 introduces a “fair value through other comprehensive income” category for certain debt instruments. Financial liabilities are classified in a similar manner to under IAS 39; however, there are differences in the requirements applying to the measurement of an entity's own credit risk. |
|   | · | Impairment. The 2014 version of IFRS 9 introduces an “expected credit loss” model for the measurement of the impairment of financial assets, so it is no longer necessary for a credit event to have occurred before a credit loss is recognized.                                                                       |
|   | · | Hedge accounting. Introduces a new hedge accounting model that is designed to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk exposures.                                                                                                               |
|   | · | Derecognition. The requirements for the derecognition of financial assets and liabilities are carried forward from IAS 39.                                                                                                                                                                                                          |

 

Applicable to the Company's annual periods beginning on April 1, 2018.

 

**Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS****16 and IAS 38)**

 

Amends IAS 16 *Property, Plant and Equipment* and IAS 38 *Intangible Assets* to:

 

|   | · | Clarify that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate for property, plant and equipment                                                                                                                                                                                                                                                             |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Introduce a rebuttable presumption that an amortization method that is based on the revenue generated by an activity that includes the use of an intangible asset is inappropriate, which can only be overcome in limited circumstances where the intangible asset is expressed as a measure of revenue, or when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated |
|   | · | Add guidance that expected future reductions in the selling price of an item that was produced using an asset could indicate the expectation of technological or commercial obsolescence of the asset, which, in turn, might reflect a reduction of the future economic benefits embodied in the asset.                                                                                                                                         |

 

Applicable to the Company’s annual periods beginning on April 1, 2017.

 

|   |
|--------|
| 129    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **4.** | **CONVERTIBLE DEBENTURE** |
|--------|---------------------------|

 

On June 19, 2014, the Company entered into an agreement for a convertible senior secured debenture (the “Debenture”) with a private arm’s length company (the “Borrower”). The principal amount is $1,000,000 and bears interest of 10% per annum with a maturity date of March 31, 2016. The Debenture will be convertible at the Company’s option into common shares that will be issued to result in a 50% interest in the Borrower at any time up to, but no later than, the maturity date. As at March 31, 2015, $1,000,000 has been advanced to the Borrower and $84,589 in interest income has been accrued. The Debenture is secured by an interest over all the assets of the Borrower. A value of $nil was recognized for the option to convert, which is accounted for as a separate derivative, at initial recognition given the early stage of the Borrower.

 

As at March 31, 2015, the Company determined that there was insufficient information available to support a reliable estimate of a recoverable amount of the Debenture and therefore recorded in the consolidated statements of operations and comprehensive loss an impairment against the full balance of the convertible debenture including $84,589 of accrued interest.

 

| **5.** | **INVESTMENTS** |
|--------|-----------------|

 

At March 31, 2015, the Company held investments as follows:

 

|                             |   | **Quantity of Common Shares** |       |   | **Cost** |   |       | **Accumulated Unrealized Gains (Losses)** |   |   | **Fair Value** |   |
|----------------------------------|--------|-------------------------------|------------|--------|----------|--------|------------|-------------------------------------------|--------|--------|----------------|--------|
| **Available-for-sale**           |   | ****                          |       |   | ****     |   |       | ****                                      |   |   | ****           |   |
| Pershing Gold Corporation (1)(2) |   |                               | 35,178,572 |   |     | $      | 11,097,010 |                                      |   | $      | 4,965,104      |   |   | $ | 16,062,114 |   |
| Great Thunder Gold Corp.         |   |                          | 11,632     |   |     |   | 26,811     |                                      |   |        | (26,577        | )      |   |   | 234 |   |
| **Balance, March 31, 2015**      |   |                          |       |   |     | $      | 11,123,821 |                                      |   | $      | 4,938,527      |   |   | $ | 16,062,348 |   |

 

(1) During the year ended March 31, 2015, the Company purchased a 9.9% interest in Pershing Gold Corporation (“Pershing”) by acquiring 35,178,572 shares of common stock at US dollars (“USD”) of $0.28 per share for an aggregate amount of USD $9,850,000. Pershing’s common stock is traded on the OTCQB under the symbol PGLC.

(2) On June 18, 2015, Pershing effected a reverse stock split of its common shares at a ratio of 1-for-18 and the Company now holds 1,954,366 common shares in Pershing.

 

At March 31, 2014, the Company held investments as follows:

 

|                     |   | **Quantity of Common Shares** |   |   | **Cost** |   |   | **Accumulated Unrealized Gains (Losses)** |   |   | **Fair Value** |   |
|--------------------------|--------|-------------------------------|--------|--------|----------|--------|--------|-------------------------------------------|--------|--------|----------------|--------|
| **Available-for-sale**   |   | ****                          |   |   | ****     |   |   | ****                                      |   |   | ****           |   |
| Great Thunder Gold Corp. |   |                               | 11,632 |   |     | $      | 26,811 |                                      |   | $      | (26,520        | )      |   | $ | 291 |   |

 

During the year ended March 31, 2014, the Company sold 2,200 shares of Avino Silver & Gold Mines Ltd. for $4,544 and recognized a gain on disposition of $1,882.

 

|   |
|--------|
| 130    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **6.** | **RECLAMATION DEPOSITS** |
|--------|--------------------------|

 

The Company has pledged specified term deposits as security for reclamation permits, as required by certain government agencies. The Company has a varying number of deposits on hand ranging from $1,000 to $6,000 with maturity dates ranging from July 29, 2015 to January 13, 2016 and interest rates at 1.00%. These deposits are renewed annually.

 

| **7.** | **AMOUNTS RECEIVABLE** |
|--------|------------------------|

 

The Company is corresponding with the Mexican government to recover the Mexican value added tax. During the year ended March 31, 2015, the Company recovered Mexican value added tax of approximately $656,000. At March 31, 2015, there are no indications that suggest that the Company’s Mexican value added tax is not recoverable.

 

| **8.** | **EXPLORATION AND EVALUATION ASSETS** |
|--------|---------------------------------------|

 

The Company has capitalized the following acquisition expenditures:

 

|                        |   | **Cordero** |            |
|-----------------------------|--------|-------------|-----------------|
| **Balance, March 31, 2013** |   | **$**       | **126,601,959** |   |
| Additions during the year   |   |        | 2,161,690       |   |
| **Balance, March 31, 2014** |   |        | **128,763,649** |   |
| Impairment                  |   |             | (78,763,649     | ) |
| **Balance, March 31, 2015** |   | **$**       | **50,000,000**  |   |

 

Subsequent to the year ended March 31, 2015, the Company obtained an opinion of value on Cordero. It was determined that the recoverable value of the project based on fair value less costs to sell is approximately $50,000,000 using a median of three valuation methods, including adjusted appraised value based on historical costs, comparables approach based on resource value and attributed share of market capitalization as secondary corroboration. Key assumptions in the adjusted appraised value include the amount that historical expenditures have added to the project value and the market to book value ratio estimate. Key assumptions in the comparables approach include the percentage taken of published median metal prices of deposits with contained metal reflecting Cordero’s resource estimates and grades.

 

The fair value estimated is in accordance with Level 3 of the fair value hierarchy. As such, the Company recognized an impairment of $78,763,649.

 

|   |
|--------|
| 131    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **8.** | **EXPLORATION AND EVALUATION ASSETS (Continued)** |
|--------|---------------------------------------------------|

 

The Company incurred the following exploration expenditures, which were expensed in the consolidated statements of operations and comprehensive loss for the years ended March 31, 2015, 2014 and 2013:

 

| **Cordero **(Note 8c)    |   | **2015** |          |   | **2014** |   |          | **2013** |   |
|------------------------------------|--------|----------|---------------|--------|----------|--------|---------------|----------|--------|
|                               |   | ****     |          |   | ****     |   |          | ****     |   |
| Assays                             |   | $        | 43,682        |   |     | $      | 371,501       |     |   | $ | 381,036 |   |
| Drilling and exploration           |   |     | 54,701        |   |     |   | 1,930,792     |     |   |   | 1,050,438 |   |
| Geological and management services |   |     | 568,700       |   |     |   | 847,281       |     |   |   | 2,239,723 |   |
| Machinery rental                   |   |     | -             |   |     |   | 170,356       |     |   |   | 216,471 |   |
| Mining rights                      |   |     | 196,504       |   |     |   | 123,574       |     |   |   | 117,148 |   |
| Payroll and general supplies       |   |     | 195,315       |   |     |   | 219,031       |     |   |   | 240,365 |   |
| Professional fees                  |   |     | -             |   |     |   | 126,806       |     |   |   | 111,627 |   |
| Travel                             |   |     | 30,339        |   |     |   | 129,472       |     |   |   | - |   |
| Waste collection                   |   |     | -             |   |     |   | 28,020        |     |   |   | 64,108 |   |
| Water well construction            |   |     | -             |   |     |   | -             |     |   |   | 297,438 |   |
| **Balance, March 31**              |   | **$**    | **1,089,241** |   |     | **$**  | **3,946,833** |     |   | **$** | **4,718,354** |   |

