----

| “David                Adamson” |   | “Robert                Lewis” |
|--------------------------------------------|--------|-------------------------------------------|
| David                Adamson               |   | Robert                Lewis               |
| President                                  |   | Chief                Financial Officer    |

----

----

|                                                                                          |   | As                at December 31 |        |
|-----------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|
|                                                                                          |   | 2007                             |        |   | 2006 |   |
| Assets                                                                                        |   |                             |        |   |   |   |
| Current                assets                                                                 |   |                             |        |   |   |   |
| Cash                and cash equivalents                                                      |   | $                                | 14,791,309  |   |   | $ | 7,233,680 |   |
| Temporary                investments (note 6)                                                 |   |                             | 15,082,513  |   |   |   | 4,019,398 |   |
| Amounts                receivable                                                             |   |                             | 1,708,000   |   |   |   | 1,218,865 |   |
| Prepaid                expenses                                                               |   |                             | 43,498      |   |   |   | 28,748 |   |
|                                                                                          |   |                             | 31,625,320  |   |   |   | 12,500,691 |   |
|                                                                                          |   |                             |        |   |   |   |   |   |
| Investment                in companies                spun-off (note 3)                       |   |                             | 439,629     |   |   |   | 2,147,933 |   |
| Equipment                (note                7)                                              |   |                             | 157,786     |   |   |   | 89,450 |   |
| Other                investments (note                8)                                      |   |                             | 2,637,877   |   |   |   | 1,435,227 |   |
| Mineral                property costs                (note 9) (schedule)                      |   |                             | 66,157,058  |   |   |   | 15,712,278 |   |
|                                                                                          |   | $                                | 101,017,670 |   |   | $ | 31,885,579 |   |
|                                                                                          |   |                             |        |   |   |   |   |   |
| Liabilities                                                                                   |   |                             |        |   |   |   |   |   |
| Current                Liabilities                                                            |   |                             |        |   |   |   |   |   |
| Accounts                payable and accrued liabilities                                       |   | $                                | 811,130     |   |   | $ | 824,066 |   |
| Corporate                income tax payable (note 12)                                         |   |                             | 74,000      |   |   |   | 152,000 |   |
|                                                                                          |   |                             | 885,130     |   |   |   | 976,066 |   |
|                                                                                          |   |                             |        |   |   |   |   |   |
|   Future                Income Taxes                (note 12)                       |   |                             | 14,774,288  |   |   |   | - |   |
| Shareholders’                equity                                                     |   |                             |        |   |   |   |   |   |
| Share                capital (note 10(a))                                                     |   |                             | 103,572,229 |   |   |   | 47,991,901 |   |
| Contributed                surplus (note 10(b))                                               |   |                             | 3,082,261   |   |   |   | 2,547,075 |   |
| Deficit                                                                                       |   |                             | (21,845,844 | ) |   |   | (19,629,463 | ) |
| Accumulated                other comprehensive income (note 11)                               |   |                             | 549,606     |   |   |   | - |   |
|                                                                                          |   |                             | 85,358,252  |   |   |   | 30,909,513 |   |
|                                                                                          |   | $                                | 101,017,670 |   |   | $ | 31,885,579 |   |
| See                accompanying notes to the consolidated financial                statements |   |                             |        |   |   |   |   |   |

| Commitments                (Note 14)       |
|--------------------------------------------|
| Subsequent                events (Note 17) |

| Approved                by the Board of Directors: |   |                                         |
|----------------------------------------------------|--------|----------------------------------------------|
| “David                Adamson”         |   | “John                R. Brodie”  |
| David                Adamson, Director             |   | John                R. Brodie, FCA, Director |

|                                                                                           |   | For                the years ended December 31 |        |
|------------------------------------------------------------------------------------------------|--------|------------------------------------------------|-------------|
|                                                                                           |   | 2007                                           |        |   | 2006 |   |   | 2005 |   |
|                                                                                           |   |                                           |        |   |   |   |   |   |   |
| Expenses                                                                                       |   |                                           |        |   |   |   |   |   |   |
| Amortization                                                                                   |   | $                                              | 52,304      |   |   | $ | 21,442 |   |   | $ | 17,412 |   |
| Consulting                                                                                     |   |                                           | 85,569      |   |   |   | 95,346 |   |   |   | 138,847 |   |
| General                mineral exploration                                                     |   |                                           | 189,027     |   |   |   | 236,278 |   |   |   | 283,391 |   |
| Investor                relations                                                              |   |                                           | 397,115     |   |   |   | 592,141 |   |   |   | 496,172 |   |
| Office                                                                                         |   |                                           | 270,288     |   |   |   | 221,251 |   |   |   | 218,868 |   |
| Professional                fees                                                               |   |                                           | 353,126     |   |   |   | 281,364 |   |   |   | 304,741 |   |
| Rent                                                                                           |   |                                           | 54,586      |   |   |   | 81,207 |   |   |   | 84,418 |   |
| Salaries                                                                                       |   |                                           | 1,032,130   |   |   |   | 784,731 |   |   |   | 629,701 |   |
| Stock-based                compensation (notes 4 and 10(b))                                    |   |                                           | 576,605     |   |   |   | 220,964 |   |   |   | 683,671 |   |
| IPO                costs of subsidiary                                                         |   |                                           | -           |   |   |   | - |   |   |   | 2,913 |   |
| Re-organization                costs (note 3)                                                  |   |                                           | 64,691      |   |   |   | 925,439 |   |   |   | 129,210 |   |
| Transfer                agent and regulatory filing fees                                       |   |                                           | 130,141     |   |   |   | 103,383 |   |   |   | 112,797 |   |
| Travel                and accommodation                                                        |   |                                           | 122,457     |   |   |   | 41,000 |   |   |   | 28,804 |   |
| Write-off                of deferred property costs                                            |   |                                           | 224,696     |   |   |   | 258,823 |   |   |   | 1,715,674 |   |
|                                                                                           |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Loss                before other items:                                                        |   |                                           | (3,552,735  | ) |   |   | (3,863,369 | ) |   |   | (4,846,619 | ) |
| Interest                and miscellaneous income                                               |   |                                           | 941,330     |   |   |   | 355,300 |   |   |   | 82,232 |   |
| Option                and administration fees in excess of property costs                      |   |                                           | 317,801     |   |   |   | 448,998 |   |   |   | 119,606 |   |
| Gain                on sales of investments                                                    |   |                                           | 7,822       |   |   |   | 128,880 |   |   |   | 76,765 |   |
| Other                gains and losses                                                          |   |                                           | 128,779     |   |   |   | 142,223 |   |   |   | 101,251 |   |
| Loss                on disposal of equipment                                                   |   |                                           | -           |   |   |   | (3,226 | ) |   |   | - |   |
| Loss                on equity investments                                                      |   |                                           | (75,938     | ) |   |   | (1,338,877 | ) |   |   | (288,323 | ) |
| Current                income tax expense                                                      |   |                                           | (7,000      | ) |   |   | (152,000 | ) |   |   | - |   |
| Future                income tax recovery (note 12)                                            |   |                                           | 23,560      |   |   |   | 477,400 |   |   |   | 1,043,943 |   |
| Allocation                of subsidiary’s loss to minority interest                      |   |                                           | -           |   |   |   | 16,751 |   |   |   | 66,861 |   |
|                                                                                           |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Net                loss for the year                                                           |   |                                           | (2,216,381  | ) |   |   | (3,787,920 | ) |   |   | (3,644,284 | ) |
| Deficit,                beginning of year                                                      |   |                                           | (19,629,463 | ) |   |   | (15,841,543 | ) |   |   | (12,197,259 | ) |
| Deficit,                end of year                                                            |   | $                                              | (21,845,844 | ) |   | $ | (19,629,463 | ) |   | $ | (15,841,543 | ) |
|                                                                                           |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Basic                and diluted loss per                common share                          |   | $                                              | (0.02       | ) |   | $ | (0.05 | ) |   | $ | (0.06 | ) |
| Weighted                average number of common shares outstanding                            |   |                                           | 118,158,856 |   |   |   | 73,500,891 |   |   |   | 60,223,727 |   |
| See                accompanying notes to the consolidated financial                statements. |   |                                           |        |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                   |   | For                the years ended December 31 |        |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|-------------|
|                                                                                                                                   |   | 2007                                           |        |   | 2006 |   |   | 2005 |   |
|                                                                                                                                   |   |                                           |        |   |   |   |   |   |   |
| Net                Loss for the year                                                                                                   |   | $                                              | (2,216,381  | ) |   | $ | (3,787,920 | ) |   | $ | (3,644,284 | ) |
|                                                                                                                                   |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income                                                                                              |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Fair                value adjustment to financial instruments:                                                                         |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Temporary                investments                                                                                                   |   |                                           | (19,852     | ) |   |   | - |   |   |   | - |   |
| Investments                in public company shares                                                                                    |   |                                           | 784,505     |   |   |   | - |   |   |   | - |   |
| Change                in fair value of investment in spun-off companies                                                                |   |                                           | (423,600    | ) |   |   | - |   |   |   | - |   |
| Other                comprehensive income in the year                                                                                  |   |                                           | 341,053     |   |   |   | - |   |   |   | - |   |
| Comprehensive                loss for the year                                                                                         |   |                                           | (1,875,328  | ) |   |   | (3,787,920 | ) |   |   | (3,644,284 | ) |
|                                                                                                                                   |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Adjustment                to accumulated other                comprehensive income on adoption of new standard (note                5) |   |                                           | 208,553     |   |   |   | - |   |   |   | - |   |
| Accumulated                comprehensive loss, beginning of the year                                                                   |   |                                           | (19,629,463 | ) |   |   | (15,841,543 | ) |   |   | (12,197,259 | ) |
| Accumulated                comprehensive loss, end of the year*                                                                        |   | $                                              | (21,296,238 | ) |   | $ | (19,629,463 | ) |   | $ | (15,841,543 | ) |
| *                Comprised of operating deficit and accumulated other comprehensive                income                              |   |                                           |        |   |   |   |   |   |   |   |   |   |
|                                                                                                                                   |   |                                           |        |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to the consolidated financial                statements.                                         |   |                                           |        |   |   |   |   |   |   |   |   |   |

