Exhibit 19.1








                           NORTH AMERICAN NICKEL INC.

                       (formerly Widescope Resources Inc.)

                       Management Discussion and Analysis
                      For the Year Ended December 31, 2010







                                       1
<PAGE>
THE ATTACHED AUDITED CONSOLIDATED  FINANCIAL STATEMENTS FORM AN INTEGRAL PART OF
THIS MANAGEMENT DISCUSSION AND ANALYSIS AND ARE HEREBY INCLUDED BY REFERENCE

The date of this Management's Discussion and Analysis is April 19, 2011.

North American  Nickel Inc. (the "Company") was  incorporated  under the laws of
the Province of British  Columbia,  Canada, by filing of Memorandum and Articles
of Association on September 20, 1983, under the name Rainbow  Resources Ltd. The
company's  name was changed to Widescope  Resources  Ltd. on May 1, 1984, and to
Gemini  Technology  Inc. on September  17, 1985. In  conjunction  with a reverse
split of its common shares on a five-old for one-new basis,  the Company adopted
the name International  Gemini Technology Inc effective  September 23, 1993. The
Company's name was changed to Widescope Resources Inc., effective July 12, 2006.
Effective  April  19,  2010  the  Company's   shareholders  approved  a  special
resolution to reorganize the Company's  capital  structure by consolidating in a
reverse stock split the existing  common shares on the basis of each two (2) old
shares  being  equal  to one (1)  new  share  and  concurrently  increasing  the
authorized  capital of the Company from  100,000,000  common shares  without par
value to an unlimited number of common shares without par value.  Also effective
this date the  Company's  name was  changed to North  American  Nickel  Inc.  to
reflect its new focus. All references to common shares, stock options,  warrants
and weighted  average number of shares  outstanding  in this  discussion and the
accompanying  consolidated financial statements  retroactively reflect the share
consolidation unless otherwise noted.

In April 2010 the  Company  initiated  a series of actions to realign  its focus
into the  field of  nickel  exploration  in the  prolific  nickel  belts  around
Sudbury,  Ontario and Thompson,  Manitoba. These actions were reported in a news
release dated April 6, 2010.

Additionally - in April 2010 the Company's shareholders elected 4 new directors,
to replace three retiring directors. The directors of the Company have appointed
new senior management to oversee the daily operations of the Company.

TREND ANALYSIS

The business of the Company entails significant risks. Any analysis of the trend
of the Company's  activities  would reveal this. And there is nothing to suggest
that these trends will change.

The Company's  principal business activity is the exploration and development of
mineral  properties in Canada.  The Company has not yet determined whether these
properties contain ore reserves that are economically recoverable.

The recoverability of amounts shown for mineral property costs is dependent upon
a number of factors including  environmental risk, legal and political risk, the
existence of  economically  recoverable  mineral  reserves,  confirmation of the
Company's interests in the underlying mineral claims, the ability of the Company
to obtain necessary  financing to complete  exploration and development,  and to
attain sufficient net cash flow from future profitable production or disposition
proceeds.  As of December  31, 2010 the Company had working  capital of $556,665
compared  with a deficit of $102,535 at the December  31, 2009  year-end and has
incurred substantial losses to date. The Company will require additional funding
to meet its obligations and the costs of its operations.

When  managing  capital,  the  Company's  objectives  is to  ensure  the  entity
continues  as a  going  concern  as  well  as to  maintain  optimal  returns  to
shareholders and benefits for other stakeholders. Management adjusts the capital
structure as necessary in order to support the  acquisition  and  exploration of
mineral  properties.  The Board of  Directors  does not  establish  quantitative
return on capital criteria for management, but rather relies on the expertise of
the Company's management team to manage its capital.

The  properties  in which  the  Company  currently  has an  interest  are in the
exploration  stage.  As such, the Company is dependent on external  financing to
fund its activities.  In order to carry out the planned  exploration and pay for
administrative  costs,  the Company will spend its existing  working capital and
raise  additional  amounts as needed.  The Company  will  continue to assess new
properties  and seek to acquire  interests in additional  properties if there is
sufficient  geologic  or economic  potential  and if it has  adequate  financial
resources are available to do so.

RESOURCE PROPERTIES

All  technical  information  in this  document  has been  reviewed  by Dr.  Mark
Fedikow,  PGeo, the qualified  person for the Company under National  Instrument
43-101.

                                       2
<PAGE>
SUDBURY, ONTARIO NICKEL PROPERTIES:

POST CREEK PROPERTY

On  December  23,  2009,  the  Company  executed a letter of intent  whereby the
Company  has an option to  acquire  the  mineral  claim  known as the Post Creek
Property located within the Sudbury Mining District of Ontario. The Company paid
a non-refundable deposit of $7,500. On April 5, 2010 the Company entered into an
option  agreement to acquire rights to Post Creek Property.  In order to acquire
100% working  interests in the property,  subject to certain net smelter  return
royalties  ("NSR")  and  advance  royalty  payments  the  Company  agreed to the
following consideration:

<TABLE>
<CAPTION>
                                           Issuance                                  Exploration
         Date                   Cash       of shares                                 Requirements
         ----                   ----       ---------                                 ------------
<S>                           <C>         <C>                                       <C>
On or before April 5, 2010     $12,500      400,000   (paid & issued)
On or before April 5, 2011     $30,000      300,000   (subsequently paid and issued)    $15,000
On or before April 5, 2012     $50,000      300,000                                     $15,000
On or before April 5, 2013     $50,000           --                                     $15,000
</TABLE>

The property is located 35 km east of Sudbury in Norman and Parkin townships and
consists  of 35  contiguous  unpatented  mining  claims and one  isolated  claim
covering an area of 688 hectares.  It is  strategically  located adjacent to the
producing Podolsky copper-nickel-platinum group metal deposit of FNX Mining. The
property lies along the extension of the Whistle Offset Dyke Structure  which is
a major geological control for Ni-Cu-PGM  mineralization.  This structure hosted
the former INCO Whistle Offset  copper-nickel-PGM Mine (5.7 million tons grading
0.33% Cu,  0.95% Ni and 3.77 g/t total  platinum  metals as well as the Podolsky
North and  Podolsky  2000  copper-precious  metal  deposits.  FNX  forecast  the
production  of 372,049 tons of ore at Podolsky  yielding  1.8 million  pounds of
payable  nickel,  28.5  million  pounds of payable  copper and 27,300  ounces of
payable platinum,  palladium and gold for 2009.  Previous  operators located the
extension of the Whistle  Offset Dyke  structure on the Post Creek property as a
direct result of their geological,  geophysical and Mobile Metal Ion geochemical
surveys.  Drilling on this  structure  intersected  a 0.66 m near solid to solid
sulphide  zone with 0.48%  copper,  0.08%  nickel,  53 parts per  billion  (ppb)
palladium,  34 ppb platinum and 20 ppb gold. A rock sample  collected  along the
structure  assayed  0.83% Ni,  0.74% Cu,  0.07% Co, 2241 ppb Pt and 1051 ppb Pd.
Significant  potential for  nickel-copper-PGM  is demonstrated on the Post Creek
property.

