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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20F

[   ] Registration Statement pursuant to Section
12(b) or 12(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 the fiscal year ended January 31, 2012

Or

[   ] Transition Report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934

For the transition period from ____________________ to
____________________

[   ] Shell Company Report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934

Commission file number 000-33299

DORATO RESOURCES INC.(Exact name of Registrant as specified in its charter)

British Columbia, Canada(Jurisdiction of incorporation or organization)

#2300  1177 West Hastings StreetVancouver,
British Columbia, V6E 2K3(Address of principal executive offices)

Rowland Perkins

#2300-1177 West Hastings Street, Vancouver, BC V6E 2K3,
Tel: 604-638-5817, Fax: 604-408-7499(Name, Telephone ,
E-Mail and/or Facsimile number and Address of Company Contact Person)

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

Securities registered or to be registered pursuant to Section
12(g) of the Act: Common Shares, no par value(Title of
Class)

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
Issuers classes of capital or common stock as of the close of the period
covered by the annual report.

|Title of Each Class         | Outstanding at January 31, 2012
|--------------------------- | -------------------------------
|Common Shares, no par value | 76,639,977                     

1

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

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: [√]

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 12 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: [ √ ]   
 No: [   ]

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.

Large accelerated filer: [   ]
    Accelerated filer: [   ]
    Non-accelerated filer: [√ ]


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 [√ ]
    Other [ ]By the International Accounting
      Standards Board


If Other has been checked in response to 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: [√ ]

2

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TABLE OF CONTENTS

|                                |                                                                      |                                                         | PAGE
|------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------- | ----
|                                |                                                                      |                                                         |     
|**FORWARD-LOOKING INFORMATION** | 7                                                                   
|PART I                          |                                                                      |                                                         | 8   
|ITEM 1.                         | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                | 8                                                      
|ITEM 2.                         | OFFER STATISTICS AND EXPECTED TIMETABLE                              | 8                                                      
|ITEM 3.                         | KEY INFORMATION                                                      | 8                                                      
|                                | 3.A                                                                  | Selected Financial Data                                 | 8   
|                                | 3.B                                                                  | Capitalization and Indebtedness                         | 11  
|                                | 3.C                                                                  | Reasons for the Offer and Use of Proceeds               | 11  
|                                | 3.D                                                                  | Risk Factors                                            | 11  
|ITEM 4.                         | INFORMATION ON THE COMPANY                                           | 19                                                     
|                                | 4.A                                                                  | History and Development of the Company                  | 19  
|                                | 4.B                                                                  | Business Overview                                       | 20  
|                                | 4.C                                                                  | Organizational Structure                                | 23  
|                                | 4.D                                                                  | Property, Plants and Equipment                          | 23  
|ITEM 5.                         | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                         | 35                                                     
|                                | 5.A                                                                  | Operating Results                                       | 35  
|                                | 5.B                                                                  | Liquidity and Capital Resources                         | 37  
|                                | 5.C                                                                  | Research and Development, Patents and Licences, etc.    | 39  
|                                | 5.D                                                                  | Trend Information                                       | 39  
|                                | 5.E                                                                  | Off-Balance Sheet Arrangements                          | 39  
|                                | 5.F                                                                  | Tabular Disclosure of Contractual Obligations           | 39  
|ITEM 6.                         | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                           | 39                                                     
|                                | 6.A                                                                  | Directors and Senior Management                         | 39  
|                                | 6.B                                                                  | Compensation                                            | 41  
|                                | 6.C                                                                  | Board Practices                                         | 44  
|                                | 6.D                                                                  | Employees                                               | 45  
|                                | 6.E                                                                  | Share Ownership                                         | 45  
|ITEM 7.                         | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                    | 47                                                     
|                                | 7.A                                                                  | Major Shareholders                                      | 47  
|                                | 7.B                                                                  | Related Party Transactions                              | 48  
|ITEM 8.                         | FINANCIAL INFORMATION                                                | 49                                                     
|                                | 8.A                                                                  | Consolidated Statements and Other Financial Information | 49  
|                                | 8.B                                                                  | Significant Changes                                     | 50  
|ITEM 9.                         | THE OFFER AND LISTING                                                | 50                                                     
|                                | 9.A                                                                  | Offer and Listing Details                               | 50  
|                                | 9.B                                                                  | Plan of Distribution                                    | 52  
|                                | 9.C                                                                  | Markets                                                 | 52  
|                                | 9.D                                                                  | Selling Shareholders                                    | 52  
|                                | 9.E                                                                  | Dilution                                                | 52  
|                                | 9.F                                                                  | Expenses of the Issue                                   | 52  
|ITEM 10.                        | ADDITIONAL INFORMATION                                               | 52                                                     
|                                | 10.A                                                                 | Share Capital                                           | 52  
|                                | 10.D                                                                 | Exchange Controls                                       | 54  
|                                | 10.E                                                                 | Taxation                                                | 54  
|                                | 10.F                                                                 | Dividends and Paying Agents                             | 64  
|                                | 10.G                                                                 | Statement by Experts                                    | 64  
|                                | 10.H                                                                 | Documents on Display                                    | 64  
|                                | 10.I                                                                 | Subsidiary Information                                  | 65  
|ITEM 11.                        | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      **RISK** | 65                                                     

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|ITEM 12.  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                                 | 67 
|--------- | -------------------------------------------------------------------------------------- | ---
|PART II   |                                                                                        | 67 
|ITEM 13.  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                        | 67 
|ITEM 14.  | MATERIAL MODIFICATIONS TO THE RIGHTS
      OF SECURITY **HOLDERS AND USE OF PROCEEDS** | 67 
|ITEM 15.  | CONTROLS AND PROCEDURES                                                                | 67 
|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT                                                       | 68 
|ITEM 16B. | CODE OF ETHICS                                                                         | 68 
|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                 | 69 
|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT **COMMITTEES**                         | 69 
|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE
      ISSUER AND **AFFILIATED PURCHASERS**       | 69 
|ITEM 16F. | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                           | 69 
|ITEM 16G. | CORPORATE GOVERNANCE                                                                   | 69 
|PART III  |                                                                                        | 70 
|ITEM 17.  | FINANCIAL STATEMENTS                                                                   | 70 
|ITEM 18.  | FINANCIAL STATEMENTS                                                                   | 106
|ITEM 19.  | EXHIBITS                                                                               | 106
|          | **SIGNATURES**                                                                         | 107

4

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Glossary of Symbols

The following is a glossary of symbols that are used in this
annual report to describe our business.

Ag
    silverAs
    arsenicAu
    goldCu
    copperHg
    mercuryMo
    molybdenumPb
    leadSb
    antimonySn
    tinW
    tungstenZn
    zinc


Glossary of Terms

The following is a glossary of terms that are used in this
annual report to describe our business.

|Adit         | horizontal or nearly horizontal passage driven from the
      surface for the working or dewatering of a mine                                                                                                                                      
|------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                                                                                                                                    
|Alteration   | changes in the chemical or mineralogical composition of a
      rock, generally produced by weathering or hydro-thermal solutions                                                                                                                  
|             |                                                                                                                                                                                                                                                    
|Anomalous    | inconsistent with or deviating from what is usual, normal
      or expected                                                                                                                                                                        
|             |                                                                                                                                                                                                                                                    
|Anomaly      | the geographical area corresponding to anomalous
      geochemical or geophysical values                                                                                                                                                           
|             |                                                                                                                                                                                                                                                    
|Assay        | a chemical test performed on a sample of ores or minerals
      to determine the amount of valuable metals contained                                                                                                                               
|             |                                                                                                                                                                                                                                                    
|Breccia      | a coarse-grained clastic rock, composed of angular broken
      rock fragments held together by a mineral cement or in a fine-grained
      matrix                                                                                                 
|             |                                                                                                                                                                                                                                                    
|Clastic      | consisting of fragments of minerals, rocks, or organic
      structures that have been moved individually from their places of origin                                                                                                              
|             |                                                                                                                                                                                                                                                    
|Cretaceous   | applied to the third and final period of the Mesozoic Era                                                                                                                                                                                          
|             |                                                                                                                                                                                                                                                    
|Epithermal   | said of a hydrothermal mineral deposit formed within
      about 1 km of the Earth's surface and in the temperature range of 50 to
      200 degrees C, occurring mainly as veins                                                                  
|             |                                                                                                                                                                                                                                                    
|g/t          | grams per tonne                                                                                                                                                                                                                                    
|             |                                                                                                                                                                                                                                                    
|Gangue       | the commercially worthless material that surrounds, or is
      closely mixed with, a wanted mineralin an
      ore deposit. The separation of mineral from gangue is
    known as mineral processing                                              
|             |                                                                                                                                                                                                                                                    
|Grade        | the concentration of an ore metal in a rock sample, given
      either as weight percent for base metals or in grams per tonne or ounces
      per short ton for precious metals                                                                   
|             |                                                                                                                                                                                                                                                    
|Hydrothermal | of or pertaining to hot water, to the action of hot
      water, or to the products of this action, such as a mineral deposit
      precipitated from a hot aqueous solution, with or without demonstrable
      association with igneous processes
|             |                                                                                                                                                                                                                                                    
|Intrusive    | of or pertaining to intrusion, both the processes and the
      rock so formed, including granite, granodiorite, and dacite                                                                                                                        
|             |                                                                                                                                                                                                                                                    
|Limestone    | a sedimentary rock consisting chiefly (more than 50% by
      weight or by areal percentages under the microscope) of calcium carbonate,
      primarily in the form of the mineral calcite, and with or without
      magnesium carbonate         

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|Mesozoic       | era of geologic time spanning 245 to 66 million years
      before the present                                                   
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                  
|Metamorphic    | pertaining to the process of metamorphism or to its
      results                                                                
|               |                                                                                                                                  
|Mineralization | minerals of value occurring in rocks                                                                                             
|               |                                                                                                                                  
|Minerals       | a homogeneous naturally occurring chemical substance                                                                             
|               |                                                                                                                                  
|Porphyry       | a rock composed of prominent crystals                                                                                            
|               |                                                                                                                                  
|Ppm            | parts per million                                                                                                                
|               |                                                                                                                                  
|Pyrite         | a mineral composed of iron and sulfur                                                                                            
|               |                                                                                                                                  
|Quartz         | any hard, gold or silver ore, as distinguished from
      gravel or earth                                                        
|               |                                                                                                                                  
|Sampling       | the gathering of specimens of ore or wall rock for
      appraisal of an orebody                                                 
|               |                                                                                                                                  
|Sericite       | a white, fine-grained potassium mica occurring in small
      scales as an alteration product of various aluminosilicate minerals
|               |                                                                                                                                  
|Shale          | a fine-grained detrital sedimentary rock, formed by the
      consolidation (esp. by compression) of clay, silt, or mud          
|               |                                                                                                                                  
|Skarn          | metamorphic rocks surrounding an igneous intrusive where
      it comes in contact with a limestone or dolostone formation       
|               |                                                                                                                                  
|Sulphide       | group of minerals consisting of metals combined with
      sulfur; common metallic ores                                          
|               |                                                                                                                                  
|Vein           | a tabular or sheet like mineral deposit with identifiable
      walls, often filling a fracture or fissure                       
|               |                                                                                                                                  
|Volcanics      | a general collective term for extrusive igneous and
      pyroclastic material and rocks                                         

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FORWARD-LOOKING INFORMATION

In this Annual Report on Form 20-F, references to the
Company, Dorato, we, our and us refer to Dorato Resources Inc. (unless
the context otherwise requires). This Annual Report contains forward-looking
statements and information relating to Dorato that are based on beliefs of our
management as well as assumptions made by and information currently available to
us. When used in this document, the words anticipate, believe, estimate,
expect, intend, plan, and project and similar expressions, as they
relate to Dorato or our management, are intended to identify forward-looking
statements. Forward-looking statements in this Annual Report include, but are
not limited to, statements with respect to the future financial or operating
performances of Dorato, its subsidiaries and their respective projects, the
timing and amount of estimated future operating and exploration expenditures,
costs and timing of the development of new deposits, costs and timing of future
exploration, requirements for additional capital, government regulation of
mining operations, environmental risks, reclamation and rehabilitation expenses,
title disputes or claims, limitations of insurance coverage and the timing and
possible outcome of any pending litigation and regulatory matters. Such
statements reflect our current views with respect to future events and are
subject to certain risks, uncertainties and assumptions. Many factors could
cause our actual results, performance or achievements to be materially different
from any future results, performance or achievements that may be expressed or
implied by such forward-looking statements, including, among others, changes in
general economic and business conditions, changes in currency exchange rates and
interest rates, the need for additional financing, fluctuations in mineral
prices, operational risks associated with mining and mineral processing,
including risks related to accidents, equipment breakdowns, labor disputes or
other unanticipated difficulties with or interruptions in operations which may
or may not be insured, changes in business strategy and various other factors,
both referenced and not referenced in this annual report. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein.
Except as required by law, we undertake no obligation to publicly update or
review any forward-looking statements or information whether as a result of new
information, future developments or otherwise.

Cautionary Note to U.S. Investors Concerning Reserve and
Resource Estimates

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 United States
Securities and Exchange Commission Industry Guide 7 (SEC Industry Guide
7) under theSecurities Act of 1933, as amended. Under SEC Industry
Guide 7 standards, 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. The United States Securities and Exchange Commission has
taken the position that mineral reserves for a mineral property may not be
designated unless: (i) competent professional engineers conduct a detailed
engineering and economic study, and the bankable or final
feasibility study demonstrates that a mineral deposit can be mined profitably at
a commercial rate; (ii) a historic three-year average commodity price is used in
any reserve or cash flow analysis used to designate reserves; and (iii) the
company has demonstrated that the mineral property will receive its governmental
permits, and the primary environmental document has been filed with the
appropriate governmental authorities.

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 United States Securities and Exchange Commission. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves or that they can be mined
economically or legally. 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.

7

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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 that it can be economically or legally mined.
Disclosure of contained ounces in a resource is permitted disclosure
under Canadian regulations; however, the United States Securities and Exchange
Commission normally only permits issuers to report mineralization that does not
constitute reserves by Securities and Exchange Commission standards as
in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this Annual Report may
contain descriptions of the companys 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.

PART I

Effective from February 1, 2010, the Company adopted
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board. Unless otherwise stated, all
information presented herein has been prepared in accordance with IFRS and all
prior period amounts have been reclassified to conform with IFRS. These are the
Companys first consolidated financial statements prepared in accordance with
IFRSs and IFRS 1 First-time Adoption of International Financial Reporting
Standards has been applied. Our adoption date of IFRS was February 1, 2011, with
a transition date of February 1, 2010. Please note that our prior annual
consolidated financial statements were prepared in accordance with Canadian
generally accepted accounting principles and included a reconciliation to United
States generally accepted accounting principles, which may not be comparable to
IFRS. Please refer to Note 17 of our annual consolidated financial statements
included herein for a discussion on the impact of our transition from Canadian
generally accepted accounting principles to IFRS.

ITEM
1.             
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM
2.             
OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM
3.             
KEY INFORMATION

3.A             
Selected Financial Data

The summary consolidated financial information set forth below
should be read in conjunction with, and is qualified in its entirety by
reference to, our consolidated financial statements as of January 31, 2012 and
2011 and February 1, 2010 and for the years ended January 31, 2012 and 2011,
together with the notes thereto, which appear elsewhere in this annual report.
Our adoption date of IFRS was February 1, 2011 with a transition date of
February 1, 2010. Our consolidated financial statements as of and for the years
ended January 31, 2012 and 2011 have been audited by Smythe Ratcliffe LLP,
Chartered Accountants.

The financial data set forth in this Annual Report is expressed
in Canadian dollars (Cdn$, CAD or $) unless otherwise noted as
reported in US dollars (US$ or USD). During our 2010 fiscal year, the
Company changed its reporting currency from the United States dollar to the
Canadian dollar. The change was consistent with our change of business to the
resource sector completed on April 24, 2008 and its continuance of jurisdiction
from Wyoming, United States, to British Columbia, Canada, completed August 21,
2006.

8

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The following financial data summarizes selected financial data
for our company prepared in accordance with IFRS as issued by the International
Accounting Standards Board (IASB) as at January 31, 2012 and 2011 for the two
fiscal years ended January 31, 2012 and 2011. Such information is derived from
our consolidated financial statements which were examined by our independent
auditors. The information set forth below should be read in conjunction with our
audited annual consolidated financial statements and related notes thereto
included in this annual report, and with the information appearing under the
heading Item 5  Operating and Financial Review and Prospects.

Years Ended January 31 IFRS2012 Cdn $
      2011 Cdn $Revenue
      
      
      Nil
      NilNet Loss and comprehensive loss for the year
      
      
      (17,091,671)
      (13,728,240)Basic and diluted loss per share
      
      
      (0.22)
      (0.20)


**Years Ended** **January
        31** **IFRS**2012 Cdn $
      2011 Cdn $Total Assets
      
      6,563,479
      21,168,408Total Liabilities
      
      1,071,974
      542,783Capital Stock
      
      55,279,506
      53,339,099Shareholders Equity (Deficit)
      
      5,491,505
      20,625,625


There is no difference between IFRS and and U.S. generally
accepted accounting principles (U.S. GAAP) for the Companys financial
information as of January 31, 2012 and 2011.

The weighted average outstanding shares used to calculate
income (loss) per share for the following fiscal periods are: 75,840,556 for the
year ended January 31, 2012; and 69,372,422 for the year ended January 31, 2011;
49,819,536 for the year ended January 31, 2010; 24,859,595 for the year ended
January 31, 2009; and 5,399,532 for the fiscal year ended January 31, 2008.

During the year ended January 31, 2012, the Company changed its
accounting policy for mineral exploration costs from capitalizing to being
included in profit or loss of the year. The following selected financial data as
at January 31, 2010, 2009 and 2008 and for the three fiscal years ended January
31, 2010, 2009 and 2008 has been prepared in accordance with U.S. GAAP, based on
the audited consolidated financial statements (previously filed with our Annual
Reports on Form 20-F) for the 2010,2009 and 2008 fiscal years, adjusted to
reflect the change in accounting policy.

Years Ended January 312010 Cdn $
      2009 Cdn $
      2008 Cdn $Consolidated Statement of Operations and Comprehensive
        LossNet Loss and comprehensive loss for the year
      (3,605,068)
      (2,646,137)
      (281,832)Change of accounting policy Expenditures on mineral property
        interests expensed
      (4,099,925)
      (6,384,962)
      (474,198)Net Loss and comprehensive loss for the year
      (7,704,993)
      (9,031,099)
      (756,030)Basic and diluted loss per share
      (0.15)
      (0.36)
      (0.14)


9

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Years Ended January 312010 Cdn $
      2009 Cdn $
      2008 Cdn $Consolidated Balance SheetsTotal assets
      
      40,834,823
      19,522,698
      6,395,149Change of accounting policy Expenditures on mineral property
        interests expensed
      
      (10,959,085)
      (6,859,160)
      (474,198)Total assets
      
      29,425,738
      12,663,538
      5,920,951Total liabilities
      
      387,706
      421,976
      241,269Total shareholders equity
      
      39,997,117
      19,100,722
      6,153,880Change of accounting policy Expenditures on mineral property
        interests expensed
      
      (10,959,085)
      (6,859,160)
      (474,198)Total shareholders equity
      
      29,038,032
      12,241,562
      5,679,682Total liabilities and shareholders equity
      
      29,425,738
      12,663,538
      5,920,951


To date, the Company has not generated any cash flow from its
activities to fund on-going activities and cash commitments. The Company has
financed operations principally through the sale of equity securities. The
Company normally maintains sufficient cash and cash equivalents to meet the
Companys business requirements and at January 31, 2012, the cash and cash
equivalents balance of $60,151 is insufficient to meet the needs for the coming
year. Therefore, the Company will be required to raise additional capital in
order to fund its operations in fiscal 2013.

Exchange Rate Data

The Company maintains its accounts in Canadian dollars. These
consolidated financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.

The following table sets forth, for the periods indicated,
certain exchange rates based on the noon buying rate in Canadian dollars as
reported by the Bank of Canada. On May 29, 2012, the exchange rate was USD 1.00
per CAD 1.0253. The high and low exchange rates (CAD per USD 1.00) for each
month during the previous six months were as follows:

High
      LowMay 2012
    1.0023
    0.9830April 2012
    1.0050
    0.9800March 2012
    1.0035
    0.9842February 2012
    1.0040
    0.9844January 2012
    1.0295
    0.9966December 2011
    1.0423
    1.0052


The average, year end, high and low exchange rates (CAD per USD
1.00) for the five most recent financial years were as follows:

For Years Ended
        January 312012
      2011
      2010
      2009
      2008Average Rate during Year (1)
      0.9907
      1.0260
      1.1272
      1.0849
      1.0603Year End
      1.0052
      1.0022
      1.0693
      1.2265
      1.0038High
      1.0604
      1.0778
      1.2991
      1.2935
      1.1855Low
      0.9449
      0.9862
      1.0234
      0.9765
      0.9215


| | (1) | The average exchange rate is based on the average of the
      noon buying rates (CAD per USD 1.00) in Canadian dollars as reported by
      the Bank of Canada on the last day of each month during such
    periods.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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3.B             
Capitalization and Indebtedness

Not applicable.

3.C             
Reasons for the Offer and Use of Proceeds

Not applicable.

3.D             
Risk Factors

The Company, and thus the securities of the Company, should be
considered a speculative investment and investors should carefully consider all
of the information disclosed in this Annual Report prior to making an investment
in the Company. In addition to the other information presented in this Annual
Report, the following risk factors should be given special consideration when
evaluating an investment in any of the Company's securities.

Our independent auditors have expressed doubts about our
ability to continue as a going concern.

The report of our independent auditors on our financial
statements for the year ended January 31, 2012 includes a note stating that our
ability to continue as a going concern is dependent upon our ability to generate
profitable operations in the future and/or to obtain the necessary financing to
meet our obligations and repay our liabilities arising from normal business
operations when they come due. The outcome of these matters cannot be predicted
with any certainty, at this time. We have historically satisfied our capital
needs primarily by issuing equity securities. If we are unable to continue to
fund our operations through the issuance of equity securities we would have to
cease operations.

Risks Associated with Exploration

The Company has no known reserves on its interests in
exploration properties.

The Company has no mineral producing properties and has never
generated any revenue from its operations. The majority of exploration projects
do not result in the discovery of commercially mineable deposits of ore. Only
those mineral deposits that the Company can economically and legally extract or
produce, based on a comprehensive evaluation of cost, grade, recovery and other
factors, are considered resources or reserves. The Company has no known
bodies of commercial ore or economic deposits and has not defined or delineated
any proven or probable reserves or resources on any of its properties. The
Company may never discover any gold, silver or other minerals from mineralized
material in commercially exploitable quantities and any identified mineralized
deposit may never qualify as a commercially mineable (or viable) reserve. In
addition, the Company is in its early stages of exploration and substantial
additional work will be required in order to determine if any economic deposits
exist on the Companys properties. Substantial expenditures are required to
establish ore reserves through drilling and metallurgical and other testing
techniques. No assurance can be given that any level of recovery of the ore
reserves will be realized or that any identified mineral deposit will ever
qualify as a commercial mineable ore body which can be legally and economically
exploited.

The Company faces risks related to exploration and
development, if warranted, of its properties.

The level of profitability of the Company, if any, in future
years will depend to a great degree on gold and silver prices and whether any of
the Companys exploration stage properties can be brought into production. The
exploration for and development of mineral deposits involves significant risks.
It is impossible to ensure that the current and future exploration programs
and/or feasibility studies, if any, on the Companys existing mineral properties
will establish reserves. Whether an ore body will be commercially viable depends
on a number of factors, including, but not limited to: the particular attributes
of the deposit, such as size, grade and proximity to infrastructure; metal
prices, which cannot be predicted and which have been highly volatile in the
past; mining, processing and transportation costs; perceived levels of political
risk and the willingness of lenders and investors to provide project financing; labour
costs and possible labour strikes; and governmental regulations, including,
without limitation, regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting materials, foreign exchange,
environmental protection, employment, worker safety, transportation, and
reclamation and closure obligations.

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The Company is also subject to the risks normally encountered
in the mining industry, such as:

- unusual or unexpected geological formations;
- fires, floods, earthquakes, volcanic eruptions, and other natural
  disasters;
- power outages and water shortages;
- cave-ins, landslides, and other similar mining hazards;
- labour disruptions and labour disputes;
- inability to obtain suitable or adequate machinery, equipment, or labour;
- liability for pollution or other hazards; and
- other known and unknown risks involved in the operation of mines and the
  conduct of exploration.

The development of interests in exploration properties is
affected by many factors, including, but not limited to: the cost of operations,
variations in the grade of ore, fluctuations in metal markets, costs of
extraction and processing equipment, availability of equipment and labour,
labour costs and possible labour strikes, and government regulations, including
without limitation, regulations relating to taxes, royalties, allowable
production, importing and exporting of minerals, foreign exchange, employment,
worker safety, transportation, and environmental protection. Depending on the
price of minerals, the Company may determine that it is impractical to commence,
or, if commenced, continue, commercial production. Such a decision would
negatively affect the Companys profits and may affect the value of its equity.

The Company relies on a limited number of properties.

The Companys only current properties of interest are the
Cordillera del Condor property located in Amazonas and Cajamarca regions, and
the Deborah property, located in Cajamarca Region, Peru. As a result, unless the
Company acquires additional property interests, any adverse developments
affecting these properties could have a material adverse effect upon our
business and would materially and adversely affect our potential mineral
resource production, profitability, financial performance and results of
operations.

The Companys properties may be subject to unregistered
agreements, transfers or claims and title may be adversely affected by
undetected defects or aboriginal claims.

The Company has not conducted a legal survey of the boundaries
of any of its properties, and therefore, in accordance with the laws of the
jurisdictions in which these properties are situated, their existence and area
could be in doubt. The Company has obtained only limited formal title reports on
some of its properties and title to all of its properties may be in doubt. The
Companys properties may be subject to unregistered agreements, transfers or
claims and title may be adversely affected by such undetected defects. If title
is disputed, the Company may have to defend its ownership through the courts,
and the Company cannot guarantee that a favourable judgment will be obtained.
Any litigation could be extremely costly to the Company and could limit the
available capital for use in other exploration and development activities. The
Company may require additional financing to cover the costs of any litigation
necessary to establish title. In the event of an adverse judgment with respect
to any of its mineral properties, the Company could lose its property rights and
may be required to cease its exploration and development activities on that
property. Mining operations may also be affected by claims of native peoples,
any of which could have the effect of reducing or preventing the Company from
exploiting any possible mineral reserves on its properties.

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Ownership, exploration and development of the Companys
properties are subject to government approvals and regulations.

All of the interests in exploration property held by the
Company are located in Peru. Those properties within the Cordillera del Condor
are held through option agreements that can only be exercised by the Company
upon receipt of a Supreme Decree from the Peruvian Government, as Peruvian law
requires a Supreme Decree with respect to the Companys properties when the
Company is a foreign entity and its properties are located within 50 kilometers
of the Peruvian national border. The Company has applied for, but not been
issued, the Supreme Decree, and there can be no guarantee that the Supreme
Decree will be issued. The Deborah property is not subject to this rule as it is
farther than 50 kilometers from the border.

The individuals and entities that granted the Company options
pursuant to the option agreements have obtained mining concessions with respect
to the properties covered by each option agreement. There can be no guarantee
that the individuals and entities that granted the Company options will be able
to maintain these mining concessions in good standing, nor is there any
guarantee that the Company will be able to obtain and maintain these mining
concessions.

Peruvian law also requires mining permits and licenses in order
to undertake exploration activities or commence construction or operation of
mine facilities on the Companys properties. An exploration permit is required
when the proposed exploration may have a significant impact on the environment,
people or historical sites. The Company has required and anticipates that it
will continue to require exploration permits in order to undertake exploration
activities on its properties.

There can be no guarantee that the Company will be able to
obtain the Supreme Decree and all necessary permits and approvals from the
Peruvian Government or that such approvals, if obtained, will not later be
revoked or amended in a manner adverse to the Company. If the Company is unable
to obtain the Supreme Decree, it will not be able to exercise the options set
forth in its option agreements, and it will be prohibited from owning the
underlying properties. If the Company or its optioners are unable to obtain and
maintain other required approvals, permits and licenses, the Company may be
unable to undertake its intended exploration and development activities on such
properties. Any of these developments could have a material adverse effect on
the Company, and could require the Company to cease exploration and development
activities on all or a portion of its properties, or abandon or dispose of all
or a portion of its properties.

Mining operations are subject to a wide range of additional
government regulations including, but not limited to: restrictions on production
and production methods, price controls, tax increases, expropriation of
property, import and export control, employment laws, worker safety regulations,
environmental protection, protection of agricultural territory or changes in
conditions under which minerals may be marketed. Any failure to comply with such
regulations, adverse changes in such regulations or shifts in political
conditions could have a material adverse effect on the Company and its business,
or if significant enough, could make it impossible to continue to operate in the
country.

Mineral operations are subject to market forces outside of
the Companys control.

The marketability of minerals is affected by numerous factors
beyond the Companys control. These factors include, but are not limited to,
market fluctuations, government regulations relating to prices, taxes,
royalties, allowable production, import restrictions applicable to equipment and
supplies, export controls and supply and demand. One or more of these risk
elements could have an impact on costs of an operation and, if significant
enough, reduce the profitability of the operation and threaten its continuation.

The mining industry is highly competitive.

The business of the acquisition, exploration, and development
of mineral properties is intensely competitive. The Company will be required to
compete, in the future, directly with other corporations that have better access
to potential mineral resources, more developed infrastructure, more available
capital, better access to necessary financing, and more knowledgeable and available
employees than the Company. The Company may encounter competition in acquiring
mineral properties, hiring mining professionals or obtaining mining resources,
such as manpower, drill rigs, and other mining equipment. Such corporations
could outbid the Company for potential projects or produce minerals at lower
costs. Increased competition could also affect the Companys ability to attract
necessary capital funding or acquire suitable producing properties or prospects
for mineral exploration in the future.

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Mining and mineral exploration have substantial operational
risks which are uninsured or uninsurable risks.

Exploration, development and mining operations involve various
hazards, including environmental hazards, industrial accidents, metallurgical
and other processing problems, unusual or unexpected rock formations, structural
cave-ins or slides, flooding, fires, metal losses and periodic interruptions due
to inclement or hazardous weather conditions. These risks could result in damage
to or destruction of mineral properties, facilities or other property, personal
injury, environmental damage, delays in operations, increased cost of
operations, monetary losses and possible legal liability. The Company may not be
able to obtain insurance to cover these risks at economically feasible premiums
or at all. The Company may elect not to insure where premium costs are
disproportionate to its perception of the relevant risks. The payment of such
insurance premiums and of such liabilities would reduce the funds available for
exploration and production activities.

The prices of precious and base minerals and metals
fluctuate widely and may not produce enough revenue to cover the
Companys costs.

Even if commercial quantities of mineral deposits are
discovered, there is no guarantee that a profitable market will exist for the
sale of the metals produced. The Companys long-term viability and profitability
depend, in large part, upon the market price of metals which have experienced
significant movement over short periods of time, and are affected by numerous
factors beyond the Companys control, including international economic and
political trends, expectations of inflation, currency exchange fluctuations,
interest rates and global or regional consumption patterns, speculative
activities and increased production due to improved mining and production
methods. The supply of and demand for metals are affected by various factors,
including political events, economic conditions and production costs in major
producing regions. There can be no assurance that the price of any minerals
produced from the Companys properties will be such that any such deposits can
be mined at a profit.