 

| ** ** | **(a)** | **Congress claims** |
|------------|---------|---------------------|

 

|   |   | The Company owns a 50% leasehold interest in certain claims in the Lillooet Mining Division, British Columbia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | The Congress claims are subject to a Joint Venture Agreement dated February 25, 1983 between the Company and Veronex Resources Ltd. (“Veronex”). Veronex has earned a 50% net interest in the claims, net of a 5% net smelter royalty (“NSR”) held by the Company, by expending $1,000,000 in a prior year. All subsequent expenditures are to be contributed equally by the Company and Veronex. The Company is looking to reacquire Veronex’s interest in the claims, as Veronex transferred its interest to another company against the terms of the original agreement and had not complied with other terms of agreement. |

 

| ** ** | **(b)** | **Gold Bridge claims (BRX Project)** |
|------------|---------|--------------------------------------|

 

|   |  | The Company owns a 50% interest in certain mineral claims in the Gold Bridge area, Lillooet Mining Division, British Columbia. The claims remain in good standing. |
|--------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| ** ** | **(c)** | **Cordero Sanson** |
|------------|---------|--------------------|

 

|   |  | The Cordero property is located near Hidalgo Del Parral, Chihuahua, Mexico. The Cordero mining claims are comprised of claims wholly-owned by VHV by agreement with long-standing ranch families and small local mining companies, and certain other claims that were staked by the Company. |
|--------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   |
|--------|
| 132    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **8.** | **EXPLORATION AND EVALUATION ASSETS (Continued)** |
|--------|---------------------------------------------------|

 

|   | **(d)** | Other claims include the Eagle, Ruf and Norma Sass, and Wayside, as described below: |
|--------|---------|--------------------------------------------------------------------------------------|

 

|   |   | (i)    | Eagle claims                                                                                                                                                                                                                                                |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   |   | The Company holds a 50% interest in certain lode mining claims located in Lander County, Nevada. The claims are subject to a 3% NSR.                                                                                                                        |
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   | (ii)   | Ruf and Norma Sass properties                                                                                                                                                                                                                               |
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   |   | In 2003, the Company acquired from Coral Gold Resources Inc., a public company with common directors and management, an undivided one-third interest in certain mineral claims known as the Ruf and Norma Sass properties located in Lander County, Nevada. |
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   |   | A third party holds a 3% NSR on the production from certain of the claims, up to a limit of USD $1,250,000.                                                                                                                                                 |
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   | (iii)  | Wayside claims                                                                                                                                                                                                                                              |
|   |   |   |                                                                                                                                                                                                                                                        |
|   |   |   | The Company owns certain mineral claims in the Lillooet Mining Division, British Columbia.                                                                                                                                                                  |

 

|   | **(e)** | During the year ended March 31, 2015, the Company also incurred general exploration expenditures of $368,039 (2014 - $nil; 2013 - $nil) in relation to due diligence and exploration on mining projects. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Realization of assets**

 

The investment in and expenditures on exploration and evaluation assets comprise a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal.

 

Mineral exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.

 

**Title to exploration and evaluation assets**

 

Although the Company has taken steps to verify title to exploration and evaluation assets in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by an undetected defect.

 

|   |
|--------|
| 133    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **8.** | **EXPLORATION AND EVALUATION ASSETS (Continued)** |
|--------|---------------------------------------------------|

 

**Environmental**

 

Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.

 

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company.

 

|   |
|--------|
| 134    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **9.** | **PROPERTY AND EQUIPMENT** |
|--------|----------------------------|

 

|                          |   | **Computer Equipment** |       |   | **Furniture and Equipment** |   |       | **Vehicles** |   |   | **Machinery Equipment** |   |   | **Total** |        |
|-------------------------------|--------|------------------------|------------|--------|-----------------------------|--------|------------|--------------|--------|--------|-------------------------|--------|--------|-----------|-------------|
|                          |   | ****                   |       |   | ****                        |   |       | ****         |   |   | ****                    |   |   | ****      |        |
| **COST**                      |   | ****                   |       |   | ****                        |   |       | ****         |   |   | ****                    |   |   | ****      |        |
| Balance at March 31, 2013     |   | $                      | 11,493     |   |                        | $      | 33,950     |         |   | $      | 54,976                  |   |   | $         | 101,948     |   |   | $ | 202,367 |   |
| Additions                     |   |                   | -          |   |                        |   | -          |         |   |   | -                       |   |   |      | 5,493       |   |   |   | 5,493 |   |
| Balance at March 31, 2014     |   |                   | 11,493     |   |                        |   | 33,950     |         |   |   | 54,976                  |   |   |      | 107,441     |   |   |   | 207,860 |   |
| Additions                     |   |                   | 3,541      |   |                        |   | -          |         |   |   | -                       |   |   |      | -           |   |   |   | 3,541 |   |
| **Balance at March 31, 2015** |   | **$**                  | **15,034** |   |                        | **$**  | **33,950** |         |   | **$**  | **54,976**              |   |   | **$**     | **107,441** |   |   | **$** | **211,401** |   |
|                               |   |                   |       |   |                        |   |       |         |   |   |                    |   |   |      |        |   |   |   |   |   |
| **ACCUMULATED DEPRECIATION**  |   |                        |       |   |                        |   |       |         |   |   |                    |   |   |      |        |   |   |   |   |
| Balance at March 31, 2013     |   | $                      | 4,859      |   |                        | $      | 13,524     |         |   | $      | 13,676                  |   |   | $         | 35,879      |   |   | $ | 67,938 |   |
| Depreciation                  |   |                   | 1,203      |   |                        |   | 3,869      |         |   |   | 3,607                   |   |   |      | 24,995      |   |   |   | 33,674 |   |
| Balance at March 31, 2014     |   |                   | 6,062      |   |                        |   | 17,393     |         |   |   | 17,283                  |   |   |      | 60,874      |   |   |   | 101,612 |   |
| Depreciation                  |   |                   | 978        |   |                        |   | 3,095      |         |   |   | 2,525                   |   |   |      | 23,341      |   |   |   | 29,939 |   |
| **Balance at March 31, 2015** |   | **$**                  | **7,040**  |   |                        | **$**  | **20,488** |         |   | **$**  | **19,808**              |   |   | **$**     | **84,215**  |   |   | **$** | **131,551** |   |
|                               |   |                   |       |   |                        |   |       |         |   |   |                    |   |   |      |        |   |   |   |   |   |
| **CARRYING AMOUNTS**          |   |                   |       |   |                        |   |       |         |   |   |                    |   |   |      |        |   |   |   |   |   |
| At March 31, 2014             |   | $                      | 5,431      |   |                        | $      | 16,557     |         |   | $      | 37,693                  |   |   | $         | 46,567      |   |   | $ | 106,248 |   |
| **At March 31, 2015**         |   | **$**                  | **7,994**  |   |                        | **$**  | **13,462** |         |   | **$**  | **35,168**              |   |   | **$**     | **23,226**  |   |   | **$** | **79,850** |   |

 

For the year ended March 31, 2015, depreciation of $15,077 (2014 - $20,792; 2013 - $35,487) was expensed as depreciation expense and the remaining balance of $14,862 (2014 - $12,882; 2013 - $982) was expensed as exploration expenditures.

 

|   |
|--------|
| 135    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **10.** | **SHARE CAPITAL** |
|---------|-------------------|

 

**Authorized**

 

Unlimited number of common shares without par value.

 

**Issued**

 

During the year ended March 31, 2015:

 

|   | · | 200,000 stock options with an exercise price of $0.25 were exercised for proceeds of $50,000. The Company reallocated the fair value of these options previously recorded in the amount of $23,512 from reserve for options to share capital.                                                                                                                                                                                                                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | 27,000,000 shares were issued pursuant to a private placement at $0.22 per share for proceeds of $5,940,000 (USD $5,400,000).                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | · | 4,400,000 shares were issued pursuant to a private placement at $0.25 per share for proceeds of $1,100,000 (USD $1,000,000). In connection with the placement, the Company paid $28,493 (USD $25,000) cash, and issued 110,000 common shares and 132,000 share purchase warrants. Each warrant is exercisable at a price of $0.26 for a period of 12 months. The warrants were subsequently cancelled during the year, and the value of $11,828 was transferred from reserve to deficit. |

 

There were no share transactions during the year ended March 31, 2014.

 

During the year ended March 31, 2013, 100,000 stock options were exercised for gross proceeds of $35,000. The Company reallocated the fair value of these options previously recorded in the amount of $21,160 from reserve for options to share capital.