----

|                                                                      |   | For                the years ended December 31 |        |
|---------------------------------------------------------------------------|--------|------------------------------------------------|-------------|
|                                                                      |   | 2007                                           |        |   | 2006 |   |   | 2005 |   |
| Cash                Provided by (Used for):                               |   |                                           |        |   |   |   |   |   |   |
| Operating                Activities                                       |   |                                           |        |   |   |   |   |   |   |
| Net                loss for the year                                      |   | $                                              | (2,216,381  | ) |   | $ | (3,787,920 | ) |   | $ | (3,644,284 | ) |
| Adjustment                for items which do not involve cash:            |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Amortization                                                              |   |                                           | 52,304      |   |   |   | 21,442 |   |   |   | 17,412 |   |
| Stock-based                compensation                                   |   |                                           | 576,605     |   |   |   | 220,964 |   |   |   | 683,671 |   |
| Write-off                of deferred property costs                       |   |                                           | 224,696     |   |   |   | 258,823 |   |   |   | 1,715,674 |   |
| Gain                on sale of investments                                |   |                                           | (176,201    | ) |   |   | (271,103 | ) |   |   | (76,765 | ) |
| Loss                on disposal of equipment                              |   |                                           | -           |   |   |   | 3,226 |   |   |   | - |   |
| Loss                on equity investments                                 |   |                                           | 75,938      |   |   |   | 1,338,877 |   |   |   | 288,323 |   |
| Interest                and miscellaneous income                          |   |                                           | 135,318     |   |   |   | 35,318 |   |   |   | - |   |
| Future                income tax recovery                                 |   |                                           | (23,560     | ) |   |   | (477,400 | ) |   |   | (1,043,943 | ) |
| Allocation                of subsidiary’s loss to minority interest |   |                                           | -           |   |   |   | (16,751 | ) |   |   | (66,861 | ) |
|                                                                      |   |                                           | (1,351,281  | ) |   |   | (2,674,524 | ) |   |   | (2,126,773 | ) |
| Changes                in non-cash working capital components:            |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Prepaid                expenses                                           |   |                                           | (14,750     | ) |   |   | (9,665 | ) |   |   | 40,829 |   |
| Amounts                receivable                                         |   |                                           | (157,694    | ) |   |   | (293,247 | ) |   |   | (663,479 | ) |
| Accounts                payable and accrued liabilities                   |   |                                           | 66,749      |   |   |   | (499,095 | ) |   |   | (525,011 | ) |
| Corporate                tax payable                                      |   |                                           | (78,000     | ) |   |   | 152,000 |   |   |   | - |   |
|                                                                      |   |                                           | (1,534,976  | ) |   |   | (3,324,531 | ) |   |   | (3,274,434 | ) |
| Investing                Activities*                                      |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Temporary                investments                                      |   |                                           | (11,218,285 | ) |   |   | (4,019,398 | ) |   |   | - |   |
| Deferred                property costs                                    |   |                                           | (11,415,083 | ) |   |   | (3,661,518 | ) |   |   | (6,354,538 | ) |
| Purchase                of equipment                                      |   |                                           | (120,640    | ) |   |   | (82,592 | ) |   |   | (12,036 | ) |
| Proceeds                on disposal of equipment                          |   |                                           | -           |   |   |   | 3,750 |   |   |   | - |   |
| Purchase                of investments                                    |   |                                           | (24,190     | ) |   |   | (870,845 | ) |   |   | (4,151,793 | ) |
| Proceeds                on sales of investments                           |   |                                           | 1,659,211   |   |   |   | 755,758 |   |   |   | 804,233 |   |
|                                                                      |   |                                           | (21,118,987 | ) |   |   | (7,874,845 | ) |   |   | (9,714,134 | ) |
| Financing                Activities*                                      |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Common                shares issued for cash                              |   |                                           | 27,737,051  |   |   |   | 13,904,766 |   |   |   | 8,200,368 |   |
| Share                issue costs                                          |   |                                           | (534,122    | ) |   |   | (876,764 | ) |   |   | (902,328 | ) |
| Recovery                of property costs incurred                        |   |                                           | 2,844,874   |   |   |   | 2,430,434 |   |   |   | 1,495,182 |   |
| Management                and administration fees received                |   |                                           | 163,789     |   |   |   | 164,117 |   |   |   | 64,001 |   |
|                                                                      |   |                                           | 30,211,592  |   |   |   | 15,622,553 |   |   |   | 8,857,223 |   |
|                                                                      |   |                                           |        |   |   |   |   |   |   |   |   |   |
| Net                cash provided (used) during the year                   |   |                                           | 7,557,629   |   |   |   | 4,423,177 |   |   |   | (4,131,345 | ) |
| Cash                and cash equivalents, beginning of year               |   |                                           | 7,233,680   |   |   |   | 2,810,503 |   |   |   | 6,941,848 |   |
| Cash                and cash equivalents, end of year                     |   | $                                              | 14,791,309  |   |   | $ | 7,233,680 |   |   | $ | 2,810,503 |   |