Surface Rights and Access

Although the Company acquires the rights to some or all of the
minerals in the ground subject to the tenures that it acquires, or has a right
to acquire, in most cases it does not thereby acquire any rights to, or
ownership of, the surface to the areas covered by its mineral tenures. In such
cases, applicable mining laws usually provide for rights of access to the
surface for the purpose of carrying on mining activities, however, the
enforcement of such rights can be costly and time consuming. In areas where
there are no existing surface rights holders, this does not usually cause a
problem, as there are no impediments to surface access. However, in areas where
there are local populations or land owners (as with many of the Companys
properties), it is necessary, as a practical matter, to negotiate surface
access. There can be no guarantee that, despite having the right at law to
access the surface and carry on mining activities, the Company will be able to
negotiate a satisfactory agreement with any such existing landowners/occupiers
for such access, and therefore it may be unable to carry out mining activities.
In addition, in circumstances where such access is denied, or no agreement can
be reached, the Company may need to rely on the assistance of local officials or
the courts in such jurisdiction. The Company has not yet been successful in
negotiating any formal surface access agreements.

Environmental Regulatory Requirements

In connection with its operations and properties, the Company
is subject to extensive and changing environmental legislation, regulation and
actions. The Company cannot predict what environmental legislation, regulation or policy will be enacted or adopted in
the future or how future laws and regulations will be administered or
interpreted. The recent trend in environmental legislation and regulation,
generally, is toward stricter standards and this trend is likely to continue in
the future. This recent trend includes, without limitation, laws and regulations
relating to air and water quality, mine reclamation, waste handling and
disposal, the protection of certain species and the preservation of certain
lands. These regulations may require the acquisition of permits or other
authorizations for certain activities. These laws and regulations may also limit
or prohibit activities on certain lands. Compliance with more stringent laws and
regulations, as well as potentially more vigorous enforcement policies or
stricter interpretation of existing laws, may necessitate significant capital
outlays, may materially affect the Companys results of operations and business,
or may cause material changes or delays in the Companys intended activities.

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The Companys operations may require additional analysis in the
future including environmental and social impact and other related studies.
Certain activities require the submission and approval of environmental impact
assessments. Environmental assessments of proposed projects carry a heightened
degree of responsibility for companies and its directors, officers, and
employees. There can be no assurance that the Company will be able to obtain or
maintain all necessary permits that may be required to continue its operation or
its exploration of its properties or, if feasible, to commence development,
construction or operation of mining facilities at such properties on terms which
enable operations to be conducted at economically justifiable costs.

Other Regulatory Requirements

The Companys activities are subject to extensive regulations
governing various matters, including management and use of toxic substances and
explosives, management of natural resources, exploration, development of mines,
production and post-closure reclamation, exports, price controls, taxation,
regulations concerning business dealings with indigenous peoples, labour
standards on occupational health and safety, including mine safety, and historic
and cultural preservation.

Failure to comply with applicable laws and regulations may
result in civil or criminal fines or penalties, enforcement actions thereunder,
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, any of
which could result in the Company incurring significant expenditures. The
Company may also be required to compensate those suffering loss or damage by
reason of a breach of such laws, regulations or permitting requirements. It is
also possible that future laws and regulations, or more stringent enforcement of
current laws and regulations by governmental authorities, could cause additional
expense, capital expenditures, restrictions on or suspension of the Companys
operations and delays in the exploration and development of its mineral
properties.

Financing Risks

The Company has a history of losses and no revenues.

The Company is a mineral exploration company without operations
and has historically incurred losses. To date, the Company has not recorded any
revenues from its operations nor has the Company commenced commercial production
on any of its properties. The Company does not expect to receive revenues from
operations in the foreseeable future, if at all. The Company expects to continue
to incur losses unless and until such time as properties enter into commercial
production and generate sufficient revenues to fund its continuing operations.

Until such time, the Company will be dependent upon future
financing in order to meet its capital requirements and continue its plan of
operations. Although the Company has raised additional private placement
financing in prior fiscal years, these funds may not be sufficient to undertake
all planned acquisition, exploration, and development programs of the Company.
The Company cannot guarantee that it will obtain necessary financing. The
development of the Companys properties will require the commitment of substantial resources to conduct the time-consuming
exploration and development of properties. The amounts and timing of
expenditures will depend on the progress of on-going exploration, assessment and
development, the results of consultants analyses and recommendations, the rate
at which operating losses are incurred, the execution of any joint venture
agreements with strategic partners, the Companys acquisition of additional
properties and other factors, many of which are beyond the Companys control.
The Company may never generate any revenues or achieve profitability.

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The Company will require additional capital to meet its
capital requirements for 2012 and for future fiscal years.

The Company does not have sufficient financial resources to
undertake all of its planned acquisition and exploration programs for 2012. The
Companys ability to continue its exploration, assessment, and development
activities depends in part on the Companys ability to obtain financing through
joint ventures, debt financing, equity financing, production sharing
arrangements or some combination of these or other means, and ultimately,
commence operations and generate revenue. There can be no assurance that any
such arrangements will be concluded and the associated funding obtained. There
can be no assurance that the Company will commence operations and generate
sufficient revenues to meet its obligations as they become due or will obtain
necessary financing on acceptable terms, if at all. The failure of the Company
to meet its on-going obligations on a timely basis could result in the loss or
substantial dilution of the Companys interests (as existing or as proposed to
be acquired) in its properties. In addition, should the Company incur
significant losses in future periods, it may be unable to continue as a going
concern, and realization of assets and settlement of liabilities in other than
the normal course of business may be at amounts significantly different from
those in the financial statements included in this Annual Report.

Currency fluctuation may affect the Companys operations and
financial stability.

While engaged in the business of exploiting mineral properties,
the Companys operations outside Canada make it subject to foreign currency
fluctuation and such fluctuations may adversely affect the Companys financial
positions and results. Such fluctuations are outside the control of the Company
and may be largely unpredictable. Management may not take any steps to address
foreign currency fluctuations that will eliminate all adverse effects and,
accordingly, the Company may suffer losses due to adverse foreign currency
fluctuations.

Risks Relating to an Investment in the Securities of the
Company

The Company is dependent upon key management.

The success of the Companys operations will depend upon
numerous factors, many of which are beyond the Companys control, including (i)
the ability to design and carry out appropriate exploration programs on its
mineral properties; (ii) the ability to produce minerals from any mineral
deposits that may be located on its properties; (iii) the ability to attract and
retain additional key personnel in exploration, marketing, mine development and
finance; and (iv) the ability and the operating resources to develop and
maintain the properties held by the Company. These and other factors will
require the use of outside suppliers as well as the talents and efforts of the
Company and its consultants and employees. There can be no assurance of success
with any or all of these factors on which the Companys operations will depend,
or that the Company will be successful in finding and retaining the necessary
employees, personnel and/or consultants in order to be able to successfully
carry out such activities.

The Companys growth, if any, will require new personnel,
which it will be required to recruit, hire, train and retain.

The Company expects significant growth in the number of
employees required if it determines that a mine at any of its properties is
commercially feasible, it is able to raise sufficient funding and it elects to
develop the property. This growth will place substantial demands on the Company
and its management, and the Companys ability to assimilate new personnel will be critical
to its performance. The Company will be required to recruit additional personnel
and to train, motivate and manage employees. It will also have to adopt and
implement new systems in all aspects of its operations. This will be
particularly critical if the Company decides not to use contract miners at any
of its properties. There is no assurance that the Company will be able to
recruit the personnel required to execute its programs or to manage these
changes successfully.

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The Company has limited experience with development stage
mining operations.

The Company has limited experience in placing resource properties
  into production, and its ability to do so will be dependent upon using the services
  of appropriately experienced personnel or entering into agreements with other
  major resource companies that can provide such expertise. There can be no assurance
  that the Company will have available the necessary expertise when and if it
  places a property into production.

Certain of the Companys directors and officers are also
directors and/or officers and/or shareholders of potential competitors of
the Company, giving rise to potential conflicts of interest.

Several of the Companys directors and officers are also
directors, officers or shareholders of other companies. Some of the directors
and officers of the Company are engaged and will continue to be engaged in the
search for additional business opportunities on behalf of other corporations,
and situations may arise where these directors and officers will be in direct
competition with the Company. 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 could place the Company in a worse
position than if no conflict existed. Conflicts, if any, will be dealt with in
accordance with the relevant provisions of the Business Corporations Act
(British Columbia). The Board has resolved that any transaction either at the
Company level or of a subsidiary level, with entities having directors, officers
or significant shareholders in common, must be approved by disinterested Board
members. The Companys directors are required by law to act honestly and in good
faith with a view to the best interests of the Company and to disclose any
interest which they may have in any project or opportunity in respect of which
the Company is proposing to enter into a transaction.

Stock market price and volume volatility.

The market for the Companys common shares (Common Shares)
may be highly volatile for reasons both related to the performance of the
Company or events pertaining to the industry (i.e., mineral price
fluctuation/high production costs/accidents) as well as factors unrelated to the
Company or its industry. In particular, market demand for products incorporating
minerals in their manufacture fluctuates from one business cycle to the next,
resulting in change of demand for the mineral and an attendant change in the
price for the mineral. The Common Shares can be expected to be subject to
volatility in both price and volume arising from market expectations,
announcements and press releases regarding the Companys business, and changes
in estimates and evaluations by securities analysts or other events or factors.
In recent years the securities markets in the United States and Canada have
experienced a high level of price and volume volatility, and the market price of
securities of many companies, particularly small-capitalization companies such
as the Company, have experienced wide fluctuations that have not necessarily
been related to the operations, performances, underlying asset values, or
prospects of such companies. For these reasons, the price of the Common Shares
can also be expected to be subject to volatility resulting from purely market
forces over which the Company has no control. Further, despite the existence of
a market for trading the Common Shares in Canada and the United States,
stockholders of the Company may be unable to sell significant quantities of
Common Shares in the public trading markets without a significant reduction in
the price of the stock.

Dilution through the granting of options.

Because the success of the Company is highly dependent upon the
performance of its directors, officers and consultants, the Company has granted,
and will in the future grant, to some or all of its directors, officers and
consultants, options to purchase its Common Shares as non-cash incentives. Those
options may be granted at exercise prices below those for the Common Shares prevailing in
the public trading market at the time or may be granted at exercise prices equal
to market prices at times when the public market is depressed. To the extent
that significant numbers of such options may be granted and exercised, the
interests of the other stockholders of the Company may be diluted.

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The Company is likely a "passive foreign investment company"
which will likely have adverse U.S. federal income tax consequences for
U.S. shareholders.

U.S. investors in our Common Shares should be aware that the
  Company believes it constituted a passive foreign investment company (PFIC)
  during the tax year ended January 31, 2012, and may be a PFIC in the current
  and future tax years. If the Company is a PFIC for any year during a U.S. shareholders
  holding period, then such U.S. shareholder generally will be required to treat
  any gain realized upon a disposition of Common Shares, or any so-called excess
  distribution received on its Common Shares, as ordinary income, and to
  pay an interest charge on a portion of such gain or distributions, unless the
  shareholder makes a timely and effective "qualified electing fund" election
  (QEF Election) or a "mark-to-market" election with respect to the
  Common Shares. A U.S. shareholder who makes a QEF Election generally must report
  on a current basis its share of the Company's net capital gain and ordinary
  earnings for any year in which the Company is a PFIC, whether or not the Company
  distributes any amounts to its shareholders. However, U.S. shareholders should
  be aware that there can be no assurance that we will satisfy record keeping
  requirements that apply to a qualified electing fund, or that we will supply
  U.S. shareholders with information that such U.S. shareholders require to report
  under the QEF Election rules, in the event that we are a PFIC and a U.S. shareholder
  wishes to make a QEF Election. Thus, U.S. shareholders may not be able to make
  a QEF Election with respect to their Common Shares. A U.S. shareholder who makes
  the mark-to-market election generally must include as ordinary income each year
  the excess of the fair market value of the Common Shares over the taxpayers
  basis therein. This paragraph is qualified in its entirety by the discussion
  below under the heading Certain United States Federal Income Tax Considerations.
  Each U.S. shareholder should consult its own tax advisor regarding the tax consequences
  of the PFIC rules and the acquisition, ownership, and disposition of our Common
  Shares.

Broker-Dealers may be discouraged from effecting
transactions in the Common Shares because they are considered Penny
Stocks and are subject to the Penny Stock Rules.

Rules 15g-1 through 15g-9 promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act) impose sales practice and
disclosure requirements on certain broker-dealers who engage in certain
transactions involving a "penny stock". Subject to certain exceptions, a penny
stock generally includes any equity security that has a market price of less
than US$5.00 per share. The market price of the Common Shares over the year
ended January 31, 2012 and through May 29, 2012 was at all times below US$5.00
and the Common Shares are deemed penny stock for the purposes of the Exchange
Act. The additional sales practice and disclosure requirements imposed upon
broker-dealers may discourage broker-dealers from effecting transactions in the
Common Shares, which could severely limit the market liquidity of the Common
Shares and impede the sale of Common Shares in the secondary market.

Under the penny stock regulations, a broker-dealer selling
penny stock to anyone other than an established customer or accredited
investor (generally, an individual with net worth in excess of US$1,000,000 or
an annual income exceeding US$200,000, or US$300,000 together with his or her
spouse) must make a special suitability determination for the purchaser and must
receive the purchaser's written consent to the transaction prior to sale, unless
the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the
broker-dealer to deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Securities and Exchange Commission relating
to the penny stock market, unless the broker-dealer or the transaction is
otherwise exempt. A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the registered representative and current
quotations for the securities. Finally, a broker-dealer is required to send
monthly statements disclosing recent price information with respect to the penny stock held in a
customer's account and information with respect to the limited market in penny
stocks.

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The board of directors is currently comprised of four
directors, only one of whom is independent.

The Board is currently comprised of four directors, only one of
whom is independent. The Company is actively attempting to appoint an additional
independent director to the Board in order to bring the Company into compliance
with the corporate governance rules and regulations that it is subject to in
Canada, however there is no assurance when this will occur, if at all. The lack
of independent directors on the Board may weaken the quality of oversight of the
Companys management and compromise the Boards effectiveness in carrying out
its duties and responsibilities.

The Company does not intend to pay cash dividends and there
is no assurance that it will ever declare cashdividends.

The Company intends to retain any future earnings to finance
its business and operations and any future growth. Therefore, the Company does
not anticipate paying any cash dividends in the foreseeable future.

ITEM
4.             
INFORMATION ON THE COMPANY

4.A             
History and Development of the Company

The Company was incorporated under the laws of the Province of
British Columbia on May 26, 1981 under the name "Force Energy Ltd.". On
September 10, 1981, the Company changed its name to "Force Resources
Ltd.". On December 1, 1994, the Company subsequently changed its name to
"Force Technologies Inc." in connection with a consolidation of its share
capital on a five old shares for one new share basis. On October 1, 1997, the
Company changed its name to "Glassmaster Industries Inc." in connection
with a split of its share capital on a one old share for two new shares basis.

Effective April 24, 1998, the Company continued its
jurisdiction of registration from British Columbia to the State of Wyoming by
filing a Certificate of Registration and Articles of Continuance in the office
of the Secretary of State of Wyoming.

On January 19, 2000, the Company changed its name to
"Interlink Systems Inc." in connection with a consolidation of its share
capital on a ten old shares for one new share basis. On August 14, 2000, the
Company changed its name to "iQuest Networks Inc." in connection with the
acquisition of its interest in iNoize.com Software Ltd. (a company involved in
the development of music transfer software). The Company also concurrently
effected a consolidation of its share capital on a one new share for two old
shares basis.

On October 28, 2003, the Company ceased operations as a company
involved in the development of music transfer software. Also effective October
28, 2003, the Companys shares were consolidated on the basis of one new share
for every four old shares, and the authorized share capital was subsequently
increased from 25,000,000 common shares to 100,000,000 common shares. In
connection with the share consolidation, the Company changed its name to
"Quest Ventures Inc.".

At a shareholders meeting held on June 22, 2004, the Companys
shareholders approved a change of our primary business focus to other business
opportunities, including the acquisition, exploration and development of natural
resources properties. At the Companys annual meeting held on July 19, 2005, the
Companys shareholders approved a consolidation of our shares and concurrent
name change. Effective April 24, 2006, the Companys shares were consolidated on
the basis of one new share for each two old shares and the Company also changed
its name to Dorato Resources Inc..

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Effective August 21, 2006, the Company continued its
jurisdiction of incorporation into British Columbia from Wyoming. The Company is
governed by the Business Corporations Act (British Columbia) (BCBCA).

On October 18, 2007, the Company commenced its present business
of acquiring and exploring natural resource properties by entering into five
agreements with several Peruvian nationals and a Peruvian company to acquire
options to earn a 100% interest in 70 mineral claims located in Peru and to
acquire certain mining concessions. On April 24, 2008, the TSX Venture Exchange
(the TSX.V) accepted for filing the documentation related to these
option contracts, and the Companys listing was transferred from the NEX to the
TSX.V effective April 25, 2008.

The Companys head office is located at #2300  1177 West
Hastings Street, Vancouver, British Columbia, Canada, the phone number is (604)
638-5817 and the fax number is (604) 408-7499. The Companys registered and
records office and address for service is #2600 - 595 Burrard Street, Vancouver,
British Columbia, Canada.

4.B             
Business Overview

The Company is a mineral exploration company engaged in the
acquisition, exploration of mineral properties. The Company currently has rights
to acquire interests in a number of mineralproperties in Peru. The Company is in
the exploration stage as its properties have not yet reached commercial
production and none of its properties are beyond the preliminary exploration
stage. There are currently no identified mineral resources or mineral reserves
on any of the Companys mineral properties.

The Company has entered into seven option agreements granting
the option to earn a 100% interest in certain mineral claims and mining
concessions located in Peru that we collectively refer to as the Cordillera del
Condor Project (consisting of the Vicmarama Property, Maravilla Property,
Lahaina 1 Property, Lahaina 2 Property, David Property, Marita Property and
Cangaza Property) and one option agreement granting us the option to earn a 100%
interest in the Deborah Property. Peruvian Government approval is required prior
to exercising the options to acquire these properties and [, as described
below,] this approval is in the process of being obtained [for certain of the
properties]. We previously held an additional option agreement related to the
Cordillera del Condor Project, the option agreement for the Afrodita Property,
but we terminated this agreement in May, 2012 in order to reduce our holding
costs.

The material terms of our option agreements are as follows:

- We have fulfilled the commercial terms of the option to earn 100% interest
  in the Vicmarama Property. In order to earn a 100% interest in the Vicmarama
  Property, we agreed to issue a total of 750,000 common shares. 250,000 shares
  were issued on TSX-V approval and an additional 250,000 shares were issued on
  April 16, 2009 and the remaining 250,000 shares were issued on November 17,
  2009. We also agreed to pay US$250,000 as consideration for the Vicmarama
  Property and the final instalment of US$50,000 was paid on April 24, 2009.
  Although the obligations to exercise the option under this agreement have been
  met, the option has not yet been exercised. The exercise of the option is also
  subject to receipt of the Supreme Decree to be issued by the Peruvian
  Government.
- We have fulfilled the commercial terms of the option to earn 100% interest
  in the Maravilla Property. In order to earn a 100% interest in the Maravilla
  Property, we agreed to issue 1,250,000 common shares, which have been issued.
  We also paid US$300,000 as consideration for the Maravilla Property. Although
  the obligations to exercise the option under this agreement have been met, the
  option has not yet been exercised. The exercise of the option is also subject
  to receipt of the Supreme Decree to be issued by the Peruvian Government.
- We have fulfilled the commercial terms of the option to earn a 100%
  interest in the Lahaina 1 Property. In order to earn the 100% interest in the
  Lahaina 1 Property, we issued 3,400,000 common shares. We also paid US$270,000 as additional consideration for the property.
  Although the obligations to exercise the option under this agreement have been
  met, the option has not yet been exercised. The exercise of the option is also
  subject to receipt of the Supreme Decree to be issued by the Peruvian Government.

20

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- We have fulfilled the commercial terms of the option to earn 100% interest
    in the Lahaina 2 Property. In order to earn a 100% interest in the Lahaina
    2 Property, we agreed to issue 1,500,000 common shares, of which 250,000 shares
    were issued upon TSX-V approval and an additional 500,000 shares were issued
    on April 16, 2009. The remaining 750,000 shares were issued on November 17,
    2009. We also agreed to pay US$400,000 as additional consideration for the
    Lahaina 2 Property, which has been paid in full. Although the obligations
    to exercise the option under this agreement have been met, the option has
    not yet been exercised. The exercise of the option is also subject to receipt
    of the Supreme Decree to be issued by the Peruvian Government.
- On June 5, 2009, the Company entered into an assignment/option agreement
    to earn a 100% interest in the David Property. In order to earn a 100% interest
    we agreed to pay US$66,031 plus an additional consideration of US$5,000 on
    exercise of the option/assignment. The exercise of the option will be triggered
    by issuance of the Supreme Decree to the Company.
- On June 11, 2010, the Company entered into an option agreement to acquire
    a 100% interest in the Marita Property In order to earn the 100% interest
    we will pay US$200,000 within 10 days of TSX-V approval (approved on June
    15, 2010 and paid) and issue an aggregate of 1,000,000 shares. 50,000 shares
    were issued on July 25, 2011, an additional 200,000 on or before June 15,
    2012 and 750,000 on or before June 15, 2013. The exercise of the option is
    also subject to receipt of the Supreme Decree to be issued by the Peruvian
    Government.
- We have fulfilled the commercial terms of the option to earn 100% interest
    in the Cangaza Property by making cash payments of US$150,000 and issuing
    1,050,000 common shares. Although the obligations to exercise the option under
    this agreement have been met, the option has not yet been exercised. The exercise
    of the option is subject to receipt of the Supreme Decree to be issued by
    the Peruvian Government.
- On September 16, 2011, the Company entered into an option agreement to acquire
    a 100% interest in the Deborah Gold property, Cajamarca, Peru. Under the terms
    of the option agreement, the Company can acquire a 100% interest in the property
    in exchange for cumulative payments of US$6,000,000 over a minimum of 5 years.
    The detailed terms of the option agreement are summarized in the table below.

Event
    USD Cash
      PaymentsTSX-V Approval effective date
    $50,000 (paid)On commencing drill-testing drill date
    $200,0001 year anniversary of drill date
    400,0002 year anniversary of drill date
    600,0003 year anniversary of drill date
    900,0004 year anniversary of drill date
    1,200,0005 year anniversary of drill date
    2,650,0006,000,000


The option agreement required an
immediate payment of $50,000 on receipt of TSX-V approval (Effective Date).
This payment was made and the Company commenced systematic surface exploration
of the property in early February, 2012. A second payment of $200,000 is payable
on the commencement of drilling (Drill Date) and all subsequent payments are
tied to this drill-related anniversary. In addition, a royalty of $4.00 per ounce of gold produced is payable
  to the underlying vendors, up to a maximum of $2,000,000. There was no finders
  fee paid by the Company in connection with the Option Agreement.

21

---

- In May, 2012, we terminated our option agreement relating to the Afrodita
    Property in the Cordillera del Condor Project in order to reduce our holding
    costs. As a result, the Company no longer holds any interest in this property
    and at January 31, 2012, the Companys interest in this property ($7,957,496)
    was written off.

Private Placements

The Company did not complete any financings during the year
ended January 31, 2012.

On May 25, 2012, the Company closed a non-brokered private
placement financing through the issuance of 13,190,391 shares at a price of
$0.09 per share for total gross proceeds to the Company of $1,187,135 (the
"Offering"). Proceeds from the Offering will be used to finance initial
exploration of its Deborah Gold Property (100% owned) in Cajamarca, Peru and for
general working capital.

Royalty Agreement with Franco-Nevada

On July 18, 2008, the Company entered into a Royalty Option
Agreement with Franco-Nevada Corporation (Franco-Nevada). Pursuant to this
agreement, Dorato granted Franco-Nevada the option to purchase a perpetual
royalty on 100% of the gold and silver produced from a portion of the option
agreement land package covering approximately 417 square kilometers (the
"Option") which is part but not all of the concessions on
the Lahaina 1 and 2, Maravilla and Vicmarama properties.The material
terms of the Option were as follows:

- The Option will expire the sooner of: (a) the expiration or termination of
  the concessions and surrounding land packages; or (b) sixty days following a
  decision to construct a mine;
- The Option may be exercised within sixty days following a decision to
  construct a mine by Dorato and/or its successor in interest together with a
  firm commitment to finance construction;
- The royalty rate shall be either 1% or 2% of the Net Smelter Return,
  dependent on the gold price at the time of the exercise of the Option; and
- The Option may be exercised at a purchase price equal to the Royalty Net
  Present Value which, for the purposes of the Royalty Option Agreement, shall
  mean the after tax net present value of the royalty revenue from the
  production of gold and silver using the royalty rate and a 7.5% discount rate
  applied to the base case model assumptions contained in a feasibility study
  used to make the decision to construct the mine.

Amended Royalty Agreement

Dorato and Franco-Nevada entered into a certain Subscription
Agreement dated March 31, 2009 pursuant to which Franco-Nevada agreed to
purchase 2,000,000 units for $0.50 per Unit with each Unit to consist of one
common share and one-half of one common share purchase warrant. Each full
warrant entitling the holder to purchase one common share of Company at a price
of $0.65 per share until March 31, 2011. As additional consideration for
Francos subscription, Dorato agreed to amend the July 18, 2008 Royalty Option
Agreement to expand the size of the Mineral Property to which Francos royalty
will apply to 417 square kilometers.

Effects of Government Regulation

For a description of the material effects of government
regulation on the Companys business, see the disclosure contained under Item
5.A.

22

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Current State of Operations

Cordilla del Condor and Deborah are grassroots exploration
projects, meaning that there are no existing mine operations within the project
area. The level of exploration across the projects varies from early stage,
where only initial exploration data has been generated, to advanced, where an
initial phase of drilling has been completed.

Early stage exploration begins with review of satellite imagery
and existing regional geology maps, followed by airborne geophysical surveys.
Geophysical surveys are rapid assessment tools that help generate targets for
further exploration. At Cordillera del Condor, a helicopter was flown on lines
spaced 400 meters apart. The instruments on the helicopter measured the physical
properties of the rocks on the ground, including magnetic, electromagnetics and
radiometrics. Once that data was reviewed, targets were defined for additional
work on the ground. This includes geological mapping and surface geochemical
sampling of stream sediments, soils and rocks. This sampling helps define areas
for more detailed sampling and mapping. Ultimately, drill targets are defined
based on an assessment of all data collected.

Advanced exploration is focused on initial drill-testing of
these targets. This phase may involve anything from 5 to 50 drill holes
depending on the type of mineral deposit encountered and the level of
information required to make a decision to move forward. The ultimate aim is to
discover a mineral deposit worthy of additional investigation.

Following advanced exploration, a project will move to resource
definition if warranted. Drilling continues to define the deposit and ultimately
an independent third party will calculate an initial resource. A project may go
through several phases of drilling and resource estimation before a decision is
made to move to more advanced studies.

Ultimately, a project would move through three phases of advanced
  studies called Preliminary Economic Assessment (also called a scoping study),
  Prefeasibility Study and a Feasibility Study. These studies may take several
  years. Ultimately on receipt of a positive feasibility study, a company is in
  a position to make a production decision  this is the final decision to
  build a mine and begin development work.

4.C             
Organizational Structure

The significant subsidiaries of Dorato Resources Inc. are:

|                                    |               |                 | Doratos effective    
|----------------------------------- | ------------- | --------------- | ----------------------
|                                    | Country of    | Principal       | interest for          
|                                    | Incorporation | Activity        | 2012
      and 2011   
|                                    |               |                 |                       
|Dorato Peru S.A.C.1                 | Peru          | Mining company  | 100%                  
|Compania Minera la Luminosa S.A.C.2 | Peru          | Holding company | 99%
      (2011  nil)

|1. | Dorato Peru S.A.C. (Dorato Peru) was incorporated in
      Peru on April 25, 2007.                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Compania Minera la Luminosa S.A.C. (Luminosa) was
      incorporated in Peru on August 23, 2011. Luminosa holds the exploration
      rights on the Deborah property.

4.D             
Property, Plants and Equipment

National Instrument 43-101 Compliance

Except as otherwise indicated, John Drobe, P.Geo., the
Companys Vice-President of Exploration and a Qualified Person as defined by NI
43-101, has reviewed and is responsible for the technical information contained
in this Annual Report on Form 20-F.

23

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Mineral Properties  Cordillera del Condor

The Cordillera del Condor property is comprised of mineral
claims and mining concessions, comprising approximately 99,617 hectares, located
in northern Peru. The mineral rights extend along the easterly to
southerly-facing slopes of the Cordillera del Condor, a north-northeast trending
range the summit of which forms the border between Peru and Ecuador. The area is
sparsely populated and covered by tropical rain forest. The mean elevation of
the area is about 1,200 meters above sea level.



Map of Mineral Properties, with geology and other mineral
prospects. The area covered by Minera Afrodita concessions( in which the Company
no longer has any interest) is shown in the cross-hatch pattern in the map
inset.

24

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Title information is outlined in the following table.

MINING RIGHT
    CODE
    TITULAR
    DATE
    HECTARESLAHAINA 1
    010257406
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    803.34LAHAINA 2
    010257506
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    900.00LAHAINA 3
    010257606
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    900.00LAHAINA 4
    010257706
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    689.24LAHAINA 5
    010257806
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    800.00LAHAINA 6
    010257906
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    975.93LAHAINA 7
    010258006
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 8
    010258106
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 9
    010258206
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 10
    010258306
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 11
    010258406
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    900.00LAHAINA 12
    010258506
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    800.00LAHAINA 13
    010258606
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    882.51LAHAINA 14
    010258706
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 15
    010258806
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 16
    010258906
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    1,000.00LAHAINA 17
    010259006
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-06-12
    800.00LAHAINA 18
    010459106
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    907.78LAHAINA 19
    010459206
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    922.46LAHAINA 20
    010459306
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    1,000.00LAHAINA 21
    010459406
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    200.00LAHAINA 22
    010459506
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    956.68LAHAINA 23
    010459606
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    800.00LAHAINA 24
    010459706
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    947.89LAHAINA 25
    010459806
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    973.43LAHAINA 26
    010459906
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    1,000.00LAHAINA 27
    010460106
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    1,000.00LAHAINA 281
    010460006
    CARLOS ARMANDO
      BALLON BARRAZA
    2006-10-27
    951.44MARAVILLA 2
    010081007
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    1,000.00MARAVILLA 3
    010081107
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    1,000.00MARAVILLA 4
    010081207
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    1,000.00MARAVILLA 6
    010081407
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    1,000.00MARAVILLA 7
    010081507
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    800.00MARAVILLA 8
    010081607
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    700.00MARAVILLA 9
    010081707
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    700.00MARAVILLA 10
    010082007
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-12
    1,000.00MARAVILLA 12
    010088007
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    932.08MARAVILLA 13
    010088107
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    1,000.00MARAVILLA 14
    010088207
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    873.48MARAVILLA 15
    010088307
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    907.60MARAVILLA 16
    010088407
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    94.85MARAVILLA 17
    010088507
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-01-17
    1,000.00MARAVILLA 182
    010406207
    CARLOS ARMANDO
      BALLON BARRAZA
    2007-08-01
    1,000.00VICMARAMA 1
    010456306
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    400.00VICMARAMA 2
    010455906
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    815.02VICMARAMA 3
    010455406
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    1,000.00VICMARAMA 4
    010455206
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    800.00VICMARAMA 5
    010455706
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    792.41VICMARAMA 6
    010455506
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    1,000.00PAMINA
    010173707
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2007-03-08
    1,000.00VICMARAMA 8
    010456106
    CARLOS ARMANDO
      BALLÓN BARRAZA
    2006-10-27
    1,000.00


______________________________________________1
All the Lahaina Mining Rights were part of an Option Transfer Agreement entered
into by Carlos Ballón and Dorato Perú S.A.C. on October, 11th 2007.
2 All the Maravilla Mining Rights were part of an Option Transfer
  Agreement entered into by Carlos Ballón and Dorato Perú S.A.C. on
  October, 11th 2007.