 

|   |
|--------|
| 136    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **10.** | **SHARE CAPITAL (Continued)** |
|---------|-------------------------------|

 

**Share purchase warrants**

 

For the years ended March 31, 2015 and 2014, share purchase warrant activity is summarized as follows:

 

|                        |   | **UnderlyingShares** |       |   | **Weighted Average Exercise Price** |   |
|-----------------------------|--------|----------------------|------------|--------|-------------------------------------|--------|
| **Balance, March 31, 2013** |   |                      | 1,030,000  |   |                                | $      | 1.95 |   |
| Expired                     |   |                      | (1,030,000 | )      |                                | $      | 1.95 |   |
| **Balance, March 31, 2014** |   |                 | **-**      |   |                                |   | **-** |   |
| Granted                     |   |                 | 132,000    |   |                                | $      | 0.26 |   |
| Cancelled                   |   |                      | (132,000   | )      |                                | $      | 0.26 |   |
| **Balance, March 31, 2015** |   |                 | **-**      |   |                                |   | **-** |   |

 

The fair value of warrants granted was calculated using the Black-Scholes option pricing model with following weighted average assumptions:

 

|                                 |   | **2015** |   |   | **2014** |   |
|--------------------------------------|--------|----------|--------|--------|----------|--------|
| Weighted average assumptions:        |   | ****     |   |   | ****     |   |
| Fair value of warrants at grant date |   | $        | 0.09   |   |     |        | - |   |
| Risk-free interest rate              |   |     | 0.98   | %      |     |   | - |   |
| Expected dividend yield              |   |     | -      |   |     |   | - |   |
| Expected warrant life (years)        |   |     | 1.00   |   |     |   | - |   |
| Expected share price volatility      |   |     | 95.70  | %      |     |   | - |   |

 

Expected volatility is based on historical price volatility to the extent of the expected life of the warrant.

 

|   |
|--------|
| 137    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)** 

**Years ended March 31, 2015 and 2014**

----

 

| **10.** | **SHARE CAPITAL (Continued)** |
|---------|-------------------------------|

 

**Stock options**

 

The Company established a rolling stock option plan in 2011 that was amended and restated by shareholders on September 21, 2012 under which it may grant stock options totaling in aggregate up to 10% of the Company’s total number of shares issued and outstanding on a non-diluted basis. The stock option plan provides for the granting of stock options to employees and persons providing investor relations or consulting services up to a limit of 5% and 2%, respectively, of the Company’s total number of issued and outstanding shares per year. The stock option plan provides for the vesting of stock options over a period of one year or as otherwise determined by the Company’s Board of Directors at the time of the grant. The option price must be greater than or equal to the discounted market price on the grant date and the option expiry date cannot exceed five years from the grant date.

 

For the years ended March 31, 2015 and 2014, stock option activity is summarized as follows:

 

|                                          |   | **UnderlyingShares** |           |   | **Weighted Average Exercised Price** |   |
|-----------------------------------------------|--------|----------------------|----------------|--------|--------------------------------------|--------|
| **Stock options outstanding, March 31, 2013** |   |                      | **14,680,000** |   |                                 | **$**  | **0.84** |   |
| Granted                                       |   |                 | 4,885,000      |   |                                 | $      | 0.41 |   |
| Expired                                       |   |                      | (1,075,000     | )      |                                 | $      | 1.25 |   |
| **Stock options outstanding, March 31, 2014** |   |                 | **18,490,000** |   |                                 | **$**  | **0.72** |   |
| Granted                                       |   |                 | 4,075,000      |   |                                 | $      | 0.28 |   |
| Exercised                                     |   |                      | (200,000       | )      |                                 | $      | 0.25 |   |
| Expired                                       |   |                      | (450,000       | )      |                                 | $      | 0.67 |   |
| **Stock options outstanding, March 31, 2015** |   |                 | **21,915,000** |   |                                 | **$**  | **0.64** |   |

 

A summary of stock options outstanding and exercisable as at March 31, 2015 and 2014 are as follows:

 

|              |   | ****               |   |   | **Stock Options Outstanding********** |   |           | **Stock Options Exercisable********** |   |
|-------------------|--------|--------------------|--------|--------|---------------------------------------|--------|----------------|---------------------------------------|--------|
| **Expiry Date**   |   | **Exercise Price** |   |   | **March 31,2015**                     |   |           | **March 31,2014**                     |   |   | **March 31,2015** |   |   | **March 31,2014** |   |
|              |   | ****               |   |   | ****                                  |   |           | ****                                  |   |   | **** |   |   | **** |   |
| April 28, 2014    |   | $                  | 0.25   |   |                                  |        | -              |                                  |   |  | 225,000 |   |   |  | - |   |   |  | 225,000 |   |
| January 28, 2015  |   | $                  | 0.70   |   |                                  |   | -              |                                  |   |   | 200,000 |   |   |   | - |   |   |   | 200,000 |   |
| July 15, 2015     |   | $                  | 0.75   |   |                                  |   | -              |                                  |   |   | 100,000 |   |   |   | - |   |   |   | 25,000 |   |
| July 20, 2015     |   | $                  | 0.65   |   |                                  |   | 400,000        |                                  |   |   | 400,000 |   |   |   | 400,000 |   |   |   | 400,000 |   |
| September 3, 2015 |   | $                  | 1.00   |   |                                  |   | 3,285,000      |                                  |   |   | 3,285,000 |   |   |   | 3,285,000 |   |   |   | 3,285,000 |   |
| March 25, 2016    |   | $                  | 0.75   |   |                                  |   | 7,920,000      |                                  |   |   | 7,920,000 |   |   |   | 7,920,000 |   |   |   | 7,920,000 |   |
| October 3, 2016   |   | $                  | 1.50   |   |                                  |   | 25,000         |                                  |   |   | 25,000 |   |   |   | 25,000 |   |   |   | 25,000 |   |
| October 3, 2016   |   | $                  | 0.75   |   |                                  |   | 200,000        |                                  |   |   | 200,000 |   |   |   | 200,000 |   |   |   | 200,000 |   |
| November 26, 2015 |   | $                  | 0.75   |   |                                  |   | 100,000        |                                  |   |   | 100,000 |   |   |   | 100,000 |   |   |   | 62,500 |   |
| November 26, 2015 |   | $                  | 1.00   |   |                                  |   | 200,000        |                                  |   |   | 200,000 |   |   |   | 200,000 |   |   |   | 125,000 |   |
| November 26, 2015 |   | $                  | 1.25   |   |                                  |   | 200,000        |                                  |   |   | 200,000 |   |   |   | 200,000 |   |   |   | 125,000 |   |
| May 15, 2017      |   | $                  | 1.00   |   |                                  |   | 750,000        |                                  |   |   | 750,000 |   |   |   | 750,000 |   |   |   | 750,000 |   |
| June 7, 2017      |   | $                  | 1.00   |   |                                  |   | 50,000         |                                  |   |   | 100,000 |   |   |   | 50,000 |   |   |   | 100,000 |   |
| March 10, 2019    |   | $                  | 0.40   |   |                                  |   | 4,710,000      |                                  |   |   | 4,785,000 |   |   |   | 2,355,000 |   |   |   | - |   |
| October 21, 2019  |   | $                  | 0.28   |   |                                  |   | 4,075,000      |                                  |   |   | - |   |   |   | 1,018,750 |   |   |   | - |   |
|                   |   |               |   |   |                                  |   | **21,915,000** |                                  |   |   | **18,490,000** |   |   |   | **16,503,750** |   |   |   | **13,442,500** |   |

 

|   |
|--------|
| 138    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **11.** | **SHARE-BASED PAYMENTS** |
|---------|--------------------------|

 

During the year ended March 31, 2015, the Company granted 4,075,000 stock options with an exercise price of $0.28 and a life of five years to directors, officers, employees and consultants of the Company; 25% of the options vest every three months.

 

During the year ended March 31, 2014, the Company granted 4,885,000 stock options exercisable ranging from $0.40 to $0.75 and ranging from a life of two to five years to directors, officers, employees and consultants of the Company; 25% of the options vest every six months.

 

During the year ended March 31, 2013, the Company granted 1,350,000 stock options exercisable ranging from $0.75 to $1.25 and ranging from a life of three to five years to directors, officers, employees and consultants of the Company; 25% of the options vest every three months.

 

The Company recorded share-based payments of $1,334,525 (2014 - $103,306; 2013 - $1,023,915) on options issued, which vested during the year.

 

Option pricing requires the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates. The fair value of the options revalued, vested and granted to officers, directors, consultants and employees was calculated using the Black-Scholes option pricing model with following weighted average assumptions:

 

|                                |   | **2015** |   |   | **2014** |   |   | **2013** |   |
|-------------------------------------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Weighted average assumptions:       |   | ****     |   |   | ****     |   |   | ****     |   |
| Fair value of options at grant date |   | $        | 0.20   |   |     | $      | 0.21   |     |   | $ | 0.26 |   |
| Risk-free interest rate             |   |     | 1.47   | %      |     |   | 1.62   | %        |   |   | 1.34 | % |
| Expected dividend yield             |   |     | -      |   |     |   | -      |     |   |   | - |   |
| Expected option life (years)        |   |     | 4.93   |   |     |   | 4.94   |     |   |   | 4.26 |   |
| Expected share price volatility     |   |     | 87.76  | %      |     |   | 87.94  | %        |   |   | 103.57 | % |
| Share price                         |   | $        | 0.31   |   |     | $      | 0.33   |     |   | $ | 0.50 |   |
| Expected forfeitures                |   |     | -      |   |     |   | -      |     |   |   | - |   |

 

Expected volatility is based on historical price volatility to the extent of the expected life of the option.