A NI 43-101  compliant  Technical Report was completed with Dr. Walter Peredery,
formerly of INCO, as the author.

DURING THE YEAR ENDED DECEMBER 31, 2010:

The exploration  program to evaluate the mineral potential of the Whistle Offset
Dyke Structure was initiated.  This project included outcrop stripping,  washing
and  detailed  mapping.  There  were  also a number of  reconnaissance  programs
initiated  concurrently to evaluate the Post Creek property for shallowly-buried
mineralization.  The geophysical approach was based on the use of a beep mat and
selected traverses across the property were undertaken.  A number of elevated EM
responses  were obtained and a number of these areas were stripped of overburden
using an excavator  and washed using a Wajax pump.  Exposed  mineralization  was
chip  sampled  and sent to SGS Mineral  Services  for a  multi-element  analysis
including  assay for nickel,  copper,  cobalt,  gold,  platinum  and  palladium.
Results are pending.  Selected soil  geochemical  surveys were  undertaken  over
historic IP  chargeability  anomalies.  Samples  were  submitted  to SGS Mineral
Services for analysis  using the Mobile Metal Airborne VTEM  geophysical  survey
results and ground IP and magnetic surveys undertaken by previous operators were
obtained from the geophysical contractors in digital formats and these data will
form  individual  "layers"  for  integration  with  geological  and  geochemical
datasets.

All databases  will form the basis for an  assessment  report to be submitted to
the Ontario government Mining Recorders office in Sudbury.

During the year ended December 31, 2010, the Company  incurred  $153,310 (2009 -
$Nil) in deferred exploration costs on the Post Creek Property.

                                       3
<PAGE>
SUBSEQUENT EVENTS

Analytical  data,  geological  maps and historic  geophysical  information  were
compiled by Dr. Walter Peredery to form the basis for a 43-101  technical report
which has been submitted to the TSX Exchange as part of listing requirements for
North American Nickel.

The  assessment  report  for the Post  Creek  property  of merit was  assembled,
submitted  to  the  Sudbury  Mining  Recorder  and  subsequently   accepted  for
assessment credit.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Additional  outcrop  mapping  supplemented  by  thin  section  studies  will  be
undertaken.  Shallow  electromagnetic  surveys  utilizing  the  Beep mat will be
required to cover the remainder of the Post Creek property. Follow-up geological
mapping and  prospecting  will be required  in addition to  deep-looking  ground
geophysical surveys to assist in the delineation of drill targets.

WOODS CREEK PROPERTY

On December 23, 2009 the Company executed a letter of intent whereby the Company
has an option to acquire  the mineral  claim  known as the Woods Creek  Property
located  within the  Sudbury  Mining  District of  Ontario.  The Company  paid a
non-refundable  deposit of $2,500. On April 5, 2010, the Company entered into an
option agreement to acquire rights to Woods Creek Property.  In order to acquire
up to a 100% working  interests in the property,  subject to certain net smelter
return royalties  ("NSR") and advance royalty payments the Company agreed to the
following consideration:

<TABLE>
<CAPTION>
                                           Issuance                                  Exploration
         Date                   Cash       of shares                                 Requirements
         ----                   ----       ---------                                 ------------
<S>                           <C>         <C>                                       <C>
On or before April 5, 2010     $ 7,500      150,000   (paid & issued)
On or before April 5, 2011     $15,000      150,000   (subsequently paid and issued)    $24,000
On or before April 5, 2012     $20,000           --                                     $24,000
On or before April 5, 2013     $45,000           --                                     $24,000
</TABLE>

The Woods  Creek claim  block is located in Hyman  Township  about 50 km west of
Sudbury and comprises eight contiguous  unpatented  mining claims covering 1,264
hectares.   The  target  on  the   property  is   disseminated   to   near-solid
nickel-copper-cobalt-PGM  mineralization  hosted within Nipissing  Diabase dykes
which cover 50% of the property. This style of mineralization is currently being
mined by Ursa Major Minerals at their Shakespeare deposit 15 km southwest of the
Woods Creek  property.  It contains  7,301,000  tons grading 0.37% Ni, 0.39% Cu,
0.024% Co, 0.37 g/t Pt, 0.40 g/t Pd and 0.20 g/t Au.

Previous  operators  defined a number of  mineralized  zones on the Woods  Creek
property,  but  little  follow-up  exploration  was  undertaken.  The Main  Zone
prospect is a zone of 10-40% pyrrhotite-chalcopyrite mineralization that assayed
1.22% Cu, 0.95% Ni, 354 ppb combined Pt and Pd and 136 ppb Au. Diamond  drilling
on  this  zone  intersected  a 6.5 m  section  of  gabbro  with  pyrrhotite  and
chalcopyrite  that  assayed up to 1.09% Ni, 0.37% Cu, 301 ppb combined Pt and Pd
and 1110 ppm Co (0.11%).  The  Ravenshill  prospect was  discovered in 2005 as a
result of geological mapping and prospecting. It comprises near solid pyrrhotite
and  chalcopyrite in brecciated  gabbro with assays of 0.66% Ni, 0.90% Cu, 0.09%
Co, 68 ppb Pt, 227 ppb Pd and 46 ppb Au.

DURING THE YEAR ENDED DECEMBER 31, 2010:

An  assessment  report  based  on  shallow  electromagnetic  Beep  Mat  surveys,
geological mapping, prospecting, excavator work to clear overburden from outcrop
and channel and chip rock sampling was completed on claims  1242388 and 1242390.
The results will be summarized  in an  assessment  report to be submitted to the
Ontario Mining recorder in Sudbury.

During the year ended  December 31, 2010, the Company  incurred  $20,341 (2009 -
$Nil) in deferred exploration costs on the Woods Creek Property.

SUBSEQUENT EVENTS

An  assessment  report  was  constructed  based on the  results  of field  work,
including assay results. Data indicates multiple zones of greater than 1% copper
and strongly elevated nickel are present in outcrop on the property. These zones

                                       4
<PAGE>
were uncovered by the use of a beep mat and a mechanical excavator to expose the
rock from beneath soil cover.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Additional  beep mat  surveys  will be  undertaken  to  extend  the  geophysical
coverage on the property. These data will be assessed with additional overburden
stripping and sampling of newly  exposed  mineralized  rock, if warranted.  Deep
looking  geophysics  will be required to assist in drill targeting for a planned
drill program.