25

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MINING RIGHT
    CODE
    TITULAR
    DATE
    HECTARESVICMARAMA 9
    010455806
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    1,000.00VICMARAMA 10
    010454906
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    900.00VICMARAMA 13
    010455106
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    808.88VICMARAMA 14
    010456006
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    674.68VICMARAMA 15
    010456206
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    1,000.00VICMARAMA 16
    010455606
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    967.02VICMARAMA 173
    010460206
    CARLOS ARMANDO BALLÓN BARRAZA
    2006-10-27
    1,000.00MARAVILLA 19
    010023208
    CARLOS ARMANDO BALLON BARRAZA
    2008-01-15
    1,000.00MARAVILLA 20
    010023308
    CARLOS ARMANDO BALLON BARRAZA
    2008-01-15
    500.00MARAVILLA 21
    010023408
    CARLOS ARMANDO BALLON BARRAZA
    2008-01-15
    700.00MARAVILLA 22
    010023508
    CARLOS ARMANDO BALLON BARRAZA
    2008-01-15
    219.74DAVID B1
    010326408
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B2
    010326508
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B3
    010326608
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B4
    010326708
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B5
    010326908
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B6
    010326808
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    534.11DAVID B7
    010327008
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B8
    010327108
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B9
    010327208
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B10
    010327308
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B11
    010327408
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B12
    010327508
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B13
    010327608
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B14
    010327708
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B15
    010327808
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    556.46DAVID B16
    010327908
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    800.00DAVID B17
    010328008
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B18
    010328108
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B19
    010328208
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B20
    010328308
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    1,000.00DAVID B214
    010328408
    CARLOS ARMANDO BALLON BARRAZA
    2008-06-02
    700.00EESM 9
    010645407
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    997.48EESM 10
    010645507
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    873.94EESM 11
    010645607
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    1,000.00EESM 12
    010645707
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    1,000.00EESM 13
    010645807
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    1,000.00EESM 14
    010645907
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    926.45EEMS 15
    010646007
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    1,000.00EESM 16
    010646107
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    959.70EESM 17
    010646207
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    768.97EESM 18
    010646307
    MICHELLE BERENDSON BERNINZON
    2007-12-11
    822.52EESM 21
    010000508
    MICHELLE BERENDSON BERNINZON
    2008-01-02
    254.50EESM 29
    010330608
    MICHELLE BERENDSON BERNINZON
    2008-06-03
    1,000.00EESM 30
    010330708
    MICHELLE BERENDSON BERNINZON
    2008-06-03
    1,000.00EESM 31
    010330808
    MICHELLE BERENDSON BERNINZON
    2008-06-03
    700.00EESM 37
    010364308
    MICHELLE BERENDSON BERNINZON
    2008-06-24
    1,000.00EESM 385
    010364208
    MICHELLE BERENDSON BERNINZON
    2008-06-24
    600.00Alto Cangaza 10
    010655408
      COMPAÑIA MINERA CANGAZA S.A.C.
    2008-11-19
    1,000.00Alto Cangaza 11
    010655208
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    1,000.00Alto Cangaza 12
    010655308
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    900.00Alto Cangaza 13
    010655508
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    600.00Alto Cangaza 14
    010655708
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    1,000.00


____________________________________________________3
The Vicmarama and Pamina Mining Rights were part of an Option Transfer Agreement
entered into by Carlos Ballón and Dorato Perú S.A.C. on October, 11th
2007. 4 Maravilla 19, 20, 21, 22 and David Mining Rights were
part of an Option Transfer Agreement entered into by Carlos Ballón and Dorato
Perú S.A.C. on June 5, 2009.5 The EESM Mining Rights were part of a Mineral Option Transfer Agreement
  entered into by Michelle Berendson and Dorato Resources Inc. on June, 9th
  2010.

26

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MINING RIGHT
    CODE
    TITULAR
    DATE
    HECTARESAlto Cangaza 15
    010655608
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    1,000.00Rio Cangaza 1
    010656008
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    500.00Rio Cangaza 2
    010656108
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    1,000.00Rio Ayambis 1
    010656208
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    1,000.00Rio Ayambis 2
    010656308
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    500.00Rio Ayambis 3
    010656408
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    500.00Rio Ayambis 4
    010656508
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    800.00Rio Ayambis 5
    010656608
      COMPAÑIA MINERA CANGAZA S.A.C
    2008-11-19
    327.004Rio Ayambis 6A
    010006909
      COMPAÑIA MINERA CANGAZA S.A.C
    2009-01-13
    900.00Rio Naraime 1
    010655908
      COMPAÑIA MINERA CANGAZA S.A.C6
    2008-11-19
    400.00DANI7
    010194409
    ELSA LORENA ZUAZO VILLARROEL
    2009-08-03
    1,000.00TOTAL
    
    99,617.594


Although there has been considerable mining and exploration
activity on the Ecuadorian side of the border in recent years and a number of
roads that service small towns and exploration camps come close to the border,
there is still virtually no infrastructure on the Peruvian side except for a few
small military outposts scattered through the region. Access is via helicopter
or on foot via the extensive road network in Ecuador.

Prior to Dorato, little exploration had been carried out on the
Peruvian side of the border to date. With the changing of the mining law in
1992, Metales Y Finanzas, S.A. (Metalfin), a predecessor of Compania
Minera Afrodita S.A.C., acquired a group of concessions adjacent to the Ecuador
border and shortly thereafter expanded their holdings to cover an area more than
150 km long along the border region. Metalfin carried out minor preliminary
prospecting, mapping and geochemical sampling in the central part of the claim
block (northern part of the current Afrodita concessions) in 1993 and early
1994. Work was suspended due to the brief border dispute with Ecuador in early
2005. In 2003, with surface rights once again available for exploration,
Anglogold Exploraciones Peru S.A.C. optioned the property from Metalfin/Afrodita
and conducted initial exploration work consisting of mapping and sampling at El
Tambo (now Taricori). They also undertook 500 meter spaced reconnaissance
traverses for mapping and sampling. Stream sediment, pan concentrate, and
biogeochemical samples were collected to the east, north, and south of Taricori
within a radius of about 6 kilometers. Five target areas were identified with El
Tambo (Taricori) being the first. The others were named Casa Quemada, Conaima 4,
El Conguime, and Cobra 1.

Doratos concessions cover terrain which is prospective for
gold-bearing porphyry copper, high and low sulfidation Au-Ag epithermal, and
Au-Cu skarn type deposits. In 2008, a total of 155 square kilometers were
geochemically and geophysically screened in the Taricori Block, resulting in the
identification of multiple high-priority targets. Phase II reconnaissance and
prospecting began in early July 2009 on multiple gold targets identified during
Minera Afroditas 2008 work program. Phase III regional exploration began in
July 2010 using airborne geophysical data collection to generate initial targets
to be followed up with stream geochemical sampling. The regional airborne
geophysical survey was completed in May, 2011 and collected the same magnetic
and electromagnetic data as the 2008 airborne survey, with an additional
radiometric component to potentially help identify porphyry mineralization.
Magnetic, electromagnetic and radiometric data now covers 80 kilometers of
strike length along the belt, or 90 000Ha.

Field work was suspended on the properties in August, 2011, due
to a lack of funds. Since that time, the most significant development in the
area is one of the larger projects on the Ecuador side of the Cordillera, the
Mirador Cu-Au Porphyry deposit, owned by CRCC-Tongguan Investment, being
permitted to proceed to the exploitation stage.

__________________________________________6 All
the Compañía Minera Cangaza S.A.C. shares were part of an Option Transfer
Agreement entered with Dorato Perú S.A.C. on December, 28th2009.
7 Dani was part of an Option Transfer Agreement entered into by Lorena
  Zuazo and Dorato Perú S.A.C. on December, 16th 2009.

27

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Taricori Gold Zone

The Taricori Gold Zone drill program was completed in late
2010, and no further work is planned by the company, as the project falls
entirely within the Minera Afrodita concession block released in May, 2012. The
project was advanced through early-stage exploration to advanced exploration
(initial drill-testing). The drill program discovered high-grade, narrow
vein-hosted gold mineralization. However, the discovery was considered to be of
limited size and of limited potential interest to major mining companies seeking
an acquisition opportunity. For this reason, the next step in the exploration
process, resource definition, was not pursued.

Lucero Skarn and Porphyry

The Lucero discovery, located in the Taricori Block, was
defined initially by coincident magnetic and electromagnetic geophysical
anomalies and anomalous silt geochemistry. Follow-up rock sampling and trenching
(48.9 meters grading 3.97 g/t gold and 0.25% copper) defined a mineralized zone
1,000 by 750 meters in size. Lucero is a 100% grass-roots discovery and was not
previously exposed by informal miners. On completion of early-stage exploration,
Minera Afrodita moved to advanced exploration, completing 25 drill holes
totalling 5,975 meters. The discovery was considered to be of limited size and
of limited potential interest to major mining companies seeking an acquisition
opportunity. For this reason, the next step in the exploration process, resource
definition, was not pursued. Only a small portion along the western margin of
Lucero is affected by the release of the Minera Afrodita concessions, including
three drill holes (LUC-04, 05 and 07) that did not intersect significant gold or
copper mineralization. The company is seeking a joint venture agreement with a
junior or mid-tier mining company, for whom the discovery could potentially be
of considerable interest.

Cobrecon Cu-Au Porphyry

Cobrecon comprises three separate target areas. All areas have
undergone early-stage exploration (geophysics, geochemistry, mapping, drill
target generation). The Cobrecon Cu-Au porphyry target contains multiple
anomalies over several kilometers and is the current drill target, with the
Phase I drilling completed on the northern anomaly. Zonation of the soil
geochemical anomaly suggests three porphyry systems are present. Two of these,
Cobrecon and Cobrecon Sur, are now well-defined at surface by ridge and crest
soil sampling, while the latest discovery, Cobrecon Este, is still open to the
south and east, pending further soil sampling, but appears to be the same size
as the other two anomalies based on the EM anomaly. The termination of the
Minera Afrodita option agreement affects the Cobrecon area significantly, in
that the northern target (Cobrecon) is divided roughly in half, with the
southern portion retained, and the south anomaly (Cobrecon Sur) is reduced by
roughly 75%, again with the southern portion retained. Cobrecon Este and
anomalous silt samples to the south are unaffected by the change in concession
coverage.

Drilling with two rigs got underway at the northern anomaly,
Cobrecon, in mid-April 2011, with 3215 metres completed in ten holes. The holes
intersected widespread, low-grade copper mineralization that remains open along
the east margin. The southern holes intersected the highest-grade and most
consistent mineralization, hosted within breccia, albeit within shorter
intersections. Mineralization occurs as chalcopyrite, which is finely
disseminated within the dacite and coarsely disseminated within the matrix of
younger phreatic breccia. The better grades are associated with intense quartz
stockwork and quartz-sericite alteration in the dacite, and potassic alteration
within the breccia. Best results from holes 7 to 10 include; hole CBC-8, which
intersected 103 metres (23 metres to 126 metres) grading 0.14% copper, or 0.19%
copper equivalent. CBC-10, the northern-most hole, also demonstrates thick,
pervasive mineralization, intersecting 170 metres (10 metres to 180 metres)
grading 0.10% copper. Grades can be considered sub-economic at 0.1% to 0.2%
copper, but the presence of such a large and pervasive mineralized system is
encouraging for the two remaining drill targets (Cobrecon Sur and Cobrecon
Este), which are defined by larger, more intense surface geochemical
anomalies.

28

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Map
of northern Cobrecon target, showing portion returned to Minera Afrodita
(Campana 2 concession).

29

---

Map
of entire Cobrecon area, showing portion returned to Minera Afrodita (Campana 1
and 2, Hito, and Apu concessions).

Cordillera del Condor Regional Work  Project Pipeline

In addition to further drill testing of advanced targets at
Cobrecon, regional target evaluation is on-going. During the latter part of 2010
and early 2011, airborne geophysical surveys were carried out over approximately
90% of the land position. Only approximately 20% of the total land position has
been geochemically evaluated, and therefore target generation is primarily
driven by results of the airborne geophysical surveying. A review of the data
has outlined 18 geophysical targets that will be investigated on the ground with
detailed silt and reconnaissance rock sampling and mapping. The targets are then
re-prioritized based on the geochemical and geological results. The most robust
soil and rock sample anomalies will then be drilled. This work was started in
the main concession block, moving south from Cobrecon, but was halted due to
social problems arising near target T12 in May 2011. Consequently the focus has
shifted to the Ponce Atunez and Cangaza blocks, where exploration activity will
not affect any communities. In due course, the intention is to complete early
stage exploration on all targets and select the best targets for advanced
exploration. Targets will be discussed in future once they are considered
suitable for advanced exploration.

Mineral Properties  Deborah

On September 16, 2011, the Company signed an option agreement
to acquire a 100% interest in the Deborah Gold property, Cajamarca, Peru. The
property is located 1.5 hours east of the city of Cajamarca, with good access
via paved and dirt roads. It is nestled between several major ore deposits
including Anglo Americans Michiquillay Copper-Gold Porphyry, located 6
kilometres to the southwest (631MT of 0.69% copper, 0.15 g/t gold, and 0.02%
moly) and China Minmetals and Jiangxi Copper Corps El Galeno Copper-Gold
Porphyry, located 6 kilometres to the north (661MT of 0.50% copper, 0.12 g/t
gold), though it is not possible to determine if similar results will be
obtained from the property.

Regional Context

30

---

There are several major, large scale producing mines and
significant development projects in the belt and, more importantly, in the
immediate vicinity of the property. The geology between all local deposits is
similar, with mineralization related to Miocene dacite porphyry stocks intruding
Lower to Upper Cretaceous carbonate and sandstone units, though it is not
possible to determine if the Deborah property will be similar.

Deborah Exploration History

There are numerous exploration and small scale gold production
adits on the Deborah property developed over the last 100 years targeting
gold-rich structures, replacements and breccia bodies. Newmont Peru drilled 13
holes at Deborah in 2006 in the area of historic workings, targeting the down
dip extension of the near vertical mantos (bedding parallel layer) of
gold and silver-bearing sulphides and related SE trending breccia zones along
the western edge and in the southeast corner of the concession. A large area of
almost no outcrop in the centre of the property was not drill tested, nor
surface sampled.

The underlying property vendors have provided historical
exploration data from Newmonts exploration drill program. Gold and silver assay
results include:

DRILLHOLE
    THICKNESS (m)
    GOLD (g/t)
    SILVER (g/t)DEB-002
    9.20
    1.26
    2.6DEB-003
    51.35
    0.51
    3.4and
    44.00
    0.73
    12.3DEB-004
    47.75
    0.59
    18.0DEB-005A
    4.05
    1.30
    43.0


These holes appear to have targeted breccia in quartzite
adjacent to an area of sulphide veining in the southwest corner of the
concession, where surface channel samples returned anomalous precious metal
values.

Deborah Geology & Mineral Potential

Thick-bedded to massive quartzite of the Late Jurassic Chicama
Formation and/or Lower Cretaceous Chimu Formation is intruded by hornblende
granodiorite and dacite porphyry, the latter of which forms a large recessively
weathered stock under the west and south margins of the property, as well as
narrow dikes and sills in the central zone. Carbonate of the Santa Formation is
present in the northeast corner of the concession, in fault contact across a
1-5m wide pyrite-bearing breccia named the Punre Fault. These units are the same
as those hosting mineralization at El Galeno 6 km to the northwest, and
Michiquillay 6 km to the southwest.

The 13 holes drilled by Minera Yanacocha (Newmont) are
concentrated in the area of historic workings, and appear to have targeted the
down dip extension of the near-vertical gold-silver rich replacement bodies and
related southeast trending breccia along the western edge of the concession.
None of the holes were drilled under an extensive recessive zone northeast of
the main quartzite hill. Part of this area was mapped in 2004 as dacite
porphyry, though mapping completed in early 2012 identified mostly interbedded
shale and sandstone.

Mineralization at the Galeno porphyry deposit is also recessive
and forms a topographically low area in the surrounding resistive quartzite. The
central recessive zone at Deborah is therefore considered a prospective area, as
this is where highly fractured and mineralized zones might be expected to occur.
The recessive zone is in fact on strike with the tectonic breccia related to the
regional Punre fault, which geologically connects Deborah with the Hilorico
gold-breccia target east of Galeno, and may represent a splay of the structure.
Also, the carbonate could be an important unit in terms of hosting disseminated
mineralization in permeable (decalcified) sandy horizons along strike and
adjacent to the mineralized breccia. This target has yet to be drill tested.

31

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Phase 1 Exploration Completed

The first phase of surface exploration commenced in February
2012 following receipt of approvals for surface access from the land title
holders. Soil lines spaced 100 meters apart, with samples spaced 50 meters apart
were covered a 120 Ha core area of the property. Outcrops within this area were
also chip sampled, mostly over 1-2 meter lengths. Assay results from soils
returned a maximum value of 1.78 g/t gold, with 20% of the soil samples
returning >0.129 g/t gold and 10% returning >0.284 g/t gold. The sampling
has defined two gold anomalies that are approximately 400 meters each in extent
when contoured at the 0.1 g/t gold level. Both anomalies show a strong
correlation with pathfinder elements arsenic and antimony, as well as silver and
lead. Overburden, comprising quartzite talus from the main ridge, covers the
area between the two anomalies and possibly mineralization linking them into a
singular northeast-trending zone.

The central anomaly is a circular feature at the intersection
of northwest- and southwest-trending structures, on the northeast flank of the
main ridge. One artisanal working was discovered, and breccia within this
assayed 0.43 g/t gold over 2 meters. The central anomaly has significantly less
silver than the soil anomaly over the western breccias drilled by Newmont in
2006, suggesting a different type of mineralization. The northeastern anomaly
abuts the eastern boundary of the concession and is open to the north. One rock
sample from the south edge of the anomaly returned 1.24 g/t gold over 1.5
meters.

The soil samples returned better gold values than the soil
samples, supporting the exploration model that gold mineralization at Deborah is
hosted by recessive, sulphide-rich material that does not crop out well and
remains under-sampled.

The second phase of surface work will be approximately 800
meters of hand-trenching and additional soil samples to close off the northeast
anomaly. Some test pits will also be excavated in the area of talus to determine
depth to bedrock, and sampled where appropriate. Results from the second phase
of work will identify drill targets.

32

---

Location
and Regional Geology, Deborah Project

33

---

Work
Completed, Gold Soil Anomaly, Deborah Project

QA/QC

Quality control and quality assurance is implemented in the
field and results are monitored regularly throughout the sampling programs.
Blind certified reference material, certified coarse blank material,
quarter-core duplicates and preparation duplicates are inserted at regular
intervals (1/20) into the sample sequence. On-site personnel rigorously collect
and track samples which are then security sealed and trucked by a third party
shipper to either the ACME affiliate preparation laboratory in Cuenca, Ecuador,
for the Cordillera del Condor project, or to ALS Laboratories in Lima, Peru, for
the Deborah property. Here the samples weights are recorded and the samples are
cross-referenced with the sampling list.

For samples sent to ACME, after coarse crushing and pulverizing
to >80% passing 200 mesh, a 250g split is forwarded to ACME Analytical
Laboratories (ACME) in Vancouver, BC, Canada for analysis. ACME's quality
system complies with the requirements for the international standards ISO
9001:2008 and ISO 17025:2005. Samples are analysed for gold by fire assay (30g)
and forty additional elements by four-acid digestion with an ICP-MS finish. Any
sample over 10 g/t gold are re-analysed by gravimetric fire assay (30g) for gold
and silver. Any sample returning over 1% copper, lead or zinc are re-analysed by
the base metal assay method with an ICP-OES finish. Analytical accuracy and
precision are also regularly monitored by the laboratory through the analysis of
reagent blanks, reference material and replicate samples. In addition,
representative blind duplicate samples are routinely forwarded to an
ISO-compliant third party laboratory for additional quality control.

Soil samples sent to ALS Peru are sieved to passing 180 microns
(80 mesh) and then 25g (gold) and 0.5g (51 element) splits are dissolved using
an aqua-regia digestion, followed by an ICP-MS finish. Rock samples are crushed
to 70% passing 2mm , then 250g are pulverized to 75% passing 75 microns. They
are then analysed for gold by fire assay (25g) and 33 elements by four-acid
digestion with an ICP-AES finish (>1.0g) . The ALS analytical laboratory in
Lima is ISO 9001:2008 and ISO 17025:2005 certified.

34

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ITEM
5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The Company is in the business of acquiring, exploring and
evaluating interests in mineral properties. The Companys current property
interests are held for the purposes of exploration for precious and base metals.

5.A              Operating
Results

Year ended January 31, 2012 compared to the year ended
January 31, 2011

We incurred a net loss of $17,091,671 for the year ended
January 31, 2012, compared to a net loss of $13,728,240 in the prior year. The
increase in the net loss was due mainly to the write-off of interests in
exploration properties of $7,957,496 (2011 - $Nil) resulting from our decision
to terminate the Afrodita option agreement in May 2012 in order to reduce our
holding costs and a foreign exchange loss of $381,245 (2011  foreign exchange
gain of $259,129) resulting from changes in the value of Peruvian currency in
relation to the Canadian dollar. Other significant comparative changes
offsetting the foreign exchange gain (loss) are as follows:

Consulting fees of $425,926 compared to $2,002,486 in the prior
year. The decrease in consulting fees was affected by a change in the method of
accounting for personnel and other administrative costs at our Peruvian
subsidiary, and from efforts to lower consulting fees and use the liquidities
for exploration and evaluation projects. This category also includes $nil (2011
- $1,061,516) of share-based payments.

Exploration and evaluation costs of $6,601,455 were incurred
during the year compared to $9,741,264 recorded in the prior year. The decrease
is mainly due to end of the drilling program on the Cordillera del Condor
project in 2012. This category also includes $nil (2011 - $645,465) of
share-based payments.

Investor relations expenses of $453,199 compared to $852,031
recorded in the prior year. The decrease is due to effort in lowering marketing
costs. This also includes $117,251 (2011 - $289,966) of share-based payments.

Professional fees of $309,654 compared to $476,101 recorded in
the prior year. The decreased is due to lower fees associated with mineral
property acquisitions and other regulatory matters. This category also included
stock-based compensation expenses of $nil (2011 - $36,795).

No property investigation costs were incurred in the year
compared to $37,750 recorded last year.

Regulatory fees of $40,421 (2011 - $108,731) decreased due to
the fees associated with listing the Companys stock in the US OTC market in the
prior year.

Travel expenses of $121,972 were incurred in the year compared
to $270,628 in the prior year. The decrease is primarily due to lower activity.

Wages and benefits of $512,980 were incurred compared to
$139,341 in prior year. The increase was due to increase in administrative
personnel required for our Peruvian mineral projects.

Doratos mineral rights in Peru are currently subject to
regulations that may be subject to change, and may become subject to new
regulations, which could impose significant costs and burdens.

Exploration activities in Peru depend on mining concessions for
exploration and ultimately for exploitation works, obtained from the Geologic,
Mining and Metallurgic Institute (Instituto Geológico Minero Metalúrgico), or
the INGEMMET. In addition, operations in Peru depend on obtaining other
administrative rights, such as provisional permits, from the Ministry of Energy
and Mines, or the MEM, and for exploration rights on the area of a claim. In
Peru, ownership of a mining concession by a foreign entity within 50 kilometres of the national border is subject to issuance of a
Supreme Decree from the Peruvian Government. All of the Companys option
properties are within 50 kilometres of the Peruvian national border. Thus, the
Company must obtain a Supreme Decree from the Peruvian Government in respect of
all of the mining concessions comprising the Companys properties. In addition,
the terms of the option agreements through which the Company holds its property
interests require issuance of a Supreme Decree before the options can be
exercised. The Company has applied for, but not been issued, the Supreme Decree.

35

---

Under Perus current regulatory regime, mining concessions for
the exploration and exploitation of minerals have an indefinite term, subject to
compliance by the titleholder with the obligations set forth by the General
Mining Act (Ley General de Minería), or the LGM. Compliance with such
obligations is required to maintain the mining concessions in good standing.
Among such obligations are the payment of an Annual Concession Fee (equivalent
to U.S.$3 per hectare) and compliance with a minimum annual production target.
Failure to pay the Annual Concession Fee for any two consecutive or
non-consecutive years may result in the cancellation of the relevant mining
concession.

If the INGEMMET or the MEM revoke or cancel any of Doratos
option concessions, Doratos financial condition and results of exploration
activities could be adversely affected.

On June 24, 2004, the Peruvian Congress approved the Mining
Royalty Law, which established a mining royalty that owners of mining
concessions must pay to the Peruvian government for the exploitation of metallic
and non-metallic resources. This royalty is calculated on a sliding scale with
rates ranging from 1% to 3% over the value of mineral concentrates based on
international market prices. As provided by the Mining Royalty Law, effective
since January 26, 2007, the Peruvian Tax Authority is responsible for the
collection of mining royalties.

There can be no assurance that the Peruvian government will not
impose additional mining royalties or payments in the future or that they will
not have an adverse effect on future operations. Dorato has no mining operations
on the property.

Details of Regulatory and Supervisory Entities

In general terms, the principal regulator of mining activities
in Peru is the Ministry of Energy and Mines, or the MEM, through its General
Bureau of Mining (Dirección General de Minería), or DGM, and its General Bureau
of Mining and Environmental Affairs (Dirección General de Asuntos Ambientales
Mineros), or DGAAM. Other regulatory institutions are the Geological, Mining and
Metallurgical Institute (Instituto Geológico Minero Metalúrgico), or the
INGEMMET; the Supervisory Body of Investment in Energy and Mining (Organismo
Supervisor de la Inversión en Energía Minería), or the OSINERGMIN; and the
Assessment and Environment Supervising Agency (Organismo de Evaluación y
Fiscalización Ambiental), or the OEFA, which was created in 2008 and entered
into operation in 2010.

The DGM is the senior body of the MEM overseeing the mining
industry. It reports directly to the Office of the Vice-Minister of Mining and
is responsible for, among other things, the promotion of mining activities, the
granting of beneficiation, ore transportation and general working concessions,
the proposal of welfare, health and safety regulations.

The DGAAM has the following duties, among others: (i) propose
policy and legal provisions for environmental conservation and protection in the
mining sector; (ii) approve technical standards for the appropriate application
of regulations on environmental conservation and protection to apply to
activities of the mining sector; and (iii) assess environmental and social
impacts derived from activities of the mining sector, establishing the
preventive and corrective measures necessary to control such impacts.

The INGEMMET has the following duties, among others: (i)
process mining claims, grant titles to mining concessions and act on
applications relating to mining rights pursuant to law; (ii) keep the National
Mining Land Register (Catastro Minero); administer and distribute the Annual
Concession Fee, or ACF, and collect any penalties for failure to meet minimum annual production
targets; and (iii) cancel mining claims or mining concessions pursuant to
applicable laws.

36

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The OSINERGMIN supervises and inspects mining activities as
regards matters of mine safety and health. Until July 2010, OSINERGMIN also
oversaw the environmental compliance of mining activities.

Since July 2010, all supervising, inspecting and sanctioning
duties regarding environmental matters have been undertaken by the Organization
for Environmental Assessment (Organismo de Evaluación Ambiental), or the OEFA.
The OEFA is also responsible for proposing to the Ministry of Environment the
scale of penalties applicable to each type of infringement pursuant to the
Environmental Act.

Details of Concessions

In accordance with the LGM, mining activities (except
surveying, prospecting and trading) must be performed exclusively under the
concession system. A concession confers upon its holder the exclusive right to
develop a specific exploration activity within a defined area.

Mining concessions confer the right to explore and exploit the
mineralization granted which is within a solid of undefined depth, limited by
vertical planes corresponding to the sides of a square, rectangle or closed
polygon, the vertices of which refer to Universal Transversal Mercator, or UTM,
coordinates. A mining concession is a real property interest independent and
separate from surface land located within the UTM coordinates of the concession.
It is granted by the INGEMMET. Once the claimed area is subject to a mining
concession, the titleholder must register its title with the Public Mining
Registry (Registro de Derechos Mineros) administered by the National
Superintendent of Public Registers (Superintendencia Nacional de Registros
Públicos) where all the agreements, resolutions and acts thereto must also be
registered.

Holders of mining concessions or pending claims for mining
concessions must comply with several obligations, including payment of the ACF,
which is equivalent to U.S.$3.00 per hectare per year. Default in payment of the
ACF for two consecutive or non-consecutive years may result in cancellation of
the relevant concession or claim.

Environmental

During the 1990s, a modern environmental practice that conforms
to the international environmental standards was established and made generally
applicable to most of the mining industry. In 1990, the Environmental Code was
enacted, which established for the first time a legal and institutional system
to preserve the environment. In 1993, the Environmental Protection Regulations
for Mining and Metallurgical Activities were enacted. On October 15, 2005, the
Environmental Act completely repealed and replaced the Environmental Code.

As of July 2010, OEFA, rather than OSINERGMIN, is responsible
for performing periodic Environmental Audits to supervise compliance with the
commitments undertaken in the respective EIAs and/or PAMA.

5.B             
Liquidity and Capital Resources

Cash and cash equivalents were $60,151 as at January 31, 2012
compared to $6,904,719 as at January 31, 2011. As at January 31, 2012 the
Company had a negative working capital of $961,191 compared to working capital
of $6,461,170 as of January 31, 2011. On May 25, 2012 the Company closed a
non-brokered private placement of 13,190,391 shares at $0.09 cents per share for
gross proceeds of $1,187,135. Finders fees of $5,199 were paid to certain
finders for part of the private placement. In addition the Company has
negotiated extended payments terms with certain vendors.

37

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During the year ended January 31, 2012, the Company:

- Issued 270,000 common shares pursuant to the exercise of stock options for
  total proceeds of $155,000.
- Issued 2,362,000 common shares pursuant to the exercise of warrants for
  total proceeds of $1,535,300.

The Company has not entered into any long-term lease
commitments nor is the Company subject to any mineral property commitments other
than those outlined under Note 7 in the Companys audited consolidated financial
statements for the year ended January 31, 2012.

The Company has no exposure to any asset-backed commercial
paper. Other than cash held by its subsidiary for their immediate operating
needs in Peru, all of the Companys cash and cash equivalent reserves are on
deposit with a major Canadian chartered bank or invested in Government of Canada
Treasury Bills or Bankers Acceptances issued by major Canadian chartered banks.
The Company does not believe that the credit, liquidity or market risks with
respect thereto have increased as a result of the current market conditions.
However, in order to achieve greater security for the preservation of its
capital, the Company has, of necessity, been required to accept lower rates of
interest which has also lowered its potential interest income.

The Company has no revenue generating operations from which it
can internally generate funds. To date, the Companys on-going operations have
been predominantly financed by the sale of its equity securities by way of
private placements and the subsequent exercise of share purchase warrants and
options. However, the exercise of warrants/options is dependent primarily on the
market price and overall market liquidity of the Companys securities at or near
the expiry date of such warrants/options (over which the Company has no control)
and therefore there can be no guarantee that any existing warrants/options will
be exercised. In addition, the Company can seek to raise funds through the sale
of interests in its exploration properties, although current market conditions
have substantially reduced the number of potential buyers/acquirers of any such
interest(s). This situation is unlikely to change until such time as the Company
can develop a bankable feasibility study on one of its projects. When acquiring
an interest in exploration properties through purchase or option the Company
will from time to time issue common shares to the vendor or optionee of the
property as partial or full consideration for the property interest in order to
conserve its cash (the majority of the Companys outstanding option agreements
require the issuance of common shares of the Company, as opposed to cash
payments, to the vendors thereof).