----

|                                                          |   | Balance                December 31 2005 |       |   | Gross                Expenditures 2006 |   |      | Write-off,                Recovery or Sold 2006 (note 3) |   |   | Balance                December 31 2006 |   |   | Gross                Expenditures 2007 |       |   | Write-off                or Recovery2007 |   |      | Balance                December 31 2007 |   |
|---------------------------------------------------------------|--------|-----------------------------------------|------------|--------|----------------------------------------|--------|-----------|----------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------------|------------|--------|------------------------------------------|--------|-----------|-----------------------------------------|--------|
| CANADA                                                        |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |
| ONTARIO                                                       |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |
| RED                LAKE MINING DIVISION                       |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |
| Phoenix                Gold Project                           |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |
| Acquisition                and option                payments |   | $                                       | 3,392,440  |   |                                   | $      | 259,100   |                                                     |   | $      | -                                       |   |   | $                                      | 3,651,540  |   |                                     | $      | 75,000    |                                    |   | $ | - |   |   | $ | 3,726,540 |   |
| Exploration                costs                              |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 1,410,683  |   |                                   |   | 233,666   |                                                     |   |   | -                                       |   |   |                                   | 1,644,349  |   |                                     |   | 187,437   |                                    |   |   | - |   |   |   | 1,831,786 |   |
| Drilling                                                      |   |                                    | 5,675,629  |   |                                   |   | 327,957   |                                                     |   |   | -                                       |   |   |                                   | 6,003,586  |   |                                     |   | 2,514,748 |                                    |   |   | - |   |   |   | 8,518,334 |   |
| Geophysical                                                   |   |                                    | 101,147    |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 101,147    |   |                                     |   | -         |                                    |   |   | - |   |   |   | 101,147 |   |
| Travel                and accommodation                       |   |                                    | 183,041    |   |                                   |   | 10,547    |                                                     |   |   | -                                       |   |   |                                   | 193,588    |   |                                     |   | 14,917    |                                    |   |   | - |   |   |   | 208,505 |   |
| Other                                                         |   |                                    | 32,056     |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 32,056     |   |                                     |   | 60,846    |                                    |   |   | - |   |   |   | 92,902 |   |
|                                                          |   |                                    | 10,794,996 |   |                                   |   | 831,270   |                                                     |   |   | -                                       |   |   |                                   | 11,626,266 |   |                                     |   | 2,852,948 |                                    |   |   | - |   |   |   | 14,479,214 |   |
|                                                          |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Other                Red Lake Properties                      |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 473,677    |   |                                   |   | 60,684    |                                                     |   |   | -                                       |   |   |                                   | 534,361    |   |                                     |   | 66,000    |                                    |   |   | (121,750 | ) |   |   | 478,611 |   |
| Exploration                costs                              |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 954,813    |   |                                   |   | 245,477   |                                                     |   |   | (15,974                                 | )      |   |                                   | 1,184,316  |   |                                     |   | 235,667   |                                    |   |   | (138,097 | ) |   |   | 1,281,886 |   |
| Drilling                                                      |   |                                    | 623,119    |   |                                   |   | 1,019,495 |                                                     |   |   | (975,803                                | )      |   |                                   | 666,811    |   |                                     |   | 1,857,096 |                                    |   |   | (1,807,559 | ) |   |   | 716,348 |   |
| Geophysical                                                   |   |                                    | 280,310    |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 280,310    |   |                                     |   | -         |                                    |   |   | (10,506 | ) |   |   | 269,804 |   |
| Travel                and accommodation                       |   |                                    | 79,663     |   |                                   |   | 31,657    |                                                     |   |   | (19,801                                 | )      |   |                                   | 91,519     |   |                                     |   | 17,650    |                                    |   |   | (8,003 | ) |   |   | 101,166 |   |
| Other                                                         |   |                                    | 35,474     |   |                                   |   | 5,421     |                                                     |   |   | -                                       |   |   |                                   | 40,895     |   |                                     |   | 13,962    |                                    |   |   | (2,153 | ) |   |   | 52,704 |   |
| Administration                fees (earned)                   |   |                                    | (459,694   | )      |                                   |   | -         |                                                     |   |   | (66,116                                 | )      |   |                                   | (525,810   | )      |                                     |   | -         |                                    |   |   | (116,410 | ) |   |   | (642,220 | ) |
|                                                          |   |                                    | 1,987,362  |   |                                   |   | 1,362,734 |                                                     |   |   | (1,077,694                              | )      |   |                                   | 2,272,402  |   |                                     |   | 2,190,375 |                                    |   |   | (2,204,478 | ) |   |   | 2,258,299 |   |
|                                                          |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| McCuaig                JV Project                             |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 109,940    |   |                                   |   | 9,950     |                                                     |   |   | -                                       |   |   |                                   | 119,890    |   |                                     |   | 6,000     |                                    |   |   | - |   |   |   | 125,890 |   |
| Exploration                costs                              |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 449,370    |   |                                   |   | 1,672     |                                                     |   |   | -                                       |   |   |                                   | 451,042    |   |                                     |   | 85,394    |                                    |   |   | (5,115 | ) |   |   | 531,321 |   |
| Drilling                                                      |   |                                    | 1,144,229  |   |                                   |   | 2,003     |                                                     |   |   | -                                       |   |   |                                   | 1,146,232  |   |                                     |   | 1,873,932 |                                    |   |   | (746,104 | ) |   |   | 2,274,060 |   |
| Geophysical                                                   |   |                                    | 27,425     |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 27,425     |   |                                     |   | -         |                                    |   |   | - |   |   |   | 27,425 |   |
| Travel                and accommodation                       |   |                                    | 32,192     |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 32,192     |   |                                     |   | 6,028     |                                    |   |   | (2,411 | ) |   |   | 35,809 |   |
| Other                                                         |   |                                    | 2,000      |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 2,000      |   |                                     |   | -         |                                    |   |   | - |   |   |   | 2,000 |   |
| Administration                fees (earned)                   |   |                                    | (27,635    | )      |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | (27,635    | )      |                                     |   | -         |                                    |   |   | (47,379 | ) |   |   | (75,014 | ) |
|                                                          |   |                                    | 1,737,521  |   |                                   |   | 13,625    |                                                     |   |   | -                                       |   |   |                                   | 1,751,146  |   |                                     |   | 1,971,354 |                                    |   |   | (801,009 | ) |   |   | 2,921,491 |   |
|                                                          |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| English                Royalty Division                       |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 75,000     |   |                                   |   | 109,057   |                                                     |   |   | (184,057                                | )      |   |                                   | -          |   |                                     |   | 481,142   |                                    |   |   | (481,142 | ) |   |   | - |   |
| Exploration                costs                              |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 358,748    |   |                                   |   | -         |                                                     |   |   | (305,510                                | )      |   |                                   | 53,238     |   |                                     |   | 3,370     |                                    |   |   | (56,608 | ) |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 9,119      |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 9,119      |   |                                     |   | -         |                                    |   |   | (9,119 | ) |   |   | - |   |
| Other                                                         |   |                                    | 107        |   |                                   |   | -         |                                                     |   |   | -                                       |   |   |                                   | 107        |   |                                     |   | 14,293    |                                    |   |   | (14,400 | ) |   |   | - |   |
|                                                          |   |                                    | 442,974    |   |                                   |   | 109,057   |                                                     |   |   | (489,567                                | )      |   |                                   | 62,464     |   |                                     |   | 498,805   |                                    |   |   | (561,269 | ) |   |   | - |   |
|                                                          |   |                                    |       |   |                                   |   |      |                                                     |   |   |                                    |   |   |                                   |       |   |                                     |   |      |                                    |   |   |   |   |   |   |   |   |