 

| **12.** | **RELATED PARTY TRANSACTIONS** |
|---------|--------------------------------|

 

Due to related parties consists of the following:

 

|                                     |   | **2015** |   |   | **2014** |   |
|------------------------------------------|--------|----------|--------|--------|----------|--------|
| Chevillon Exploration (i)                |   | $        | -      |   |     | $      | 3,579 |   |
| Coral Gold Resources Ltd. (ii)           |   |     | 58,774 |   |     |   | 43,582 |   |
| Great Thunder Gold Corp. (ii)            |   |     | 999    |   |     |   | 787 |   |
| Oniva International Services Corp. (iii) |   |     | -      |   |     |   | 33,718 |   |
|                                          |   | $        | 59,773 |   |     | $      | 81,666 |   |

 

|   |
|--------|
| 139    |
|        |

 

**LEVON RESOURCES LTD. ** 

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **12.** | **RELATED PARTY TRANSACTIONS (Continued)** |
|---------|--------------------------------------------|

 

|   | (i)    | Chevillon Exploration is a private company controlled by a director and officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | (ii)   | Coral Gold Resources Ltd. and Great Thunder Gold Corp. are public companies related by way of common directors. The increase to the amount payable held in USD as at March 31, 2015 as compared with March 31, 2014 is due to changes in the foreign exchange rate.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | (iii)  | Oniva International Services Corp. (“Oniva”) is a private company related by way of common management and directors. The Company holds 16.67% of Oniva as part of a cost-sharing arrangement with five other reporting issuers. Under the agreement, the Company reimburses Oniva a variable percentage of its overhead expenses, pays 100% of out-of-pocket expenses incurred on behalf of the Company, and pays a percentage fee based on the total overhead and corporate expenses. The agreement may be terminated with one month’s notice by either party, and was terminated as at March 31, 2015 and subsequent to March 31, 2015, the Company is no longer a shareholder of Oniva. |

 

During the year ended March 31, 2015, $320,386 (2014 - $372,154) was charged by Oniva to the Company for office, occupancy and miscellaneous costs; shareholder relations and promotion; travel; and salaries and benefits.

 

Related party transactions are measured at the estimated fair values of the services provided or goods received. Amounts owing to related parties are unsecured, without interest or stated terms of repayment.

 

**Management transactions**

 

The Company has identified its directors and certain senior officers (CEO, VP Exploration, CFO and corporate secretary) as its key management personnel. The compensation costs for key management personnel for the years ended March 31, 2015 and 2014 are as follows:

 

|                            |   | **2015** |      |   | **2014** |   |
|---------------------------------|--------|----------|-----------|--------|----------|--------|
| Salaries and benefits           |   | $        | 84,264    |   |     | $      | 98,308 |   |
| Consulting and management fees* |   |     | 809,190   |   |     |   | 680,000 |   |
| Share-based payments            |   |     | 1,032,042 |   |     |   | 49,381 |   |
| Directors’ fees           |   |     | 160,500   |   |     |   | 97,500 |   |
|                                 |   | $        | 2,085,996 |   |     | $      | 925,189 |   |

____________

* Includes amounts paid to the CEO, CFO, and VP Exploration of the Company, recorded in consulting and management fees and exploration expense, respectively. The Company also has commitments related to change in control provisions to the CEO and VP Exploration (Note 18).

 

|   |
|--------|
| 140    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **13.** | **SEGMENTED INFORMATION** |
|---------|---------------------------|

 

The Company operates in one reportable operating segment, being the acquisition, exploration and development of mineral properties.

 

The Company has non-current assets, excluding financial instruments, in the following geographic locations:

 

|                              |   | **2015** |       |   | **2014** |   |
|-----------------------------------|--------|----------|------------|--------|----------|--------|
| **Canada**                        |   | ****     |       |   | ****     |   |
| Reclamation deposit               |   | $        | 32,629     |   |     | $      | 32,629 |   |
| Property and equipment            |   |     | 79,850     |   |     |   | 106,248 |   |
| Total Canada                      |   |     | 112,479    |   |     |   | 138,877 |   |
|                                   |   |     |       |   |     |   |   |   |
| **Mexico**                        |   |     |       |   |     |   |   |   |
| Exploration and evaluation assets |   |     | 50,000,000 |   |     |   | 128,763,649 |   |
|                                   |   | $        | 50,112,479 |   |     | $      | 128,902,526 |   |

 

| **14.** | **COMMITMENTS** |
|---------|-----------------|

 

The Company has entered into consulting agreements with the CEO and VP of Exploration that have expiry dates between May 2015 and April 2019. The Company’s commitment for future minimum payments in respect of these agreements is as follows:

 

|                                             |   | **2015** |      |   | **2014** |   |
|--------------------------------------------------|--------|----------|-----------|--------|----------|--------|
| Not later than one year                          |   | $        | 780,005   |   |     | $      | 483,662 |   |
| Later than one year and no later than five years |   |     | 1,826,352 |   |     |   | 1,920,000 |   |
|                                                  |   | $        | 2,606,357 |   |     | $      | 2,403,662 |   |

 

In addition, the Company has operating lease agreements with total payments of $16,045 (2014 - $ nil) expiring in 2016.

 

|   |
|--------|
| 141    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **15.** | **INCOME TAXES** |
|---------|------------------|

 

A reconciliation of income tax recovery computed at the Canadian statutory rate of 26% (2014 - 26%: 2013 - 25%) to income tax recovery (expense) for the years ended March 31 is as follows:

 

|                                                                                  |   | **2015** |        |   | **2014** |   |       | **2013** |   |
|---------------------------------------------------------------------------------------|--------|----------|-------------|--------|----------|--------|------------|----------|--------|
|                                                                                  |   | ****     |        |   | ****     |   |       | ****     |   |
| Expected income tax recovery                                                          |   | $        | 21,897,107  |   |     | $      | 1,320,383  |     |   | $ | 1,692,377 |   |
| Non-deductible expenses and other                                                     |   |          | (20,549,293 | )      |     |   | 192,181    |     |   |   | 241,601 |   |
| Expired or used loss carry-forwards                                                   |   |          | (88,875     | )      |     |   | -          |     |   |   | - |   |
| Adjustments due to effective tax rate attributable to income taxes in other countries |   |     | 182,059     |   |     |        | (1,669     | )        |   |   | 657,676 |   |
| Changes in income tax rates                                                           |   |          | (3,794      | )      |     |   | 699,235    |     |   |  | (201,150 | ) |
| Change in foreign exchange on tax assets and liabilities                              |   |          | (24,975     | )      |     |        | (142,087   | )        |   |   | 516,001 |   |
| Changes in unrecognized benefits                                                      |   |          | (1,514,715  | )      |     |        | (2,068,043 | )        |   |  | (2,906,505 | ) |
| True up of loss carry-forwards and exploration and evaluation assets                  |   |     | 744,146     |   |     |   | -          |     |   |   | - |   |
| Income tax recovery (expense)                                                         |   | $        | 641,660     |   |     | $      | -          |     |   | $ | - |   |

 

The tax effected items that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities at March 31, 2015 and 2014 are presented below:

 

|                                |   | **2015** |     |   | **2014** |   |
|-------------------------------------|--------|----------|----------|--------|----------|--------|
|                                |   | ****     |     |   | ****     |   |
| **Deferred income tax assets**      |   | ****     |     |   | ****     |   |
| Non-capital losses                  |   | $        | 641,660  |   |     | $      | - |   |
| **Deferred income tax liabilities** |   |     |     |   |     |   |   |   |
| Available-for-sale securities       |   |          | (641,660 | )      |     |   | - |   |
|                                     |   |     |     |   |     |   |   |   |
| Net deferred income tax liabilities |   | $        | -        |   |     | $      | - |   |

 

As at March 31, 2015 and 2014, no deferred tax assets are recognized on the following temporary differences, as it is not probable that sufficient future taxable profit will be available to realize such assets:

 

|                                          |   | **2015** |       |   | **2014** |   |
|-----------------------------------------------|--------|----------|------------|--------|----------|--------|
|                                          |   | ****     |       |   | ****     |   |
| Non-capital loss carry-forwards               |   | $        | 28,111,236 |   |     | $      | 26,636,349 |   |
| Exploration and evaluation assets             |   |     | 9,323,400  |   |     |   | 12,747,450 |   |
| Share issue costs                             |   |     | 493,162    |   |     |   | 681,069 |   |
| Other                                         |   |     | 4,140,326  |   |     |   | 4,124,588 |   |
|                                               |   |     |       |   |     |   |   |   |
| Unrecognized deductible temporary differences |   | $        | 42,068,124 |   |     | $      | 44,189,456 |   |

 

|   |
|--------|
| 142    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)** 

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **15.** | **INCOME TAXES (Continued)** |
|---------|------------------------------|

 