HALCYON PROPERTY

On April 5, 2010, the Company entered into an option agreement to acquire rights
to Halcyon  Property.  In order to acquire up to a 100% working interests in the
property,  subject to certain net smelter return  royalties  ("NSR") and advance
royalty payments the Company agreed to the following consideration:

<TABLE>
<CAPTION>
                                           Issuance                                  Exploration
         Date                   Cash       of shares                                 Requirements
         ----                   ----       ---------                                 ------------
<S>                           <C>         <C>                                       <C>
On or before April 5, 2010     $ 5,000      300,000   (paid & issued)
On or before April 5, 2011     $25,000      200,000   (subsequently paid and issued)    $22,000
On or before April 5, 2012     $35,000      200,000                                     $22,000
On or before April 5, 2013     $35,000           --                                     $22,000
</TABLE>

The property is located 35 Km NNE of Sudbury in the SE corner of Parkin Twp, and
consists of 46 unpatented mining claims.  It is readily  accessible by paved and
all-weather  gravel  road.  Halcyon is adjacent to the Post Creek  property  and
contains the  extension of the  metallogenetically  significant  Whistle  Offset
Structure.  It is approximately 2 km north of the producing Podolsky Mine of FNX
Mining.  Previous  operators on the property defined  numerous  conductive zones
based on induced  polarization  (I.P.)  surveys with  coincident  anomalous soil
geochemistry. Base and precious metal mineralization have been found in multiple
locations  on the  property  but  follow-up  work was  never  done.  The  former
producing Jon Smith Mine  (nickel-copper-cobalt-platinum) is situated 1 Km North
of the property.

DURING THE YEAR ENDED DECEMBER 31, 2010:

Data  compilation was initiated with the aim of delineating  potential areas for
follow-up exploration.

During the year ended December 31, 2010, the Company incurred $Nil (2009 - $Nil)
in deferred exploration costs on the Halcyon Property.

SUBSEQUENT EVENTS

No work has been performed subsequently.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Activities  contemplated  for the future  include  the  compilation  of historic
exploration data from assessment files to prepare for 2011 ground programs.

BELL LAKE PROPERTY

On April 5, 2010, the Company entered into an option agreement to acquire rights
to Bell Lake Property. In order to acquire up to a 100% working interests in the
property,  subject to certain net smelter return  royalties  ("NSR") and advance
royalty payments the Company agreed to the following consideration:

                                       5
<PAGE>
<TABLE>
<CAPTION>
                                           Issuance                                  Exploration
         Date                   Cash       of shares                                 Requirements
         ----                   ----       ---------                                 ------------
<S>                           <C>         <C>                                       <C>
On or before April 5, 2010     $25,000      300,000   (paid & issued)
On or before April 5, 2011     $25,000      300,000   (subsequently paid and issued)    $    --
On or before April 5, 2012     $40,000      400,000                                     $    --
On or before April 5, 2013     $40,000           --                                     $    --
On or before April 5, 2014     $80,000           --
</TABLE>

The Bell Lake property is a 256 acre property that covers  approximately 1 km of
the Mystery  Offset Dyke or "MOD".  The MOD is interpreted to be an extension of
the Worthington Offset Dyke which is a 10-11 km long mineralized  structure that
extends from the southwest  margin of the Sudbury Igneous  Complex.  Offset Dyke
environments are significant  hosts to  nickel-copper-PGM  mineralization in the
Sudbury Basin. The Worthington Offset Dyke hosts the past producing  Worthington
Mine and the Victoria Mine (1.5 million tons of 2.2% copper, 1.5% nickel and 2.3
g/t  total  precious  metals).  It is  also  host  to Vale  Inco's  Totten  Mine
development  (10.1  million tons at 1.5% nickel,  2% copper and 4.8 g/t platinum
group  metals).  Crowflight  Minerals  AER-Kidd  property also occurs within the
Worthington  Offset.  The Bell Lake  property is marked by surface  exposures of
disseminated  to  near-solid  nickel-copper  sulphide  mineralization  with  PGM
values. The Mystery Offset Dyke offers excellent  exploration  potential for the
discovery of additional  nickel-copper-PGM  mineralization.  Deep-looking ground
geophysical  technologies  and diamond  drilling  will test the  property  after
detailed geological mapping has been undertaken on the property.

DURING THE YEAR ENDED DECEMBER 31, 2010:

Data  compilation was initiated with the aim of delineating  potential areas for
follow-up exploration.

During the year ended December 31, 2010, the Company incurred $560 (2009 - $Nil)
in deferred exploration costs on the Bell Lake Property

SUBSEQUENT EVENTS

No work has been performed subsequently.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Activities  contemplated  for the future  include  the  compilation  of historic
exploration data from assessment files to prepare for 2011 ground programs.

MANITOBA NICKEL PROPERTIES:

On July 23, 2010 the  Company  issued  6,000,000  shares at a price of $0.06 per
share to a company  with common  directors in  accordance  with the Purchase and
Sale Agreement  entered into on April 5, 2010 to acquire  ownership of the South
Bay,  Thompson North and Cedar Lake properties in Manitoba,  subject to a 2% NSR
reserved  by the  vendor,  in  exchange  for a $1,000  cash  payment  (paid) and
6,000,000 post-consolidation common shares valued at $0.06 per share (issued).

SOUTH BAY:  Exploration  was spurred at the South Bay property by the September,
2003   discovery   of  a  zone  of   high-grade   nickel   mineralization.   The
nickel-copper-cobalt  platinum group element  ("PGE") zone was found in one wall
of a new road cut 60 km east of the town of Leaf Rapids,  Manitoba.  The average
grade of eleven  samples of near-solid  sulphide  collected  from  boulder-sized
blast  rubble in the road cut  exposure  is 2.42 % Ni, 0.78 % Cu, 697 ppm Co and
1.32 g/t PGE. The mineralization is sedimentary-rock-hosted and exhibits similar
metal characteristics to ores associated with magma-derived nickel deposits that
are mined at Thompson and worldwide.  Airborne  geophysical  surveys (VTEM) have
been flown over the property and preliminary soil geochemical  surveys have been
undertaken.

                                       6
<PAGE>
DURING THE YEAR ENDED DECEMBER 31, 2010:

A Mobile  Metal Ions soil  geochemical  orientation  survey was  undertaken  and
samples  submitted to SGS Mineral  Services  (Toronto,  Ontario)  for  analysis.
Results have been received and a report is in preparation.

During the year ended  December 31, 2010,  the Company  incurred  $2,523 (2009 -
$Nil) in deferred exploration costs on the South Bay Property

SUBSEQUENT EVENTS

No work was performed on this property subsequently.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Ground  geophysical  surveys  will be  required  in the  area of  airborne  VTEM
anomalies defined from an earlier airborne  geophysical  program.  These surveys
will accurately define drill targets. Mobile Metal Ions soil geochemical surveys
are  planned in the  vicinity  of  coincident  ground and  airborne  geophysical
anomalies.