|                                                          |   | Balance                December 31 2005 |      |   | Gross                Expenditures 2006 |   |    | Write-off,                Recovery or Sold 2006 (note 3) |   |   | Balance                December 31 2006 |   |   | Gross                Expenditures 2007 |   |   | Write-off                or Recovery2007 |   |   | Balance                December 31 2007 |   |
|---------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|----------------------------------------|--------|---------|----------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------------|--------|--------|------------------------------------------|--------|--------|-----------------------------------------|--------|
| NEWFOUNDLAND                                                  |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |
| GOLD                PROPERTIES                                |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |
| StarTrack                Trend Properties                     |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |
| Acquisition                and option                payments |   | $                                       | 244,242   |   |                                   | $      | -       |                                                     |   | $      | (244,242                                | )      |   | $                                      | -      |   |                                     | $      | -      |                                    |   | $ | - |   |   | $ | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Geological                and geochemical                     |   |                                    | 488,475   |   |                                   |   | 21,888  |                                                     |   |   | (510,363                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 124,058   |   |                                   |   | -       |                                                     |   |   | (124,058                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Geophysical                                                   |   |                                    | 482       |   |                                   |   | -       |                                                     |   |   | (482                                    | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 10,762    |   |                                   |   | 29      |                                                     |   |   | (10,791                                 | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Other                                                         |   |                                    | 3,580     |   |                                   |   | -       |                                                     |   |   | (3,580                                  | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 871,599   |   |                                   |   | 21,917  |                                                     |   |   | (893,516                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Golden                Promise Trend Properties                |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 203,338   |   |                                   |   | (81,293 | )                                                        |   |   | (122,045                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 404,776   |   |                                   |   | 77,529  |                                                     |   |   | (482,305                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 178,459   |   |                                   |   | 943,471 |                                                     |   |   | (1,121,930                              | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Geophysical                                                   |   |                                    | 55,329    |   |                                   |   | -       |                                                     |   |   | (55,329                                 | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 10,749    |   |                                   |   | 4,515   |                                                     |   |   | (15,264                                 | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Other                                                         |   |                                    | -         |   |                                   |   | -       |                                                     |   |   | -                                       |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Administration                fees (earned)                   |   |                                    | (190,701  | )      |                                   |   | -       |                                                     |   |   | 190,701                                 |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 661,950   |   |                                   |   | 944,222 |                                                     |   |   | (1,606,172                              | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Avalon                Trend Properties                        |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 68,938    |   |                                   |   | 6,375   |                                                     |   |   | (75,313                                 | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 195,805   |   |                                   |   | 2,568   |                                                     |   |   | (198,373                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | -         |   |                                   |   | -       |                                                     |   |   | -                                       |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 4,055     |   |                                   |   | -       |                                                     |   |   | (4,055                                  | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Other                                                         |   |                                    | -         |   |                                   |   | -       |                                                     |   |   | -                                       |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Administration                fees (earned)                   |   |                                    | (16,451   | )      |                                   |   | -       |                                                     |   |   | 16,451                                  |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 252,347   |   |                                   |   | 8,943   |                                                     |   |   | (261,290                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Glenwood-Botwood                Trend Properties              |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 675,532   |   |                                   |   | 195,577 |                                                     |   |   | (871,109                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 1,540,751 |   |                                   |   | 317,814 |                                                     |   |   | (1,858,565                              | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 666,098   |   |                                   |   | 418,228 |                                                     |   |   | (1,084,326                              | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Geophysical                                                   |   |                                    | 259,029   |   |                                   |   | 32,248  |                                                     |   |   | (291,277                                | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 15,241    |   |                                   |   | 2,515   |                                                     |   |   | (17,756                                 | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
| Administration                fees (earned)                   |   |                                    | (67,724   | )      |                                   |   | -       |                                                     |   |   | 67,724                                  |   |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 3,088,927 |   |                                   |   | 966,382 |                                                     |   |   | (4,055,309                              | )      |   |                                   | -      |   |                                     |   | -      |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                     |   |   |                                    |   |   |                                   |   |   |                                     |   |   |                                    |   |   |   |   |   |   |   |   |

|                                                          |   | Balance                December 31 2005 |      |   | Gross                Expenditures 2006 |   |    | Write-off,                Recovery or Sold 2006 (note3) |   |   | Balance                December 31 2006 |   |   | Gross                Expenditures 2007 |   |   | Write-off                or Recovery2007 |   |       | Balance                December 31 2007 |   |
|---------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|----------------------------------------|--------|---------|---------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------------------------------------|--------|--------|------------------------------------------|--------|------------|-----------------------------------------|--------|
| NEWFOUNDLAND                GOLDPROPERTIES(continued)         |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |
| New                World Trend Property                       |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |
| Acquisition                and option                payments |   | $                                       | 107,540   |   |                                   | $      | -       |                                                    |   | $      | (107,540                                | )      |   | $                                      | -      |   |                                     | $      | -          |                                    |   | $ | - |   |   | $ | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 330,458   |   |                                   |   | 21,368  |                                                    |   |   | (351,826                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 2,150     |   |                                   |   | -       |                                                    |   |   | (2,150                                  | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Geophysical                                                   |   |                                    | -         |   |                                   |   | 92,844  |                                                    |   |   | (92,844                                 | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 1,874     |   |                                   |   | -       |                                                    |   |   | (1,874                                  | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 442,022   |   |                                   |   | 114,212 |                                                    |   |   | (556,234                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Base                Metal Properties                          |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option                payments |   |                                    | 49,989    |   |                                   |   | 93,249  |                                                    |   |   | (143,238                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 369,731   |   |                                   |   | 217,316 |                                                    |   |   | (587,047                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 484,898   |   |                                   |   | 61,628  |                                                    |   |   | (546,526                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Geophysical                                                   |   |                                    | 82,637    |   |                                   |   | -       |                                                    |   |   | (82,637                                 | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 21,987    |   |                                   |   | 169     |                                                    |   |   | (22,156                                 | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Other                                                         |   |                                    | 225       |   |                                   |   | 1,035   |                                                    |   |   | (1,260                                  | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 1,009,467 |   |                                   |   | 373,397 |                                                    |   |   | (1,382,864                              | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| UNITED                STATES OF AMERICA                       |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| ALASKA                                                        |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Alaska                Properties (McEwen Acquisition)         |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option payments                |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 37,200,284 |                                    |   |   | - |   |   |   | 37,200,284 |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 777,287    |                                    |   |   | - |   |   |   | 777,287 |   |
| Drilling                                                      |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 1,800,184  |                                    |   |   | - |   |   |   | 1,800,184 |   |
| Travel                and accommodation                       |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 8,320      |                                    |   |   | - |   |   |   | 8,320 |   |
| Other                                                         |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 423,960    |                                    |   |   | - |   |   |   | 423,960 |   |
|                                                          |   |                                    | -         |   |                                   |   | -       |                                                    |   |   | -                                       |   |   |                                   | -      |   |                                     |   | 40,210,035 |                                    |   |   | - |   |   |   | 40,210,035 |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Palmer                Property                                |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Acquisition                and option payments                |   |                                    | 209,415   |   |                                   |   | -       |                                                    |   |   | (209,415                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Exploration                costs                              |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |
| Geological                and geochemical                     |   |                                    | 374,841   |   |                                   |   | -       |                                                    |   |   | (374,841                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Drilling                                                      |   |                                    | 682,215   |   |                                   |   | -       |                                                    |   |   | (682,215                                | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Travel                and accommodation                       |   |                                    | 18,003    |   |                                   |   | -       |                                                    |   |   | (18,003                                 | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Other                                                         |   |                                    | 18,013    |   |                                   |   | -       |                                                    |   |   | (18,013                                 | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
| Administration                fees                (earned)    |   |                                    | (76,483   | )      |                                   |   | -       |                                                    |   |   | 76,483                                  |   |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    | 1,226,004 |   |                                   |   | -       |                                                    |   |   | (1,226,004                              | )      |   |                                   | -      |   |                                     |   | -          |                                    |   |   | - |   |   |   | - |   |
|                                                          |   |                                    |      |   |                                   |   |    |                                                    |   |   |                                    |   |   |                                   |   |   |                                     |   |       |                                    |   |   |   |   |   |   |   |   |