In Q3 2011, the Company significantly reduced its staff on the
Cordillera del Condor project, keeping only a few people to run the Taricori
camp in care and maintenance mode. In April 2012, the Minera Afrodita agreement
was terminated to reduce holding costs. The Company is conserving its working
capital to the extent possible while still focusing on the development of its
Peruvian mineral properties.

In May 2012, the Company completed a non-brokered private
placement of common shares for gross proceeds of $1,187,135. However, the report
of our independent auditors on our financial statements for the year ended
January 31, 2012 includes a note stating that our ability to continue as a going
concern is dependent upon our ability to generate profitable operations in the
future and/or to obtain the necessary financing to meet our obligations and
repay our liabilities arising from normal business operations when they become
due. At the present time, the Company anticipates that its current liquidity and
capital resources will be sufficient to fund its planned operations for
approximately 4 months. After such time, the Company expects that it will
require additional financing to fund its planned exploration of our current
exploration properties and to continue its operations (including general and
administrative expenses). There is significant uncertainty that the Company will
be able to continue to secure additional financing in the current equity markets
 see Risk Factors  Insufficient Financial Resources/Share Price Volatility.
The quantity of funds to be raised and the terms of any proposed equity
financing that may be undertaken will be negotiated by management as
opportunities to raise funds arise. No assurance can be provided that the
efforts of management will be successful.

38

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5.C              Research
and Development, Patents and Licences, etc.

Not applicable.

5.D              Trend
Information

None, except as disclosed elsewhere in this report.

5.E              Off-Balance
Sheet Arrangements

We do not have any material off balance sheet arrangements that
have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.

5.F              Tabular
Disclosure of Contractual Obligations

No applicable obligations.

ITEM
6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A             
Directors and Senior Management

The following table sets out the directors and executive
officers of the Company and all positions and offices held with the Company.

Name
      Position
      Age
      Date of First Election orAppointmentRowland Perkins (1)
    Director, Interim President & CEO
    59
    October 31, 2011Gordon Neal(1)
    Director
    57
    November 9, 2009Carlos Ballon
    Director
    52
    July 20, 2010Anton J. Drescher(1)
    Chief Financial Officer & Director
    55
    December 1998Marla K. Ritchie
    Corporate Secretary
    49
    July 30, 2008John Drobe
    Vice President Exploration
    46
    November 1st, 2010


(1) Member of Audit Committee

Anton (Tony) J. Drescher(Director and Chief Financial
Officer)  Mr. Drescher has served as director since December 1998 and President
and Chief Executive Officer of the Company from December 2004 to December 2008.
On March 2, 2012 Mr. Drescher became the Chief Financial Officer of the Company.
Mr. Drescher has provided administrative and consulting services in his capacity
as President and a director of Harbour Pacific Capital Corp. since 1998 and
Westpoint Management Consultants Ltd. of Vancouver, British Columbia, Canada
since 1978. Mr. Drescher also currently serves as a director and/or officer of
the following listed companies: International Tower Hill Mines Ltd., Trevali
Mining Corporation and Corvus Gold Inc., all Toronto Stock Exchange listed
companies and, USA Video Interactive Corp., a TSX Venture Exchange listed
company. Mr. Drescher is also President and a director of Ravencrest Resources
Inc., a Canadian Stock Exchange (CNSX) listed company. Mr. Drescher obtained a
Diploma in Financial Management from the British Columbia Institute of
Technology in June 1974. He also obtained his Certified Management Accountant's
designation in October 1981.

Gordon Neal(Director)  Mr. Neal is currently the Vice
President Corporate Development at MAG Silver Corp. and is also on the advisory
board of West Timmins Mining. Mr. Neal has twenty-five years experience in
advising public companies and providing corporate finance services. Most notably
he founded Neal McInerney Investor Relations in 1991 which raised more than $4
billion in debt and equity financings and became the second largest full service
Investor Relations firm in Canada.

39

---

Carlos Ballon(Director)  Mr. Ballon is a graduate of
Colorado School of Mines and a very experienced mining engineer who managed the
Santander Mine in Peru from 1985 to 1993. More recently he was VP South America
for Corriente Resources Ltd. and a director of Thiess South America (Australia's
largest contract miner) where he managed major engineering works at Tintaya and
Yanacocha in Peru.

Rowland Perkins (Director, Interim President and Chief
Executive Officer)  Mr. Perkins has been the President and a director of
eBackup Inc. from 2001 to present. Previously, he was the Marketing Manager of
Intellisave Datavaults Inc. (Securinet Inc.) from 1999 to 2000. Mr. Perkins has
also served as a director of USA Video Interactive Corp. since 2005. On March 9,
2012 Mr. Drescher became the Interim President and Chief Executive Officer of
the Company.

Marla K. Ritchie(Corporate Secretary)Ms. Ritchie brings over 23 years experience in public markets working as a
Corporate Administrator and Corporate Secretary for companies specializing in
resource based exploration. Ms. Ritchie became the Companys Corporate Secretary
in July 2008. Between 1992 and 2003, she was a Secretary and the Office
Administrator for Ascot Resources Ltd, Brett Resources Inc, Golden Band
Resources Inc, Hyder Gold Inc., Leicester Diamond Mines Ltd., Loki Gold
Corporation, Oliver Gold Corporation and Solomon Resources Limited, all public
junior natural resource exploration companies. Ms. Ritchie is currently the
Corporate Secretary for the following public companies: Cardero Resource Corp.,
Corvus Gold Inc., International Tower Hill Mines Ltd. and Wealth Minerals Ltd.

John Drobe (Vice President Exploraiton)  Mr. Drobe is a
geologist with 25 years of experience, specializing in porphyry copper-gold,
epithermal and skarn deposits throughout Latin America. Mr Drobe comes to Dorato
from Corriente Resources where he held the position of Chief Geologist and was
responsible for all aspects of exploration and resource definition at the
company's Mirador, Panantza, and San Carlos porphyry copper deposits.

Mr Drobe is considered an expert on Cordillera del Condor
geology and his knowledge and experience in this area will add tremendous value
to the company given the substantial amount of high-quality data that has been
collected during the past two years. In addition, Mr Drobe brings considerable
resource modelling experience, which will be invaluable as more discoveries are
made on the Peruvian side of the border.

Carlos Ballon, a Director of the Company has a conflict of
interest as he is the owner of the Lahaina 1 and 2, Maravilla, Vicmarama and
David concessions.In addition, Mr. Ballon has been paid consulting fees
prior to and since his nomination to the board of directors in July 2010 for his
management responsibilities mostly in Peru (see item 7. B Related party
Transactions).

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 we are conducting our operations. Such associations may give
rise to conflicts of interest from time to time. Such a conflict poses the risk
that we may enter into a transaction on terms which place us in a worse position
than if no conflict existed. Our directors are required by law to act honestly
and in good faith with a view to our best interests 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 following table identifies, as of May 29, 2012, the name of
each officer and director and any company (i) which employs such officer or
director, (ii) for which such officer or director currently serves as an officer
or director, or (iii) which is affiliated with such officer or director:

40

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Name of Director
      Name of Company
      Description of Business
      PositionAnton J. Drescher
    Oculus VisionTech Inc.
    Video-on-Demand
    CFO,
      Sec & DirInternational Tower Hill Mines Ltd.
    Natural resource
    DirectorTrevali Mining Corporation
    Natural resource
    DirectorRavencrest Resources Inc.
    Natural resource
    CEO
      & Dir.Corvus
      Gold Inc.
    Natural resource
    DirectorGordon Neal
    DRUK Capital Partners Inc.
    Natural resource
    DirectorBalmoral Resources Limited
    Natural resource
    DirectorMag Silver Corp.
    Natural resource
    VP 
      Corporate Dev.Rockgate Capital Inc.
    Natural resource
    DirectorAbzu
      Gold Ltd.
    Natural resource
    DirectorCarlos Ballon
    N/A
    N/A
    N/ACorvus Gold Inc.
    Natural resource
    ChairmanRowland Perkins
    Oculus VisionTech Inc.
    Video-on-Demand
    Pres,
      CEO & Dir.Strikepoint Gold Inc.
    Natural resource
    DirectorAnna Ladd
    Trevali Mining Corporation
    Natural Resource
    CFOMarla K. Ritchie
    Cardero Resource Corp.
    Natural resource
    SecretaryCorvus Gold Inc.
    Natural resource
    SecretaryWealth
      Minerals Ltd.
    Natural resource
    SecretaryJohn Drobe
    Indico
      Resources Ltd.
    Natural resource
    COO


6.B              Compensation

Executive Compensation

For the fiscal year ending January 31, 2012, the Company paid
an aggregate of $387,015 in cash compensation to the directors and senior
management as a group.

Under applicable Canadian securities laws, the Company is
required to disclose the compensation paid to its CEO, CFO and each of the three
most highly compensated executive officers, or individuals acting in a similar
capacity, as of the end of the Companys most recently completed financial year,
whose total compensation exceeded Cdn $150,000. In the case of the Company, only
the compensation of the individuals serving as Chief Executive Officer and Chief
Financial Officer as of the end of the Companys most recently completed
financial year is required to be disclosed (collectively, the CEO and CFO, are
referred to as the Named Executive Officers or NEOs). The following table
sets out the compensation paid to the Named Executive Officers for the fiscal
years ended January 31, 2012, January 31, 2011 and January 31, 2010.

41

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Name and principal position
      Fiscal Year Ended
      Salary (Cdn$)
      Share- based awards (Cdn$)
      Option- based awards (Cdn$)
      Non-equity incentive plan compensation
        (Cdn$)
      Pension value (Cdn$)
      All other compensation(Cdn$)
      Total **compensation**
        (Cdn$)Annualincentive plans
      **Long-term** incentive
        plans(5)Keith Henderson 
        Former President 
        and Chief 
        Executive 
        Officer(1)
      2012 
        2011 
        2010
      116,200(2)
        237,540(2)
        194,600(2)
      Nil 
        Nil 
        Nil
      Nil 
        166,573 
        156,012
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      116,200 
        404,113 
        350,612Michael Kinley 
        Former Chief 
        Financial Officer(4)
      2012 
        2011 
        2010
      30,000 (3)
        60,000 (3)
        60,000 (3)
      Nil 
        Nil 
        Nil
      Nil 
        81,332 
        85,250
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      30,000 
        141,332 
        145,250Anton Drescher 
        Chief Financial 
        Officer; Former 
        President and 
        Chief Executive
      2012
      24,900
      Nil
      -
      Nil
      Nil
      Nil
      10,000(7)
      34,900Officer(6)
        Anna Ladd 
        Former Chief 
        Financial Officer(8)
      2012
      15,000
      Nil
      -
      Nil
      Nil
      Nil
      Nil
      15,000


|(1) | Keith Henderson was resigned as President and Chief
      Executive Officer of the Company on October 31, 2011.                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                               
|(2) | Consulting fees paid to Acuitas Consulting Ltd
      (Acuitas), a consulting company owned by Keith J. Henderson. Acuitas
      provides management services to the Company comprising all duties and
      responsibilities performed by Mr. Henderson as President and Chief
      Executive Officer of the Company.                                      
|    |                                                                                                                                                                                                                                                                                                                                                               
|(3) | Consulting fees paid to Winslow Associates Management
      & Communications Inc.(Winslow), a consulting company owned by
      Michael W. Kinley. Winslow provides services to the Company on a
      month-to-month contract basis comprised of all duties and responsibilities
      performed by Mr. Kinley as Chief Financial Officer of the
  Company.
|    |                                                                                                                                                                                                                                                                                                                                                               
|(4) | Michael Kinley was appointed Chief Financial Officer of
      the Company on July 30, 2008, and resigned as Chief Financial Officer of
      the Company on July 12, 2011.                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                               
|(5) | "LTIP" or "long term incentive plan" means any plan that
      provides compensation intended to motivate performance to occur over a
      period greater than one fiscal year, but does not include option or
      share-based awards. The Company does not have any such plans.                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                               
|(6) | Anton Drescher was appointed interim President and Chief
      Executive Officer of the Company on October 31, 2011 and resigned as
      President and Chief Executive Officer on March 2, 2012 and was then
      appointed Chief Financial Officer of the Company March 2, 2012.                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                               
|(7) | Mr. Drescher received $10,000 in directors fees prior to
      being appointed as an officer of the Company.                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                               
|(8) | Anna Ladd was appointed Chief Financial Officer of the
      Company on July 12, 2011, and resigned as Chief Financial Officer of the
      Company on March 2, 2012.                                                                                                                                                                                         

During the fiscal year ended January 31, 2012, no incentive
stock options were granted to the Named Executive Officers.

The following table sets forth details of all exercises of
stock options during the fiscal year ended January 31, 2012 by the NEOs and the
financial year-end value of unexercised options on an aggregated basis:

42

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NEO Name
    Securities Acquired
      on Exercise (#)
    Aggregate Value
      Realized (CAD $)(1)
    Unexercised Options at
      Financial Year-End (#) Exercisable/
      Unexercisable
    Value of Unexercised
      In-the-Money Options at Financial
      Year-End (CAD $)(2)
      Exercisable/ UnexercisableKeith Henderson
    Nil
    Nil
    650,000/Nil
    Nil/NilMichael Kinley
    Nil
    Nil
    330,000/Nil
    Nil/NilAnton Drescher
    Nil
    Nil
    175,000/Nil
    Nil/Nil


| | (1) | Value calculated using the closing price of Common Shares
      on the TSX.V on the date of exercise, less the exercise price per
      share.                                                                                              
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                             
| | (2) | Value calculated using the closing price of Common Shares
      on the TSX.V on January 31, 2012, being the last trading day of the
      Companys shares for the fiscal year, of $0.07 per share, less the
      exercise price per share.

The Company does not provide retirement benefits for directors
or senior management.

Director Compensation

Except as noted below, the Company had no arrangements,
standard or otherwise, pursuant to which directors were compensated by the
Company for their services in their capacity as directors, or for committee
participation, involvement in special assignments or for services as a
consultant or expert during the fiscal year ended January 31, 2012.

Except as noted below, none of the Companys current directors
  who are not also executive officers have received any manner of compensation
  for services provided in their capacity as directors, consultants or experts
  during the Companys most recently completed financial year.

Effective December 1, 2008, the Board approved the payment of
  an annual retainer and meeting fees to the directors who are not also executive
  officers of the Company, in recognition of the fact that service as a director
  in an active resource exploration company such as the Company requires a significant
  commitment of time and effort, as well as the assumption of increasing liability.
  Directors who were not executive officers and did not receive any consulting
  fees from the Company received a monthly retainer fee of $2,000 ($24,000 per
  annum), plus an additional fee of $500 per Board or Board committee meeting
  attended in person or by conference telephone, with no additional compensation
  paid with respect to committee membership. Starting August 1, 2011, in effort
  to reduce costs of the Company the directors fees were reduced to $Nil until
  further notice. The Company has and continues to reimburse directors for their
  out-of-pocket costs incurred in attending board meetings. During the fiscal
  year ended January 31, 2012, the persons serving as our directors who were not
  also executive officers received the following directors fees:

Name
    Fees earned (Cdn$)(5)Mark Cruise(1)
    $10,000Anton Drescher(2)
    $10,000Gordon Neal
    $10,000Carlos Ballon (3)
    $NilRowland Perkins(4)
    $Nil


(1)
    Mark Cruise resigned as a director on October 31,
      2011.(2)
    Anton Drescher received directors fees prior to its
      nomination as interim CEO for the months he was a director (February to
      July 2011). Mr. Drescher also received fees to act as Interim CEO from
      November 1, 2011 to March 2, 2012. See Executive Compensation above and
      refer to Item 7B 6. Related Party Transaction.(3)
    Carlos Ballon received consulting fees pursuant an oral
      agreement. Refer to Item 7B 5. Related Party
Transaction.


43

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(4)
    Rowland Perkins was appointed as a director of the
      Company on October 31, 2011. He receives no compensation as a
    director.(5)
    Directors were paid for 5 months during the year ending
      January 31, 2012 to reduce operational
costs.


Directors who are not also executive officers are also eligible
to receive incentive stock options. No incentive stock options were granted
during the financial year ended January 31, 2012 to the directors of the Company
who were not executive officers.

Consulting fees paid to officers and a director were as follow:

|Name of Director/Officer    | Position                                                   | Category        |   | Amount Paid/Accrued | 
|--------------------------- | ---------------------------------------------------------- | --------------- | - | ------------------- | 
|Keith Henderson             | Former Director,
      President & Chief Executive Officer | Consulting Fees | $ | 116,200             | 
|Michael Kinley              | Former Chief Financial Officer                             | Consulting Fees | $ | 30,000              | 
|Anna Ladd                   | Chief Financial Officer                                    | Consulting Fees | $ | 15,000              | 
|Marla Ritchie               | Corporate Secretary                                        | Consulting Fees | $ | 24,000              | 
|John Drobe                  | VP Exploration                                             | Consulting Fees | $ | 150,000             | 
|Carlos Ballon
      Barraza | Director                                                   | Consulting Fees | $ | 158,115             | 

6.C              Board
Practices

The Board is elected at each annual general meeting of the
shareholders. Each director elected will hold office until the next annual
meeting or until his successor is duly elected or appointed, unless his office
is earlier vacated in accordance with the BCBCA. See Item 6.A  Directors and
Senior Management - for dates directors were first elected to the Board. No
director has a service contract with the Company or any of its subsidiaries
providing for benefits upon termination of employment.

Audit Committee

The following directors are on the Audit Committee:

Anton J. DrescherGordon
NealRowland Perkins

At the first meeting following each annual general meeting, the
directors must elect an audit committee to hold office until the next annual
general meeting consisting of no fewer than three directors, of whom a majority
must not be officers or employees or a control person, of the Company or of
any affiliate or associate of the Company. A control person means any person
that holds or is one of a combination of persons that holds a sufficient number
of securities of the Company so as to affect materially the control of the
Company or that holds 20% or more of the voting securities of the Company.

The primary duties and responsibilities of the Audit Committee
are to:

- Serve as an independent and objective party to monitor the financial
  reporting process and the system of internal controls of Dorato.
- Monitor the independence and performance of the auditor of Dorato (the
  Auditor) and the internal audit function of Dorato.
- Provide an open avenue of communication among the Auditor, financial and
  senior management and the Board of Directors.

44

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Before a financial statement that is to be submitted to an
annual general meeting is considered by the directors, it must be submitted to
the Audit Committee for review, and the report of the Audit Committee on the
financial statements must be submitted to the directors thereafter.

The Company has no compensation or remuneration committee.

6.D             
Employees

As at January 31, 2012 we had two employees both of which are
located in Vancouver BC. One employee is related to operations and the other to
investors relations. None of our employees is covered by any labour union. The
Company retains consultants to perform administrative and financial
accounting/bookkeeping services. The Company did not employed temporary
employees during the fiscal year.

6.E              Share
Ownership

The following table sets out the beneficial ownership of
Company common shares by the Companys directors and NEOs listed in Item 6.B as
of May 29, 2012.

Name
      Common Shares Beneficially Owned(1)
      Percentage of Class(2)Anton J. Drescher(3)
    ****1,367,444
    1.5%Gordon Neal(4)
    ****317,223
    0.3%Carlos Ballon(5)
    ****12,757,851
    14.1%Rowland Perkins
    **** Nil
    0All Executive Officers andDirectors as a Group
    ****14,442,518
    15.9%


| | (1) | Includes common shares issuable pursuant to stock options
      and common share purchase warrants that are exercisable on, or within 60
      days after, May 29, 2012.                                                                                                                                                                                                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | Percentages are based on 89,830,376 common shares
      outstanding as of May 29, 2012. Common shares subject to stock options and
      common share purchase warrants that are exercisable on, or within 60 days
      after, May 29, 2012 are deemed outstanding for computing the percentage of
      the person holding such stock options and common share purchase warrants
      but are not deemed outstanding for computing the percentage of any other
      person..
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (3) | Includes 50,0000 common shares issuable pursuant to stock
      options that are exercisable on, or within 60 days after, May 29,
    2012.                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (4) | Includes 50,000 common shares issuable pursuant to stock
      options that are exercisable on, or within 60 days after, May 29,
    2012.                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (5) | Includes 200,000 common shares issuable pursuant to stock
      options that are exercisable on, or within 60 days after, May 29,
    2012.                                                                                                                                                                                                                                                                                                                                     

Incentive Stock Option Plan

At the annual general meeting held on July 30, 2008, the
shareholders approved the 2008 Stock Option Plan of the Company (the Plan).

The purpose of the Plan is to recognize contributions made by
directors, officers, consultants and employees of the Company and to provide for
an incentive for their continuing relationship with the Company.

Pursuant to the policies of the TSX.V, we must seek shareholder
approval for the Plan at each annual meeting as the Plan is considered a
Rolling Plan. The Plan was ratified by shareholders at the annual meeting held
July 12, 2011.

45

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The material terms of the Plan are as follows:

|1. | Options may be granted to directors, officers, employees
      and consultants of, and to the employees of companies providing management
      services to, the Company and its affiliates.                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                   
|2. | The aggregate number of shares which may be issued
      pursuant to options granted under the Plan, unless otherwise approved by
      shareholders, may not exceed that number which is equal to 10% of the
      Common Shares issued and outstanding at the time of the grant.
|   |                                                                                                                                                                                                                                                                                   
|3. | The number of Common Shares subject to each option will
      be determined by the Board, or a duly appointed committee of the Board,
      provided that the aggregate number of shares reserved for issuance
      pursuant to options granted to:                              
|   |                                                                                                                                                                                                                                                                                   
|   | (a)                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                   
|   | (b)                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                   
|   | (c)                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                   
|   | (d)                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                   
|   | (e)                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                   
|   | (f)                                                                                                                                                                                                                                                                               

|4. | The exercise price of an option may not be set at less
      than the minimum price permitted by the TSX.V (currently the closing price
      of the Common Shares on the TSX.V on the day prior to an option grant less
      the maximum discount permitted by the TSX.V).                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | Options may be exercisable for a period of up to five
      years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | The options are non-assignable and non-transferable. The
      options can only be exercised by the optionee as long as the optionee
      remains an eligible optionee pursuant to the Plan or within a period of
      not more than 90 days after ceasing to be an eligible optionee (30 days in
      the case of a person engaged in investor relations activities) or, if the
      optionee dies, within one year from the date of the optionees
    death.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | Options granted to consultants engaged to perform
      investor relations activities must be subject to a vesting requirement,
      whereby such options will vest over a period of not less than 12 months,
      with a maximum of 25% vesting in any 3 month period.                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | On the occurrence of a takeover bid, issuer bid or going
      private transaction, the Board will have the right to accelerate the date
      on which any option becomes exercisable.                                                                                                                                                                                                                                                                            

As of May 29, 2012 there were 1,245,000 stock options
outstanding; however, the Company may in the future grant options to eligible
participants in accordance with the Plan. Based on the outstanding Common
Shares, as at May 29, 2012, options with respect to an additional
7,738,037 Common Shares are available for grant under the Plan.

46

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The stock options held by our NEOs and directors listed in Item
6.B as of May 29, 2012 are as follows:

Name
    Securities UnderOptions
      Granted(#)
    Exercise or BasePrice(CAD/Security)
    Expiration DateAnton Drescher
    50,000
    $1.20
    January 25, 2013Gordon Neal
    50,000
    $1.20
    January 25, 2013Carlos Ballon
    200,000
    $1.20
    January 25, 2013


ITEM
7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A              Major
Shareholders

As at May 29, 2012, to the knowledge of management, the
following shareholders are the only persons who beneficially own 5% or more of
the issued and outstanding Common Shares:

Identity of Person or Group
      No. of SharesBeneficially
      Owned(1)
    Percent of Class(2)Carlos Ballon(3)
    12,757,851
    14.1%Franco Nevada Corporation(4)
    4,828,167
    5.4%


| | (1) | Includes common shares issuable pursuant to stock options
      and common share purchase warrants that are exercisable on, or within 60
      days after, May 29, 2012.                                                                                                                                                                                                                                                                                                       
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (2) | Percentages are based on 89,830,376 common shares
      outstanding as of May 29, 2012. Common shares subject to stock options and
      common share purchase warrants that are exercisable on, or within 60 days
      after, May 29, 2012 are deemed outstanding for computing the percentage of
      the person holding such stock options and common share purchase warrants
      but are not deemed outstanding for computing the percentage of any other
      person.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (3) | Includes 200,000 common shares issuable pursuant to stock
      options that are exercisable on, or within 60 days after, May 29,
    2012.                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (4) | Based on information provided by Franco Nevada
      Corporation.                                                                                                                                                                                                                                                                                                                                                                                                              

None of the shareholders disclosed above have any voting rights
with respect to their respective Common Shares that are different from any other
holder of Common Shares. All of the Common Shares, both issued and unissued, are
shares of the same class and rank equally as to dividends, voting powers and
participation of powers. Accordingly, there are no special voting powers held by
the Companys major shareholders.

As of May 29, 2012, there were 89,830,376 Common Shares issued
  and outstanding. The Companys shareholder list as provided by Computershare
  Investor Services, Inc., the Companys registrar and transfer agent, indicates
  that the Company had 58 registered shareholders owning Common Shares, of which
  37 of these registered shareholders, holding approximately 11,698,926 (13.00%)
  Common Shares, are residents of the United States, 12 of these registered shareholders,
  holding approximately 64,117,059 (71.30 %) Common Shares, are residents of Canada,
  and 9 of these registered shareholders, holding approximately 824,000 (0.90%)
  Common Shares, are residents of jurisdictions other than the United States and
  Canada.

Control by Foreign Government or Other Persons

To the best of our 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.

47

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Change of Control

As of the date of this Annual Report, there are no arrangements
known to us which may at a subsequent date result in a change of control.

7.B              Related
Party Transactions

Except as noted below, there have been no transactions or loans
since February 1, 2011 which are material to the Company or a related party, or
are unusual in their nature or conditions, and have been entered into, or are
proposed to be entered into, between the Company and (a) enterprises that
directly or indirectly through one or more intermediaries, control or are
controlled by, or are under common control with, the Company; (b) associates;
(c) individuals owning, directly or indirectly, an interest in the voting power
of the Company that gives them significant influence over the Company, and close
members of any such individuals family; (d) key management personnel, that is,
those persons having authority and responsibility for planning, directing and
controlling the activities of the Company, including directors and senior
management of the Company and close members of such individuals families; and
(e) enterprises in which a substantial interest in the voting power is owned,
directly or indirectly, by any person described in (c) or (d) or over which such
a person is able to exercise significant influence. This includes enterprises
owned by directors or major shareholders of the Company and enterprises that
have a member of key management in common with the Company. Close members of an
individuals family are those that may be expected to influence, or be
influenced by, that person in their dealings with the Company. An associate is
an unconsolidated enterprise in which the Company has a significant influence or
which has significant influence over the Company. Significant influence over an
enterprise is the power to participate in the financial and operating policy
decisions of the enterprise but is less than control over those policies.
Shareholders beneficially owning a 10% interest in the voting power of the
Company are presumed to have a significant influence on the company.

|1. | Pursuant to an oral agreement, effective as and from
      December 1, 2008, the Company has retained Acuitas Consulting Ltd. Inc.
      (Acuitas), a company controlled by Keith Henderson, the President and
      Chief Executive Officer and a director of the Company, to provide
      management services to the Company comprised of all duties and
      responsibilities performed by Mr. Henderson as President and Chief
      Executive Officer of the Company, at a fee of $12,000 per month. This fee
      was increased to $16,600 effective March 1, 2009. The arrangement is
      without a fixed term, and is terminable by either party on 30 days notice.
      The arrangement terminated effective October 31, 2011.During the
      financial year ended January 31, 2012, the Company paid Acuitas an
      aggregate of $116,200 (2011 - $237,540, 2010 - $194,600).
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Pursuant to an oral agreement, effective as and from
      August 1, 2008, the Company retained Winslow Associates Management &
      Communications Inc. (Winslow), a company controlled by Michael W.
      Kinley, the Chief Financial Officer of the Company from July 30, 2008 to
      July 12, 2011, to provide financial services to the Company comprised of
      all duties and responsibilities performed by Mr. Kinley as Chief Financial
      Officer of the Company, at a fee of $5,000 per month. The arrangement was
      without a fixed term, and terminable by either party on 30 days notice.
      The arrangement terminated effective August 1, 2011.During the
      financial year ended January 31, 2012, the Company paid Winslow an
      aggregate of $30,000 (2011  $60,000, 2010 - $30,000).                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | Pursuant to an oral agreement, effective as and from July
      12, 2011, the Company retained Anna Ladd, the Chief Financial Officer of
      the Company from July 12, 2011, to provide financial services to the
      Company comprised of all duties and responsibilities performed by Ms. Ladd
      as Chief Financial Officer of the Company, at a fee of $2,500 per month.
      The arrangement was without a fixed term, and terminable by either party
      on 30 days notice. The arrangement terminated effective March 2, 2012.
      During the financial year ended January 31, 2012, the Company paid Ms.
      Ladd an aggregate of $15,000 (2011- $Nil, 2010 -
$Nil).                                                                                                                                                                                                        

48

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|4. | Pursuant to an oral agreement, effective as of and from
      October 1, 2008, the Company leases office space and receives
      administrative services from Cardero Resource Corp. (Cardero), a company
      with a certain officer (Marla Ritchie) in common with the Company. Under
      the lease, the Company is obligated to pay $4,306.20 per month in rent
      (plus utilities). The term of the lease is from April 1, 2011 to March 31,
      2021 and is terminable by either party with 30 days notice. Other
      administrative services are provided upon request, and invoiced at cost.
      During the financial year ended January 31, 2012, the Company paid or
      accrued exploration expenditures of $112,305 (2011 - $218,508; 2010 
      $98,283), office and miscellaneous expenses of $139,390 (2011 - $35,401;
      2010 - $80,220), professional fees of $21,840 (2011 - $Nil; 2010 - $Nil),
      regulatory expenses of $3,950 (2011 - $3,950; 2010 - $3,950), consulting
      fees of $3,000 (2011 - $138,842; 2010  141,666), travel and promotion
      expenses of $69,112 (2011 - $164,774; 2010 - $78,946), prepaid expenses of
      $Nil (2011 - $751; 2010 - $Nil), donation expense of $Nil (2011 - $Nil;
      2010 - $3,000) and investor relations expenses of $18,270 (2011 - $9,281;
      2010 - $Nil) pursuant to the terms of this agreement.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | Pursuant to an oral agreement, effective as and from July
      20, 2010, the Company retained Carlos Ballon, who has also served as a
      Director of the Company since July 20, 2010, to provide consulting
      services to the Company at a fee of US$15,000 (reduced to US$12,200 on
      July 1, 2011) per month. Pursuant to the agreement, Mr. Ballon serves as
      the general manager of the Companys Peruvian operations. The arrangement
      is without a fixed term, and terminable by either party on 30 days notice.
      During the financial year ended January 31, 2012, the Company paid Mr.
      Ballon an aggregate of $158,115 (2011- $107,274, 2010 - $Nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | Pursuant to an oral agreement, effective as and from
      November 1, 2011, the Company retained Anton Drescher, the Interim
      President and Chief Executive Officer and a director of the Company, to
      provide management services to the Company comprised of all duties and
      responsibilities performed by Mr. Drescher as President and Chief
      Executive Officer of the Company, at a fee of $8,300 per month. The
      arrangement is without a fixed term, and is terminable by either party on
      30 days notice. The arrangement terminated effective March 2, 2012.During the financial year ended January 31, 2012, the Company paid Mr.
      Drescher an aggregate of $24,900 (2011 - $Nil, 2010 -
  $Nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

7.C             
Interests of Experts and Counsel

Not applicable.