THOMPSON  NORTH:  The  property  overlies the world class  Thompson  Nickel Belt
("TNB")  where Vale Inco  continues  to mine  nickel-copper-cobalt  and platinum
group element  mineralization  hosted  within  sedimentary  and mafic  intrusive
rocks.  Based on research by the  Manitoba  Geological  Survey the  northeastern
extension of the TNB has been traced through the Thompson North property  making
the area highly  attractive  for  repetitions  of TNB  mineralization.  Airborne
geophysics  (VTEM) has been  flown  over the  property  and  numerous  anomalous
magnetic and electromagnetic features identified.  Follow-up exploration will be
based upon ranking and modeling of geophysics and soil geochemical surveys.

DURING THE YEAR ENDED DECEMBER 31, 2010:

There have been no current activities on the property.

During the year ended December 31, 2010, the Company incurred $585 (2009 - $Nil)
in deferred exploration costs on the Thompson North Property

SUBSEQUENT EVENTS

No work was performed on this property subsequently.

ACTIVITIES CONTEMPLATED IN THE FUTURE

The  activities  contemplated  for the future  are  limited  to  compilation  of
historic exploration data from assessment files.

CEDAR LAKE: The property  occupies the southern  portion of the Thompson  Nickel
Belt  where  previous  exploration  based on the  drill-testing  of  geophysical
anomalies  has  identified  key  stratigraphic  components  that host  producing
nickel-copper-cobalt  and platinum group elements at the Thompson and Pipe Mines
of Vale Inco. Nickel mineralization has been intersected in drilling on adjacent
Mineral Exploration Licenses. The prospective rock units are overlain by younger
carbonate  rocks and  conceal the TNB in this area.  The Company has  undertaken
airborne  geophysical  surveys  (VTEM) and  delineated  numerous  conductive and
magnetic  anomalies.  These  anomalies  will be  prioritized  and  drill  tested
subsequent to soil geochemical surveys.

DURING THE YEAR ENDED DECEMBER 31, 2010:

There have been no current activities on the property.

During the year ended December 31, 2010, the Company incurred $400 (2009 - $Nil)
in deferred exploration costs on the Cedar Lake Property

SUBSEQUENT EVENTS

No work was performed on this property subsequently.

ACTIVITIES CONTEMPLATED IN THE FUTURE

Activities  contemplated  for the future  include  the  compilation  of historic
exploration data from assessment files to prepare for 2011 ground programs.

                                       7
<PAGE>
SELECTED FINANCIAL INFORMATION

The Company's  consolidated financial statements for the year ended December 31,
2010 (the "Consolidated  Financial Statements") have been prepared in accordance
with Canadian generally accepted accounting  principles and practices.  Currency
amounts are in Canadian dollars,  except where stated  otherwise.  The following
selected  financial  information  is  taken  from  the  Consolidated   Financial
Statements and should be read in conjunction with those statements.

<TABLE>
<CAPTION>
                                                        For the year ended
                                       December 31, 2010     December 31, 2009      December 31, 2008
                                       -----------------     -----------------      -----------------
<S>                                      <C>                   <C>                    <C>
Financial Results
  Net loss                               $    529,808          $    117,645           $    200,977
  Basic loss per share                           0.03                  0.02                   0.04

As at:                                 December 31, 2010     December 31, 2009      December 31, 2008
                                       -----------------     -----------------      -----------------
Balance Sheet Data
  Share capital per Canadian GAAP        $ 15,310,333          $ 13,649,333           $ 13,649,333
  Common shares issued                     35,231,730             5,441,730              5,441,730
  Weighted average shares
   outstanding per Canadian GAAP           19,941,566             5,441,730              5,441,730
  Total assets                           $  1,363,910          $    184,212           $    251,312
  Net assets (liabilities)                  1,234,383          $    (54,784)          $     38,336

Exchange rates (Cdn$ to U.S.$)
 period average                                0.9709                0.8757                 0.9371
</TABLE>

RESULTS OF OPERATIONS

Historically  - the Company has shown modest losses for the past several  years.
Prior to the  acquisition  of PFG - the  expenses  of the  Company  were  almost
completely related to satisfying regulatory  requirements,  including the annual
meeting, financial reporting,  communication with shareholders;  and seeking and
evaluating   acquisition  prospects  for  suitability  and  ability  to  attract
financing.  With  the  June  30,  2006  completion  of the PFG  acquisition  the
Company's  expenses  became more heavily  weighted in favour of the  exploration
work and analysis being carried out on its exploration properties.

During the year  ended  December  31,  2010 the  Company  recorded a net loss of
$529,808 compared with a loss of $117,645 for the same 2009 period.  The loss is
a  result  of the  operating  expenses  increasing  mainly  due  to the  private
placement  transaction  and the  acquisition  of the Sudbury  properties and the
Manitoba  properties.  The  significant  areas of increased  operating costs are
professional  fees of  $132,730,  regulatory  fees of $40,856  and,  stock-based
compensation  $182,500,  consulting $25,557,  management fees $90,000,  salaries
$22,115,   investor   relation   trade  show  costs   $23,101  and  general  and
administrative  expenses of $15,311.  The Company reported a loss on the sale of
Outback of $7,163.

LIQUIDITY AND CAPITAL RESOURCES

Since the  Company is  organized  in Canada,  the  Company's  December  31, 2010
financial  statements have been prepared in accordance  with Canadian  generally
accepted accounting principles.

As at December 31, 2010 the Company had accumulated losses totaling $14,311,794.
The  Company  had  working  capital  of  $556,665  at  December  31,  2010.  The
continuation of the Company is dependent upon the continued financial support of
shareholders,  its  ability  to  raise  capital  through  the  issuance  of  its
securities,  as well as obtaining long-term financing when the company concludes
an appropriate merger or acquisition agreement.

On April 7, 2010 the Company entered into a Stock Purchase  Agreement whereby it
agreed to sell its entire  interest in Outback to an arms length  party for cash
consideration  equivalent to the calculated book value of the Company's  holding
at the date of closing.  As a result of this  transaction  the Company no longer
reports  the PFG held  shares of Cougar  Minerals  Corp.  ("Cougar"),  a company
listed on the TSX  Venture  Exchange.  At  initial  recognition,  each share was
recorded at a fair value of $0.05.  During the year ended December 31, 2010, PFG
sold 100,000 common shares of Cougar, resulting in a gain of $3,854. Pursuant to
the Purchase Agreement,  the Company sold its interest in PFG and therefore does

                                       8
<PAGE>
not hold an  interest  in Cougar at December  31,  2010.  As at May 31, 2010 the
closing price of Cougars's common shares was $0.06 per common share with a total
fair value of $26,000.