----

|                                                               | Balance                December 31 2005                                                | Gross                Expenditures 2006                                                 | Write-off,                Recovery or Sold 2006  (note 3)                                      | Balance                December 31 2006                                          | Gross                Expenditures 2007 | Write-off                or Recovery2007                                                     | Balance                December 31 2007 |
|--------------------------------------------------------------------|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|----------------------------------------|----------------------------------------------------------------------------------------------|-----------------------------------------|
| UNITED                STATES OF AMERICA                (continued) |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| NEVADA                                                             |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Nevada                Properties (McEwen Acquisition)              |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Acquisition                and option payments                     | $              - | $              - | $                 - | $             - | $6,176,343                             | $               - | $6,176,343                              |
| Exploration                costs                                   |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Geological                and geochemical                          | -                                                                                      | -                                                                                      | -                                                                                                        | -                                                                                | 79,449                                 | -                                                                                            | 79,449                                  |
| Geophysics                                                         | -                                                                                      | -                                                                                      | -                                                                                                        | -                                                                                | 31,809                                 | -                                                                                            | 31,809                                  |
| Other                                                              | -                                                                                      | -                                                                                      | -                                                                                                        | -                                                                                | 418                                    | -                                                                                            | 418                                     |
|                                                               | -                                                                                      | -                                                                                      | -                                                                                                        | -                                                                                | 6,288,019                              | -                                                                                            | 6,288,019                               |
|                                                               |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Toquima                Properties                                  |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Acquisition                and option payments                     | 291,643                                                                                | -                                                                                      |  (291,643)                                                                                          |  -                                                                          |  -                                |  -                                                                                      |   -                           |
| Exploration                costs                                   |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Geological                and geochemical                          |  154,832                                                                          | -                                                                                      | (154,832)                                                                                                | -                                                                                | -                                      | -                                                                                            | -                                       |
|                                                               | 446,475                                                                                | -                                                                                      | (446,475)                                                                                                | -                                                                                | -                                      | -                                                                                            | -                                       |
|                                                               |                                                                                   |                                                                                   |                                                                                                     |                                                                             |                                   |                                                                                         |                                    |
| Mineral                Property Costs                              | $                22,961,644                                                            | $                4,745,759                                                             | $(11,995,125)                                                                                            | $15,712,278                                                                      | $54,011,536                            | $(3,566,756)                                                                                 | $66,157,058                             |

|                                                                                                    | 2005                                                                                                                       | 2006                                                                                                                             | 2007                                                                       |
|---------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|
| Other                Red Lake Properties                                                                | $                    - | $                     - | $           224,696 |
| Avalon                Trend Properties                                                                  | 195,554                                                                                                                    | 259,210                                                                                                                          | -                                                                          |
| Golden                Promise Trend Properties                                                          | 6,186                                                                                                                      | 6                                                                                                                                | -                                                                          |
| Other                Newfoundland Properties                                                            | 38                                                                                                                         | (393)                                                                                                                            | -                                                                          |
| Other                Properties                                                                         | 1,513,896                                                                                                                  | -                                                                                                                                | -                                                                          |
| Total                costs written-off                                                                  | 1,715,674                                                                                                                  | 258,823                                                                                                                          | 224,696                                                                    |
| Costs                recovered through Toquima plan of arrangement                                      | -                                                                                                                          | 1,672,479                                                                                                                        | -                                                                          |
| Costs                transferred to Paragon Minerals pursuant to the Plan of                Arrangement | -                                                                                                                          | 6,979,705                                                                                                                        | -                                                                          |
| Aggregate                cost recoveries and administration fees received                               | 1,791,809                                                                                                                  | 3,084,118                                                                                                                        | 3,342,060                                                                  |
| Gross                write-offs and recoveries                                                          | $       3,507,483                                                                       | $      11,995,125                                                                                  | $      3,566,756                             |
|                                                                                                    |                                                                                                                       |                                                                                                                             |                                                                       |

----

|                                                                                                       |   | $      |        |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|
| Newfoundland                Properties transferred to Paragon                                              |   |   | (6,979,704  | )      |
| Office                equipment transferred to Paragon                                                     |   |   | (15,952     | )      |
| Adjusted                cost of Africo Resources (BC) Ltd. shares transferred to New                Africo |   |   | (5,807,438  | )      |
| Net                residual fair value of options/warrants transferred                                     |   |   | 2,205,667   |   |
|                                                                                                       |   |   |        |   |
| Net                reduction to share capital on POA                                                       |   |   | (10,597,427 | )      |
|                                                                                                       |   |   |        |   |

----

| 3.   | RE-ORGANIZATION(continued) |
|----------------|----------------------------|

|                                                                                                        |   | $      |       |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Share                receivable from Africo at fair value, net of option/warrant                liabilities |   |   | 2,047,097  |   |
| Fair                value of Paragon options/warrants net of option/warrant                liabilities      |   |   | 100,836    |   |
| Net                investment of Rubicon at December 31, 2006                                               |   |   | 2,147,933  |   |
| Africo                and Paragon shares and related cash proceeds realized in                2007          |   |   | (1,284,704 | )      |
| Adjustment                to fair value of net investment at December 31, 2007                              |   |   | (423,600   | )      |
| Net                investment of Rubicon at December 31, 2007                                               |   |   | 439,629    |   |

| 4.   | SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES |
|----------------|-----------------------------------------------------------|

----

----

----

|                                                 |   |   |    |   |         |   |    | December                31 2007 |   |   |    |   |   |         |    |   | December                31                2006 |   |
|------------------------------------------------------|--------|--------|---------|--------|--------------|--------|---------|--------------------------------------|--------|--------|---------|--------|--------|--------------|---------|--------|------------------------------------------------|--------|
|                                                 |   |   |    |   | Accumulated  |   |    | Net                Book              |   |   |    |   |   | Accumulated  |    |   | Net                Book                        |   |
|                                                 |   | Cost   |    |   | Amortization |   |    | Value                                |   |   | Cost    |   |   | Amortization |    |   | Value                                          |   |
|                                                 |   |   |    |   |         |   |    |                                 |   |   |    |   |   |         |    |   |                                           |   |
| Furniture                and                fixtures |   | $      | 76,771  |   |         | $      | 49,266  |                                 |   | $      | 27,505  |   |   | $            | 75,553  |   |                                           | $      | 42,542 |   |   | $ | 33,011 |   |
| Computer                equipment                    |   |   | 129,877 |   |         |   | 68,035  |                                 |   |   | 61,842  |   |   |         | 85,055  |   |                                           |   | 51,136 |   |   |   | 33,919 |   |
| Leasehold                Improvements                |   |   | 12,291  |   |         |   | 1,844   |                                 |   |   | 10,447  |   |   |         | -       |   |                                           |   | - |   |   |   | - |   |
| Software                                             |   |   | 96,944  |   |         |   | 38,952  |                                 |   |   | 57,992  |   |   |         | 34,635  |   |                                           |   | 12,115 |   |   |   | 22,520 |   |
|                                                 |   |   |    |   |         |   |    |                                 |   |   |    |   |   |         |    |   |                                           |   |   |   |   |   |   |   |
|                                                 |   | $      | 315,883 |   |         | $      | 158,097 |                                 |   | $      | 157,786 |   |   | $            | 195,243 |   |                                           | $      | 105,793 |   |   | $ | 89,450 |   |
|                                                 |   |   |    |   |         |   |    |                                 |   |   |    |   |   |         |    |   |                                           |   |   |   |   |   |   |   |