ITEM 8.FINANCIAL INFORMATION

8.A             
Consolidated Statements and Other Financial Information

See the Companys audited consolidated financial statements as
of January 31, 2012, 2011 and February 1, 2010 and for the fiscal years ended
January 31, 2012, and 2011, together with the notes thereto, attached to this
annual report.

The Company is not aware of any current or pending material
legal or arbitration proceeding to which we are or are likely to be a party or
of which any of our properties are or are likely to be the subject.

The Company is not aware of any material proceeding in which
any director, senior manager or affiliate is either a party adverse to us or our
subsidiaries or has a material interest adverse to us.

The Company has not declared or paid any cash dividends on our
capital stock. The Company does not currently expect to pay cash dividends in
the foreseeable future.

49

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8.B             
Significant Changes

At the IFRS transition date, the Company elected to make a
change in accounting policy to:

| | i)  | Once the legal right to explore a property has been
      acquired, costs directly related to the acquisition of mineral property
      rights are capitalized, on an area-of-interest basis. Subsequently, the
      mineral property rights are carried at cost, less any impairment, until
      such time as the assets are substantially ready for their intended use or
      sale, being commercial production at operating levels intended by
      management.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ii) | Exploration expenditures incurred during the exploration
      and evaluation phase are expensed as incurred and included in profit or
      loss.                                                                                                                                                                                                                                                                                                                     

At the IFRS transition date, the Company recorded a $10,959,085
decrease to interests in exploration properties and a corresponding $10,959,085
increase to deficit. At January 31, 2011, the transition to IFRS resulted in the
Company recording a $20,700,349 decrease to interests in exploration properties
and a corresponding $20,700,349 increase to deficit. Exploration expenditures
for the year ended January 31, 2011 increased from $nil to $9,741,264.

On the consolidated statement of cash flows for the year ended
January 31, 2011, there is a decrease to investing activities of $9,124,199
resulting from the change in accounting policy, to expensing exploration
expenditures. Accounts payable for non-cash items changed by $28,401 as expensed
exploration expenditures are now included in operating activities.

On May 25, 2012 the Company closed a non-brokered private
placement of 13,190,391 shares at $0.09 cents per share for gross proceeds of
$1,187,135. Finders fees of $5,199 were paid to certain finders for part of the
private placement. See Note 16 to the Companys annual financial statements.

ITEM 9.THE OFFER AND LISTING

9.A             
Offer and Listing Details

The following table discloses the annual high and low sales
prices in Canadian dollars for our common shares for the five (5) most recent
financial years as traded on the TSX Venture Exchange (TSX.V) after April 24,
2008 and the NEX board (NEX) prior thereto:

Year
      High
      Low2012
    $1.18
    $0.062011
    $1.63
    $0.532010
    $1.35
    $0.532009
    $2.37
    $0.192008
    $2.40
    $0.67


The following table discloses the high and low sales prices in
Canadian dollars for our common shares for each quarterly period within the two
most recent fiscal years and any subsequent quarterly period as traded on the
TSX.V:

50

---

Quarter Ended
      High
      Low****Apr
      30, 2012
    $0.12
    $0.07****January
      31, 2012
    $0.10
    $0.06****October
      31, 2011
    $0.19
    $0.08****July
      31, 2011
    $0.45
    $0.15****April
      30, 2011
    $1.19
    $0.34****January
      31, 2011
    $1.63
    $0.93****October
      31, 2010
    $1.58
    $0.62****July
      31, 2010
    $0.96
    $0.55****April
      30, 2010
    $1.27
    $0.53****January
      31, 2010
    $1.35
    $0.50


The following table discloses the monthly high and low sales
prices in Canadian dollars for our common shares for the most recent six months
as traded on the TSX.V:

Month
      High
      Low****May
      2012
    $0.10
    $0.08****April
      2012
    $0.10
    $0.07****March
      2012
    $0.10
    $0.08****February
      2012
    $0.12
    $0.07****January
      2012
    $0.08
    $0.06****December
      2011
    $0.09
    $0.06


The following table discloses the high and low sales prices in
US dollars for our common shares for each quarterly period within the two most
recent fiscal years and any subsequent quarterly period as traded on the OTCQX
International since the listing of our common shares on the OTCQX International
on March 2, 2010:

Quarter Ended
      High
      LowApril 30,
      2012
    US$0.10
    US$0.06January 31,
      2012
    US$0.10
    US$0.06October 31,
      2011
    US$0.19
    US$0.08July 31,
      2011
    US$0.47
    US$0.17April 30,
      2011
    US$1.20
    US$0.37January 31,
      2011
    US$1.60
    US$1.01October 30,
      2010
    US$1.50
    US$0.60July 31,
      2010
    US$0.94
    US$0.56April 30,
      2010
    US$1.24
    US$0.54January 31,
      2010
    US$1.29
    US$0.99


The following table discloses the monthly high and low sales
prices in US dollars for our common shares for the most recent six months as
traded on the OTCQX International:

Month
      High
      Low****May
      2012
    US$0.10
    US$0.07****April
      2012
    US$0.08
    US$0.06****March
      2012
    US$0.09
    US$0.07****February
      2012
    US$0.10
    US$0.07****January
      2012
    US$0.08
    US$0.06****December
      2011
    US$0.08
    US$0.06


51

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9.B              Plan
of Distribution

Not applicable.

9.C              Markets

The Companys common shares are listed on the TSX.V, under the
trading symbol DRI. There are currently no restrictions on the
transferability of these shares under Canadian securities laws. We are also
quoted on OTCQX International under the trading symbol DRIFF and the
Berlin Stock Exchange  Unofficial Regulated Market and the Frankfurt Stock
Exchange under the symbol DO5.

9.D              Selling
Shareholders

Not applicable.

9.E              Dilution

Not applicable.

9.F              Expenses
of the Issue

Not applicable.

ITEM 10.ADDITIONAL
  INFORMATION

10.A            Share
Capital

Not applicable.

10.B            Memorandum
and Articles of Association

Effective August 21, 2006, we continued our jurisdiction of
incorporation into British Columbia from Wyoming. Our new form of Articles, as
approved by our shareholders at our annual meeting held on August 9, 2006
(adjourned from July 17, 2006), were adopted on the date of continuation.

Under the Business Corporations Act(British Columbia)
we are permitted to conduct any lawful business that we are not restricted from
conducting by our Articles, which does not contain any restriction on the
business we may conduct.

A director who, in any way, directly or indirectly, is
interested in a proposed contract or transaction with us must disclose in
writing the nature and extent of the director's interest at a meeting of
directors and abstain from voting on approval of the matter. Our Articles permit
an interested director to be counted in the quorum and the Business
Corporations Act(British Columbia) provides that a director of a company is
not deemed to be interested in a proposed contract or transaction merely because
the proposed contract or transaction relates, among other things, to an
indemnity, liability insurance or the remuneration of a director in that
capacity. Hence, directors can vote compensation to themselves or any of their
members. The board of directors has the power to borrow, issue debt obligations
and to charge our assets on the terms and conditions they consider appropriate,
provided only that such power is exercised bona fide and in our best interests.
There is no mandatory retirement age for directors. A director is not required
to have any share qualification.

The Company has only one class of common shares, without any
special rights or restrictions. The dividend entitlement of a shareholder of
record is fixed at the time of declaration by the board of directors. A vested
dividend entitlement does not lapse, but unclaimed dividends are subject to a
statutory six year contract debts limitation. Each common share is entitled to one vote on the
election of each director. There are no cumulative voting rights, in consequence
of which a simple majority of votes at the annual meeting can elect all of our
directors. Each common share carries with it the right to share equally with
every other common share in dividends declared and in any distribution of our
surplus assets after payment to creditors on any winding up, liquidation or
dissolution. There are no sinking fund provisions. All common shares must be
fully paid prior to issue and are thereafter subject to no further capital calls
by us. There exists no discriminatory provision affecting any existing or
prospective holder of common shares as a result of such shareholder owning a
substantial number of shares.

52

---

Under the Business CorporationsAct(British
Columbia), the rights of shareholders may be changed only by the shareholders
passing a special resolution approved by 2/3 of the votes cast at a special
meeting of shareholders, the notice of which is accompanied by an information
circular describing the proposed action and its effect on the shareholders.

The Board of Directors must call an annual general meeting once
in each calendar year and not later than 15 months after the last such meeting.
The Board may call an extraordinary general meeting at any time. Notice of such
meetings must be accompanied by an information circular describing the proposed
business to be dealt with and making disclosures as prescribed by statute. A
shareholder or shareholders having in the aggregate 5% of our issued shares may
requisition a meeting and the Board is required to hold such meeting within four
months of such requisition. Admission to such meetings is open to registered
shareholders and their duly appointed proxies. Others may be admitted subject to
the pleasure of the meeting.

The Companys Notice of Articles and Articles contain no
limitations on the rights of non-resident or foreign shareholders to hold or
exercise rights on our shares. Except for the Investment Canada Act,
which requires certain transactions to be approved by the Minister of Industry
and/or the Minister of Canadian Heritage as being of net benefit to Canada
before they may proceed, there is no limitation at law upon the right of a
nonresident to hold shares in a Canadian company.

There are no provisions in our Notice of Articles and Articles
that would have an effect of delaying, deferring or preventing a change in
control and that would operate only with respect to a merger, acquisition or
corporate restructuring involving us or any of our subsidiaries.

There is no provision in our Notice of Articles and Articles
setting a threshold or requiring or governing disclosure of shareholder
ownership above any level. Securities Acts, regulations and the policies and
rules thereunder in the Provinces of Alberta and British Columbia and in the
United States, where we are a reporting company, require any person holding or
having beneficial ownership or control or direction of more than 10% of our
issued shares to file insider and other reports disclosing such share
holdings.

10.C            Material
Contracts

Each of the following material contracts to which the Company
has been a party for the two years immediately preceding the publication of this
annual report is listed as an exhibit to this annual report and is summarized
elsewhere herein:

|1. | Option Agreement with Carlos Ballon Barraza, a director
      and major shareholder of our Company, dated October 18, 2007 whereby we
      were granted the option to earn a 100% interest in the Vicmarama
      Property.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                             
|2. | Option Agreement with Carlos Ballon Barraza, a director
      and major shareholder of our Company, dated October 18, 2007 whereby we
      were granted the option to earn a 100% interest in the Maravilla
      Property.

53

---

|3. | Option Agreement with Carlos Ballon Barraza, a director
      and major shareholder of our Company, dated October 18, 2007 whereby we
      were granted the option to earn a 100% interest in the Lahaina 2
      Property.                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|4. | Option Agreement with Carlos Ballon Barraza, a director
      and major shareholder of our Company, dated October 18, 2007 whereby we
      were granted the option to earn a 100% interest in the Lahaina 1
      Property.                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Royalty Agreement between the Company and Franco-Nevada
      Corporation dated August 18, 2008, as amended March 20, 2009.                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|6. | First Amendment to the Royalty Agreement between the
      Company and Franco-Nevada Corporation dated March 30, 2009.                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|7. | Option Agreement with Sociedad Minera de Responsabilidad
      Limitada La Luminose de Cajamarca (Luminosa) whereby we were granted
      option agreement to acquire a 100% interest in the Deborah Gold property,
      Cajamarca, Peru. The Company can acquire a 100% interest in the property
      in exchange for cumulative payments of $6,000,000 over a minimum of 5
      years.

10.D           
Exchange Controls

There are no governmental laws, decrees or regulations in
Canada relating to restrictions on the export or import of capital, or affecting
the remittance of interest, dividends or other payments to non-resident holders
of our common stock. See Taxation below.

10.E           
Taxation

Material Canadian Federal Income Tax
Considerations

The following is a summary of the material anticipated tax
consequences of an investment by an investor not resident or deemed resident in
Canada, under Canadian tax laws and any applicable bilateral income treaty. This
summary does not apply to an investor that carries on, or is deemed to carry on,
an insurance business in Canada or elsewhere or an authorized foreign bank as
defined in the Income Tax Act(Canada).

The discussion of Canadian federal income considerations is not
exhaustive of all possible Canadian federal income tax considerations and does
not take into account provincial, territorial or foreign tax considerations. It
is not intended to be, nor should it be construed to be, legal or tax advice to
any particular holder of common shares. Prospective purchasers of our common
shares, including non-resident insurers carrying on business in Canada, are
advised to consult with their advisors about the income tax consequences to them
of an acquisition of common shares. The discussion of Canadian federal income
considerations assumes that holders of common shares hold their common shares as
capital property, deal at arm's length and are not affiliated with us, are not
"financial institutions" or "specified financial institutions"as
defined in the Income Tax Act, an interest in which would be a "tax
shelter investment"as defined in the Income Tax Act, has not made an
election under the Income Tax Actto determine their Canadian tax results
in a foreign currency and do not use or hold their common shares in, or in the
course of, carrying on a business in Canada and has not acquired them in one or
more transactions considered to be an adventure in the nature of trade. The
discussion of Canadian federal income considerations is based on the current
provisions of the Income Tax Actand the regulations under the Income
Tax Act, all proposed amendments to the Income Tax Actand the Actregulations announced by the Minister of Finance (Canada) as at the date
hereof, the current administrative policies and assessing practices of the
Canada Revenue Agency, and the current provisions of the published
Canada-United States Tax Convention (1980). It has been assumed that any
proposed amendments to the Income Tax Act and the regulations thereto
will be enacted in substantially their present form. This discussion does not
take into account or anticipate any change in law, administrative policy or
assessing practice, whether by legislature, regulatory, administrative,
governmental or judicial decision or action, nor does it take into account the tax laws of any province or territory in
Canada or of any jurisdiction outside of Canada, which may differ significantly
from the Canadian Federal income tax considerations discussed therein.

54

---

The anticipated tax consequences may change, and any change may
be retroactively effective. If so, this summary may be affected. Further, any
variation or difference from the facts or representations recited here, for any
reason, might affect the following discussion, perhaps in an adverse manner, and
make this summary inapplicable.

Dividends
on our Common Shares

Under the Income Tax Act, amounts paid or credited on
account or in lieu of payment of, or in satisfaction of, dividends, including
stock dividends, to holders of our common shares that are resident in a country
other than Canada will be subject to Canadian withholding tax of 25% of the
amount of the dividend. The rate of withholding tax may be reduced in accordance
with the terms of a bilateral income tax treaty between Canada and the country
in which a holder of common shares is resident.

Under the Canada-United States Tax Convention (1980),
when the recipient of a dividend on the common shares is the beneficial owner of
the dividend, does not have a "permanent establishment" in Canada, and is
considered to be a resident of the United States and a "qualifying person" under
the Canada-United States Tax Convention (1980), the rate of Canadian
withholding tax on the dividends will generally be reduced to 15% of the gross
amount of the dividends or, if the recipient is a corporation which owns at
least 10% of our voting stock, to 5% of the gross amount of the dividends.
Dividends paid or credited to a holder that is a United States tax-exempt
organization, as described in Article XXI of the Canada-United States Tax
Convention (1980), will not have to pay the Canadian withholding tax.

Disposition
of Common Shares

A holder of common shares will not be required to pay tax for a
capital gain on the disposition of a common share unless the common share is
"taxable Canadian property" of the holder as defined by the Income Tax
Act, and no relief is afforded under the Canada-United States Tax
Convention (1980). A common share will generally be taxable Canadian
property to a holder if the common share is listed on a designated stock
exchange within the meaning of the Income Tax Act (which includes the
TSX.V) and at any particular time during the 60-month period that ends at that
time (i) the holder, or persons with whom the holder did not deal at arm's
length (within the meaning of the Income Tax Act), or any combination of
these parties, owned 25% or more of the issued shares of any class of our
shares, and (ii) more than 50% of the fair market value of the shares was
derived directly or indirectly from one or any combination of real or immovable
property situated in Canada, Canadian resource properties, timber resource
properties (each as defined in the Income Tax Act and options in respect
of or interests in, or for civil law rights in any such properties. Where a
common share is taxable Canadian property to a U.S. resident holder who is a
"qualifying person" for purposes of the Canada-United States Tax Convention
(1980) it will generally exempt such holder from tax on the disposition of
the common share provided its value is not, at the time of the disposition,
derived principally from real property situated in Canada. This relief under the
Canada-United States Tax Convention (1980) may not be available to a U.S.
resident holder who had a "permanent establishment" available in Canada
during the 12 months immediately preceding the disposition of the common share
where the common share constitutes business property and where any gain on the
disposition of the share is attributable to such permanent establishment.

Under the Income Tax Act, the disposition of a common
share by a holder may occur in a number of circumstances including on a sale or
gift of the share or upon the death of the holder. There are no Canadian federal
estate or gift taxes on the purchase or ownership of the common shares.

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Repurchase
of Common Shares

If we repurchase our common shares from a holder of our common
shares (other than a purchase of common shares on the open market in a manner in
which shares would be purchased by any member of the public in the open market),
the amount paid by us that exceeds the "paid-up capital" of the shares
purchased will be deemed by the Income Tax Act to be a dividend paid by
us to the holder of our common shares. The paid-up capital of our common shares
may be less than the holder's cost of its common shares. The tax treatment of
any dividend received by a holder of our common shares has been described above
under "Dividends on our Common Shares."

A holder of our common shares will also be considered to have
disposed of its common shares purchased by us for proceeds of disposition equal
to the amount received or receivable by the holder on the purchase, less the
amount of any dividend as described above. As a result, the holder of our common
shares will generally realize a capital gain (or capital loss) equal to the
amount by which the proceeds of disposition, net of any costs of disposition and
adjusted for any deemed dividends, exceed (or are exceeded by) the adjusted cost
base of these shares. The tax treatment of any capital gain or capital loss has
been described above under "Disposition of Common Shares."

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain 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.

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. 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 foreign tax consequences
relating to the acquisition, ownership and disposition of Common Shares.

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 (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
(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.

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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 (a) 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 (b) has a valid election in effect under applicable Treasury
  Regulations to be treated as a U.S. person.

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 foreign 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 the following U.S. Holders: (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); (h) partnerships
and other pass-through entities (and investors in such partnerships and
entities); or (i) 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; (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 Income 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 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 foreign tax consequences relating to the acquisition, ownership and
disposition of Common Shares.

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If an entity 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 partner. Partners of entities that are classified as
partnerships for U.S. federal income tax purposes should consult their own tax
advisor regarding the U.S. federal income tax consequences arising from and
relating to the acquisition, ownership, and disposition of Common Shares.

Tax Consequences Not Addressed

This summary does not address the, U.S. federal alternative
minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax
consequences to U.S. Holders of the acquisition, ownership, and disposition of
Common Shares. Each U.S. Holder should consult its own tax advisor regarding the
U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and
local, and foreign tax consequences of the acquisition, ownership, and
disposition of Common Shares.

Tax Status of the Company

On August 21, 2006, the Company continued from its
incorporation in the State of Wyoming to being a British Columbia, Canada
corporation. Section 7874 of the Code was enacted in 2004 to address
transactions whereby U.S. corporations migrate to a foreign jurisdiction to
avoid U.S. federal income tax. Section 7874(b) provides generally that a
corporation that migrates from the U.S. will nonetheless be considered a U.S.
corporation and remain subject to U.S. tax on its worldwide income unless the
migrating entity has substantial business activities in the foreign country to
which it is migrating when compared to its total business activities. The
Company has taken the position that at the time of its continuance to Canada, it
had substantial business activities in Canada when compared to its total
business activities, and that Section 7874(b) of the Code does not apply to
cause the Company to be treated as a U.S. corporation and be subject to U.S.
income tax on its worldwide income. The position taken by the Company may be
challenged by U.S. tax authorities with the result that the Company may be
treated as a U.S. corporation and remain subject to U.S. federal income tax on
its worldwide income. In addition to U.S. income taxes, were Section 7874(b) of
the Code to apply to the Company, the Company could be subject to penalties for
failure to file U.S. tax returns, late fees, and interest on past due taxes. The
remainder of this summary assumes that Section 7874(b) of the Code does not
apply to the Company.

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 (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
constitutes a PFIC, such holder would be required to file an annual report with
the IRS containing such information as Treasury Regulations and/or other IRS
guidelines 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 a 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 for such tax year 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.

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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,
if such gains constitute more than 85% of the corporations total receipts 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, passive income does not include any interest,
dividends, rents, or royalties that are received or accrued by the Company from
a related person (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 which is also a PFIC (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 stock of such Subsidiary PFIC.

The Company believes that it constituted a PFIC during the tax
year ended January 31, 2012, and may be a PFIC in the current and 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 or that the
Company (and each Subsidiary PFIC) was not, or will not be, a PFIC for any tax
year. Each U.S. Holder should consult its own tax advisor regarding the PFIC
status of the Company and each Subsidiary PFIC.

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 as a qualified electing fund or QEF
under Section 1295 of the Code (a QEF Election) or a mark-to-market election
under Section 1296 of the Code (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 the 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 the Common Shares, if shorter).

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Under Section 1291 of the Code, any gain recognized on the sale
or other taxable disposition of Common Shares, 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 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) 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 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. However, a U.S. Holder that makes a 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.

A U.S. Holder that makes a QEF Election 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 the 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 the
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.

A QEF Election will apply to the tax year for which such QEF
Election is 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.

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U.S. Holders should be aware that there can be no assurances
that the Company will satisfy the 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 the 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.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the
Common Shares are marketable stock. The Common Shares generally will be
marketable stock if the 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 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.

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 the 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, the
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 the 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 the 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 the 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 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 the
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.

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Although a U.S. Holder may be eligible to make a Mark-to-Market
Election with respect to the 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 interest charge 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.

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.

U.S. Federal Income Tax Consequences of the Acquisition,
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
a Common 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. 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
the 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 the
Common Shares will constitute ordinary dividend income. Dividends received on
Common Shares generally will not be eligible for the dividends received
deduction. In addition, the Company does not anticipate that its distributions
will be eligible for the preferential tax rates applicable to long-term capital
gains. The dividend rules are complex, and each U.S. Holder should consult its
own tax advisor regarding the application of such rules.

62

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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, the 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 who are individuals, estates or trusts
will be required to pay up to an additional 3.8% tax on, among other things,
dividends and capital gains for tax years beginning after December 31, 2012.
U.S. Holders should consult their own tax advisors regarding the effect, if any,
of this tax on their ownership and disposition of Common Shares.

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). If the foreign currency received is not converted into U.S. dollars
on the date of receipt, 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
receives payment in foreign currency and engages in a subsequent conversion or
other disposition of the foreign currency 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. 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 the 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 the 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.

63

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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, new
U.S. return disclosure obligations (and related penalties) are imposed on U.S.
Holders that hold certain specified foreign financial assets in excess of
US$50,000. 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 a domestic
financial institution. 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.

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 generally may be subject to information reporting
and backup withholding tax, at the rate of 28% (and increasing to 31% for
payments made after December 31, 2012), 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, such as corporations, 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.

10.F            Dividends
and Paying Agents

Not applicable.

10.G           
Statement by Experts

Not applicable.

10.H           
Documents on Display

Material contracts and publicly available corporate records may
be viewed at our head office located at Suite 2300  1177 West Hastings Street,
Vancouver, British Columbia, V6E 2K3.

The Companys reports and other information, including this
annual report and the exhibits thereto, as filed with the Securities and
Exchange Commission in accordance with the Exchange Act, may be inspected and
copied at the public reference facilities maintained by the Securities and
Exchange Commission at Judiciary Plaza, 100 F Street NE, Washington, D.C. 20549.
Copies of such material may also be obtained from the Public Reference Section
of the Securities and Exchange Commission at 100 F Street NE, Washington, D.C.
20549, at prescribed rates. Information may be obtained regarding the Washington
D.C. Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330 or by contacting the Securities and Exchange Commission over the
Internet at its website at http://www.sec.gov.

64

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10.I            Subsidiary
Information

Not applicable.

ITEM
11.            QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company manages its capital structure and makes adjustments
to it, based on the funds available to the Company, in order to support future
business opportunities. The Company defines its capital as shareholders equity.
The Board does not establish quantitative return on capital criteria for
management, but rather relies on the expertise of the Companys management to
sustain future development of the business.

The Company currently has no source of revenues; as such the
Company is dependent upon external financings or the sale of assets (or an
interest therein) to fund activities. In order to carry future projects and pay
for administrative costs, the Company will spend its existing working capital
and raise additional funds as needed. Management reviews its capital management
approach on an ongoing basis and believes that this approach, given the relative
size of the Company, is reasonable. There were no changes in the Companys
approach to capital management during the year ended January 31, 2012. The
Company is not subject to externally imposed capital requirements.

The Company classifies its cash and cash equivalents as
financial assets at fair value through profit or loss; accounts receivable as
loans and receivables; accounts payable and accrued liabilities and due to
related parties as other financial liabilities.

The carrying values of accounts receivable, and accounts
payable and accrued liabilities approximate their fair values due to the
expected maturity of these consolidated financial instruments. The fair values
of amounts due to related parties have not been disclosed as their fair values
cannot be reliably measured since the parties are not at arms length.

The Companys risk exposure and the impact on the Companys
financial instruments are summarized below:

|(a) | Credit risk                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                     
|    | In respect to accounts receivable, the Company is not
      exposed to significant credit risk as the majority are due from
      governmental agencies.                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                     
|    | Concentration of credit risk exists with respect to the
      Companys cash as all amounts are held at a single major Canadian
      financial institution and a major Peruvian financial institution. The
      Companys concentration of credit risk and maximum exposure thereto in
      Canada follows. Similar risk in Peru is considered not
  significant.

| | Cash and equivalents                                 |   | January 31, 2012 |  |   | January 31, 2011 |  |   | February 1, 2010 | 
| | ---------------------------------------------------- | - | ---------------- |  | - | ---------------- |  | - | ---------------- | 
| |                                                      |   |                  |  |   |                  |  |   |                  | 
| | Held at a major Canadian
      financial institution | $ | 59,865           |  | $ | 6,879,002        |  | $ | 15,911,974       | 
| | Peruvian financial institution                       |   | 286              |  |   | 25,717           |  |   | -                | 
| |                                                      | $ | 60,151           |  | $ | 6,904,719        |  | $ | 15,911,974       | 

The credit risk associated with cash
and cash equivalents is minimized substantially by ensuring that these financial
assets are placed with major Canadian and Peruvian financial institutions with
strong investment-grade ratings by a primary ratings agency.

65

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|(b) | Liquidity risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Liquidity risk is the risk that the Company will
      encounter difficulty in satisfying financial obligations as they fall due.
      The Companys approach to managing liquidity risk is to provide reasonable
      assurance that it will have sufficient funds to meet liabilities when due.
      The Company manages its liquidity risk by forecasting cash flows required
      by operations and anticipated investing and financing activities. The
      Company normally maintains sufficient cash to meet the Companys business
      requirements and at January 31, 2012, the cash balance of $60,151 is
      insufficient to meet the needs for the coming year. Therefore, the Company
      will be required to raise additional capital in order to fund its
      operations in 2012.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Liabilities as at January 31, 2012 are as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                          |   | 0 to 3    |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |           | 
| | ---------------------------------------- | - | --------- |  | - | ------ |  | - | ------------- |  | - | --------- | 
| |                                          |   | months    |  |   | months |  |   | months        |  |   | Total     | 
| |                                          |   |           |  |   |        |  |   |               |  |   |           | 
| | Accounts payable and accrued liabilities | $ | 611,030   |  | $ | -      |  | $ | -             |  | $ | 611,030   | 
| | Due to related
      parties             |   | 460,944   |  |   | -      |  |   | -             |  |   | 460,944   | 
| |                                          | $ | 1,071,974 |  | $ | -      |  | $ | -             |  | $ | 1,071,974 | 

Liabilities as at January 31, 2011 were
as follows:

| |                                          |   | 0 to 3  |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |         | 
| | ---------------------------------------- | - | ------- |  | - | ------ |  | - | ------------- |  | - | ------- | 
| |                                          |   | months  |  |   | months |  |   | months        |  |   | Total   | 
| |                                          |   |         |  |   |        |  |   |               |  |   |         | 
| | Accounts payable and accrued liabilities | $ | 334,300 |  | $ | -      |  | $ | -             |  | $ | 334,300 | 
| | Due to related
      parties             |   | 208,483 |  |   | -      |  |   | -             |  |   | 208,483 | 
| |                                          | $ | 542,783 |  | $ | -      |  | $ | -             |  | $ | 542,783 | 

Liabilities as at February 1, 2010 were
as follows:

| |                                          |   | 0 to 3  |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |         | 
| | ---------------------------------------- | - | ------- |  | - | ------ |  | - | ------------- |  | - | ------- | 
| |                                          |   | months  |  |   | months |  |   | months        |  |   | Total   | 
| |                                          |   |         |  |   |        |  |   |               |  |   |         | 
| | Accounts payable and accrued liabilities | $ | 345,398 |  | $ | -      |  | $ | -             |  | $ | 345,398 | 
| | Due to related
      parties             |   | 42,308  |  |   | -      |  |   | -             |  |   | 42,308  | 
| |                                          | $ | 387,706 |  | $ | -      |  | $ | -             |  | $ | 387,706 | 

|(c) | Market risk                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                            
|    | Market risk is the risk that the fair value or future
      cash flows of a financial instrument will fluctuate because of changes in
      market prices. Market risk comprises three types of risk: interest rate
      risk, foreign currency risk and other price risk.
|    |                                                                                                                                                                                                                                                                            
|    | i.                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                            

66

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| | ii.  | Foreign currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | The Company is exposed to foreign currency risk to the
      extent expenditures incurred or funds received and balances maintained by
      the Company are denominated in currencies other than the Canadian dollar
      (primarily United States dollars (USD) and Peruvian soles (soles). The
      Company has net monetary assets of $33,000 denominated in USD and net
      monetary liabilities of $150,000 denominated in soles. For year ended
      January 31, 2012, the Companys sensitivity analysis suggests that a
      change in the absolute rate of exchange in USD by 11% will increase or
      decrease net loss by $3,700 and a change in the absolute rate of exchange
      in soles by 15% will increase or decrease net loss by $22,000. The Company
      has not entered into any foreign currency contracts to mitigate this
      risk.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | iii. | Other price risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | Other price risk is the risk that the fair or future cash
      flows of a financial instrument will fluctuate because of changes in
      market prices, other than those arising from interest rate risk or foreign
      currency risk. The Company is not exposed to any other price
  risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

The Companys operations are not yet exposed to risks
associated with commodity prices, interest rates and credit. Commodity price
risk is defined as the potential loss that the Company may incur as a result of
changes in the fair value of gold, silver, iron, copper or other metals that may
be produced by the Company. Industry wide risks can, however, affect the
Companys general ability to finance exploration, and development of exploitable
resources; however, such effects are not predictable or quantifiable.

ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM
13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14           .MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS ANDUSE OF PROCEEDS

Material Modifications to the Rights of Security
Holders

There have been no material modifications to the rights of
security holders since the adoption of new Articles in 2006.

Use of Proceeds

Not applicable.

ITEM 15.CONTROLS AND PROCEDURES

Evaluation of disclosure controls and
procedures

Under the supervision and with the participation of the
Companys management, including its Chief Executive Officer and Chief Financial
Officer, the Company evaluated the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in Rule 13a-15(e) or
15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this
report, the Companys disclosure controls and procedures were adequately
designed and are effective to ensure that information required to be disclosed
by the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in applicable rules and forms.