At March 31, 2015, the Company had non-capital losses aggregating approximately $30,465,000. The non-capital losses are available to reduce taxable income of future years expire as follows:

 

| ****   |   |   | **Canada** |       |   | **Mexico** |   |      | **Total** |   |
|--------|--------|--------|------------|------------|--------|------------|--------|-----------|-----------|--------|
| 2015   |   |   | $          | -          |   |       | $      | 49,000    |      |   | $ | 49,000 |   |
| 2016   |   |   |       | 451,000    |   |       |   | 284,000   |      |   |   | 735,000 |   |
| 2017   |   |   |       | -          |   |       |   | 139,000   |      |   |   | 139,000 |   |
| 2018   |   |   |       | -          |   |       |   | 152,000   |      |   |   | 152,000 |   |
| 2019   |   |   |       | -          |   |       |   | 253,000   |      |   |   | 253,000 |   |
| 2020   |   |   |       | -          |   |       |   | 172,000   |      |   |   | 172,000 |   |
| 2021   |   |   |       | -          |   |       |   | 837,000   |      |   |   | 837,000 |   |
| 2022   |   |   |       | -          |   |       |   | 1,370,000 |      |   |   | 1,370,000 |   |
| 2023   |   |   |       | -          |   |       |   | 4,081,000 |      |   |   | 4,081,000 |   |
| 2024   |   |   |       | -          |   |       |   | 2,537,000 |      |   |   | 2,537,000 |   |
| 2027   |   |   |       | 766,000    |   |       |   | -         |      |   |   | 766,000 |   |
| 2028   |   |   |       | 642,000    |   |       |   | -         |      |   |   | 642,000 |   |
| 2029   |   |   |       | 601,000    |   |       |   | -         |      |   |   | 601,000 |   |
| 2030   |   |   |       | 1,791,000  |   |       |   | -         |      |   |   | 1,791,000 |   |
| 2031   |   |   |       | 1,646,000  |   |       |   | -         |      |   |   | 1,646,000 |   |
| 2032   |   |   |       | 2,577,000  |   |       |   | -         |      |   |   | 2,577,000 |   |
| 2033   |   |   |       | 1,885,000  |   |       |   | -         |      |   |   | 1,885,000 |   |
| 2034   |   |   |       | 8,943,000  |   |       |   | -         |      |   |   | 8,943,000 |   |
| 2035   |   |   |       | 1,289,000  |   |       |   | -         |      |   |   | 1,289,000 |   |
|   |   |   | $          | 20,591,000 |   |       | $      | 9,874,000 |      |   | $ | 30,465,000 |   |

 

| **16.** | **FINANCIAL INSTRUMENTS** |
|---------|---------------------------|

 

Financial instruments comprise cash and cash equivalents, amounts receivable (excluding HST and IVA, being Mexican value added tax), convertible debenture, reclamation deposits, investments, due to related parties and accounts payable. At initial recognition management has classified financial assets and liabilities as follows.

 

The Company has classified its cash and cash equivalents as FVTPL. Investments are classified as available-for-sale with changes in fair value recorded through other comprehensive income. Amounts receivable (excluding HST and IVA, being Mexican value added tax), and reclamation deposits are classified as loans and receivables. Accounts payable and amounts due to related parties are classified as other liabilities.

 

The Company’s financial instruments are exposed to certain financial risks: credit risk, liquidity risk and market risk.

 

|   |
|--------|
| 143    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **16.** | **FINANCIAL INSTRUMENTS (Continued)** |
|---------|---------------------------------------|

 

| ** ** | **(a)** | **Credit risk** |
|------------|---------|-----------------|

 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and cash equivalents is exposed to credit risk.

 

The Company manages credit risk, in respect of cash and cash equivalents, by maintaining the majority of cash and cash equivalents at high credit rated Canadian financial institutions. Concentration of credit risk exists with respect to the Company’s cash and reclamation deposits as the majority of the amounts are held with a Canadian and a Mexican financial institution. The Company’s concentration of credit risk, and maximum exposure thereto, is as follows:

 

|                                                           |   | **2015** |       |   | **2014** |   |
|----------------------------------------------------------------|--------|----------|------------|--------|----------|--------|
|                                                           |   | ****     |       |   | ****     |   |
| Cash and cash equivalents held at major financial institutions |   | ****     |       |   | ****     |   |
| Canada                                                         |   | $        | 33,857,365 |   |     | $      | 41,644,257 |   |
| Mexico                                                         |   |     | 68,955     |   |     |   | 41,519 |   |
|                                                                |   |     |       |   |     |   |   |   |
|                                                                |   |     | 33,926,320 |   |     |   | 41,685,776 |   |
| Reclamation deposits held at a major financial institution     |   |     |       |   |     |   |   |   |
| Canada                                                         |   |     | 32,629     |   |     |   | 32,629 |   |
|                                                                |   |     |       |   |     |   |   |   |
| Total                                                          |   | $        | 33,958,949 |   |     | $      | 41,718,405 |   |

 

| **(b)** | **Liquidity risk** |
|---------|--------------------|

 

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due.

 

The Company manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities. The Company has sufficient current assets to meet short-term business requirements. At March 31, 2015, the Company had current liabilities of $350,595 (2014 - $275,031). Accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms.

 

| **(c)** | **Market risk** |
|---------|-----------------|

 

Market risk consists of interest rate risk, foreign currency risk and other price risk. The Company is exposed to interest rate risk and foreign currency risk.

 

*Interest rate risk*

 

Interest rate risk consists of two components:

 

|   | (i) | To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   |
|--------|
| 144    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **16.** | **FINANCIAL INSTRUMENTS (Continued)** |
|---------|---------------------------------------|

 

| ** ** | **(c)** | **Market risk (Continued)** |
|------------|---------|-----------------------------|

 

|   |   | (ii) | To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk. The Company’s cash and cash equivalents consist of cash held in bank accounts, fixed income investments and GICs that earn interest at variable interest rates. Due to the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values as of March 31, 2015 and 2014. Future cash flows from interest income on cash will be affected by interest rate fluctuations. The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of capital and liquidity. |
|--------|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

*Foreign currency risk*

 

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk on monetary assets and liabilities are denominated in foreign currency. The Company is exposed to foreign currency fluctuation related to its cash and cash equivalents, accounts payable and accrued liabilities, and amounts due to related parties in US dollars and Mexican pesos (“MXN”). The Company is also exposed to foreign currency fluctuation on its investments which are securities traded on the OTCQX. A significant change in the exchange rate between the Canadian dollar relative to the US dollar or Mexican peso could have an effect on the Company’s financial position, results of operations and cash flows, as follows:

 

|                                     |   | **2015********** |       |   | **2014********** |   |
|------------------------------------------|--------|------------------|------------|--------|------------------|--------|
|                                     |   | **MXN Pesos**    |       |   | **USD**          |   |   | **MXN Pesos** |   |   | **USD** |   |
| Cash and cash equivalents                |   |                  | 780,797    |   |             | $      | 5,642,745 |   |   |  | 443,193 |   |   | $ | 201,872 |   |
| Investments                              |   |             | -          |   |             |   | 12,664,286 |   |   |   | - |   |   |   | - |   |
| Accounts payable and accrued liabilities |   |                  | (2,250,007 | )      |             |        | (47,129 | ) |   |  | (20,862,833 | ) |   |   | - |   |
| Amounts due to related parties           |   |             | -          |   |             |   | - |   |   |   | - |   |   |  | (39,423 | ) |
| Net exposure                             |   |                  | (1,469,210 | )      |             | $      | 18,259,902 |   |   |  | (20,419,640 | ) |   | $ | 162,449 |   |
| Canadian dollar equivalent               |   | $                | (122,224   | )      |             | $      | 23,159,034 |   |   | $ | (1,728,523 | ) |   | $ | 179,555 |   |

 

Based on the net US dollar denominated asset and liability exposures as at March 31, 2015, a 6% (2014 - 6%) fluctuation in the Canadian/US exchange rates will impact the Company’s losses by approximately $425,000 (2014 - $11,000) and other comprehensive income by approximately $963,727 (2014 - $nil).

 

Based on the net Mexican peso denominated asset and liability exposures as at March 31, 2015, an 8% (2014 - 8%) fluctuation in the Canadian/Mexican exchange rates will impact the Company’s losses by approximately $10,000 (2014 - $138,000).

 

|   |
|--------|
| 145    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements**

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **16.** | **FINANCIAL INSTRUMENTS (Continued)** |
|---------|---------------------------------------|

 

| ** ** | **(d)** | **Other price risk** |
|------------|---------|----------------------|

 

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is exposed to other price risk with respect to its investment securities as they are carried at fair value based on quoted market prices. A 5% fluctuation in market prices will impact other comprehensive income by $633,214 (2014 - immaterial).