|                                           |   | 2007                                   |      |   |   |   |   | 2006        |   |
|------------------------------------------------|--------|----------------------------------------|-----------|--------|--------|--------|--------|-------------|--------|
|                                           |   | AggregateCarrying                Value |      |   |   |   |   | MarketValue |   |   |   |   |   | AggregateCarrying                Value |   |   |   |   |   | MarketValue |   |
|                                           |   |                                   |      |   | $      |   |   |        |   |   |   | $ |   |   |   |   |   |   | $ |   |   |   | $ |   |   |
| Carlin                Gold Corp                |   |                                   | 434,719   |   |   |   |   |        |   |   | 434,719 |   |   |   |   |   |   |   | 695,550 |   |   |   |   |   |   |   | 891,174 |   |
| Constantine                Metal Resources (a) |   |                                   | 1,704,667 |   |   |   |   |        |   |   | 1,704,667 |   |   |   |   |   |   |   | 478,049 |   |   |   |   |   |   |   | 782,494 |   |
| Other                public companies (b)      |   |                                   | 498,491   |   |   |   |   |        |   |   | 498,491 |   |   |   |   |   |   |   | 261,628 |   |   |   |   |   |   |   | 274,557 |   |
|                                           |   |                                   | 2,637,877 |   |   |   |   |        |   |   | 2,637,877 |   |   |   |   |   |   |   | 1,435,227 |   |   |   |   |   |   |   | 1,948,225 |   |

|   | (a) | Constantine                Metal Resources Ltd. ceased to be an equity method investment on                July 10,                2007 and was categorized as an available for sale financial instrument                at                that date, with carrying value adjusted to market value. See note                5. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Comprised                of common shares of different public companies, largely received                pursuant                to the terms of mineral property option agreements. All public company                market values were based on quoted prices in an active market. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 9. | MINERAL                PROPERTY INTERESTS                (continued) |
|----|----------------------------------------------------------------------|

----

| 9. | MINERAL                PROPERTY INTERESTS                (continued) |
|----|----------------------------------------------------------------------|

----

| 9. | MINERAL                PROPERTY INTERESTS                (continued) |
|----|----------------------------------------------------------------------|

|                                         |                          |
|----------------------------------------------|-------------------------------|
| Mineral                properties            | $   37,155,461 |
| Future                income tax liability   | (14,729,074)                  |
| Total                cost                    | $   22,426,387 |
|                                         |                          |
| Consisting                of:                |                          |
| Common                shares issued at $0.70 | $   22,000,000 |
| Other                acquisition costs       | 426,387                       |
| Total                cost                    | $   22,426,387 |

| 9. | MINERAL                PROPERTY                INTERESTS(Continued) |
|----|---------------------------------------------------------------------|

|                                                         |   | 2007                            |        |   |   |   |        | 2006   |                                 |   |       |   |   | 2005   |        |                                 |   |   |
|--------------------------------------------------------------|--------|---------------------------------|-------------|--------|--------|--------|-------------|--------|--------------------------------------|--------|------------|--------|--------|--------|-------------|--------------------------------------|--------|--------|
|                                                         |   | Number                of Shares |        |   | $      |   |        |   | Number                of Shares |   |       | $      |   |   |        | Number                of Shares |   |   | $ |   |   |
| Balance,                beginning of year                    |   |                            | 76,810,525  |   |   |   | 47,991,901  |   |                                 |   | 66,179,524 |   |   |   | 45,610,692  |                                 |   |   | 55,006,031 |   |   |   | 39,184,721 |   |
| Private                placements                (1),(2),(4) |   |                            | 21,428,564  |   |   |   | 24,165,197  |   |                                 |   | 7,640,560  |   |   |   | 10,431,265  |                                 |   |   | 10,232,000 |   |   |   | 6,420,989 |   |
| Mineral                properties                            |   |                            | 40,000,000  |   |   |   | 28,000,000  |   |                                 |   | 101,000    |   |   |   | 130,720     |                                 |   |   | 159,000 |   |   |   | 151,520 |   |
| Stock                options exercised                (3)    |   |                            | 1,547,374   |   |   |   | 1,476,765   |   |                                 |   | 760,628    |   |   |   | 1,114,599   |                                 |   |   | 300,000 |   |   |   | 338,087 |   |
| Warrants                exercised                            |   |                            | 3,152,792   |   |   |   | 1,451,905   |   |                                 |   | 2,128,813  |   |   |   | 1,779,452   |                                 |   |   | 482,493 |   |   |   | 559,318 |   |
| Spin-off                of companies (note 2)                |   |                            | -           |   |   |   | -           |   |                                 |   | -          |   |   |   | (10,597,427 | )                                    |   |   | - |   |   |   | - |   |
| Flow-through                renunciation                (4)  |   |                            | 4,836,898   |   |   |   | -           |   |                                 |   | -          |   |   |   | (477,400    | )                                    |   |   | - |   |   |   | (1,043,943 | ) |
| Agent                Commissions                (4)          |   |                            | 393,262     |   |   |   | 700,006     |   |                                 |   | -          |   |   |   | -           |                                 |   |   | - |   |   |   | - |   |
| Shares                returned                               |   |                            | (297,914    | )      |   |   | (213,545    | )      |                                 |   | -          |   |   |   | -           |                                 |   |   | - |   |   |   | - |   |
| Balance,                end of year                          |   |                            | 147,871,501 |   |   |   | 103,572,229 |   |                                 |   | 76,810,525 |   |   |   | 47,991,901  |                                 |   |   | 66,179,524 |   |   |   | 45,610,692 |   |

| (1)   | Nil                (2006 – Nil; 2005 -1,000,000) shares were issued under flow-through share                purchase agreements. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Net                of issue costs of $1,234,178 (2006 - $876,764; 2005 -                $979,811) |
|-----------------|---------------------------------------------------------------------------------------------------|

| (3)   | Inclusive                of the original $377,399 (2006 -$297,314, 2005 - $97,83) fair value                of                these options re-allocated from contributed surplus to share capital                on                exercise |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | On                November 15, 2007, the Company closed bought deal flow-through private                placement financing with Research Capital Corporation, issuing 4,651,200                flow-through common shares at a price of $2.15 per share for aggregate                proceeds of $10,000,080. The underwriter received a commission amounting                to 7% of the value of the financing payable in common shares of the                Company at a value of $1.78 per share for a total of 393,262 common                shares. In addition, another of 185,698 flow-through shares were                issue to                other investors pursuant to a further non-brokered private placement                at a                price of $2.15 per share, for further proceeds of $399,251. The                non-brokered financing was not subject to a commission.  Earlier                in 2007, the Company also completed a private placement financing                with                Robert McEwen and associated persons, as described in note                2. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                          |   | 2007                            |       |   | 2006                                           |   |   | 2005                           |   |
|-----------------------------------------------|--------|---------------------------------|------------|--------|------------------------------------------------|--------|--------|--------------------------------|--------|
|                                          |   | Number                of Shares |       |   | Weighted                Average Exercise Price |   |   | Number                ofShares |   |   | Weighted                Average Exercise Price |   |   | Number                ofShares |   |   | Weighted                Average Exercise Price |   |
|                                          |   |                            |       |   |                                           |   |   | $                              |   |   |   |   |   |   | $ |   |   |   | $ |   |   |
| Balance                at beginning of year   |   |                            | 3,798,748  |   |                                           |   | 0.73   |                           |   |   | 4,815,000 |   |   |   | 1.10 |   |   |   | 3,486,625 |   |   |   | 1.11 |   |
| Granted                                       |   |                            | 1,260,000  |   |                                           |   | 1.09   |                           |   |   | 40,000 |   |   |   | 1.70 |   |   |   | 2,310,000 |   |   |   | 1.10 |   |
| Exercised                                     |   |                            | (1,547,374 | )      |                                           |   | 0.71   |                           |   |   | (760,628 | ) |   |   | 1.07 |   |   |   | (300,000 | ) |   |   | 0.79 |   |
| Expired/Cancelled                             |   |                            | (183,124   | )      |                                           |   | 0.86   |                           |   |   | (295,624 | ) |   |   | 1.22 |   |   |   | (681,625 | ) |   |   | 1.29 |   |
| Outstanding                at end of year (1) |   |                            | 3,328,250  |   |                                           |   | 0.87   |                           |   |   | 3,798,748 |   |   |   | 0.73 |   |   |   | 4,815,000 |   |   |   | 1.10 |   |
| Exercisable                at end of year     |   |                            | 2,600,750  |   |                                           |   | 0.77   |                           |   |   | 3,232,606 |   |   |   | 0.72 |   |   |   | 3,349,288 |   |   |   | 1.10 |   |
|                                          |   |                            |       |   |                                           |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | At                December 31, 2007, the weighted-average remaining contractual life                of                stock options outstanding is 2.91 years (20065 – 2.92; 2005 –                3.00). |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       | 2007                   | 2006                   | 2005                     |
|--------------------------------------------|------------------------|------------------------|--------------------------|
| Risk-free                interest rate (%) | 4.13%                  | 4.27%                  | 3.6%                     |
| Expected                life (years)       | 5                years | 5                years | 4.6                years |
| Expected                volatility (%)     | 64%                    | 50%                    | 40%                      |
| Expected                dividend yield (%) | 0%                     | 0%                     | 0%                       |