The Company classified the investment as available-for-sale,  with the Company's
portion of the  unrealized  gain on the shares  recorded in other  comprehensive
income and the  remaining  portion  included in the  balance of  non-controlling
interest.

As noted,  these conditions raise  substantial doubt about the Company's ability
to continue as a going concern.  The  consolidated  financial  statements do not
include any adjustment that might arise from uncertainty.  However, had the last
audit  been  conducted  in  accordance  with U.S.  generally  accepted  auditing
standards the auditors would have  reflected  these concerns in their report and
would have included an  explanatory  paragraph in their report  raising  concern
about the Company's ability to continue as a going concern.

As at  December  31, 2010 the  Company  had a cash  balance of $659,227  (2009 -
$16,515).

SELECTED FINANCIAL DATA QUARTERLY

<TABLE>
<CAPTION>

                                                                      Three months ended
                                    December 31, 2010     September 30, 2010      June 30, 2010       March 31, 2010
                                    -----------------     ------------------      -------------       --------------
<S>                                   <C>                    <C>                  <C>                  <C>
Net loss                              $   (147,554)          $   (200,626)        $   (176,702)        $     (4,926)
Basic loss per share                          0.00                   0.00                (0.03)                0.00

                                                                      Three months ended
                                    December 31, 2009     September 30, 2009      June 30, 2009       March 31, 2009
                                    -----------------     ------------------      -------------       --------------

Net loss                              $    (85,578)          $     (5,746)        $    (11,508)        $    (14,813)
Basic loss per share                         (0.02)                  0.00                 0.00                 0.00

As at:                              December 31, 2010     September 30, 2010      June 30, 2010       March 31, 2010
                                    -----------------     ------------------      -------------       --------------
Balance Sheet Data
  Share capital per Canadian GAAP     $ 15,310,333           $ 15,310,333         $ 14,740,333         $ 13,649,333
  Common shares issued                  35,231,730             35,231,730           25,291,730            5,441,730
  Weighted average shares
   outstanding per Canadian GAAP        19,941,566             14,788,836            5,661,067            5,441,730
  Total assets                        $  1,363,583           $  1,409,603         $  1,130,716         $    152,435
  Net assets (liabilities)            $  1,234,383           $  1,346,937         $    971,063         $    (71,155)

As at:                              December 31, 2009     September 30, 2009      June 30, 2009       March 31, 2009
                                    -----------------     ------------------      -------------       --------------

  Share capital per Canadian GAAP     $ 13,649,333           $ 13,649,333         $ 13,649,333         $ 13,649,333
  Common shares issued                   5,441,730              5,441,730            5,441,730            5,441,730
  Weighted average shares
   outstanding per Canadian GAAP         5,441,730              5,441,730            5,441,730            5,441,730
  Total assets                        $    184,212           $    251,476         $    203,378         $    234,078
  Net assets (liabilities)            $    (54,784)          $    (31,629)        $    (12,985)        $     23,523
</TABLE>

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

The business of the Company entails  significant risks, and an investment in the
securities of the Company should be considered highly speculative. An investment
in the  securities of the Company  should only be undertaken by persons who have
sufficient  financial  resources  to  enable  them to  assume  such  risks.  The

                                       9
<PAGE>
following is a general  description of all material  risks,  which can adversely
affect the business and in turn the financial results,  ultimately affecting the
value of an investment the Company.

     The Company has no significant revenues.
     The Company has limited funds.
     There is no assurance that the Company can access additional capital.
     There is no assurance  that the Company will be  successful in its quest to
     find a commercially viable quantity of mineral resources.
     The Company has a history of operating losses and may have operating losses
     and a negative cash flow in the future.
     The Company's auditors have indicated that U.S.  reporting  standards would
     require them to raise a concern about the company's  ability to continue as
     a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements.

TABLE OF PROPERTY CONTRACTUAL OBLIGATIONS

<TABLE>
<CAPTION>

Post Creek
                                           Issuance                 Exploration
         Date                 Payment      of shares                Requirements
         ----                 -------      ---------                ------------
<S>                           <C>         <C>                      <C>
On or before April 5, 2010    $ 12,500      400,000  paid & issued
On or before April 5, 2011    $ 30,000      300,000  paid & issued     $15,000
On or before April 5, 2012    $ 50,000      300,000                    $15,000
On or before April 5, 2013    $ 50,000           --                    $15,000
                              --------    ---------                    -------
                              $142,500    1,000,000                    $45,000
                              ========    =========                    =======

 Bell Lake

                                           Issuance                 Exploration
         Date                 Payment      of shares                Requirements
         ----                 -------      ---------                ------------

On or before April 5, 2010    $ 25,000      300,000  paid & issued
On or before April 5, 2011    $ 25,000      300,000  paid & issued     $    --
On or before April 5, 2012    $ 40,000      400,000                    $    --
On or before April 5, 2013    $ 40,000           --                    $    --
On or before April 5, 2014    $ 80,000           --
                              --------    ---------                    -------
                              $210,000    1,000,000                    $    --
                              ========    =========                    =======

Halcyon

                                           Issuance                 Exploration
         Date                 Payment      of shares                Requirements
         ----                 -------      ---------                ------------

On or before April 5, 2010    $ 15,000      300,000  paid & issued
On or before April 5, 2011    $ 25,000      200,000  paid & issued     $22,000
On or before April 5, 2012    $ 35,000      200,000                    $22,000
On or before April 5, 2013    $ 35,000           --                    $22,000
                              --------    ---------                    -------
                              $110,000      700,000                    $66,000
                              ========    =========                    =======
</TABLE>

                                       10
<PAGE>
<TABLE>
<CAPTION>

Wood Creek
                                           Issuance                 Exploration
         Date                 Payment      of shares                Requirements
         ----                 -------      ---------                ------------
<S>                           <C>         <C>                      <C>
On or before April 5, 2010    $  7,500      150,000  paid & issued
On or before April 5, 2011    $ 15,000      150,000  paid & issued     $24,000
On or before April 5, 2012    $ 20,000           --                    $24,000
On or before April 5, 2013    $ 45,000           --                    $24,000
                              --------    ---------                    -------
                              $ 87,500      300,000                    $72,000
                              ========    =========                    =======
</TABLE>

RELATED PARTY TRANSACTIONS

During the year ended December 31, 2010, the Company  entered into the following
transactions with related parties:

(a)  Recorded  $19,000  (2009 -  $Nil;  2008 - $Nil)  for  consulting  fees to a
     company in which a director has an interest;
(b)  Recorded  $90,000 (2009 - $24,000;  2008 - $24,000) for  management  fees a
     director  of the  Company  and to a  company  in  which a  director  has an
     interest;
(c)  Recorded $28,000 (2009 - $Nil; 2008 - $Nil) for geological  consulting fees
     to a  director  of the  Company,  of which  $26,833  has been  recorded  in
     consulting  services as deferred  exploration costs for mineral  properties
     and  $1,167 has been  recorded  in  consulting  fees on the  statements  of
     operations;
(d)  Recorded  $11,772  (2009 - $Nil;  2008 - $Nil) for  professional  fees to a
     company in which a director has an interest;
(e)  Entered into a purchase and sale  agreement,  with a company with directors
     in common for the acquisition mineral properties (Note 4); and
(f)  Issued  2,640,000  common  shares  (2009 - Nil) at a fair value of $132,000
     (2009 -  $Nil),  to a  company  in which a  director  has an  interest  for
     settlement of debt.