67

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In addition, the Companys Chief Executive Officer and Chief
Financial Officer have determined that the disclosure controls and procedures
are effective to ensure that information required to be disclosed in the reports
that are filed under the Exchange Act is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.

Managements annual report on internal control over
  financial reporting

The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Companys management
has employed a framework consistent with Exchange Act Rule 13a-15(c), to
evaluate the Companys internal control over financial reporting described
below. 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 and fair presentation of financial statements for
external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. 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.

Management conducted an evaluation of the design and operation
of the Companys internal control over financial reporting as of January 31,
2012 based on the criteria set forth in Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
This evaluation included review of the documentation of controls, evaluation of
the design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation,
management has concluded that the Companys internal control over financial
reporting was effective as of January 31, 2012.

Changes in Internal Control over Financial reporting

During the period covered by this Annual Report, no changes
occurred in the Companys internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

ITEM
16A.AUDIT
COMMITTEE FINANCIAL EXPERT

The Board has determined that Anton Drescher is an audit
committee financial expert (as defined in Item 16A of Form 20-F). Mr. Drescher
is not independent under the independence standards of NYSE MKT applicable to
audit committee members because he is the former President and Chief Executive
Officer of the Company.

ITEM
16B.         CODE OF ETHICS

The Company adopted a Code of Ethics effective April 2004. Any
person may obtain without charge, upon written request, a copy of such Code of
Ethics by contacting our Corporate Secretary at #2300-1177 West Hastings Street,
Vancouver, British Columbia, V6E 2K3

68

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ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees for the professional audit
services rendered by Smythe Ratcliffe LLP, Chartered Accountants for the fiscal
years ended January 31, 2012 and 2011.

Year ended January 31
      
      2012
      
      
      2011Audit fees
    $
    40,000
    
    $
    62,800Audit-Related fees
    
    -
    
    
    -Tax fees(1)
    
    2,500
    
    
    3,500All
      Other Fees
    
    -
    
    
    16,500Total
    $
    42,500
    
    $
    82,800


(1) Tax fees relate to the preparation
of corporate income tax returns.

Pre-approval policies and procedures

The Audit Committee nominates and engages the independent
auditors to audit the financial statements, and approves all audit, audit
related services, tax services and other services provided by independent
auditors. Any services provided by the independent auditors that are not
specifically included within the scope of the audit must be pre-approved by the
Audit Committee prior to any engagement. All such services provided by the
independent auditors during the last two fiscal years were pre-approved in this
manner. The Audit Committee is permitted to approve certain fees for
audit-related services, tax services and other services pursuant to a de minimus
exception before the completion of the engagement.

ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATEDPURCHASERS

Not applicable.

ITEM 16F.CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.CORPORATE GOVERNANCE

Not applicable.

69

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PART III

ITEM
17.FINANCIAL STATEMENTS

We are filing with this annual report the following:

- Auditors Report dated May 29, 2012.
- Consolidated Statements of Financial position at January 31, 2012, January
  31, 2011 and February 1, 2010.
- Consolidated Statements of Operations and Comprehensive Loss for the years
  ended January 31, 2012 and January 31, 2011.
- Consolidated Statements of Change in Equity at January 31, 2012 and 2011.
- Consolidated Statements of Cash Flows for the years ended January 31, 2012
  and January 31, 2011.
- Notes to the Consolidated Financial Statements for the years ended January
  31, 2012 and January 31, 2011.

70

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(An
Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

Years Ended January 31, 2012 and 2011

Corporate Head Office

2300-1177 West Hastings Street Vancouver, BC Canada
V6E 2K3 
  Tel: 604-638-5817

---

DORATO RESOURCES INC.
  (An Exploration Stage Company)

January 31, 2012 and 2011(Expressed in Canadian
Dollars)





|INDEX                                                              | Page        
|------------------------------------------------------------------ | ------------
|                                                                   |             
|                                                                   |             
|Consolidated
      Financial Statements                            |             
|                                                                   |             
|Independent
      Auditors Report                                 | 2           
|                                                                   |             
|Consolidated
      Statements of Financial Position                | 3           
|                                                                   |             
|Consolidated
      Statements of Operations and Comprehensive Loss | 4           
|                                                                   |             
|Consolidated
      Statements of Changes in Equity                 | 5           
|                                                                   |             
|Consolidated
      Statements of Cash Flows                        | 6           
|                                                                   |             
|Notes
      to the Consolidated Financial Statements               | 7
       35

---

INDEPENDENT AUDITORS REPORT

TO THE SHAREHOLDERS OF DORATO RESOURCES INC.

We have audited the accompanying consolidated financial
statements of Dorato Resources Inc., which comprise the consolidated statements
of financial position as at January 31, 2012, January 31, 2011 and February 1,
2010, and the consolidated statements of operations and comprehensive loss,
changes in equity and cash flows for the years ended January 31, 2012 and
January 31, 2011, and a summary of significant accounting policies and other
explanatory information.

Management's Responsibility for the Consolidated Financial
StatementsManagement 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 ResponsibilityOur 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.

OpinionIn our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of
Dorato Resources Inc. as at January 31, 2012, January 31, 2011 and February 1,
2010, and its financial performance and its cash flows for the years ended
January 31, 2012 and January 31, 2011 in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board.

Emphasis of MatterWithout qualifying our opinion,
we draw attention to note 1 in the consolidated financial statements, which
indicates that the Company incurred a net loss of $17,091,671 during the year
ended January 31, 2012 and, as of that date, the Companys current liabilities
exceeded its current assets by $961,191. These conditions, along with other
matters set forth in note 1, indicate the existence of a material uncertainty
that may cast significant doubt about the Companys ability to continue as a
going concern.

Chartered Accountants

Vancouver, Canada 
  May 29, 2012



2

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DORATO RESOURCES INC.(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
  (Expressed in Canadian Dollars)

|                                               |   | January 31, |   |   | January 31, |   |   | February 1, |  
|---------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                               |   | 2012        |   |   | 2011        |   |   | 2010        |  
|                                               |   |             |   |   | (Note 17)   |   |   | (Note 17)   |  
|ASSETS                                         |   |             |   |   |             |   |   |             |  
|                                               |   |             |   |   |             |   |   |             |  
|Current                                        |   |             |   |   |             |   |   |             |  
|Cash and cash
      equivalents                | $ | 60,151      |   | $ | 6,904,719   |   | $ | 15,868,072  |  
|Accounts receivable                            |   | 21,569      |   |   | 70,821      |   |   | 75,941      |  
|Prepaid expenses                               |   | 29,063      |   |   | 28,413      |   |   | 15,844      |  
|                                               |   |             |   |   |             |   |   |             |  
|                                               |   | 110,783     |   |   | 7,003,953   |   |   | 15,959,857  |  
|                                               |   |             |   |   |             |   |   |             |  
|Property, plant and equipment(note
      6)    |   | 42,851      |   |   | 62,391      |   |   | 72,424      |  
|Exploration advances                           |   | 100,280     |   |   | 111,579     |   |   | 108,890     |  
|Interest in exploration properties(note 7)     |   | 6,309,565   |   |   | 13,990,485  |   |   | 13,284,567  |  
|                                               |   |             |   |   |             |   |   |             |  
|                                               | $ | 6,563,479   |   | $ | 21,168,408  |   | $ | 29,425,738  |  
|                                               |   |             |   |   |             |   |   |             |  
|LIABILITIES AND SHAREHOLDERS EQUITY           |   |             |   |   |             |   |   |             |  
|                                               |   |             |   |   |             |   |   |             |  
|Current                                        |   |             |   |   |             |   |   |             |  
|Accounts payable and accrued
      liabilities | $ | 611,030     |   | $ | 334,300     |   | $ | 345,398     |  
|Due to related parties (note 10)               |   | 460,944     |   |   | 208,483     |   |   | 42,308      |  
|                                               |   |             |   |   |             |   |   |             |  
|                                               |   | 1,071,974   |   |   | 542,783     |   |   | 387,706     |  
|                                               |   |             |   |   |             |   |   |             |  
|Shareholders equity                           |   |             |   |   |             |   |   |             |  
|                                               |   |             |   |   |             |   |   |             |  
|Capital stock (note 8)                         |   | 55,279,506  |   |   | 53,339,099  |   |   | 49,160,012  |  
|Share-based payment reserve (note 9)           |   | 5,871,554   |   |   | 5,854,410   |   |   | 4,717,664   |  
|Deficit                                        |   | (55,659,555 | ) |   | (38,567,884 | ) |   | (24,839,644 | )
|                                               |   |             |   |   |             |   |   |             |  
|                                               |   | 5,491,505   |   |   | 20,625,625  |   |   | 29,038,032  |  
|                                               |   |             |   |   |             |   |   |             |  
|                                               | $ | 6,563,479   |   | $ | 21,168,408  |   | $ | 29,425,738  |  

On behalf of the Board:

|Rowland
      Perkins (signed) | Director | Gordon Neal(signed) | Director
|-------------------------------- | -------- | --------------------- | --------
|Mr. Rowland Perkins              |          | Mr. Gordon Neal       |         

The accompanying notes are an integral part of these
consolidated financial statements. 3

---

DORATO RESOURCES INC.(An Exploration Stage
Company)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in Canadian Dollars) 
  Years Ended January 31

|                                                          |   | 2012        |   |   | 2011        |  
|--------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                          |   |             |   |   | (Note 17)   |  
|Expenses                                                  |   |             |   |   |             |  
|Depreciation                                              | $ | 18,844      |   | $ | 21,682      |  
|Consulting fees (notes 9 and 10)                          |   | 425,926     |   |   | 2,002,486   |  
|Exploration and evaluation expenditures (notes 10 and 11) |   | 6,601,455   |   |   | 9,741,264   |  
|Investor relations (notes 9 and 10)                       |   | 453,199     |   |   | 852,031     |  
|Office and miscellaneous (notes 9 and 10)                 |   | 292,417     |   |   | 343,194     |  
|Professional fees (notes 9 and 10)                        |   | 309,654     |   |   | 476,101     |  
|Property investigations                                   |   | -           |   |   | 37,750      |  
|Regulatory                                                |   | 40,421      |   |   | 108,731     |  
|Travel and promotion (note 10)                            |   | 121,972     |   |   | 270,628     |  
|Wages and benefits                                        |   | 512,980     |   |   | 139,341     |  
|Loss (gain) on foreign exchange                           |   | 381,245     |   |   | (259,129    | )
|Write-off of leasehold
      improvement                  |   | 6,615       |   |   | -           |  
|Write-off of interests in exploration
      properties    |   | 7,957,496   |   |   | -           |  
|Interest and other income                                 |   | (30,553     | ) |   | (5,839      | )
|                                                          |   |             |   |   |             |  
|Net loss and comprehensive loss for the year              | $ | (17,091,671 | ) | $ | (13,728,240 | )
|                                                          |   |             |   |   |             |  
|Basic and diluted loss per share                          | $ | (0.22       | ) | $ | (0.20       | )
|                                                          |   |             |   |   |             |  
|Weighted average number of common shares outstanding      |   | 75,840,556  |   |   | 69,372,422  |  

The accompanying notes are an integral part of these
consolidated financial statements. 4

---

DORATO RESOURCES INC.(An Exploration Stage
Company)CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 
  (Expressed in Canadian Dollars)

Share-basedNumber of
    
    
    Issued Capital
    
    
    PaymentShares
    
    
    Stock
    
    
    Reserve
    
    
    Deficit
    
    
    Total EquityBalance, February 1,
      2010
    
    68,388,537
    
    $
    49,160,012
    
    $
    4,717,664
    
    $
    (24,839,644
    )
    $
    29,038,032Issuance of shares for cash:Exercise of stock options
    
    2,191,940
    
    
    1,356,912
    
    
    -
    
    
    -
    
    
    1,356,912Exercise of
      warrants
    
    2,327,500
    
    
    1,572,875
    
    
    -
    
    
    -
    
    
    1,572,875Share issuance costs
    
    -
    
    
    (79,444
    )
    
    -
    
    
    -
    
    
    (79,444
    )Shares issued for mineral
      property interests
    
    400,000
    
    
    432,000
    
    
    -
    
    
    -
    
    
    432,000Share-based payments
    
    -
    
    
    -
    
    
    2,033,490
    
    
    -
    
    
    2,033,490Reallocation from share-based
      payment    reserve on exercise of stock options
    
    -
    
    
    371,543
    
    
    (371,543
    )
    
    -
    
    
    -Reallocation from share-based payment
         reserve on exercise of warrants
    
    -
    
    
    525,201
    
    
    (525,201
    )
    
    -
    
    
    -Net loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    (13,728,240
    )
    
    (13,728,240
    )Balance, January 31, 2011
    
    73,307,977
    
    
    53,339,099
    
    
    5,854,410
    
    
    (38,567,884
    )
    
    20,625,625Issuance of shares for cash:Exercise of stock options
    
    270,000
    
    
    155,000
    
    
    -
    
    
    -
    
    
    155,000Exercise of
      warrants
    
    2,362,000
    
    
    1,535,300
    
    
    -
    
    
    -
    
    
    1,535,300Shares issued for mineral property interests
    
    700,000
    
    
    150,000
    
    
    -
    
    
    -
    
    
    150,000Share-based payments
    
    -
    
    
    -
    
    
    117,251
    
    
    -
    
    
    117,251Reallocation from share-based payment
         reserve on exercise of stock options
    
    -
    
    
    100,107
    
    
    (100,107
    )
    
    -
    
    
    -Net
      loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    (17,091,671
    )
    
    (17,091,671
    )Balance, January 31, 2012
    
    76,639,977
    
    $
    55,279,506
    
    $
    5,871,554
    
    $
    (55,659,555
    )
    $
    5,491,505


The accompanying notes are an integral part of these
consolidated financial statements. 5

---

DORATO RESOURCES INC.(An Exploration Stage
Company)CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in
Canadian Dollars)
  Years Ended January 31

|                                                          |   | 2012        |   |   | 2011        |  
|--------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                          |   |             |   |   | (Note 17)   |  
|Operating activities                                      |   |             |   |   |             |  
|Net loss for the year                                     | $ | (17,091,671 | ) | $ | (13,728,240 | )
|Add items not affecting cash                              |   |             |   |   |             |  
|Depreciation                                              |   | 18,844      |   |   | 21,682      |  
|Share-based payments                                      |   | 117,251     |   |   | 2,033,490   |  
|Unrealized loss
      on foreign exchange                 |   | 22,398      |   |   | 69,333      |  
|Write-off of leasehold
      improvement                  |   | 6,615       |   |   | -           |  
|Write-off of
      interests in exploration properties    |   | 7,957,496   |   |   | -           |  
|Changes in non-cash items                                 |   |             |   |   |             |  
|Accounts
      receivable                                 |   | 49,245      |   |   | 9,521       |  
|Prepaid expenses                                          |   | (650        | ) |   | (12,569     | )
|Accounts payable
      and accrued liabilities            |   | 284,285     |   |   | (12,500     | )
|Due to related parties                                    |   | 252,461     |   |   | 166,175     |  
|Cash used in operating activities                         |   | (8,383,726  | ) |   | (11,453,108 | )
|                                                          |   |             |   |   |             |  
|Investing activities                                      |   |             |   |   |             |  
|Expenditures on exploration properties                    |   | (126,576    | ) |   | (273,919    | )
|Purchase of equipment                                     |   | (5,920      | ) |   | (11,649     | )
|Cash used in
      investing activities                   |   | (132,496    | ) |   | (285,568    | )
|                                                          |   |             |   |   |             |  
|Financing activities                                      |   |             |   |   |             |  
|Issuance of capital stock                                 |   | 1,690,300   |   |   | 2,929,787   |  
|Share
      issuance costs                                |   | -           |   |   | (79,444     | )
|Cash provided by financing activities                     |   | 1,690,300   |   |   | 2,850,343   |  
|                                                          |   |             |   |   |             |  
|Effect of foreign exchange on cash                        |   | (18,646     | ) |   | (75,020     | )
|                                                          |   |             |   |   |             |  
|Decrease in cash and cash
      equivalents               |   | (6,844,568  | ) |   | (8,963,353  | )
|Cash and cash
      equivalents, beginning of year        |   | 6,904,719   |   |   | 15,868,072  |  
|                                                          |   |             |   |   |             |  
|Cash and cash
      equivalents, end of year              | $ | 60,151      |   | $ | 6,904,719   |  
|                                                          |   |             |   |   |             |  
|Supplemental cash flow information                        |   |             |   |   |             |  
|Interest received                                         | $ | 22,740      |   | $ | 5,839       |  
|Interest paid                                             | $ | -           |   | $ | -           |  
|Income taxes paid                                         | $ | -           |   | $ | -           |  
|Non-cash transactions                                     |   |             |   |   |             |  
|Shares issued to acquire mineral property
      interests | $ | 150,000     |   | $ | 432,000     |  

The accompanying notes are an integral part of these
consolidated financial statements. 6

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|1. | NATURE OF OPERATIONS AND GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Dorato Resources Inc. (the "Company") is incorporated
      under the laws of British Columbia, Canada. The Company is engaged in the
      acquisition, exploration and development of mineral properties. The
      Company is an exploration stage company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These consolidated financial statements have been
      prepared on the basis of accounting principles applicable to a going
      concern, which assumes that the Company will be able to continue in
      operation for the foreseeable future, and will be able to realize its
      assets and discharge its liabilities and commitments in the normal course
      of business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Several conditions cast doubt on the validity of this
      assumption. For the year ended January 31, 2012, the Company incurred a
      significant operating loss of $17,091,671 (2011 - $13,728,240), and as at
      January 31, 2012 has negative working capital of $961,191 (January 31,
      2011  positive $6,461,170; February 1, 2010  positive $15,572,151), an
      accumulated deficit of $55,659,555 (January 31, 2011 - $38,567,884;
      February 1, 2010 - $24,839,644), limited resources, no source of operating
      cash flow and no assurances that sufficient funding will be available to
      conduct further exploration and development of its mineral property
      interests.                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company does not generate cash flow from operations
      to fund its activities and has therefore relied principally upon the
      issuance of securities for financing. Future capital requirements will
      depend on many factors including the Company's ability to execute its
      business plan. The Company intends to continue relying upon the issuance
      of securities to finance its future activities, but there can be no
      assurance that such financing will be available on a timely basis under
      terms acceptable to the Company, particularly in view of current market
      conditions. Although these consolidated financial statements do not
      include any adjustments that may result from the inability to secure
      future financing, such a situation would have a material adverse effect on
      the Companys recoverability of assets, classification of assets and
      liabilities, and results of operations should the Company be unable to
      continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The business of mining and exploration involves a high
      degree of risk and there can be no assurance that current exploration
      programs will result in profitable mining operations. The Company has no
      source of revenue, and has significant cash requirements to meet its
      administrative overhead and maintain its interest in exploration
      properties. The recoverability of amounts shown for interest in
      exploration properties is dependent on several factors. These include the
      discovery of economically recoverable reserves, the ability of the Company
      to obtain the necessary financing to complete the development of these
      properties, and future profitable production or proceeds from disposition.
      The carrying values of the Companys interest in exploration properties do
      not reflect current or future values.                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | BASIS OF PREPARATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Statement of compliance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These consolidated financial statements are prepared in
      accordance with International Financial Reporting Standards (IFRS), as
      issued by the International Accounting Standards Board. The impact of the
      transition from Canadian generally accepted accounting principles (GAAP)
      to IFRS is explained in note 17. IFRS 1 First-Time Adoption of
      International Financial Reporting Standardshas been
applied.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These consolidated financial statements have been
      prepared on a historical cost basis. In addition these consolidated
      financial statements have been prepared using the accrual basis of
      accounting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The accounting policies set out in note 3 have been
      applied consistently by the Company and its subsidiaries in preparing the
      consolidated financial statements for the year ended January 31, 2012, the
      comparative information presented in these consolidated financial
      statements for the year ended January 31, 2011 and in the preparation of
      the opening consolidated statement of financial position at February 1,
      2010 (note 17), the Companys date of transition, for purposes of
      transition to IFRS. These policies are based on IFRS effective January 31,
      2012.                                                                                                                                                                                                                                                                                                                                                                                                                   

7

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|2. | BASIS OF PREPARATION(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Approval of the financial statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The consolidated financial statements of Dorato Resources
      Inc. for the year ended January 31, 2012 were reviewed by the Audit
      Committee and approved and authorized for issue by the Board of Directors
      on May 29, 2012.                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Items included in the financial statements of each of the
      Company's entities are measured using the currency of the primary economic
      environment in which the entity operates (the "functional currency"). The
      consolidated financial statements are presented in Canadian dollars, the
      Company's functional currency. The financial statements of the
      subsidiaries have the same functional currency as that of the Company.
      Amounts recorded in foreign currencies are translated into Canadian
      dollars as follows:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|   | Gains and losses arising from this translation of foreign
      currency are included in the determination of net loss for the
  year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Use of judgments and estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The preparation of financial statements in accordance
      with IFRS requires management to make estimates and assumptions that
      affect the 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 revenues and expenses during the year.
      Significant areas requiring the use of estimates include accrual of
      liabilities; rates of amortization of property, plant and equipment;
      impairment and recoverability of interests in exploration properties;
      amounts of provisions for environmental rehabilitation; assumptions used
      to determine the fair value of share-based payments expense; and
      determination of recoverability of deferred income tax assets. Key
      judgments and estimates made by management with respect to the areas noted
      previously have been disclosed in the notes to these consolidated
      financial statements as appropriate.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Basis of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These consolidated financial statements include the
      accounts of the Company and its wholly-owned subsidiary, Dorato Peru
      S.A.C., which was incorporated under the laws of Peru in 2007. All
      significant intercompany balances and transactions were eliminated upon
      consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Cash and cash equivalents consists of cash on deposit at
      major financial institutions in Canada and Peru and highly liquid
      investments that are cashable into known amounts of cash on demand, and
      which are subject to insignificant credit and interest rate
  risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

8

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
|-- | ----------------------------------------

Interests in exploration properties

All of the Companys projects are
currently in the exploration and evaluation phase.

(i) Pre-exploration costs

Pre-exploration costs are expensed in the period in which they are incurred.

(ii) Exploration and evaluation
expenditures

Once the legal right to explore a
property has been acquired, costs directly related to the acquisition of
interests in exploration properties are capitalized, on an area-of-interest
basis. Subsequently the mineral property rights are carried at cost, less any
impairment, until such time as the assets are substantially ready for their
intended use or sale, being commercial production at operating levels intended
by management.

Exploration expenditures incurred
during the exploration and evaluation phase are expensed as incurred and
included in profit or loss.

The Company assesses interests in
exploration properties for impairment when facts and circumstances suggest that
the carrying amount of an asset may exceed its recoverable amount.

Once the technical feasibility and
commercial viability of extracting the mineral resource has been determined, the
property is considered to be a mine under development and is classified as mine
development costs. Interests in exploration properties are also tested for
impairment before the assets are transferred to development properties.

As the Company currently has no
operational income, any incidental revenues earned in connection with
exploration activities are applied as a reduction to property carrying values.

Interest in exploration properties are
classified as intangible assets.

Property, plant and equipment

(i) Recognitionand
measurement

On initial recognition, property, plant
and equipment are valued at cost, being the purchase price and directly
attributable costs of acquisition or construction required to bring the asset to
the location and condition necessary to be capable of operating in the manner
intended by the Company, including appropriate borrowing costs and the estimated
present value of any future unavoidable costs of dismantling and removing items.
The corresponding liability is recognized within provisions.

Property, plant and equipment is
subsequently measured at cost less accumulated depreciation, less any
accumulated impairment losses, with the exception of land, which is not
depreciated.

When parts of an item of property,
plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item
of property, plant and equipment is recognized in the carrying amount of the
item if it is probable that the future economic benefits embodied within the
part will flow to the Company and its cost can be measured reliably. The
carrying amount of the replaced part is derecognized. The costs of the day-today
servicing of property, plant and equipment are recognized in profit or loss as
incurred.

9

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
      Property, plant and equipment(contd)
|-- | -------------------------------------------------------------------------------------

(iii) Major maintenance and repairs

Subsequent costs are included in the
assets carrying amount or recognized as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the profit or loss during the financial
period in which they are incurred.

(iv) Gains and losses

Gains and losses on disposal of an item
of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount, and are recognized in profit or loss.

(v) Depreciation

Depreciation is recognized in profit or
loss on a declining-balance basis at the following annual rates:

Computer equipment
    -
    25% - 30%Office equipment
    -
    10% - 25%Leasehold improvements
    -
    straight-line over the lease
      term


Additions during the year are
depreciated at one-half the annual rates.

Depreciation methods, useful lives and
residual values are reviewed at each financial year-end and adjusted if
appropriate.

Impairment of non-current assets

Non-current assets are evaluated at
least annually by management for indicators that carrying value is impaired and
may not be recoverable. When indicators of impairment are present the
recoverable amount of an asset is evaluated at the level of a cash generating
unit (CGU), the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or
groups of assets, where the recoverable amount of a CGU is the greater of the
CGUs fair value less costs to sell and its value in use. An impairment loss is
recognized in profit or loss to the extent the carrying amount exceeds the
recoverable amount.

The Company uses its best efforts to
fully understand all of the aforementioned to make an informed decision based
upon historical and current facts surrounding the projects. Discounted cash flow
techniques often require management to make estimates and assumptions concerning
reserves and expected future production revenues and expenses.

10

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Reversal of impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | An impairment loss is reversed if there is an indication
      that there has been a change in the estimates used to determine the
      recoverable amount. An impairment loss is reversed only to the extent that
      the assets carrying amount does not exceed the carrying amount that would
      have been determined, net of depreciation or amortization, if no
      impairment loss had been recognized. An impairment loss with respect to
      goodwill is never reversed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Provisions for environmental
  rehabilitation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company records a liability based on the best
      estimate of costs for site closure and reclamation activities that the
      Company is legally or constructively required to remediate. The liability
      is recognized at the time environmental disturbance occurs and the
      resulting costs are capitalized to the corresponding asset. The provision
      for closure and reclamation liabilities is estimated using expected cash
      flows based on engineering and environmental reports prepared by
      third-party industry specialists and discounted at a pre-tax rate specific
      to the liability. The capitalized amount is depreciated on the same basis
      as the related asset. The liability is adjusted for the accretion of the
      discounted obligation and any changes in the amount or timing of the
      underlying future cash flows. Significant judgments and estimates are
      involved in forming expectations of the amounts and timing of future
      closure and reclamation cash flows.                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Additional disturbances and changes in closure and
      reclamation estimates are accounted for as incurred with a change in the
      corresponding capitalized cost. Costs of rehabilitation projects for which
      a provision has been recorded are recorded directly against the provision
      as incurred, most of which are incurred at the end of the life of
    mine.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company uses the balance sheet method of accounting
      for income taxes. Under the balance sheet method, deferred tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences between the financial statement carrying amounts of existing
      assets and liabilities and their respective tax basis. Deferred tax assets
      and liabilities are measured using substantively enacted tax rates
      expected to apply to taxable income in the years in which those temporary
      differences are expected to be recovered or settled. Deferred tax assets
      also result from unused loss carry-forwards, resource related pools and
      other deductions. A deferred tax asset is recognized for unused tax
      losses, tax credits and deductible temporary differences to the extent
      that it is probable that future taxable profits will be available against
      which they can be utilized. Deferred tax assets are reviewed at each
      reporting date and are reduced to the extent that it is no longer probable
      that the related tax benefit will be realized.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Capital stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The proceeds from the exercise of stock options and
      warrants are recorded as capital stock in the amount for which the option
      and warrant enabled the holder to purchase a share in the Company.
      Commissions paid to underwriters, and other related share issue costs,
      such as legal, auditing and printing, on the issue of the Companys shares
      are charged directly to capital stock. Common shares issued for
      consideration other than cash are valued based on their market value at
      the date the agreement to issue shares were concluded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Valuation of equity units issued in private
      placements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has adopted the residual value method with
      respect to the measurement of shares and warrants issued as private
      placement units. The residual value method first allocates value to the
      more readily determinable component based on fair value and then the
      residual value, to the remaining component.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

11

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Share-based payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has a stock option plan that is described in
      note 9. Share-based payments to employees are measured at the fair value
      of the instruments issued and amortized over the vesting periods.
      Share-based payments to non- employees are measured at the fair value of
      the goods or services received or the fair value of the equity instruments
      issued if it is determined the fair value of the goods or services cannot
      be reliably measured, and are recorded at the date the goods or services
      are received. The amount recognized as an expense is adjusted to reflect
      the number of awards expected to vest. The offset to the recorded cost is
      to share-based payments reserve. Consideration received on the exercise of
      stock options is recorded as capital stock and the related share-based
      payments reserve is transferred to capital stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Earnings (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Basic loss per share is calculated using the weighted
      average number of common shares outstanding during the period. The Company
      uses the treasury stock method to compute the dilutive effect of options,
      warrants and similar instruments. Under this method, the dilutive effect
      on earnings per share is calculated presuming the exercise of outstanding
      options, warrants and similar instruments. It assumes that the proceeds of
      such exercise would be used to repurchase common shares at the average
      market price during the period. However, the calculation of diluted loss
      per share excludes the effects of various conversions and exercise of
      options and warrants that would be anti- dilutive.                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Financial assets and liabilities are initially recognized
      at fair value on settlement date and are subsequently measured based on
      their classification. Transaction costs are expensed when incurred.
      Regular purchases and sales of financial instruments are recognized at
      trade date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

(i) Financial assets

The Company classifies its financial
assets in the following categories: at fair value through profit or loss, loans
and receivables, held-to-maturity investments or available-for-sale financial
assets. The classification depends on the purpose for which the financial assets
were acquired. Management determines the classification of financial assets at
recognition.

Fair value through profit or
loss

Financial assets at fair value through
profit or loss are initially recognized at fair value with changes in fair value
recorded through profit or loss. Cash and cash equivalents are included in this
category of financial assets.

Loans and receivables

Loans and receivables 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 date. Loans and receivables are initially
recognized at fair value and subsequently carried at amortized cost using the
effective interest method, less any impairment. Loans and receivables are
comprised of accounts receivable.

Held-to-maturity investments

Held-to-maturity investments are
measured at amortized cost using the effective interest rate method. Transaction
costs are added and amortized to the statements of operations and comprehensive
loss over the life of the financial instrument on an effective yield basis.

Available-for-sale financial
assets

Financial assets classified as
available-for-sale are carried at fair value (where determinable based on market
prices of actively traded securities) with changes in fair value recorded in
other comprehensive income.

12

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|3. | SIGNIFICANT ACCOUNTING POLICIES(contd)
      Financial instruments(contd)
|-- | -----------------------------------------------------------------------------

(ii) Financial liabilities

Other financial liabilities

Other financial liabilities are
non-derivatives and are recognized initially at fair value, net of transaction
costs incurred, and are subsequently stated at amortized cost. Any difference
between the amounts originally received, net of transaction costs, and the
redemption value is recognized in profit and loss over the period to maturity
using the effective interest method.