| December                31, 2007   |   |
|------------------------------------|--------|
| Type                of Issue       |   |   | Number                Outstanding (1) |   |   | Weighted                Average Price (Rubicon Portion) |   |   |   |   |   | Weighted                Average Life |   |
|                               |   |   |   |   |   |   |   |   | $ |   |   |   | Years |   |
| Stock                Options       |   |   |   | 100,000 |   |   |   | 0.44 |   |   |   |   |   |   |   | 2.75 |   |
|                               |   |   |   | 150,000 |   |   |   | 0.48 |   |   |   |   |   |   |   | 2.78 |   |
|                               |   |   |   | 200,000 |   |   |   | 0.56 |   |   |   |   |   |   |   | 3.04 |   |
|                               |   |   |   | 855,000 |   |   |   | 0.74 |   |   |   |   |   |   |   | 4.00 |   |
|                               |   |   |   | 20,000 |   |   |   | 0.76 |   |   |   |   |   |   |   | 5.89 |   |
|                               |   |   |   | 1,307,000 |   |   |   | 0.77 |   |   |   |   |   |   |   | 2.12 |   |
|                               |   |   |   | 141,250 |   |   |   | 0.79 |   |   |   |   |   |   |   | 2.08 |   |
|                               |   |   |   | 210,000 |   |   |   | 0.96 |   |   |   |   |   |   |   | 1.16 |   |
|                               |   |   |   | 95,000 |   |   |   | 1.68 |   |   |   |   |   |   |   | 4.67 |   |
|                               |   |   |   | 150,000 |   |   |   | 1.90 |   |   |   |   |   |   |   | 4.50 |   |
|                               |   |   |   | 100,000 |   |   |   | 2.55 |   |   |   |   |   |   |   | 4.30 |   |
| Total                Stock Options | (1)    |   |   | 3,328,250 |   |   |   | 0.87 |   |   |   |   |   |   |   | 2.91 |   |

|                                            |   |                                  |   |                                                    |   |                                 |
|-------------------------------------------------|--------|---------------------------------------|--------|---------------------------------------------------------|--------|--------------------------------------|
| Type                of Issue                    |   | Number                Outstanding (1) |   | Weighted                Average Price (Rubicon Portion) |   | Weighted                Average Life |
|                                            |   |                                  |   |                                                    |   |                                 |
| Warrants                and Agent Options       |   |                                  |   |                                                    |   |                                 |
|                                            |   | 10,714,271                            |   | 1.50                                                    |   | 1.38                                 |
|                                            |   |                                  |   |                                                    |   |                                 |
| Total                Warrants and Agent Options | (1)    | 10,714,271                            |   | 1.50                                                    |   | 1.38                                 |

| (1)   | Subsequent                to December 31, 2007, additional options were granted and options                and                warrants were exercised, cancelled or expired.  See note                17. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                             |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Balance                at beginning of year                                                      |   | $      | 2,547,075 |   |   | $      | 2,623,780 |   |   | $ | 1,960,463 |   |
| Stock-based                compensation – Administration                                   |   |   | 576,606   |   |   |   | 220,964   |   |   |   | 683,671 |   |
| Stock-based                compensation – Mineral property costs                           |   |   | 335,979   |   |   |   | 22,062    |   |   |   | - |   |
| Share                issuance costs                                                              |   |   | -         |   |   |   | -         |   |   |   | 77,483 |   |
| Fair                value on options/warrants granted by Africo/Paragon                          |   |   | -         |   |   |   | (22,417   | )      |   |   | - |   |
| Fair                value of stock options allocated to shares issued on                exercise |   |   | (377,399  | )      |   |   | (297,314  | )      |   |   | (97,837 | ) |
| Balance                at end of year                                                            |   | $      | 3,082,261 |   |   | $      | 2,547,075 |   |   | $ | 2,623,780 |   |

|   | 11.                ACCUMULATED OTHER COMPREHENSIVE INCOME |
|--------|-----------------------------------------------------------|

|                                                                                                  |   | 2007   |     |
|-------------------------------------------------------------------------------------------------------|--------|--------|----------|
| Adjustments                to January 1, 2007 opening balance:                                        |   |   |     |
|     Unrealized                gains on investments in public company shares       |   | $      | 208,553  |   |
| Accumulated                other comprehensive income, January 1, 2007                                |   |   | 208,553  |   |
|                                                                                                  |   |   |     |   |
| Other                comprehensive income for the year                                                |   |   | 341,053  |   |
|                                                                                                  |   |   |     |   |
| Accumulated                other comprehensive income, December 31, 2007                              |   | $      | 549,606  |   |
|                                                                                                       |   |   |     |   |
| Components                of accumulated other comprehensive income, December 31,                2007 |   |   |     |   |
|                                                                                                  |   |   |     |   |
| Unrealized                losses on temporary investments                                             |   | $      | (19,852  | ) |
| Unrealized                gains on investments in public company shares                               |   |   | 993,058  |   |
| Unrealized                losses on the Company’s Africo share receivable                       |   |   | (423,600 | ) |
|                                                                                                  |   |   |     |   |
|                                                                                                  |   | $      | 549,606  |   |
|                                                                                                  |   |   |     |   |