Related  party  transaction  were in the normal course of business and have been
recorded at the  exchange  amount  which is the fair value agreed to between the
parties.

At December  31,  2010,  recorded in due to related  parties is $87,094  (2009 -
$132,333)  owing to  directors of the Company and  companies in which  directors
have an interest.  Amounts due to related  parties are  unsecured,  non-interest
bearing and without specific terms of repayment.

CRITICAL ACCOUNTING ESTIMATES

There are no critical accounting estimates.

RECENT  ACCOUNTING PRONOUNCEMENTS

Other accounting  pronouncements issued by the CICA with future effective dates,
not  listed  below,  are  either  not  applicable  or  are  not  expected  to be
significant to the financial statements of the Company.

SECTION 1582, BUSINESS COMBINATIONS

In January 2009, the CICA issued Section 1582, Business Combinations, which will
provide the Canadian  equivalent to International  Financial  Reporting Standard
IFRS 3, Business  Combinations,  and replace the existing Section 1581, Business
Combinations. The new standard will apply prospectively to business combinations
for which the acquisition date is on or after January 1, 2011.  Earlier adoption
is permitted as of the beginning of a fiscal year, in which case an entity would
also early adopt Section 1601,  Consolidated  Financial  Statements  and Section
1602, Non-controlling Interests. Management does not expect that the adoption of
this new  standard  will  have  significant  impact on the  Company's  financial
statements.

In  January  2009,  the  CICA  issued  Section  1601,   "Consolidated  Financial
Statements",  and  Section  1602,  "Noncontrolling  Interests",  which  together
replace the existing  Section 1600,  "Consolidated  Financial  Statements",  and
provide  the  Canadian  equivalent  to  International  Accounting  Standard  27,
"Consolidated  and  Separate  Financial  Statements  (January  2008)".  The  new
sections  will be  applicable  to the Company on January 1, 2011.  Section  1601
establishes standards for the preparation of consolidated  financial statements,

                                       11
<PAGE>
and Section 1602  establishes  standards for  accounting  for a  non-controlling
interest in a subsidiary in consolidated  financial  statements  subsequent to a
business  combination.  The  Company is  assessing  the  impact,  if any, of the
adoption of these new sections on its consolidated financial statements.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

On February 13, 2008, the Canadian  Accounting  Standards  Board  confirmed that
publicly  accountable  enterprises  will  be  required  to  adopt  International
Financial Reporting Standards ("IFRS") in place of Canadian GAAP for interim and
annual  reporting  purposes  for fiscal years  beginning on or after  January 1,
2011.  Accordingly,  the Company  will  transition  from current  Canadian  GAAP
reporting and commence  reporting under IFRS for the first quarter of 2011, with
restatement of comparative information presented.

The Company developed a conversion plan consisting of four key stages including;
project planning and preliminary  assessment,  detailed  assessment,  design and
implementation.  The project planning and preliminary  assessment stage has been
completed.  The  preliminary  assessment  was completed  with the  assistance of
external advisors and training and outlines the significant  differences between
Canadian  GAAP  and  IFRS  and  rates  the  impact  of each  of the  significant
differences on the entity's financial  statements,  thereby allowing the Company
to focus the detailed assessment on the highest priority items.

The  Company  has  completed  the design  stage  which  includes  completing  an
assessment of the quantified effects of the anticipated changes to the Company's
IFRS opening balance sheet and identifying business processes and resources that
may require  modification as a result of these changes. The implementation stage
proceeded  concurrently with the detailed assessment and design stages including
preparing draft IFRS compliant model financial statements and making appropriate
changes to  business,  reporting  and system  processes  and training to support
preparation  and  maintenance  of IFRS  compliant  financial  data  for the IFRS
opening balance sheet at January 1, 2010 and going forward. The Company believes
the plan is sufficiently  advanced and adequate resources are in place to ensure
an efficient and effective transition to IFRS reporting.

The following  table provides a summary of the key  activities  involved and the
status of these activities:

<TABLE>
<CAPTION>
<S>                                                         <C>
                     Key Activities                                             Status
                     --------------                                             ------
Financial Reporting

     *    Identify  key  differences  between IFRS           *    Key   differences   between   IFRS   and
          and Canadian GAAP                                       Canadian GAAP are identified

     *    Analyze  and  select  IFRS  1  elections           *    IFRS 1 elections  have been analyzed and
          available upon adoption                                 elections have been selected

     *    Analyze IFRS  accounting  policies where           *    Policy   positions  for  key  accounting
          alternativesw  are  permitted and select                differences have been completed
          appropriate alternative

     *    Quantify  key  differences  for  opening           *    Quantification of key differences for the
          balance sheet                                           opening   balance  sheet  are  near complete

     *    Prepare IFRS 1 reconciliations                     *    IFRS reconciliations are near complete

Financial Information Systems

     *    Create    solution   to   capture   IFRS           *    Solutions have been implemented for some
          information   during  2010  while  still                of the areas with key  differences  with
          reporting under Canadian GAAP                           the remaining areas still in progress

     *    Analyze information systems to determine           *    Sufficient   information   systems   are
          changes   required   to   capture   IFRS                thought to be in place
          information from January 2011 onward

Training

     *    Provide   technical   training   to  key           *    Key  finance  personnel  have  been  and
          finance personnel                                       continue to be provided with training at
                                                                  various  seminars and current  published
                                                                  materials
</TABLE>

                                       12
<PAGE>
<TABLE>
<CAPTION>
<S>                                                         <C>
Business Activities

     *    Assess    impact   of    conversion   on           *    It is  anticipated  that there will be a
          budgeting,   forecasts  and  compenstion                minimal   impact   on   these   business
          arrangements                                            activities but continuing  re-assessment
                                                                  is to be  performed  as  the  transition
                                                                  process progresses

Control Environment

     *    Maintain  effective  controls  over  the           *    Key finance  personnel meet regularly to
          IFRS conversion process                                 ensure   effective   controls  over  the
                                                                  process are maintained

     *    Revise internal  controls for changes in           *    Further information needs to be gathered
          processes as a result of the  transition                for  the   assessment   of   changes  to
          to IFRS                                                 internal  controls  for any  changes  in
                                                                  processes

     *    Approval by Audit Committee                        *    Approval is pending
</TABLE>

APPLICATION OF IFRS 1 TRANSITIONAL EXEMPTIONS AND IDENTIFIED GAAP DIFFERENCES

The Company has identified the key areas noted below where changes in accounting
policy are expected on the transition from Canadian GAAP to IFRS. These areas do
not necessarily  represent a final list of changes.  As we progress  through the
final steps of the  implementation  stage, the differences and impacts described
below are subject to change,  upon review by the Company's  Audit  Committee and
external auditors.