Other financial liabilities are
classified as current or non-current based on their maturity date. Financial
liabilities include accounts payable and accrued liabilities and due to related
parties.

|4. | CHANGES IN ACCOUNTING STANDARDS                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                    
|   | The Company has reviewed new and revised accounting
      pronouncements that have been issued but are not yet effective and
      determined that the following may have an impact on its financial
      statements on or after February 1, 2012:
|   |                                                                                                                                                                                                                                                    
|   | (i)                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                    
|   | (ii)                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                    
|   | (iii)                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                    

13

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|4. | CHANGES IN ACCOUNTING STANDARDS(contd)
|-- | ----------------------------------------

| | (iv) | IFRS 9 Financial Instruments(IFRS 9 -
    2009)                                                          
| | ---- | -----------------------------------------------------------------------------------------------------------
| |      |                                                                                                            
| |      | IFRS 9 - 2009 introduces new requirements for classifying
      and measuring financial assets, as follows:

| |  | Debt instruments meeting both a business model test and
      a cash flow characteristics test are measured at amortized cost (the use
      of fair value is optional in some limited circumstances)                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Investments in equity instruments can be designated as
      fair value through other comprehensive income with only dividends being
      recognized in profit or loss                                                     
| |  | All other instruments (including all derivatives) are
      measured at fair value with changes recognized in the profit or loss                                                                                              
| |  | The concept of embedded derivatives does not apply to
      financial assets within the scope of the standard and the entire
      instrument must be classified and measured in accordance with the above
      guidelines.

| |      | This standard is only applicable if it is optionally
      adopted for annual periods beginning before January 1, 2015. For annual
      periods beginning on or after January 1, 2015, the Company must adopt IFRS
      9 - 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (v)  | IFRS 9 Financial Instruments(IFRS 9 -
    2010)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | A revised version of IFRS 9 - 2009 incorporating revised
      requirements for the classification and measurement of financial
      liabilities, and carrying over the existing de-recognition requirements
      from IAS 39 Financial Instruments: Recognition and
    Measurement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The revised financial liability provisions maintain the
      existing amortized cost measurement basis for most liabilities. New
      requirements apply where an entity chooses to measure a liability at fair
      value through profit or loss; in these cases, the portion of the change in
      fair value related to changes in the entity's own credit risk is presented
      in OCI rather than within profit or loss. Applies to annual periods
      beginning on or after January 1, 2015. This standard supersedes IFRS 9 -
      2009. However, for annual reporting periods beginning before January 1,
      2015, an entity may early-adopt IFRS 9 - 2009 instead of applying this
      standard. The Company is currently evaluating the impact of IFRS 9 - 2010
      on its consolidated financial statements, but the impact, if any, is not
      expected to be significant.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (vi) | IFRS 10 Consolidated Financial Statements(IFRS
      10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | IFRS 10 establishes principles for the presentation and
      preparation of consolidated financial statements when an entity controls
      one or more other entities. IFRS 10 supersedes IAS 27 Consolidated and
      Separate Financial Statementsand SIC-12 ConsolidationSpecial
      Purpose Entities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The standard identifies the principles of control,
      determines how to identify whether an investor controls an investee and
      therefore must consolidate the investee, and sets out the principles for
      the preparation of consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | The standard introduces a single consolidation model for
      all entities based on control, irrespective of the nature of the investee
      (i.e., whether an entity is controlled through voting rights of investors
      or through other contractual arrangements as is common in special purpose
      entities). Under IFRS 10, control is based on whether an investor has
      power over the investee, exposure, or rights, to variable returns from its
      involvement with the investee, and the ability to use its power over the
      investee to affect the amount of the returns.                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |      | IFRS 10 is effective for annual periods beginning on or
      after January 1, 2013. Earlier application is permitted. If early-adopted,
      must be adopted together with IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28
      (2011). The Company is currently evaluating the impact of this standard on
      its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

14

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|4. | CHANGES IN ACCOUNTING STANDARDS(contd)
|-- | ----------------------------------------
|   |                                         
|   | (vii)                                   
|   |                                         
|   |                                         
|   |                                         
|   | (viii)                                  
|   |                                         
|   |                                         
|   |                                         
|   | (ix)                                    
|   |                                         
|   |                                         
|   |                                         
|   | (x)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (xi)                                    
|   |                                         
|   |                                         

|5. | RISK MANAGEMENT AND FINANCIAL
INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The carrying values of accounts receivable, accounts
      payable and accrued liabilities, and amounts due to related parties
      approximate their fair values due to the expected maturity of these
      financial instruments. Fair value estimates are made at specific points in
      time, based on relevant market information and information about the
      financial instrument.

15

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|5. | RISK MANAGEMENT AND FINANCIAL INSTRUMENTS(contd...)                                                         
|-- | -------------------------------------------------------------------------------------------------------------
|   |                                                                                                              
|   | The Companys risk exposure and the impact on the
      Companys financial instruments are summarized
below:

| | a) | Credit risk                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In respect to accounts receivable, the Company is not
      exposed to significant credit risk, as the majority are due from
      governmental agencies.                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Concentration of credit risk exists with respect to the
      Companys cash and cash equivalents, as all amounts are held at a single
      major Canadian financial institution and a major Peruvian financial
      institution. The Companys concentration of credit risk and maximum
      exposure thereto in Canada follows. Similar risk in Peru is considered not
      significant.

| | Cash and equivalents                                 |   | January 31, 2012 |  |   | January 31, 2011 |  |   | February 1, 2010 | 
| | ---------------------------------------------------- | - | ---------------- |  | - | ---------------- |  | - | ---------------- | 
| |                                                      |   |                  |  |   |                  |  |   |                  | 
| | Held at a major Canadian financial
      institution | $ | 59,865           |  | $ | 6,879,002        |  | $ | 15,911,974       | 
| | Peruvian financial
      institution                 |   | 286              |  |   | 25,717           |  |   | -                | 
| |                                                      | $ | 60,151           |  | $ | 6,904,719        |  | $ | 15,911,974       | 

| |    | The credit risk associated with cash and cash equivalents
      is minimized substantially by ensuring that these financial assets are
      placed with major Canadian and Peruvian financial institutions with strong
      investment- grade ratings by a primary ratings agency.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | b) | Liquidity risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Liquidity risk is the risk that the Company will
      encounter difficulty in satisfying financial obligations as they are due.
      The Companys approach to managing liquidity risk is to provide reasonable
      assurance that it will have sufficient funds to meet liabilities when due.
      The Company manages its liquidity risk by forecasting cash flows required
      by operations and anticipated investing and financing activities. The
      Company normally maintains sufficient cash and cash equivalents to meet
      the Companys business requirements but at January 31, 2012, the cash and
      cash equivalents balance of $60,151 is insufficient to meet the Companys
      needs for the coming year. Therefore, the Company will be required to
      raise additional capital in order to fund its operations in fiscal
      2013.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Liabilities as at January 31, 2012 were as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                                          |   | 0 to 3    |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |           | 
| | ---------------------------------------- | - | --------- |  | - | ------ |  | - | ------------- |  | - | --------- | 
| |                                          |   | months    |  |   | months |  |   | months        |  |   | Total     | 
| |                                          |   |           |  |   |        |  |   |               |  |   |           | 
| | Accounts payable and accrued liabilities | $ | 611,030   |  | $ | -      |  | $ | -             |  | $ | 611,030   | 
| | Due to related
      parties             |   | 460,944   |  |   | -      |  |   | -             |  |   | 460,944   | 
| |                                          | $ | 1,071,974 |  | $ | -      |  | $ | -             |  | $ | 1,071,974 | 

Liabilities as at January 31, 2011
were as follows:

| |                                          |   | 0 to 3  |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |         | 
| | ---------------------------------------- | - | ------- |  | - | ------ |  | - | ------------- |  | - | ------- | 
| |                                          |   | months  |  |   | months |  |   | months        |  |   | Total   | 
| |                                          |   |         |  |   |        |  |   |               |  |   |         | 
| | Accounts payable and accrued liabilities | $ | 334,300 |  | $ | -      |  | $ | -             |  | $ | 334,300 | 
| | Due to related
      parties             |   | 208,483 |  |   | -      |  |   | -             |  |   | 208,483 | 
| |                                          | $ | 542,783 |  | $ | -      |  | $ | -             |  | $ | 542,783 | 

16

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|5. | RISK MANAGEMENT AND FINANCIAL INSTRUMENTS(contd...)
|-- | ----------------------------------------------------

| | b) | Liquidity risk(contd...)                            
| | -- | -----------------------------------------------------
| |    |                                                      
| |    | Liabilities as at February 1, 2010 were as
  follows:

| |                                          |   | 0 to 3  |  |   | 3 to 6 |  |   | 6 to
      12 |  |   |         | 
| | ---------------------------------------- | - | ------- |  | - | ------ |  | - | ------------- |  | - | ------- | 
| |                                          |   | months  |  |   | months |  |   | months        |  |   | Total   | 
| |                                          |   |         |  |   |        |  |   |               |  |   |         | 
| | Accounts payable and accrued liabilities | $ | 345,398 |  | $ | -      |  | $ | -             |  | $ | 345,398 | 
| | Due to related
      parties             |   | 42,308  |  |   | -      |  |   | -             |  |   | 42,308  | 
| |                                          | $ | 387,706 |  | $ | -      |  | $ | -             |  | $ | 387,706 | 

| | c) | Market risk                                                                                                                                                                                                                                                            
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                        
| |    | Market risk is the risk that the fair value or future
      cash flows of a financial instrument will fluctuate due to changes in
      market prices. Market risk comprises three types of risk: interest rate
      risk, foreign currency risk and other price risk.
| |    |                                                                                                                                                                                                                                                                        
| |    | i.                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    | ii.                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        
| |    | iii.                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                        

17

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|6. | PROPERTY, PLANT AND
EQUIPMENT
|-- | -----------------------------

| |                                    |   | Computer  |   |   | Office    |   |   | Leasehold    |   |   |         |  
| | ---------------------------------- | - | --------- | - | - | --------- | - | - | ------------ | - | - | ------- | -
| |                                    |   | equipment |   |   | equipment |   |   | improvements |   |   | Total   |  
| | Cost                               |   |           |   |   |           |   |   |              |   |   |         |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance at February 1, 2010        | $ | 23,644    |   | $ | 57,744    |   | $ | 17,061       |   | $ | 98,449  |  
| | Additions                          |   | 11,649    |   |   | -         |   |   | -            |   |   | 11,649  |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance at January 31, 2011        |   | 35,293    |   |   | 57,744    |   |   | 17,061       |   |   | 110,098 |  
| | Additions                          |   | 5,920     |   |   | -         |   |   | -            |   |   | 5,920   |  
| | Disposals                          |   | -         |   |   | -         |   |   | (17,061      | ) |   | (17,061 | )
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance
      at January 31, 2012  | $ | 41,213    |   | $ | 57,744    |   | $ | -            |   | $ | 98,957  |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Depreciation and impairment losses |   |           |   |   |           |   |   |              |   |   |         |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance at February 1, 2010        | $ | (8,192    | ) | $ | (12,262   | ) | $ | (5,571       | ) | $ | (26,025 | )
| | Depreciation for the year          |   | (7,186    | ) |   | (10,318   | ) |   | (4,178       | ) |   | (21,682 | )
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance at January 31, 2011        |   | (15,378   | ) |   | (22,580   | ) |   | (9,749       | ) |   | (47,707 | )
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Depreciation for the year          |   | (9,341    | ) |   | (8,807    | ) |   | (697         | ) |   | (18,845 | )
| | Impairment loss                    |   | -         |   |   | -         |   |   | (6,615       | ) |   | (6,615  | )
| | Disposals                          |   | -         |   |   | -         |   |   | 17,061       |   |   | 17,061  |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Balance at January 31, 2012        | $ | (24,719   | ) | $ | (31,387   | ) | $ | -            |   | $ | (56,106 | )
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | Carrying amounts                   |   |           |   |   |           |   |   |              |   |   |         |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | At February 1, 2010                | $ | 15,452    |   | $ | 45,482    |   | $ | 11,490       |   | $ | 72,424  |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | At January 31, 2011                | $ | 19,915    |   | $ | 35,164    |   | $ | 7,312        |   | $ | 62,391  |  
| |                                    |   |           |   |   |           |   |   |              |   |   |         |  
| | At January 31, 2012                | $ | 16,494    |   | $ | 26,357    |   | $ | -            |   | $ | 42,851  |  

18

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|7. | INTEREST IN EXPLORATION
  PROPERTIES
|-- | ------------------------------------

| |                                 |   | Central Zone |   |   | North Zone |  |   | South Zone |  |   | Total      |  
| | ------------------------------- | - | ------------ | - | - | ---------- |  | - | ---------- |  | - | ---------- | -
| |                                 |   |              |   |   |            |  |   |            |  |   |            |  
| | Balance, February 1, 2010       | $ | 9,831,930    |   | $ | 1,651,703  |  | $ | 1,800,934  |  | $ | 13,284,567 |  
| |                                 |   |              |   |   |            |  |   |            |  |   |            |  
| | Acquisition costs               |   |              |   |   |            |  |   |            |  |   |            |  
| | Cash payments                   |   | 201,892      |   |   | 72,026     |  |   | -          |  |   | 273,918    |  
| | Common shares issued            |   | -            |   |   | 432,000    |  |   | -          |  |   | 432,000    |  
| |                                 |   |              |   |   |            |  |   |            |  |   |            |  
| | Balance, January 31, 2011       |   | 10,033,822   |   |   | 2,155,729  |  |   | 1,800,934  |  |   | 13,990,485 |  
| |                                 |   |              |   |   |            |  |   |            |  |   |            |  
| | Acquisition costs               |   |              |   |   |            |  |   |            |  |   |            |  
| | Cash payments                   |   | -            |   |   | 77,506     |  |   | 49,070     |  |   | 126,576    |  
| | Common shares issued            |   | 9,000        |   |   | 141,000    |  |   | -          |  |   | 150,000    |  
| | Write-off                       |   | (7,957,496   | ) |   | -          |  |   | -          |  |   | (7,957,496 | )
| |                                 |   |              |   |   |            |  |   |            |  |   |            |  
| | Balance,
      January 31, 2012 | $ | 2,085,326    |   | $ | 2,374,235  |  | $ | 1,850,004  |  | $ | 6,309,565  |  

The Companys exploration activities
currently focus on three distinct geological areas shown above (Central Zone,
North Zone and South Zone) comprised of various mineral claims blocks acquired
through the under-noted option agreements. These individual option agreements
can relate to mineral claims included in more than one geological area and are
identified below.

Property acquisitions

During the year ended January 31, 2008,
the Company entered into five option agreements (Vicmarama Property, Maravilla
Property, Lahaina 1 Property, Lahaina 2 Property and Afrodita Property) to earn
a 100% interest in certain mineral mining concessions located in Peru (the
Mineral Claims), for which Canadian regulatory approval was received on April
24, 2008. Although the commercial terms of all the undernoted option agreements
have now been completed, none of the options have been exercised. During the
years ended January 31, 2011 and 2010, the Company entered into additional
option agreements (David Property, Marita Property and Cangaza Property) for
which Canadian regulatory approval was also received. Peruvian government
approval (Supreme Decree) is required for the exercise of the undernoted option
agreements, and is in the process of being obtained.

| | i)   | Vicmarama Property                                                                                                                                                                                                                                       
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                          
| |      | On October 18, 2007, the Company acquired an option to
      earn a 100% interest in consideration for 750,000 common shares (issued)
      and US$250,000 (paid). The claims are included in the Central Zone, North
      Zone and South Zone.         
| |      |                                                                                                                                                                                                                                                          
| | ii)  | Maravilla Property                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                          
| |      | On October 18, 2007, the Company entered into an
      agreement to earn a 100% interest in consideration for 1,250,000 common
      shares (issued) and US$300,000 (paid). The claims are included in the
      Central Zone, North Zone and South Zone.
| |      |                                                                                                                                                                                                                                                          
| | iii) | Lahaina 1 Property                                                                                                                                                                                                                                       
| |      |                                                                                                                                                                                                                                                          
| |      | On October 18, 2007, the Company entered into an
      agreement to earn a 100% interest in consideration for 3,400,000 common
      shares (issued) and US$270,000 (paid). The claims are included in the
      Central Zone and North Zone.            

19

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|7. | INTEREST IN EXPLORATION PROPERTIES(contd)
|-- | -------------------------------------------
|   |                                            
|   | iv)                                        
|   |                                            
|   |                                            
|   |                                            
|   | v)                                         
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   | vi)                                        
|   |                                            
|   |                                            
|   |                                            
|   | vii)                                       
|   |                                            
|   |                                            
|   |                                            
|   | viii)                                      
|   |                                            
|   |                                            

**Cash
        Payments**
      
      Common
        sharesJuly 13, 2010
      US$
      
      30,000
      
      (paid)August 13, 2010
      
      
      
      
      
      
      200,000
      
      (issued)On or before October 13, 2010
      US$
      
      40,000
      
      (paid)On or before November 13, 2010
      
      
      
      
      
      
      200,000
      
      (issued)On or before April 13, 2011
      US$
      
      40,000
      
      (paid)
      
      200,000
      
      (issued)On or before July 13, 2011
      US$
      
      40,000
      
      (paid)
      
      200,000
      
      (issued)On or before January 13, 2012
      
      
      
      
      
      
      250,000
      
      (issued)US$
      
      150,000
      
      
      
      1,050,000


The claims are included in the North
Zone.

20

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|7. | INTEREST IN EXPLORATION PROPERTIES(contd)
|-- | -------------------------------------------
|   |                                            
|   | ix)                                        
|   |                                            
|   |                                            

| |                                            | Cash
      Payments |          
| | ------------------------------------------ | ------------------- | ---------
| |                                            |                     |          
| | September 16 (effective date)              | US$                 | 50,000   
| | On commencing drill testing (drill date) | US$                 | 200,000  
| | One year anniversary of drill date         | US$                 | 400,000  
| | Two year anniversary of drill date         | US$                 | 600,000  
| | Three year anniversary of drill date       | US$                 | 900,000  
| | Four year anniversary of drill date        | US$                 | 1,200,000
| | Five year anniversary of drill date        | US$                 | 2,650,000
| |                                            | **US$**             | 6,000,000

In addition, a royalty of US$4.00 per
ounce of gold produced is payable to the underlying vendors up to a maximum of
US$2,000,000. There was no finders fee paid by the Company in connection with
the option agreement.

The claims are included in the South
Zone.

Royalty option agreement

On July 18, 2008, the Company entered
into a Royalty Option Agreement with Franco-Nevada Corporation
(Franco-Nevada). The Company agreed to grant Franco-Nevada the option to
purchase a perpetual royalty on 100% of the gold and silver produced from its
Taricori and surrounding land packages (Central Zone) covering approximately 152
square kilometers. During the year ended January 31, 2010, the Company amended
the royalty agreement with Franco-Nevada to expand the size of the mineral
property interests to which the Franco-Nevada royalty will apply to 417 square
kilometers. The material terms of the Royalty Option Agreement are as follows:

| |  | The Option will expire the sooner of: (a) the expiration
      or termination of the concessions and surrounding land packages or (b)
      sixty days following a decision to construct a mine;                                                                                                                                                                                                                                                                         
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Option may be exercised within sixty days following a
      decision to construct a mine by the Company and/or its successor in
      interest together with a firm commitment to finance construction;                                                                                                                                                                                                                                                              
| |  | The royalty rate shall be either 1% or 2% of the net
      smelter return, dependent on the gold price at the time of the exercise of
      the Option; and                                                                                                                                                                                                                                                                                                              
| |  | The Option may be exercised at a purchase price equal to
      the royalty net present value, which, for the purpose of the Royalty
      Option Agreement, shall mean the after-tax net present value of the
      royalty revenue from the production of gold and silver using the royalty
      rate and a 7.5% discount rate applied to the base case model assumptions
      contained in a feasibility study used to make the decision to construct
      the mine.

Acquisitions

The acquisition of title to exploration
properties is a detailed and time-consuming process. The Company has taken
steps, in accordance with industry standards, to verify title to exploration
properties in which it has an interest. Although the Company has taken every
reasonable precaution to ensure that legal title to its properties is properly
recorded in the name of the Company, there can be no assurance that such title
will ultimately be secured.

21

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|7. | INTEREST IN EXPLORATION PROPERTIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Environmental Expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The operations of the Company may in the future be
      affected from time to time in varying degrees by changes in environmental
      regulations, including those for future removal and site restoration
      costs. Both the likelihood of new regulations and their overall effect
      upon the Company vary greatly and are not predictable. The Companys
      policy is to meet or, if possible, surpass standards set by relevant
      legislation by application of technically proven and economically feasible
      measures.                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Environmental expenditures that relate to ongoing
      environmental and reclamation programs are charged against earnings as
      incurred or capitalized and amortized depending on their future economic
      benefits. Estimated future removal and site restoration costs, when the
      ultimate liability is reasonably determinable, are charged against profit
      or loss over the estimated remaining life of the related business
      operation, net of expected recoveries. The Company is not aware of any
      asset retirement obligations as of January 31, 2012 and 2011.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Authorized                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | An unlimited number of common shares without par
      value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Share issuances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the year ended January 31, 2012, the
    Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | i)   | Issued 270,000 common shares pursuant to the exercise of
      stock options for total proceeds of $155,000 and transferred related
      share-based payment reserve of $100,107 to capital stock.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                    
| | ii)  | Issued 2,362,000 common shares pursuant to the exercise
      of warrants for total proceeds of $1,535,300.                                                                                        
| |      |                                                                                                                                                                                                    
| | iii) | Issued 700,000 common shares valued between $0.06 and
      $0.45 per share for exploration properties (notes 7(vii) and
  (viii).                                                                 

During the year ended January 31, 2011,
the Company:

| | i)   | Issued 2,191,940 common shares pursuant to the exercise
      of stock options for total proceeds of $1,356,912 and transferred related
      share-based payment reserve of $371,543 to capital stock.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                        
| | ii)  | Issued 2,327,500 common shares pursuant to the exercise
      of warrants for total proceeds of $1,572,875 and transferred related
      share-based payment reserve of $525,201 to capital stock.     
| |      |                                                                                                                                                                                                        
| | iii) | Issued 200,000 common shares valued at $0.84 per share
      and 200,000 common shares valued at $1.32 for exploration properties for a
      total of $432,000 (note 7(viii)).                        

|9. | SHARE-BASED PAYMENT RESERVE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has a stock option plan (the Plan) in place
      under which it is authorized to grant options to executive officers,
      directors, employees and consultants enabling them to acquire up to 10% of
      the issued and outstanding common shares of the Company. Under the Plan,
      the exercise price of each option equals the approximate market price of
      the Company's stock as calculated on the date of grant. The options can be
      granted for a maximum term of five years and periods of vesting are
      determined by the Board of Directors.

22

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|9. | SHARE-BASED PAYMENT RESERVE(contd)                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On January 25, 2011, the Company granted 1,500,000 stock
      options to directors, officers, employees and consultants of the Company.
      The options vested at the grant date, except for the options granted to
      consultants providing investor relations services, which have a vesting
      period of 12 months. All the options are exercisable at a price of $1.20
      per share for a period of two years.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On November 3, 2010, the Company granted 150,000 stock
      options to an employee of the Company. The options vested at the grant
      date. All the options are exercisable at a price of $1.35 per share for a
      period of two years.                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On May 27, 2010, the Company granted 1,900,000 stock
      options to directors, officers and consultants of the Company. The options
      vested at the grant date, except for the options granted to consultants
      providing investor relations services, which have a vesting period of 12
      months. All the options are exercisable at a price of $0.85 per share for
      a period of two years.               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | A summary of the status of the stock option plan as of
      January 31, 2012 and 2011 and changes is presented
below:                                                                                                                                                                                                                                                                                                        

| |                                        |  | Year Ended       |   |   | Year Ended       | 
| | -------------------------------------- |  | ---------------- | - | - | ---------------- | 
| |                                        |  | January 31, 2012 |   |   | January 31, 2011 | 
| |                                        |  |                  |   |   | Weighted         | 
| |                                        |  | Number of        |   |   | Average          | 
| |                                        |  | Options          |   |   | Exercise Price   | 
| |                                        |  |                  |   |   |                  | 
| | Options outstanding, beginning of year |  | 7,212,885        |   | $ | 0.89             | 
| | Granted                                |  | -                |   | $ | -                | 
| | Exercised                              |  | (270,000         | ) | $ | 0.57             | 
| | Cancelled/Expired                      |  | (4,345,385       | ) | $ | 0.84             | 
| | Options outstanding, end of year       |  | 2,597,500        |   | $ | 1.03             | 

The weighted average remaining life of
options outstanding at January 31, 2012 was 0.63 year.

Stock options outstanding are as
follows:

January 31, 2012
      
      
      January 31, 2011Exercise
      
      
      Number of
      
      
      
      
      
      Exercise
      
      
      Number ofExpiry Date
      
      Price
      
      
      Options
      
      
      Exercisable
      
      
      Price
      
      
      Options
      
      
      ExercisableApril 9, 2011
      
      -
      
      
      -
      
      
      -
      
      $
      0.60
      
      
      1,500,000
      
      
      1,500,000August 31, 2011
      
      -
      
      
      -
      
      
      -
      
      $
      0.50
      
      
      70,000
      
      
      70,000October 30, 2011
      
      -
      
      
      -
      
      
      -
      
      $
      0.45
      
      
      575,000
      
      
      575,000January 29, 2012
      
      -
      
      
      -
      
      
      -
      
      $
      1.09
      
      
      1,375,000
      
      
      1,375,000May 27, 2012
      $
      0.85
      
      
      1,352,500
      
      
      1,352,500
      
      $
      0.85
      
      
      1,825,000
      
      
      1,750,000November 3, 2012
      $
      1.35
      
      
      150,000
      
      
      150,000
      
      $
      1.35
      
      
      150,000
      
      
      150,000January 25, 2013
      $
      1.20
      
      
      1,095,000
      
      
      1,095,000
      
      $
      1.20
      
      
      1,500,000
      
      
      1,325,0002,597,500
      
      
      2,597,500
      
      
      
      
      
      6,995,000
      
      
      6,745,000July 26, 2011 (Agent
        options)
      
      -
      
      
      -
      
      
      -
      
      $
      1.05
      
      
      217,885
      
      
      217,8852,597,500
      
      
      2,597,500
      
      
      
      
      
      7,212,885
      
      
      6,962,885


No stock options were granted during
the year ended January 31, 2012. Share-based payment expense of $117,251 was
recorded for 200,000 options that vested during the year.

23

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|9. | SHARE-BASED PAYMENT RESERVE(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock options(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended January 31, 2011, the Company
      granted 3,550,000 stock options with a fair value of $2,033,490,
      calculated using the Black-Scholes option pricing model. Share-based
      payment charges for the year ended January 31, 2011 totalled $2,033,490,
      of which $1,061,516 was allocated to consulting fees, $280,110 was
      allocated to investor relations, $36,795 was allocated to professional
      fees, $9,604 was allocated to offices and miscellaneous expenses and
      $645,465 was allocated to interest in exploration properties.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The following weighted average assumptions were used for
      the Black-Scholes option pricing model
calculations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                   | January 31, | January 31,
| | --------------------------------- | ----------- | -----------
| |                                   | 2012        | 2011       
| |                                   |             |            
| | Risk-free interest rate           | N/A         | 1.72%      
| | Expected life of options/warrants | N/A         | 2 years    
| | Annualized volatility             | N/A         | 111.75%    
| | Dividend rate                     | N/A         | 0.00%      
| | Grant date fair value             | N/A         | $0.58      

Warrants

| |                            |  | January
      31, 2012 |   |   | January
      31, 2011 | 
| | -------------------------- |  | ---------------------- | - | - | ---------------------- | 
| |                            |  |                        |   |   | Weighted               | 
| |                            |  | Number of              |   |   | Average                | 
| |                            |  | Warrants               |   |   | Exercise Price         | 
| |                            |  |                        |   |   |                        | 
| | Balance, beginning of year |  | 12,087,589             |   | $ | 1.30                   | 
| | Exercised                  |  | (2,362,000             | ) | $ | 0.65                   | 
| | Expired                    |  | (9,725,589             | ) | $ | 0.65                   | 
| |                            |  |                        |   |   |                        | 
| | Balance, end of year       |  | -                      |   |   | -                      | 

At January 31, warrants were
outstanding as follows:

| |                |  | January
      31, 2012 |  |  | January
      31, 2011 | 
| | -------------- |  | ---------------------- |  |  | ---------------------- | 
| |                |  | Number of              |  |  |                        | 
| | Expiry Date    |  | Warrants               |  |  | Exercise Price         | 
| |                |  |                        |  |  |                        | 
| | March 31, 2011 |  | -                      |  |  | -                      | 
| | July 26, 2011  |  | -                      |  |  | -                      | 
| | July 29, 2011  |  | -                      |  |  | -                      | 
| |                |  | -                      |  |  |                        | 

24

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|10. | RELATED PARTY TRANSACTIONS AND BALANCES                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                        
|    | During the year ended January 31, 2012, the Company
      entered into the following transactions with related parties:
|    |                                                                                                                        
|    | Management
compensation                                                                                                

| | a) | Paid or accrued consulting fees of $161,200 (2011 -
      $297,540) to companies related to officers and directors, not including
      share-based payments.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                              
| | b) | Paid or accrued consulting fees of $387,015 (2011 -
      $223,274) to officers and directors.                                                               

Transactions with other related
parties

| | c) | Paid or accrued exploration expenditures of $112,305
      (2011 - $218,508), office and miscellaneous expenses of $139,390 (2011 -
      $35,401), professional fees of $21,840 (2011 - $Nil), regulatory expenses
      of $3,950 (2011 - $3,950), consulting fees of $3,000 (2011 - $138,842),
      travel and promotion expenses of $69,112 (2011 - $164,774), prepaid
      expenses of $Nil (2011 - $751) and investor relations expenses of $18,270
      (2011 - $9,281) to two companies with an officer and a director in common
      for reimbursement of expenditures.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | Amounts due to related parties is comprised of $350,271
      (2011 - $160,681) owed to three companies with a common officer or
      director for reimbursement of office expenses, regulatory expenses,
      professional fees, travel and promotion expenses, consulting fees,
      investor relations and exploration expenditures; $Nil (2011 - $45,248) to
      one company related to an officer; and $110,673 (2011 - $2,554) to two
      directors and an officer. The amounts due to related parties are unsecured
      and without interest or stated terms of repayment.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11. | EXPLORATION AND EVALUATION EXPENDITURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Exploration and evaluation costs incurred in the year
      ended January 31, 2012 were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                                       |   | Central Zone |  |   | North Zone |  |   | South Zone |  |   | Total     | 
| | ------------------------------------- | - | ------------ |  | - | ---------- |  | - | ---------- |  | - | --------- | 
| |                                       |   |              |  |   |            |  |   |            |  |   |           | 
| | Field expenses                        | $ | 454,292      |  | $ | -          |  | $ | -          |  | $ | 454,292   | 
| | Data acquisition and analysis         |   | 3,572,843    |  |   | -          |  |   | -          |  |   | 3,572,843 | 
| | Peruvian value added tax              |   | 90,356       |  |   | -          |  |   | -          |  |   | 90,356    | 
| | Land maintenance and tenure           |   | 294,333      |  |   | -          |  |   | -          |  |   | 294,333   | 
| | Personnel                             |   | 1,550,529    |  |   | -          |  |   | -          |  |   | 1,550,529 | 
| | Public relations                      |   | 436,298      |  |   | -          |  |   | -          |  |   | 436,298   | 
| | Survey and mapping                    |   | 21,962       |  |   | -          |  |   | -          |  |   | 21,962    | 
| | Travel                                |   | 180,842      |  |   | -          |  |   | -          |  |   | 180,842   | 
| |                                       |   |              |  |   |            |  |   |            |  |   |           | 
| | Total
      expenditures for the year | $ | 6,601,455    |  | $ | -          |  | $ | -          |  | $ | 6,601,455 | 

25

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|11. | EXPLORATION AND EVALUATION COSTS(contd)                                                          
|--- | ---------------------------------------------------------------------------------------------------
|    |                                                                                                    
|    | Exploration and evaluation costs incurred in the year
      ended January 31, 2011 were as follows:

| |                                       |   | Central Zone |  |   | North Zone |  |   | South Zone |  |   | Total     | 
| | ------------------------------------- | - | ------------ |  | - | ---------- |  | - | ---------- |  | - | --------- | 
| |                                       |   |              |  |   |            |  |   |            |  |   |           | 
| | Field expenses                        | $ | 1,628,007    |  | $ | -          |  | $ | -          |  | $ | 1,628,007 | 
| | Data acquisition and analysis         |   | 1,886,675    |  |   | -          |  |   | -          |  |   | 1,886,675 | 
| | Peruvian value added tax              |   | 159,600      |  |   | -          |  |   | -          |  |   | 159,600   | 
| | Land maintenance and tenure           |   | 130,216      |  |   | 52,229     |  |   | 58,100     |  |   | 240,545   | 
| | Personnel                             |   | 3,042,195    |  |   | -          |  |   | -          |  |   | 3,042,195 | 
| | Public relations                      |   | 390,198      |  |   | -          |  |   | -          |  |   | 390,198   | 
| | Survey and mapping                    |   | 249,251      |  |   | 231,550    |  |   | 307,044    |  |   | 787,845   | 
| | Travel                                |   | 1,606,199    |  |   | -          |  |   | -          |  |   | 1,606,199 | 
| |                                       |   |              |  |   |            |  |   |            |  |   |           | 
| | Total
      expenditures for the year | $ | 9,092,341    |  | $ | 283,779    |  | $ | 365,144    |  | $ | 9,741,264 | 

|12. | INCOME TAXES                                                                                                                                                            
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                         
|    | A reconciliation of income taxes at Canadian statutory
      rates of 26.38% (2011 - 28.33%) with the reported taxes is as follows for
      the years ended January 31:

| |                                                                              |   | 2012        |   |   | 2011        |  
| | ---------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                                              |   |             |   |   |             |  
| | Loss before income tax                                                       | $ | (17,091,671 | ) | $ | (13,728,240 | )
| | Canadian statutory
      rate                                                |   | 26.38%      |   |   | 28.33%      |  
| | Expected income tax recovery                                                 |   | (4,508,346  | ) |   | (3,889,406  | )
| | Difference in foreign tax rates                                              |   | (33,734     | ) |   | (12,478     | )
| | Share issue costs                                                            |   | (3,221      | ) |   | (27,634     | )
| | Other temporary differences                                                  |   | 1,981,440   |   |   | (119,269    | )
| | Permanent differences                                                        |   | 32,676      |   |   | 398,229     |  
| | Reduction in deferred income taxes resulting from statutory
      rate       |   | (93,077     | ) |   | 74,219      |  
| | reduction                                                                    |   |             |   |   |             |  
| | Tax effect of foreign exchange on assets and liabilities                     |   | (157,989    | ) |   | 103,715     |  
| | Unused tax losses and tax offsets not recognized as deferred
      tax asset |   | 2,782,251   |   |   | 3,472,624   |  
| |                                                                              | $ | -           |   | $ | -           |  

Effective January 1, 2011, the Canadian
federal corporate tax rate decreased from 18.0% to 16.5% and the British
Columbia provincial tax decreased from 10.5% to 10.0% . The overall reduction in
tax rates has resulted in a decrease in the Companys statutory tax rate from
28.33% to 26.38% .