 

The Company’s ability to raise capital to fund mineral resource exploration is subject to risks associated with fluctuations in mineral resource prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

 

| ** ** | **(e)** | **Classification of financial instruments** |
|------------|---------|---------------------------------------------|

 

The carrying amounts of amounts receivable (excluding HST and IVA, being Mexican value added tax), accounts payable and due to related parties are a reasonable estimate of their fair values due to their short term to maturity. Cash equivalents are comprised of cashable GICs with a maturity of three months or less and interest rates that range from 1.35% to 1.87% and are carried at fair value in accordance with Level 1 of the fair value hierarchy. Investment securities are accounted for at fair value based on quoted market prices in accordance with Level 1 of the fair value hierarchy. The carrying amount of reclamation deposits approximate their fair value in accordance with Level 2 of the fair value hierarchy as the stated rates approximate market rates of interest.

 

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as at March 31, 2015.

 

|                      |   | **Level 1** |       |   | **Level 2** |   |   | **Level 3** |   |
|---------------------------|--------|-------------|------------|--------|-------------|--------|--------|-------------|--------|
| Cash and cash equivalents |   | $           | 33,926,320 |   |        | $      | -      |        |   | $ | - |   |
| Investments               |   | $           | 16,062,348 |   |        | $      | -      |        |   | $ | - |   |
| Reclamation deposits      |   | $           | -          |   |        | $      | 32,629 |        |   | $ | - |   |

 

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as at March 31, 2014.

 

|                      |   | **Level 1** |       |   | **Level 2** |   |   | **Level 3** |   |
|---------------------------|--------|-------------|------------|--------|-------------|--------|--------|-------------|--------|
| Cash and cash equivalents |   | $           | 41,685,776 |   |        | $      | -      |        |   | $ | - |   |
| Investments               |   | $           | 291        |   |        | $      | -      |        |   | $ | - |   |
| Reclamation deposits      |   | $           | -          |   |        | $      | 32,629 |        |   | $ | - |   |

 

|   |
|--------|
| 146    |
|        |

 

**LEVON RESOURCES LTD. **

**(An Exploration Stage Company)**  

**Notes to Consolidated Financial Statements** 

**(Expressed in Canadian Dollars)**  

**Years ended March 31, 2015 and 2014**

----

 

| **17.** | **CAPITAL MANAGEMENT** |
|---------|------------------------|

 

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of its properties and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. In the management of capital, the Company includes the components of shareholders’ equity.

 

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares or reduce expenditures. Management reviews the capital structure on a regular basis to ensure that objectives are met.

 

There have been no changes to the Company’s approach to capital management during the year ended March 31, 2015. The Company is not subject to external restrictions on its capital.

 

| **18.** | **SUBSEQUENT EVENTS** |
|---------|-----------------------|

 

Subsequent to year-end, the Company entered into an arrangement agreement pursuant to which it will acquire 100% of the issued and outstanding ordinary shares of SciVac by way of the SciVac Arrangement. SciVac is a commercial-stage biotech leader in protein engineering hepatitis B vaccine. Pursuant to the SciVac Arrangement, Levon shareholders will receive one new common share of Levon (each, a "New Levon Share") and 0.5 of a common share (each, a "Spinco Share") of 1027949 BC Ltd., a newly formed exploration company ("Spinco") in exchange for each common share of Levon (each, a "Levon Share") held by them. Upon closing of the SciVac Arrangement, Levon shareholders will hold 100% of the issued and outstanding Spinco Shares and 31.6% of the issued and outstanding New Levon Shares, with the former holders of SciVac shares holding the remaining 68.4% of the issued and outstanding New Levon Shares. In addition to acquiring all of the issued and outstanding shares of SciVac, Levon will retain $27 million in cash. All other assets and liabilities of Levon will be transferred to or will be assumed by Spinco. All stock options outstanding at the effective time shall be surrendered and transferred to Levon and cancelled. Levon will change its name to SciVac Ltd. upon closing of the SciVac Arrangement. The SciVac Arrangement will trigger a change in control provision resulting in severance payments payable to the CEO and COO of the Company in the amounts of USD $1,500,000 and USD $750,000, respectively, pursuant to consulting agreements entered into by Levon with both parties and the severance payments will be paid out of the Company prior to the transfer of all assets and liabilities to Spinco.

 

On June 3, 2015, the SciVac Arrangement was approved by the shareholders and optionholders of Levon voting as a single class at a special meeting of shareholders and optionholders and, on June 4, 2015, the Supreme Court of British Columbia granted a final order approving the SciVac Arrangement. All parties are working to satisfy the remaining closing conditions to the SciVac Arrangement, which are expected to complete some time before the end of June 2015. On completion of the SciVac Arrangement, the Company will have estimated assets of $33,700,000 and liabilities of $18,600,000. For a detailed estimated financial effect, refer to the Management Information Circular dated May 1, 2015.

 

Transaction costs incurred as at March 31, 2015 represent legal and consulting fees incurred in relation to the SciVac Arrangement described above.

 

|   |
|--------|
| 147    |
|        |

 

**LEVON RESOURCES LTD.**

 

**Pro Forma Unaudited Consolidated Financial Statements**

**** 

**(Expressed in Canadian dollars)**

**(Prepared by Management)**

 

**As at and for Year Ended March 31, 2015**

**** 

**** 

 

*The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements*

 

|   |
|--------|
| 148    |
|        |

 

**LEVON RESOURCES LTD.**

Unaudited Pro Forma Consolidated Statement of Financial Position

(Expressed in Canadian dollars)

As at March 31, 2015

----

 

|                                          |   | **Levon Resources Ltd. as at March 31,2015** |            |   | **SciVac Ltd. as at December 31,2014** |   |          | **Pro forma adjustments** |   | **Note** |            | **Pro forma consolidated** |             |
|-----------------------------------------------|--------|----------------------------------------------|-----------------|--------|----------------------------------------|--------|---------------|---------------------------|--------|----------|-----------------|----------------------------|------------------|
|                                          |   | **(audited)**                                |            |   | **(unaudited)**                        |   |          | **(unaudited)**           |   |     |            | **(unaudited)**            |             |
| ** **                                    |
| **ASSETS**                                    |
| **Current assets**                            |   | ****                                         |            |   | ****                                   |   |          | ****                      |   |     |            | ****                       |             |
| Cash and cash equivalents                     |   | $                                            | 33,926,320      |   |                                   | $      | 497,774       |                      |   | $        | (6,926,320      | )                          | 3(a),(c)         |   | $ | 27,497,774 |   |
| Trade accounts receivable                     |   |                                         | -               |   |                                   |   | 407,845       |                      |   |     | -               |                       |             |   |   | 407,845 |   |
| Inventory                                     |   |                                         | -               |   |                                   |   | 2,319,145     |                      |   |     | -               |                       |             |   |   | 2,319,145 |   |
| Investments                                   |   |                                         | 16,062,348      |   |                                   |   | -             |                      |   |          | (16,062,348     | )                          | 3(a)             |   |   | - |   |
| Other current assets                          |   |                                         | 120,568         |   |                                   |   | 607,968       |                      |   |          | (120,568        | )                          | 3(a)             |   |   | 607,968 |   |
|                                               |   |                                         | 50,109,236      |   |                                   |   | 3,832,732     |                      |   |          | (23,109,236     | )                          |             |   |   | 30,832,732 |   |
|                                               |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| **Non-current assets**                        |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| Long term deposits                            |   |                                         | -               |   |                                   |   | 121,594       |                      |   |     | -               |                       |             |   |   | 121,594 |   |
| Reclamation deposits                          |   |                                         | 32,629          |   |                                   |   | -             |                      |   |          | (32,629         | )                          | 3(a)             |   |   | - |   |
| Amounts receivable                            |   |                                         | 2,751,086       |   |                                   |   | -             |                      |   |          | (2,751,086      | )                          | 3(a)             |   |   | - |   |
| Exploration and evaluation assets             |   |                                         | 50,000,000      |   |                                   |   | -             |                      |   |          | (50,000,000     | )                          | 3(a)             |   |   | - |   |
| Property and equipment, net                   |   |                                         | 79,850          |   |                                   |   | 2,184,885     |                      |   |          | (79,850         | )                          | 3(a)             |   |   | 2,184,885 |   |
| Intangible assets, net                        |   |                                         | -               |   |                                   |   | 575,036       |                      |   |     | -               |                       |             |   |   | 575,036 |   |
| **Total Assets**                              |   | **$**                                        | **102,972,801** |   |                                   | **$**  | **6,714,247** |                      |   | **$**    | **(75,972,801** | **)**                      |             |   | **$** | **33,714,247** |   |
|                                               |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| **LIABILITIES**                               |
| **Current liabilities**                       |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| Trade accounts payable                        |   | $                                            | 290,822         |   |                                   | $      | 563,637       |                      |   | $        | (290,822        | )                          | 3(a)             |   | $ | 563,637 |   |
| Related parties                               |   |                                         | 59,773          |   |                                   |   | -             |                      |   |          | (59,773         | )                          | 3(a)             |   |   | - |   |
| Other current liabilities                     |   |                                         | -               |   |                                   |   | 1,177,938     |                      |   |     | -               |                       |             |   |   | 1,177,938 |   |
| Deferred revenue                              |   |                                         | -               |   |                                   |   | 2,158,286     |                      |   |     | -               |                       |             |   |   | 2,158,286 |   |
|                                               |   |                                         | 350,595         |   |                                   |   | 3,899,861     |                      |   |          | (350,595        | )                          |             |   |   | 3,899,861 |   |
|                                               |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| Related parties                               |   |                                         | **-**           |   |                                   |   | 12,386,081    |                      |   |     | -               |                       |             |   |   | 12,386,081 |   |
| Liabilities for severance pay, net            |   |                                         | **-**           |   |                                   |   | 34,803        |                      |   |     | -               |                       |             |   |   | 34,803 |   |
| Other long-term financial liabilities         |   |                                         | **-**           |   |                                   |   | 2,312,812     |                      |   |     | -               |                       |             |   |   | 2,312,812 |   |
| **Total liabilities**                         |   |                                         | 350,595         |   |                                   |   | 18,636,752    |                      |   |          | (350,595        | )                          |             |   |   | 18,636,752 |   |
|                                               |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| **EQUITY**                                    |   |                                         |            |   |                                   |   |          |                      |   |     |            |                       |             |   |   |   |   |
| Share Capital                                 |   |                                         | 237,731,054     |   |                                   |   | -             |                      |   |          | (209,726,315    | )                          | 3(a),(b),(d)     |   |   | 28,004,739 |   |
| Equity Reserves                               |   |                                         | 16,630,525      |   |                                   |   | 59,675,859    |                      |   |          | (16,630,525     | )                          | 3(a),(b)         |   |   | 59,675,859 |   |
| Accumulated Other Comprehensive income (loss) |   |                                         | 4,323,444       |   |                                   |        | (1,200,737    | )                         |   |          | (4,323,444      | )                          | 3(a),(b)         |   |  | (1,200,737 | ) |
| Accumulated Deficit                           |   |                                              | (156,062,817    | )      |                                   |        | (70,397,628   | )                         |   |     | 155,055,078     |                       | 3(a),(b),(c),(d) |   |  | (71,402,367 | ) |
| **Total Equity**                              |   |                                         | 102,622,206     |   |                                   |        | (11,922,506   | )                         |   |          | (75,622,206     | )                          |             |   |   | 15,077,494 |   |
| **Total Liabilities and Equity**              |   | **$**                                        | **102,972,801** |   |                                   | **$**  | **6,714,247** |                      |   | **$**    | **(75,972,801** | **)**                      |             |   | **$** | **33,714,247** |   |