FIRST-TIME ADOPTION OF IFRS

The  Company's  adoption of IFRS will  require the  application  of  "First-time
adoption  of  International  Financial  Reporting  Standards"  ("IFRS  1") which
generally requires that all IFRS standards and  interpretations be accounted for
on a retrospective  basis.  IFRS 1 provides for certain optional  exemptions and
specific mandatory exemptions.  The following represents the optional exemptions
that the Company expects to apply:

     Share-based  payments - IFRS 1 allows that full  retrospective  application
     may be avoided for certain share-based  instruments  depending on the grant
     date,  vesting terms and settlement of any real  liabilities.  A first-time
     adopter can elect to not apply IFRS 2 to share-based payments granted after
     November 7, 2002 that vested before the later of (a) the date of transition
     to IFRS and (b) January 1, 2005.  The Company plans to elect this exemption
     and will apply IFRS 2 to only unvested  stock options as at January 1, 2010
     being the transition date.

     Business  Combinations - IFRS 1 allows that a first-time  adopter may elect
     not to apply  IFRS 3  Business  Combinations  retrospectively  to  business
     combinations  prior to the date of transition  avoiding the  requirement to
     restate  prior  business  combinations.  The  Company  plans to elect  this
     exemption and as such expects no difference  between Canadian GAAP and IFRS
     on transition for differences in business combination accounting.

     Deemed Cost - IFRS 1 allows for exploration and evaluation  assets costs to
     be accounted  for in cost centres  that include all  properties  in a large
     geographical  area.  A  first-time  adopter  using  such  accounting  under
     previous  Canadian  GAAP may elect to measure  exploration  and  evaluation
     assets at the amount  determined  under the Company's  previous  GAAP.  The
     Company  plans  to  elect  this   exemption  and  shall  continue  to  test
     exploration and evaluation assets in the development  phases for impairment
     at the date of transition to IFRS in accordance with IFRS 6 Exploration for
     and Evaluation of Mineral Resources.

RECONCILIATION TO PREVIOUSLY REPORTED FINANCIAL STATEMENTS

         The  following  tables  provide a  reconciliation  between  the amounts
previously  reported under Canadian GAAP and those anticipated to be reported in
accordance  with  IFRS  and  related  transitional  requirements,  based  on our
analysis  to date.  A summary of each of the noted  changes is  included  in the
notes following the reconciliations of the following Consolidated Balance Sheets
and Consolidated Statements of Operations and Comprehensive Income for the dates
noted below. The anticipated effects of transition from GAAP to IFRS on the cash
flow are not  material  therefore  a  reconciliation  of cash flows has not been
presented.  The reconciliations and related adjustments have not been audited by
the Company's external auditor.

                                       13
<PAGE>
Transitional  Consolidated  Statement of  Financial  Position  Reconciliation  -
January 1, 2010
Consolidated Statement of Financial Position Reconciliation - December 31, 2010
Consolidated  Statement of  Comprehensive  Income  Reconciliation - December 31,
2010

<TABLE>
<CAPTION>
                                                              January 1,         Effect of          January 1,
                                                                2010           Transition to          2010
                                                   Ref        CAN GAAP             IFRS               IFRS
                                                   ---      ------------       ------------       ------------
<S>                                                         <C>                <C>                <C>
ASSETS

CURRENT ASSETS
  Cash                                                      $     16,515       $         --       $     16,515
  Receivables                                                      4,197              4,197
  Marketable securities                                           62,500             62,500
                                                            ------------       ------------       ------------

Total current assets                                              83,212                 --             83,212

Mineral properties and deferred exploration costs                101,000            101,000
                                                            ------------       ------------       ------------

TOTAL ASSETS                                                $    184,212       $         --       $    184,212
                                                            ============       ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                  $    185,747       $    185,747
                                                            ------------       ------------       ------------

Total current liabilities                                        185,747                 --            185,747

Non-controlling interest                                          53,249             53,249
                                                            ------------       ------------       ------------

TOTAL LIABILITIES                                                238,996                 --            238,996

SHAREHOLDERS' EQUITY (DEFICIT)
  Share capital - preferred                                      604,724            604,724
  Share capital - common                                      13,044,609         13,044,609
  Contributed surplus                            a                53,344            (53,344)                --
  Accumulated other comprehensive income                          24,525             24,525
  Deficit                                                    (13,781,986)            53,344        (13,728,642)
                                                            ------------       ------------       ------------

TOTAL SHAREHOLDERS'S EQUITY                                      (54,784)           (54,784)
                                                            ------------       ------------       ------------

                                                            $    184,212       $         --       $    184,212
                                                            ============       ============       ============
</TABLE>

                                       14
<PAGE>
<TABLE>
<CAPTION>
                                                             December 31,        Effect of         December 31,
                                                                2010           Transition to          2010
                                                   Ref        CAN GAAP             IFRS               IFRS
                                                   ---      ------------       ------------       ------------
<S>                                                         <C>                <C>                <C>
ASSETS

CURRENT ASSETS
  Cash                                                      $    659,227       $         --       $    659,227
  Receivables                                                     26,965             26,965
  Marketable securities                                               --                 --
                                                            ------------       ------------       ------------

Total current assets                                             686,192                 --            686,192

Mineral properties and deferred exploration costs                677,718            677,718
                                                            ------------       ------------       ------------

TOTAL ASSETS                                                $  1,363,910       $         --       $  1,363,910
                                                            ============       ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                  $     42,433                          $     42,433
  Due to related party                                            87,094                                87,094
                                                            ------------       ------------       ------------

Total current liabilities                                        129,527                 --            129,527

Non-controlling interest                                              --                 --
                                                            ------------       ------------       ------------

TOTAL LIABILITIES                                                129,527                 --            129,527

SHAREHOLDERS' EQUITY (DEFICIT)
  Share capital - preferred                                      604,724                               604,724
  Share capital - common                                      14,705,609                            14,705,609
  Contributed surplus                            a               235,844            (53,344)           182,500
  Accumulated other comprehensive income                              --                                    --
  Deficit                                                    (14,311,794)            53,344        (14,258,450)
                                                            ------------       ------------       ------------