26

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|12. | INCOME TAXES(contd)                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company recognizes tax benefits on losses or other
      deductible amounts generated in countries where the probable criteria for
      the recognition of deferred tax assets has been met. The balance of tax
      assets resulting from the Companys unrecognized deductible temporary
      differences and unused tax losses consist of the following
  amounts:

| |                                                                                       |   | 2012       |  |   | 2011       | 
| | ------------------------------------------------------------------------------------- | - | ---------- |  | - | ---------- | 
| | Carrying value less than income tax basis
      of interest in exploration properties | $ | 27,418,000 |  | $ | 20,334,000 | 
| | Carrying value less than income tax basis of fixed assets                             |   | 49,000     |  |   | 51,000     | 
| | Non-capital losses carried forward                                                    |   | 8,588,000  |  |   | 6,346,000  | 
| | Share issuance
      costs                                                            |   | 475,000    |  |   | 709,000    | 
| |                                                                                       | $ | 36,530,000 |  | $ | 27,440,000 | 

The deductible temporary differences do
not expire and the tax losses expire as follows:

| | Available to |   | Canada    |  |   | Foreign   |  |   | Total     | 
| | ------------ | - | --------- |  | - | --------- |  | - | --------- | 
| |              |   |           |  |   |           |  |   |           | 
| | 2013         | $ | -         |  | $ | 22,000    |  | $ | 22,000    | 
| | 2014         |   | -         |  |   | 104,000   |  |   | 104,000   | 
| | 2015         |   | -         |  |   | 272,000   |  |   | 272,000   | 
| | 2016         |   | -         |  |   | 749,000   |  |   | 749,000   | 
| | 2017         |   | -         |  |   | 931,000   |  |   | 931,000   | 
| | 2027         |   | 50,000    |  |   | -         |  |   | 50,000    | 
| | 2028         |   | 150,000   |  |   | -         |  |   | 150,000   | 
| | 2029         |   | 871,000   |  |   | -         |  |   | 871,000   | 
| | 2030         |   | 1,899,000 |  |   | -         |  |   | 1,899,000 | 
| | 2031         |   | 2,229,000 |  |   | -         |  |   | 2,229,000 | 
| | 2032         |   | 1,311,000 |  |   | -         |  |   | 1,311,000 | 
| |              | $ | 6,510,000 |  | $ | 2,078,000 |  | $ | 8,588,000 | 

|13. | SEGMENTED INFORMATION                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                             
|    | The business of the Company is the acquisition,
      exploration and development of exploration properties.
      Geographic
    information is as follows:

| |                                    |   | January 31, 2012 |  |   | January 31, 2011 | 
| | ---------------------------------- | - | ---------------- |  | - | ---------------- | 
| |                                    |   | Canada           |  |   | Peru             | 
| |                                    |   |                  |  |   |                  | 
| |                                    |   |                  |  |   |                  | 
| | Cash                               | $ | 59,865           |  | $ | 286              | 
| | Interest in exploration properties |   | -                |  |   | 6,309,565        | 
| | Other assets                       |   | 168,795          |  |   | 24,968           | 
| | Total assets                       | $ | 228,660          |  | $ | 6,334,819        | 

27

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|14. | CAPITAL MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company manages its capital structure, being its
      capital stock, and makes adjustments to it based on the funds available to
      the Company in order to support future business opportunities. 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 to sustain future development of the business.                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company currently has no source of revenues; as such
      the Company is dependent upon external financings to fund activities. In
      order to carry future projects and pay for administrative costs, the
      Company will spend its existing working capital and needs to raise
      additional funds. Management reviews its capital management approach on an
      ongoing basis and believes that this approach, given the relative size of
      the Company, is reasonable.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | There were no changes to the Companys approach to
      capital management during the year ended January 31, 2012. The Company is
      not subject to externally imposed capital requirements.                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|15. | SUBSIDIARIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The significant subsidiaries of Dorato Resources Inc.
      are:                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                                    |               |                 | Doratos effective    
| | ---------------------------------- | ------------- | --------------- | ----------------------
| |                                    | Country of    | Principal       | interest for          
| |                                    | Incorporation | Activity        | 2012
      and 2011   
| |                                    |               |                 |                       
| | Dorato Peru S.A.C.                 | Peru          | Mining company  | 100%                  
| | Compania Minera la Luminosa S.A.C. | Peru          | Holding company | 99%
      (2011  nil)

|16. | SUBSEQUENT EVENTS
|--- | -----------------
|    |                  
|    | a)               
|    |                  
|    | b)               
|    |                  
|    | c)               

28

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | An explanation of how the transition from previous GAAP
      to IFRS has affected the Companys financial position and comprehensive
      loss is set out in this note.                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | First Time Adoption of IFRS (IFRS 1)                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company adopted IFRS on February 1, 2011 with a
      transition date of February 1, 2010. Under IFRS 1, the IFRS standards are
      applied retrospectively at the transition date with all adjustments to
      assets and liabilities as stated under GAAP taken to deficit, with IFRS 1
      providing for certain optional and mandatory exemptions to this
      principle.
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | Below are the adjustments necessary for the Companys
      transition to IFRS, including exemptions taken at the transition
    date:                                                                                                                                                                                                                                                 

| |     | Share-based payment transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | IFRS 1 gives a first-time adopter the option to not apply
      IFRS 2 Share-based Paymentto (i) equity instruments that were
      granted for the periods on or before November 7, 2002 or after November 7,
      2002, but that vested before the date of transition to IFRS and (ii)
      liabilities arising from cash-settled share-based payment transactions if
      those liabilities were settled before January 1, 2005 or before the date
      of transition to IFRS.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The Company has elected this exemption and will apply
      IFRS 2 only to unvested stock options as at February 1, 2010, being the
      transition date.                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (a) | Business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | IFRS 1 allows that a first-time adopter may elect not to
      apply IFRS 3 Business Combinationsretrospectively to business
      combinations that occur before either the date of transition to IFRS or an
      alternative pre-transition date.                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The Company elected the business combinations exemption
      in IFRS 1 to not apply IFRS 3 retrospectively to past business
      combinations. Accordingly, the Company has not restated business
      combinations that took place prior to February 1, 2010.                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | Mineral exploration costs                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Similar to Canadian GAAP, IFRS allows the choice of
      either capitalizing or expensing exploration and evaluation costs related
      to mineral exploration. Under Canadian GAAP, the Companys policy was to
      capitalize mineral exploration costs, which included such costs as
      materials used, surveying costs, drilling costs, payments made to
      contractors, and depreciation on plant and equipment during the
      exploration phase.                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Under IFRS, the Companys policy is to charge exploration
      and evaluation costs incurred in the exploration phase to profit and loss
      until certain criteria have been met (see note 3).                                                                                                                                                                                                                                                                                   

The IFRS 1 mandatory exceptions applied
by the Company in the conversion from previous GAAP to IFRS included estimates.
In accordance with IFRS 1, an entitys estimates under IFRS at the date of
transition to IFRS must be consistent with estimates made for the same date
under pre-changeover Canadian GAAP unless those estimates were in error. The
Companys IFRS estimates as at February 1, 2010 are consistent with its Canadian
GAAP estimates as at that date.

29

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                                                                                                   
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                            
|    | Adjustments on transition to IFRS                                                                                                                                                                          
|    |                                                                                                                                                                                                            
|    | Adoption of IFRS resulted in changes to the Companys
      consolidated statements of financial position, operations and
      comprehensive loss, cash flows, and changes in equity as set out
    below:

a)Share-based payment transactions

The following changes are a result of
IFRS requiring use of the graded vesting method to record the fair value of
share-based payments, whereas under GAAP allowed use of the straight-line
method. Options granted to non-employees were re-evaluated for all tranches on
the respective vesting dates and share-based payment expense was adjusted to
recognize the revaluation and timing.

At the IFRS transition date, the
Company recorded a $26,786 increase to share-based payment reserve and a
corresponding $26,786 increase to deficit.

For the year ended January 31, 2011,
the transition to IFRS resulted in a $9,856 decrease to investor relations
expense for share-based payments with a resulting $9,856 decrease to net loss,
and a corresponding $9,856 decrease to deficit. A $16,930 increase to deficit
for share-based payments with a resulting $16,930 decrease to share-based
payment reserve for the timing of graded vesting. As a result of the change in
accounting policy to expense mineral exploration expenditures described below,
cash flows used in operating activities increased by $635,609 resulting from
share-based payment expense previously capitalized to interest in mineral
properties in accordance with Canadian GAAP, and now included in net loss for
the year.

b)Mineral exploration costs

At the IFRS transition date, the
Company elected to make a change in accounting policy to:

| | i)  | Once the legal right to explore a property has been
      acquired, costs directly related to the acquisition of mineral property
      rights are capitalized, on an area-of-interest basis. Subsequently, the
      mineral property rights are carried at cost, less any impairment, until
      such time as the assets are substantially ready for their intended use or
      sale, being commercial production at operating levels intended by
      management.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ii) | Exploration expenditures incurred during the exploration
      and evaluation phase are expensed as incurred and included in profit or
      loss.                                                                                                                                                                                                                                                                                                                     

At the IFRS transition date, the
Company recorded a $10,959,085 decrease to interests in exploration properties
and a corresponding $10,959,085 increase to deficit. For the year ended January
31, 2011, the transition to IFRS resulted in the Company recording a $20,700,349
decrease to interests in exploration properties and a corresponding $20,700,349
increase to deficit. Exploration expenditures for the year ended January 31,
2011 increased from $nil to $9,741,264.

On the statement of cash flows for the
year ended January 31, 2011, there is a decrease to investing activities of
$9,124,199 resulting from the change in accounting policy with the adoption of
IFRS, to expensing exploration expenditures. Accounts payable for non-cash items
changed by $28,401 as expensed exploration expenditures are now included in
operating activities.

c)     Foreign
exchange

Under IAS 21, each entity in a group
must be analyzed, through application of primary and secondary factors, to
determine its functional currency. Based on this assessment, the functional
currency of each of the entities in the group is the Canadian dollar. Under
Canadian GAAP, the parent entity had a Canadian dollar presentation currency and
all subsidiaries were integrated. The presentation currency will continue to be
Canadian dollar.

30

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Adjustments on transition to IFRS
    (contd...)                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Deferred income tax                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Under IFRS, deferred tax is recognized on the difference
      between the accounting basis and tax basis of all items. Under Canadian
      GAAP, deferred tax assets or liabilities were not recognized for
      differences arising between the historical exchange rate and the current
      exchange rate to translate the cost of non-monetary assets or liabilities
      of integrated foreign operations.                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | For foreign currency non-monetary assets or liabilities
      where the tax basis currency differs from the functional currency of the
      entity, foreign exchange differences will result in deferred tax assets or
      liabilities, which were not previously recognized under Canadian GAAP.
      This difference results in added volatility to deferred tax expense as
      foreign exchange rates change.                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | IAS 12 does not permit recognition of temporary
      differences on the initial acquisition of assets that do not constitute a
      business combination. There was no similar prohibition under Canadian
      GAAP. Deferred taxes arising from temporary differences on initial
      recognition have been reversed against mineral properties, property, plant
      and equipment and deficit. No liability has arisen as a result of this
      change.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Reconciliation to previously reported financial
      statements                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | IFRS 1 requires an entity to reconcile equity,
      comprehensive income and cash flows for prior periods. A reconciliation of
      the above noted changes is included in the following consolidated
      statements of financial position, operations and comprehensive loss, and
      cash flows for the dates and periods noted
below.                                                                                                                  

| |  | Transitional Consolidated
      Statement of Financial Position Reconciliation  February 1, 2010  
| | - | ---------------------------------------------------------------------------------------------------
| |  | Consolidated Statement of
      Financial Position Reconciliation  January 31, 2011               
| |  | Consolidated Statement of
      Operations and Comprehensive Loss Reconciliation  January 31, 2011
| |  | Consolidated Statement of Cash
      Flows Reconciliation  January 31, 2011.                      

31

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                                        
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                 
|    | The February 1, 2010 Canadian GAAP transitional
      consolidated statement of financial position has been reconciled to IFRS
      as follows:

| |                                                |   |                  |   |   | Effect of Transition |   |     |   |                  |  
| | ---------------------------------------------- | - | ---------------- | - | - | -------------------- | - | --- | - | ---------------- | -
| |                                                |   | February 1, 2010 |   |   | to
      IFRS        |   | Ref |   | February 1, 2010 |  
| |                                                |   | CDN GAAP         |   |   |                      |   |     |   | IFRS             |  
| | ASSETS                                         |   |                  |   |   |                      |   |     |   |                  |  
| | Current                                        |   |                  |   |   |                      |   |     |   |                  |  
| | Cash                                           | $ | 15,868,072       |   | $ | -                    |   |     | $ | 15,868,072       |  
| | Accounts receivable                            |   | 75,941           |   |   | -                    |   |     |   | 75,941           |  
| | Prepaid expenses                               |   | 15,844           |   |   | -                    |   |     |   | 15,844           |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| |                                                |   | 15,959,857       |   |   | -                    |   |     |   | 15,959,857       |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| | Property and equipment                         |   | 72,424           |   |   | -                    |   |     |   | 72,424           |  
| | Exploration advances                           |   | 108,890          |   |   | -                    |   |     |   | 108,890          |  
| | Interests in exploration properties            |   | 24,243,652       |   |   | (10,959,085          | ) | (b) |   | 13,284,567       |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| |                                                | $ | 40,384,823       |   | $ | (10,959,085          | ) |     | $ | 29,425,738       |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| | LIABILITIES AND SHAREHOLDERS'
      EQUITY     |   |                  |   |   |                      |   |     |   |                  |  
| | Current                                        |   |                  |   |   |                      |   |     |   |                  |  
| | Accounts payable and accrued
      liabilities | $ | 345,398          |   | $ | -                    |   |     | $ | 345,398          |  
| | Due to related parties                         |   | 42,308           |   |   | -                    |   |     |   | 42,308           |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| |                                                |   | 387,706          |   |   | -                    |   |     |   | 387,706          |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| | Shareholders' equity                           |   |                  |   |   |                      |   |     |   |                  |  
| | Capital stock                                  |   | 49,160,012       |   |   | -                    |   |     |   | 49,160,012       |  
| | Share-based payment reserve                    |   | 4,690,878        |   |   | 26,786               |   | (a) |   | 4,717,664        |  
| | Deficit                                        |   | (13,853,773      | ) |   | (26,786              | ) | (a) |   | (24,839,644      | )
| |                                                |   |                  |   |   | (10,959,085          | ) | (b) |   |                  |  
| |                                                |   | 39,997,117       |   |   | (10,959,085          | ) |     |   | 29,038,032       |  
| |                                                |   |                  |   |   |                      |   |     |   |                  |  
| |                                                | $ | 40,384,823       |   | $ | (10,959,085          | ) |     | $ | 29,425,738       |  

32

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                
|    | The January 31, 2011 Canadian GAAP consolidated statement
      of financial position has been reconciled to IFRS as
  follows:

| |                                                |   |                  |   |   | Effect
      of Transition |   |     |   |                  |  
| | ---------------------------------------------- | - | ---------------- | - | - | -------------------------- | - | --- | - | ---------------- | -
| |                                                |   | January 31, 2011 |   |   | to
      IFRS              |   | Ref |   | January 31, 2011 |  
| |                                                |   | CDN GAAP         |   |   |                            |   |     |   | IFRS             |  
| | ASSETS                                         |   |                  |   |   |                            |   |     |   |                  |  
| | Current                                        |   |                  |   |   |                            |   |     |   |                  |  
| | Cash                                           | $ | 6,904,719        |   | $ | -                          |   |     | $ | 6,904,719        |  
| | Accounts receivable                            |   | 70,821           |   |   | -                          |   |     |   | 70,821           |  
| | Prepaid expenses                               |   | 28,413           |   |   | -                          |   |     |   | 28,413           |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| |                                                |   | 7,003,953        |   |   | -                          |   |     |   | 7,003,953        |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| | Property and equipment                         |   | 62,391           |   |   | -                          |   |     |   | 62,391           |  
| | Exploration advances                           |   | 111,579          |   |   | -                          |   |     |   | 111,579          |  
| | Interests in exploration properties            |   | 34,690,834       |   |   | (20,700,349                | ) | (b) |   | 13,990,485       |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| |                                                | $ | 41,868,757       |   | $ | (20,700,349                | ) |     | $ | 21,168,408       |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| | LIABILITIES AND
      SHAREHOLDERS' EQUITY     |   |                  |   |   |                            |   |     |   |                  |  
|
| | Current                                        |   |                  |   |   |                            |   |     |   |                  |  
| | Accounts payable and accrued
      liabilities | $ | 334,300          |   | $ | -                          |   |     | $ | 334,300          |  
| | Due to related parties                         |   | 208,483          |   |   | -                          |   |     |   | 208,483          |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| |                                                |   | 542,783          |   |   | -                          |   |     |   | 542,783          |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| | Shareholders' equity                           |   |                  |   |   |                            |   |     |   |                  |  
| | Capital stock                                  |   | 53,339,099       |   |   | -                          |   |     |   | 53,339,099       |  
| | Share-based payment reserve                    |   | 5,837,480        |   |   | 16,930                     |   | (a) |   | 5,854,410        |  
| | Deficit                                        |   | (17,850,605      | ) |   | (16,930                    | ) | (a) |   | (38,567,884      | )
| |                                                |   |                  |   |   | (20,700,349                | ) | (b) |   |                  |  
| |                                                |   | 41,325,974       |   |   | (20,700,349                | ) |     |   | 20,625,625       |  
| |                                                |   |                  |   |   |                            |   |     |   |                  |  
| |                                                | $ | 41,868,757       |   | $ | (20,700,349                | ) |     | $ | 21,168,408       |  

33

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                      
|    | The Canadian GAAP consolidated statement of operations
      and comprehensive loss for the year ended January 31, 2011 has been
      reconciled to IFRS as follows:

| |                                                            |   | January 31, |   |   | Effect
      of Transition |   |     |   | January 31, |  
| | ---------------------------------------------------------- | - | ----------- | - | - | -------------------------- | - | --- | - | ----------- | -
| |                                                            |   | 2011        |   |   | to
      IFRS              |   | Ref |   | 2011        |  
| |                                                            |   | CDN GAAP    |   |   |                            |   |     |   | IFRS        |  
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | EXPENSES                                                   |   |             |   |   |                            |   |     |   |             |  
| | Depreciation                                               | $ | 21,682      |   | $ | -                          |   |     | $ | 21,682      |  
| | Consulting fees                                            |   | 2,002,486   |   |   | -                          |   |     |   | 2,002,486   |  
| | Exploration and
      evaluation expenditures              |   | -           |   |   | 9,741,264                  |   | (b) |   | 9,741,264   |  
| | Investor relations                                         |   | 861,887     |   |   | (9,856                     | ) | (a) |   | 852,031     |  
| | Office and
      miscellaneous                             |   | 343,194     |   |   | -                          |   |     |   | 343,194     |  
| | Professional fees                                          |   | 476,101     |   |   | -                          |   |     |   | 476,101     |  
| | Property investigations                                    |   | 37,750      |   |   | -                          |   |     |   | 37,750      |  
| | Regulatory                                                 |   | 108,731     |   |   | -                          |   |     |   | 108,731     |  
| | Travel and promotion                                       |   | 270,628     |   |   | -                          |   |     |   | 270,628     |  
| | Wages and benefits                                         |   | 139,341     |   |   | -                          |   |     |   | 139,341     |  
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | Loss before other items                                    |   | (4,261,800  | ) |   | (9,731,408                 | ) |     |   | (13,993,208 | )
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | OTHER ITEMS                                                |   |             |   |   |                            |   |     |   |             |  
| | Gain on foreign
      exchange                             |   | 259,129     |   |   | -                          |   |     |   | 259,129     |  
| | Interest income                                            |   | 5,839       |   |   | -                          |   |     |   | 5,839       |  
| |                                                            |   | 264,968     |   |   | -                          |   |     |   | 264,968     |  
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | Net loss and comprehensive loss for the year               | $ | (3,996,832  | ) | $ | (9,731,408                 | ) |     | $ | (13,728,240 | )
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | Basic and diluted loss per share                           | $ | (0.06       | ) |   |                            |   |     | $ | (0.20       | )
| |                                                            |   |             |   |   |                            |   |     |   |             |  
| | Weighted average number of common shares
      outstanding |   | 69,372,422  |   |   |                            |   |     |   | 69,372,422  |  

34

---

|DORATO RESOURCES INC.                         
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|Years Ended January 31, 2012 and 2011         
|(Expressed in Canadian dollars)               
|                                              

|17. | TRANSITION TO INTERNATIONAL FINANCIAL REPORTING
      STANDARDS(contd)                                                                      
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                               
|    | The Canadian GAAP consolidated statement of cash flows
      for the year ended January 31, 2011 has been reconciled to IFRS as
      follows:

| |                                                |   | January 31, |   |   | Effect
      of Transition |   |     |   | January 31, |  
| | ---------------------------------------------- | - | ----------- | - | - | -------------------------- | - | --- | - | ----------- | -
| |                                                |   | 2011        |   |   | to
      IFRS              |   | Ref |   | 2011        |  
| |                                                |   | CDN GAAP    |   |   |                            |   |     |   | IFRS        |  
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Operating activities                           |   |             |   |   |                            |   |     |   |             |  
| | Net loss for the year                          | $ | (3,996,832  | ) | $ | (9,731,408                 | ) |     | $ | (13,728,240 | )
| | Add items not affecting cash                   |   |             |   |   |                            |   |     |   |             |  
| | Depreciation                                   |   | 21,682      |   |   |                            |   |     |   | 21,682      |  
| | Share-based payments                           |   | 1,397,881   |   |   | 635,609                    |   | (a) |   | 2,033,490   |  
| | Unrealized loss on foreign exchange            |   | 75,020      |   |   | (5,687                     | ) | (c) |   | 69,333      |  
| | Changes in non-cash items                      |   |             |   |   |                            |   |     |   |             |  
| | Accounts
      receivable                      |   | 5,120       |   |   | 4,401                      |   | (c) |   | 9,521       |  
| | Prepaid expenses                               |   | (12,569     | ) |   | -                          |   |     |   | (12,569     | )
| | Accounts
      payable and accrued liabilities |   | 17,303      |   |   | (29,903                    | ) | (c) |   | (12,500     | )
| | Due to related parties                         |   | 166,175     |   |   | -                          |   |     |   | 166,175     |  
| | Cash used in operating activities              |   | (2,326,220  | ) |   | (9,126,888                 | ) |     |   | (11,453,108 | )
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Investing activities                           |   |             |   |   |                            |   |     |   |             |  
| | Exploration advances                           |   | (2,689      | ) |   | 2,689                      |   | (b) |   | -           |  
| | Expenditures on
      exploration properties   |   | (9,398,118  | ) |   | 9,124,199                  |   | (b) |   | (273,919    | )
| | Purchase of equipment                          |   | (11,649     | ) |   | -                          |   |     |   | (11,649     | )
| | Cash used in investing activities              |   | (9,412,456  | ) |   | 9,126,888                  |   |     |   | (285,568    | )
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Financing activities                           |   |             |   |   |                            |   |     |   |             |  
| | Issuance of capital stock                      |   | 2,929,787   |   |   | -                          |   |     |   | 2,929,787   |  
| | Share issuance costs                           |   | (79,444     | ) |   | -                          |   |     |   | (79,444     | )
| | Cash provided
      by financing activities    |   | 2,850,343   |   |   | -                          |   |     |   | 2,850,343   |  
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Effect of cash
      on foreign exchange       |   | (75,020     | ) |   | -                          |   |     |   | (75,020     | )
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Decrease in cash and cash equivalents          |   | (8,963,353  | ) |   | -                          |   |     |   | (8,963,353  | )
| | Cash and cash equivalents, beginning of year   |   | 15,868,072  |   |   | -                          |   |     |   | 15,868,072  |  
| |                                                |   |             |   |   |                            |   |     |   |             |  
| | Cash and cash equivalents, end of year         | $ | 6,904,719   |   |   | -                          |   |     | $ | 6,904,719   |  

The adoption of IFRS has had no impact
on the Companys actual cash flows. The changes made to the consolidated
statements of operations and comprehensive losshas resulted in
reclassifications of various amounts on the consolidated statement of cash
flows.

35

---

ITEM
18.FINANCIAL STATEMENTS

Not applicable.

ITEM 19.EXHIBITS

|1.1(1)  | Articles effective
        August 21, 2006.                                                                                                                                                                                                 
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                             
|4.1(2)  | Option Agreement
        with Jose Clemente Contreras Centeno and Ylmany Diomar Barrenechea Solis
        dated July 7, 2010 whereby we were granted the option to earn a 100% interest
        in the Cangaza Property.                    
|        |                                                                                                                                                                                                                                             
|4.2(2)  | Option Agreement
        with Michelle Berendson Berninzon dated June 11, 2010 whereby we were
        granted the option to earn a 100% interest in the Marita Property.                                                                   
|        |                                                                                                                                                                                                                                             
|4.3(2)  | Option Agreement
        with Carlos Ballon Barraza dated October 18, 2007 whereby we were granted
        the option to earn a 100% interest in the Vicmarama Property.                                                                    
|        |                                                                                                                                                                                                                                             
|4.4(2)  | Option Agreement
        with Carlos Ballon Barraza dated October 18, 2007 whereby we were granted
        the option to earn a 100% interest in the Maravilla Property.                                                                    
|        |                                                                                                                                                                                                                                             
|4.5(2)  | Option Agreement
        with Carlos Ballon Barraza dated October 18, 2007 whereby we were granted
        the option to earn a 100% interest in the Lahaina 2 Property.                                                                    
|        |                                                                                                                                                                                                                                             
|4.6(2)  | Option Agreement
        with Carlos Ballon Barraza dated October 18, 2007 whereby we were granted
        the option to earn a 100% interest in the Lahaina 1 Property.                                                                    
|        |                                                                                                                                                                                                                                             
|4.7(3)  | Royalty Option
        Agreement between Dorato Resources Inc. and Franco-Nevada Corporation
        dated August 18, 2008.                                                                                                                 
|        |                                                                                                                                                                                                                                             
|4.8(3)  | First Amendment
        to the Royalty Option Agreement between Dorato Resources Inc. and Franco-
        Nevada Corporation dated March 30, 2009.                                                                                          
|        |                                                                                                                                                                                                                                             
|4.9(3)  | Stock Option
        Plan.                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                             
|4.10    | Option
        Agreement with Sociedad Minera de Responsabilidad Limitada La Luminose
        de Cajamarca (Luminosa) dated September 16, 2011 whereby we
        were granted the option to earn a 100% interest in the Deborah Property.
|        |                                                                                                                                                                                                                                             
|8.1     | List of Subsidiaries
        (incorporated by reference to Item 4.C  Organizational Structure)                                                                                                                                             
|        |                                                                                                                                                                                                                                             
|11.1(1) | Code of Ethics.                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                             
|12.1    | Certification
        of the Chief Executive Officer Pursuant To Rule 13a-14 Or 15d-14 of the
        Securities Exchange Act Of 1934, as adopted pursuant to
        Section 302 of the Sarbanes-Oxley Act of 2002.                        
|        |                                                                                                                                                                                                                                             
|12.2    | Certification
        of the Chief Financial Officer Pursuant To Rule 13a-14 Or 15d-14 of the
        Securities Exchange Act of 1934, as adopted pursuant to
        Section 302 of the Sarbanes-Oxley Act of 2002.                        
|        |                                                                                                                                                                                                                                             
|13.1    | Certification
        of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                       
|        |                                                                                                                                                                                                                                             
|13.2    | Certification
        of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                       

|(1) | Incorporated by reference from our Annual Report on
      Form 20-F filed on May 24, 2007 with the Securities and Exchange
      Commission.  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                               
|(2) | Incorporated by reference from our Annual Report on
      Form 20-F filed on August 1, 2008 with the Securities and Exchange
      Commission.

---

SIGNATURES

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.

DORATO RESOURCES INC.

| | /s/ | Rowland Perkins        
| | --- | -----------------------
| | By: | Rowland Perkins,       
| |     | Interim President & CEO

|Date: | June 13, 2012 | 
|----- | ------------- | 

---