 

*The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements*

 

|   |
|--------|
| 149    |
|        |

 

**LEVON RESOURCES LTD.**

Unaudited Pro Forma Consolidated Statement of Income 

(Expressed in Canadian dollars) 

For the year ended March 31, 2015

----

 

|                                        |   | **Levon Resources Ltd. (Year ended March 31,****2015)** |            |   | **SciVac Ltd. (Year ended December 31, 2014)** |   |           | **Pro forma adjustments** |   | **Note** |            | **Pro forma consolidated** |   |
|---------------------------------------------|--------|---------------------------------------------------------|-----------------|--------|------------------------------------------------|--------|----------------|---------------------------|--------|----------|-----------------|----------------------------|--------|
| Revenue                                     |   | $                                                       | -               |   |                                           |        | 3,265,792      |                      |   |          | -               |                       |   |   | $ | 2,263,925 |   |
| Cost of Revenue                             |   |                                                    | -               |   |                                           |        | (4,212,051     | )                         |   |     | -               |                       |   |   |  | (4,221,375 | ) |
|                                             |   |                                                    |            |   |                                           |   |           |                      |   |     |            |                       |   |   |   |   |   |
| **Gross profit (loss)**                     |   |                                                    | -               |   |                                           |        | (946,260       | )                         |   |     | -               |                       |   |   |  | (1,957,449 | ) |
| General administrative and selling          |   |                                                    | -               |   |                                           |   | 3,106,374      |                      |   |     | -               |                       |   |   |   | 2,982,348 |   |
| Operating and administrative                |   |                                                    | 5,842,837       |   |                                           |   | -              |                      |   |          | (5,617,837      | )                          | 3(e)   |   |   | 225,000 |   |
| Research and development                    |   |                                                    | -               |   |                                           |   | 721,936        |                      |   |     | -               |                       |   |   |   | 614,262 |   |
|                                             |   |                                                    | 5,842,837       |   |                                           |   | 3,828,309      |                      |   |          | (5,617,837      | )                          |   |   |   | 3,821,610 |   |
| **Loss before other items and taxes**       |   |                                                         | **(5,842,837**  | **)**  |                                           |        | **(4,774,569** | **)**                     |   |     | **5,617,837**   |                       |   |   |  | **(5,779,059** | **)** |
| **Other Items**                             |   |                                                    |            |   |                                           |   |           |                      |   |     |            |                       |   |   |   |   |   |
| Financing costs                             |   |                                                    | -               |   |                                           |        | (2,958,343     | )                         |   |     | -               |                       |   |   |  | (2,958,343 | ) |
| Interest income                             |   |                                                    | 628,952         |   |                                           |   | -              |                      |   |          | (628,952        | )                          | 3(a)   |   |   | - |   |
| Listing fees                                |   |                                                    | -               |   |                                           |   | -              |                      |   |          | (1,004,739      | )                          | 3(d)   |   |  | (1,004,739 | ) |
| Severance expense                           |   |                                                    | -               |   |                                           |   | -              |                      |   |          | (2,562,075      | )                          | 3(c)   |   |  | (2,562,075 | ) |
| Impairments                                 |   |                                                         | (79,848,238     | )      |                                           |   | -              |                      |   |     | 79,848,238      |                       | 3(a)   |   |   | - |   |
| Foreign exchange gain                       |   |                                                    | 842,482         |   |                                           |   | -              |                      |   |          | (842,482        | )                          | 3(a)   |   |   | - |   |
| **Net Loss Before Income Taxes**            |   |                                                         | **(84,219,641** | **)**  |                                           |        | **(7,732,912** | **)**                     |   |          | **(74,886,715** | **)**                      |   |   |  | **(11,448,001** | **)** |
|                                             |   |                                                    |            |   |                                           |   |           |                      |   |     |            |                       |   |   |   |   |   |
| **Income Taxes Benefit**                    |   |                                                    | 641,660         |   |                                           |   | 1,274,205      |                      |   |          | (641,660        | )                          |   |   |   | 1,274,205 |   |
| **Net Loss for the period**                 |   |                                                         | **(83,577,981** | **)**  |                                           |        | **(6,458,706** | **)**                     |   |          | **(75,528,375** | **)**                      |   |   |  | **(10,173,795** | **)** |
| **Other comprehensive income**              |   |                                                    | 4,393,963       |   |                                           |   | 1,162,613      |                      |   |          | (4,393,963      | )                          | 3(a)   |   |   | 1,162,613 |   |
| **Total comprehensive loss for the period** |   | **$**                                                   | **(79,228,018** | **)**  |                                           | **$**  | **(5,296,094** | **)**                     |   | **$**    | **1,362,286**   |                       |   |   | **$** | **(9,011,183** | **)** |

 

*The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements*

 

|   |
|--------|
| 150    |
|        |

 

**LEVON RESOURCES LTD.**

**Notes to the unaudited pro forma consolidated financial statements** 

For the years ended March 31, 2015 and 2014 

(Expressed in Canadian dollars) (unaudited)

----

 

| **1.** | **BASIS OF PRESENTATION** |
|--------|---------------------------|

 

The unaudited pro forma consolidated financial statements have been prepared by management of Levon Resources Ltd. (“**Levon**”) in accordance with International Financial Reporting Standards (“**IFRS**”) as issued by the International Accounting Standards Board (**“IASB**”) from information derived from the financial statements of Levon and SciVac Ltd. (“**SciVac**”) together with other information available to Levon.

 

These unaudited pro forma consolidated financial statements have been prepared for inclusion in the Annual Report on Form 20-F of Levon to reflect an arrangement agreement pursuant to which Levon will acquire all of the issued and outstanding common shares of SciVac in exchange for 501,234,384 common shares of Levon (the “**Arrangement**” or the “**Transaction**”). Upon completion of the Arrangement, SciVac will become a wholly-owned subsidiary of Levon. Immediately prior to the Arrangement, Levon will undertake a spinco reorganization to transfer all assets and liabilities held by Levon to spinco, other than $27,000,000 in cash that shall be retained in Levon. Each Levon share will be exchanged for one new Levon share and 0.5 of a spinco share, with the result that the Levon shareholders receive the spinco share as a return of capital.

 

The unaudited pro forma consolidated statement of financial position has been prepared assuming the Transaction had occurred on March 31, 2015 and the unaudited pro forma consolidated statement of income has been prepared assuming the Transaction had occurred at April 1, 2014.

 

The unaudited pro forma consolidated financial statements have been prepared in accordance with Levon’s and SciVac’s accounting policies, as disclosed in the audited financial statements of SciVac for the year ended December 31, 2014 and Levon’s audited financial statements for the year ended March 31, 2015. There are no material differences in accounting policies between SciVac and Levon.