TOTAL SHAREHOLDERS'S EQUITY                                    1,234,383          1,234,383
                                                            ------------       ------------       ------------

                                                            $  1,363,910       $         --       $  1,363,910
                                                            ============       ============       ============
</TABLE>

                                       15
<PAGE>
The Canadian GAAP consolidated  statement of operations and comprehensive income
for the year ended December 31, 2010 has been  reconciled to IFRS  (unaudited as
follows:

<TABLE>
<CAPTION>
                                                             December 31,        Effect of         December 31,
                                                                2010           Transition to          2010
                                                   Ref        CAN GAAP             IFRS               IFRS
                                                   ---      ------------       ------------       ------------
<S>                                                         <C>                <C>                <C>
EXPENSES
  Consulting                                                $     25,556                          $     25,556
  Filing fees                                                     40,856                                40,856
  Investor relation                                               23,101                                23,101
  General and administrative                                      18,294                 --             18,294
  Management fees (Note 6)                                        90,000                                90,000
  Professional fees                                              132,730                               132,730
  Salaries                                                        22,115                                22,115
  Stock-based compensation                                       182,500                 --            182,500
                                                            ------------       ------------       ------------

LOSS BEFORE OTHER ITEMS                                         (535,152)                --           (535,152)

OTHER ITEMS:
  Loss on sale of subsidiary (Note 4)                             (7,163)                               (7,163)
  Gain on sale of marketable securities (Note 3)                   3,854                 --              3,854
                                                            ------------       ------------       ------------
LOSS BEFORE NON-CONTROLLING INTEREST                            (538,461)                --           (538,461)
NON-CONTROLLING INTEREST IN LOSS                                   8,653                 --              8,653
                                                            ------------       ------------       ------------

NET LOSS FOR THE YEAR                                       $   (529,808)      $         --       $   (529,808)
                                                            ============       ============       ============

LOSS PER COMMON SHARE - BASIC AND DILUTED
  From continuing operations                                $      (0.03)      $         --       $      (0.03)
                                                            ============       ============       ============
WEIGHTED AVERAGE SHARES OUTSTANDING -
 BASIC AND DILUTED                                            19,941,566                            19,941,566
                                                            ============       ============       ============
COMPREHENSIVE LOSS
  Net Loss                                                  $   (529,808)      $         --       $   (529,808)
  Unrealized gain on marketable securities                            --                                    --
                                                            ------------       ------------       ------------

COMPREHENSIVE LOSS                                          $   (529,808)      $         --       $   (529,808)
                                                            ============       ============       ============
</TABLE>

ADJUSTMENTS ON TRANSITION TO IFRS:

The following is a summary of the significant  accounting differences considered
as part of the IFRS transition project and, where  appropriate,  the preliminary
quantification of the adjustments required as of the transition date and for the
comparative period.  Completion of the final stages of our project may result in
the identification of other adjustments or changes to the amounts presented, and
such changes may be material.

                                       16
<PAGE>
ASSET IMPAIRMENT

Both  Canadian  GAAP  and IFRS  require  an  entity  to  undertake  quantitative
impairment testing where there is an indication of impairment.  Further there is
a  requirement  under  IFRS for the  Company  to assess  whether  indicators  of
impairment exist at the date of transition to IFRS.

Unlike  Canadian  GAAP,  IFRS  requires  impairment  charges to be  reversed  if
circumstances  leading to the  impairment  no longer  exist.  The Company has no
historic impairment charges which could be reversed as of the transition date.

As at the transition  date,  there were no indications of impairment  under IFRS
identified  by  management,  therefore  no formal  quantitative  impairment  was
undertaken.

ADJUSTMENTS ON TRANSITION TO IFRS:

(A) SHARE-BASED PAYMENT TRANSACTIONS

On  transition to IFRS the Company has elected to change its  accounting  policy
for the  treatment of amounts  recorded in  contributed  surplus which relate to
stock options which expire unexercised.  Under IFRS amounts recorded for expired
unexercised  stock options will be transferred to deficit on the date of expiry.
Previously  the  Company's  Canadian  GAAP  policy was to leave such  amounts in
contributed surplus.

Impact on Consolidated Balance Sheets(Unaudited)

                                     December 31 2010         January 1 2010
                                     ----------------         --------------

Contributed surplus                       $(53,344)              $(53,344)
Adjustment to deficit                     $ 53,344               $ 53,344


A further  difference  is that IFRS 2 requires  that  forfeiture  estimates  are
recognized  in the  period  they  are  estimated  and  are  revised  for  actual
forfeitures  in subsequent  periods,  whereas under the Company's  Canadian GAAP
policy  forfeitures of awards have been recognized as they occur. On application
of the IFRS 1 exemption noted previously,  this change in accounting was applied
only to unvested  awards as of the transition  date which there were no unvested
awards at that time.

PRESENTATION ADJUSTMENTS

The following presentation  adjustment has been identified by management for the
Consolidated Balance Sheet which is Non-controlling interests shall be presented
in the consolidated  statement of financial  position within equity,  separately
from the equity of the owners of the parent.

DISCLOSURE CONTROLS AND PROCEDURES OVER FINANCIAL REPORTING

Management has the  responsibility for the design and implementation of controls
over  financial   reporting  to  provide  reasonable   assurance  regarding  the
reliability  of  financial  reporting  and  the  preparation  of  the  financial
statements in accordance with the accounting  principles  generally  accepted in
Canada.  Based  on a  review  of its  internal  controls  at the end of the year
covered by this MD&A,  management  believes its internal controls and procedures
are effective in providing  reasonable  assurance that financial  information is
recorded,  processed and reported in an accurate and timely  manner.  There have
been no  significant  changes in the Company's  internal  control over financial
reporting during the year ended December 31, 2010.

Management  is  responsible  for the  design  and  effectiveness  of  disclosure
controls and other  procedures  to provide  reasonable  assurance  that material
information  related to the  Company is made known to the  Company's  certifying
officers. The Company's Chief Executive Officer and Chief Financial Officer have
each  evaluated the  effectiveness  of the Company's  disclosure  controls as of
December 31, 2010 and have concluded these controls and procedures are effective
in providing  reasonable  assurance  that material  information  relating to the
Company is made known to them by others within the Company.

                                       17
<PAGE>
SHARE CAPITAL DATA

The following  table sets forth the Company's share capital data as at April 19,
2011:

COMMON SHARES
  -issued & outstanding              36,181,730

PREFERRED SHARES
  -issued & outstanding                 604,724

OPTIONS
  -issued & outstanding               3,300,000

WARRANTS
  -issued & outstanding              10,000,000

FURTHER INFORMATION

Additional information about the Company is available at the Canadian disclosure
website www.sedar.ca


                                       18