 

The unaudited pro forma consolidated financial statements have been compiled from the information derived from and should be read in conjunction with the following financial statements, which are prepared in accordance with IFRS, and included elsewhere in this Form 20-F or incorporated therein by reference:

 

a) SciVac’s audited financial statements for the years ended December 31, 2014.

 

b) Levon’s audited financial statements for the year ended March 31, 2015.

 

It is management’s opinion that these unaudited pro forma consolidated financial statements include all adjustments necessary for the fair presentation of the Transaction, as described in Note 2. The unaudited pro forma consolidated financial statements are not intended to reflect the financial position of the Company, which would have actually resulted had the Transaction been effected on the dates indicated. Actual amounts recorded upon consummation of the Transaction will differ from those recorded in the unaudited pro forma consolidated financial statements and the differences may be material.

 

|   |
|--------|
| 151    |
|        |

 

**LEVON RESOURCES LTD.**

**Notes to the unaudited pro forma consolidated financial statements** 

For the years ended March 31, 2015 and 2014  

(Expressed in Canadian dollars) (unaudited)

----

 

| **1.** | **BASIS OF PRESENTATION (Continued)** |
|--------|---------------------------------------|

 

**Capital Transaction**

 

As a consequence of the Arrangement, the shareholders of SciVac will acquire control over the combined entity. Levon, after its reorganization, does not meet the definition of a business, therefore the transaction is outside of the scope of IFRS 3 “Business Combinations”. Instead, the Transaction will be accounted for under IFRS 2 “Share-based payments”. Under this basis of accounting, the consolidated entity is considered to be a continuation of SciVac, with the net identifiable assets of Levon deemed to have been acquired by SciVac.

 

It is the opinion of Levon’s management that these pro forma consolidated financial statements include all adjustments necessary for the fair presentation of the Transaction described in Note 2. These pro forma consolidated financial statements are not intended to reflect the results of operations or the financial position of the Company that would have actually resulted had the Transaction been effected when indicated, and are not necessarily indicative of the results of operations that may be obtained in the future.

 

| **2.** | **Transaction Overview** |
|--------|--------------------------|

 

The Transaction will be effected by way of a statutory plan of arrangement pursuant to the Business Corporations Act (British Columbia). Under the terms of the Arrangement, Levon will reorganize its capital involving: (A) the redesignation of all of the Levon shares as “Class A” shares; (B) the creation of the New Levon shares; and (C) the transfer by every Levon shareholder of all outstanding Levon shares to Levon in exchange for one New Levon share (“New Levon” share) and 0.5 of a Spinco share for each Levon share. All assets and liabilities held by Levon will be transferred to spinco, other than $27,000,000 in cash that shall be retained in Levon.

 

SciVac shareholders will transfer to Levon all of the outstanding SciVac shares, capital notes and loans in exchange for the issuance by Levon to SciVac of their respective pro rata portions of an aggregate number of New Levon shares representing 68.4% of the issued and outstanding New Levon shares immediately following the Effective Time. All stock options outstanding at the Effective time shall be surrendered and transferred to Levon and cancelled. Levon will change its name to SciVac Ltd. upon closing of the Arrangement.

 

On a pro forma, basis, Levon expects to have approximately 732,798,807 issued and outstanding common shares, of which approximately 31.6% will be held by Levon’s shareholders and 68.4% will be held by SciVac’s shareholders.

 

On June 3, 2015, the SciVac Arrangement was approved by the shareholders and option holders of the Company voting as a single class at a special meeting of shareholders and option holders and, on June 4, 2015, the Supreme Court of British Columbia granted a final order approving the SciVac Arrangement. All parties are working to satisfy the remaining closing conditions to the SciVac Arrangement, which is currently expected to complete on or about June 30, 2015.

 

|   |
|--------|
| 152    |
|        |

 

**LEVON RESOURCES LTD.**

**Notes to the unaudited pro forma consolidated financial statements** 

For the years ended March 31, 2015 and 2014 

(Expressed in Canadian dollars) (unaudited)

----

 

| **3.** | **PRO FORMA ASSUMPTIONS AND ADJUSTMENTS** |
|--------|-------------------------------------------|

 

These unaudited pro forma consolidated financial statements have been prepared and are presented assuming that the following transactions had been completed and adjustments had been effective as of April 1, 2014 for purposes of the pro forma consolidated statements of income and March 31, 2015 for purposes of the pro forma consolidated statement of financial position.

 

|   | (a)    | Immediately prior to the Arrangement, Levon will undertake a spinco reorganization to transfer all assets and liabilities held by Levon to spinco, other than $27,000,000 in cash that shall be retained in Levon. Each Levon share will be exchanged for one new Levon share and 0.5 of a spinco share, with the result that the Levon shareholders receive the spinco shares as a return of capital. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (b)    | After giving effect to the share transactions described in Note 2, Levon’s share capital balance of $237,731,054, reserves of $16,630,525, accumulated other comprehensive income of $4,323,444, and accumulated deficit of $156,062,817 are eliminated to reflect the capital transaction.                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (c)    | The Arrangement will trigger a change in control provision resulting in severance payments payable to the CEO and VP Exploration of the Company in the amounts of US $1,500,000 and US $750,000 respectively pursuant to consulting agreements entered into by Levon with both parties.                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | (d)    | Under IFRS 2, the capital transaction is measured at the fair value of the shares deemed to have been issued by SciVac such that the Levon shareholders held 31.6% of SciVac. The fair value of the deemed shares is estimated at $28,004,739 and has been allocated as follows:                                                                                                                       |

 

| Cash         |   | $ | 27,000,000  |   |
|--------------|--------|---|-------------|--------|
| Equity       |   |   | (28,004,739 | )      |
| Listing fees |   | $ | 1,004,739   |   |

 

|   | (e)    | Transaction costs are estimated at approximately $825,000, of which approximately $600,000 had been incurred as at March 31, 2015.                                                                                                                                                                                                                                                                       |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (f)    | The pro forma statement of financial position of SciVac as at March 31, 2014 has been translated at the rates prevailing at the date of the pro forma consolidated statement of financial position (USD/CAD = 1.2666). The pro forma statement of loss and comprehensive loss of SciVac for the year ended March 31, 2015 has been translated at the average rate for the year (USD/CAD – 1.1387). |

 

|   |
|--------|
| 153    |
|        |

 

**LEVON RESOURCES LTD.**

**Notes to the unaudited pro forma consolidated financial statements** 

For the years ended March 31, 2015 and 2014  

(Expressed in Canadian dollars) (unaudited)

----

 

| **4.** | **PRO FORMA SHARE CAPITAL** |
|--------|-----------------------------|

 

|                                                       |   | **Number of shares** |            |   | **Sharecapital** |   |
|------------------------------------------------------------|--------|----------------------|-----------------|--------|------------------|--------|
| Levon shares issued and outstanding asat March 31, 2015    |   |                      | 231,564,423     |   |             | $      | 237,731,054 |   |
| Levon shares issued to SciVac pursuant to Arrangement |   |                 | 501,234,384     |   |             |   | - |   |
|                                                            |   |                 |            |   |             |   |   |   |
|                                                            |   |                 | 732,798,807     |   |             |   | 237,731,054 |   |
| Elimination of Levon share capital on Arrangement          |   |                 |            |   |             |        | (237,731,054 | ) |
| Fair value of deemed shares issued by SciVac               |   |                 |            |   |             |   | 28,004,739 |   |
|                                                       |   |                 |                 |   |             |   |   |   |
| **Pro forma consolidated share capital**                   |   |                 | **732,798,807** |   |             |   | **28,004,739** |   |

 

| **5.** | **PRO FORMA EARNINGS (LOSS) PER SHARE** |
|--------|-----------------------------------------|

 

The pro forma basic and diluted loss per share for the year ended March 31, 2015 is based on the number of the Company’s outstanding common shares after giving pro forma effect to the shares to be issued as consideration for the Arrangement, as follows:

 

|                                          |   | **Year endedMarch 31,2015** |        |
|-----------------------------------------------|--------|-----------------------------|-------------|
| Pro forma number of common shares outstanding |   |                             | 732,798,807 |   |
| Pro forma net loss for the period ended       |   |                             | (9,011,183  | ) |
| Pro forma basic and diluted loss per share    |   | $                           | (0.01       | ) |

 

| **6.** | **INCOME TAXES** |
|--------|------------------|

 

The pro forma effective income tax rate applicable to the consolidated operations will be approximately 34%.

 

|   |
|--------|
| 154    |
|        |

 

**SIGNATURE**

 

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

 

|                             | **LEVON RESOURCES LTD.** |                                                        |
|----------------------------------|--------------------------|-------------------------------------------------------------|
|                             |                     |                                                        |   |
| Dated: June 25, 2015   | By:                      | */s/ Ron Tremblay*                                          |   |
|                             |                     | Ron Tremblay                                                |   |
|                             |                     | Chief Executive Officer 
(Principal Executive Officer) |   |

 

 

155

----