----

| 12. | INCOME                TAXES |
|-----|-----------------------------|

|   | Current                income tax payable in the amount of $74,000 represents an estimated                current liability of the Company’s wholly-owned subsidiary, 1304850                Ontario Inc. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                            |   | 2007   |       |   | 2006   |   |       | 2005   |   |
|-------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                                                            |   | $      |       |   |   | $      |       |   |   | $ |   |   |
|                                                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Net                loss for the year, before taxes                                              |   |   | (2,232,941 | )      |   |   | (4,113,320 | )      |   |   | (4,688,227 | ) |
|                                                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Expected                income recovery                                                         |   |   | (761,879   | )      |   |   | (1,292,438 | )      |   |   | (1,290,219 | ) |
| Net                adjustment for current, deductible and non-deductible                amounts |   |   | 196,737    |   |   |   | 146,055    |   |   |   | 146,055 |   |
| Unrecognized                benefit of future tax assets                                        |   |   | 548,582    |   |   |   | 820,983    |   |   |   | 100,221 |   |
| Income                taxes (recoveries)                                                        |   |   | (16,560    | )      |   |   | (325,400   | )      |   |   | (1,043,943 | ) |

|                                                                                       |   | 2007   |        |   |   |   |   | 2006   |   |
|--------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|--------|--------|--------|
|                                                                                       |   |   |        |   | $      |   |   |   | $      |   |   |
|                                                                                       |   |   |        |   |   |   |   |   |   |   |   |
| Future                income tax (liabilities) assets:                                     |   |   |        |   |   |   |   |   |   |   |   |
| Net                mineral property carrying                amounts in excess of tax pools |   |   | (16,123,332 | )      |   |   |   |   |   |   | (1,682,926 | ) |
| Equipment                tax pools in excess of                carrying value              |   |   | 36,467      |   |   |   |   |   |   |   | 69,602 |   |
| Non-capital                loss                carryforwards                               |   |   | 3,785,271   |   |   |   |   |   |   |   | 3,780,837 |   |
|                                                                                       |   |   | (12,301,594 | )      |   |   |   |   |   |   | 2,167,513 |   |
| Valuation                allowance                                                         |   |   | (2,472,694  | )      |   |   |   |   |   |   | (2,167,513 | ) |
| Net                future tax (liabilities)                assets                          |   |   | (14,774,288 | )      |   |   |   |   |   |   | - |   |

| 13. | RELATED                PARTY TRANSACTIONS |
|-----|-------------------------------------------|

|   | (a) | As                at December 31, 2007, Paragon owed the Company $76,049 (2006 - $252,350).                As at December 31, 2007, the Company owes Paragon $6,574 (2006 -                $65,952)                for expense reimbursements. The Paragon receivable is included in                amounts                receivable after setting off the payable amount. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13. | RELATED                PARTY TRANSACTIONS                (continued) |
|-----|----------------------------------------------------------------------|

| a)   | Pursuant                to the McEwen agreement (see note 2) the Company became committed                to spend                $5 million on exploration on its Red Lake properties by May 18, 2008,                $5                million on its Alaska properties by May 18, 2009 and $500,000 on                its                Nevada properties by May 19, 2008. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | At                December 31, 2007, the Company has $224,502 (2006 - $303,960) in                remaining                lease payments for the use of its Vancouver office to September,                2010. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | At                December 31, 2007, the Company is committed to incur $9,984,996 (2006                -                nil; 2005 - 112,497) in eligible exploration expenditures in order                to                complete obligations entered into pursuant to flow-through share                purchase                agreements. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d)   | The                Company is required to make certain cash and share option payments                and                incur exploration costs to maintain its mineral properties in good                standing.  These payments and costs are at the Company’s                discretion and are based upon available financial resources and the                exploration merits of the mineral properties which are evaluated                on a                periodic basis. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                              |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| During                the year, the Company paid and received interest as                follows: |   |   |    |   |   |   |    |   |   |
|                                                                                              |   |   |    |   |   |   |    |   |   |
| Interest                received                                                                  |   | $      | 794,476 |   |   | $      | 274,742 |   |   | $ | 69,128 |   |
| Interest                paid                                                                      |   | $      | 744     |   |   | $      | 10,949  |   |   | $ | 26,249 |   |

----

----

| Balance                Sheets                                                                                                 | Note                reference |   | 2007   |        |   |   |   |   | 2006   |   |   |        |   |   | 2005   |   |
|-------------------------------------------------------------------------------------------------------------------------------|-------------------------------|--------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|-------------|--------|--------|--------|--------|
|                                                                                                                          |                          |   |   |        |   | $      |   |   |   |   |   |        | $      |   |   |   | $ |   |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |
| Investments                - companies spun off -                Canadian GAAP                                                |                          |   |   | 439,629     |   |   |   |   |   |   |   | 2,147,933   |   |   |   |   |   |   |   | - |   |
| Net                fair value and related                adjustments                                                          | (c)                           |   |   | 118,675     |   |   |   |   |   |   |   | 1,212,538   |   |   |   |   |   |   |   | - |   |
| Investment incompanies                spun off - US                GAAP                                                  |                          |   |   | 558,304     |   |   |   |   |   |   |   | 3,360,471   |   |   |   |   |   |   |   | - |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Other                investments  -                Canadian GAAP                                                    |                          |   |   | 2,637,877   |   |   |   |   |   |   |   | 1,435,227   |   |   |   |   |   |   |   | 6,546,411 |   |
| Mark-to-market                adjustment                                                                                      | (d)                           |   |   | -           |   |   |   |   |   |   |   | 512,998     |   |   |   |   |   |   |   | (10,562 | ) |
| Other                investments - US                GAAP                                                                     |                          |   |   | 2,637,877   |   |   |   |   |   |   |   | 1,948,225   |   |   |   |   |   |   |   | 6,535,849 |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Mineralproperty                costs - Canadian                GAAP                                                           |                          |   |   | 66,157,058  |   |   |   |   |   |   |   | 15,712,278  |   |   |   |   |   |   |   | 22,961,644 |   |
| Mineralproperty                costs expensed under US                GAAP                                                    | (a)                           |   |   | (22,780,431 | )      |   |   |   |   |   |   | (15,712,278 | )      |   |   |   |   |   |   | (22,961,644 | ) |
| Mineralproperty                costs - US                GAAP                                                                 |                          |   |   | 43,376,627  |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Other                liabilities - Canadian                GAAP                                                               |                          |   |   | -           |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
| Aggregate                liabilities assumed on                spin-off transaction                                           | (c)                           |   |   | 270,619     |   |   |   |   |   |   |   | 3,157,297   |   |   |   |   |   |   |   | - |   |
| Other                liabilities - US                GAAP                                                                     |                          |   |   | 270,619     |   |   |   |   |   |   |   | 3,157,297   |   |   |   |   |   |   |   | - |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Flow-through                share tax liability –                Canadian GAAP                                          |                          |   |   | -           |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
| Future                tax related to premium on                flow-through financing                                         | (b)                           |   |   | 1,789,652   |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
| Flow-through                share tax liability –                US GAAP                                                |                          |   |   | 1,789,652   |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Share                capital - Canadian                GAAP                                                                   |                          |   |   | 103,572,229 |   |   |   |   |   |   |   | 47,991,901  |   |   |   |   |   |   |   | 45,610,692 |   |
| Previous                years’ amounts included in income under US GAAP                                                 |                          |   |   | -           |   |   |   |   |   |   |   | (102,158    | )      |   |   |   |   |   |   | (1,006,101 | ) |
| Deferred                tax benefit included in income under US GAAP                                                          | (d)                           |   |   | -           |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | (140,000 | ) |
| Adjustment                to reverse entry                forspin-off                of Paragon                assets         | (a)                           |   |   | 6,979,704   |   |   |   |   |   |   |   | 6,979,704   |   |   |   |   |   |   |   | - |   |
| Adjustment                to reclassify spin-off                amounts as liabilities                                        | (c)                           |   |   | -           |   |   |   |   |   |   |   | (2,290,988  | )      |   |   |   |   |   |   | - |   |
| Future                tax related to premium on                flow-through financing                                         | (b)                           |   |   | (1,789,652  | )      |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Adjustment                to reinstate Canadian                GAAP FIT recoveryto                share capital               | (b)                           |   |   | -           |   |   |   |   |   |   |   | 477,400     |   |   |   |   |   |   |   | 1,043,943 |   |
| Share                capital – US                GAAP                                                                   |                          |   |   | 108,762,281 |   |   |   |   |   |   |   | 53,055,859  |   |   |   |   |   |   |   | 45,508,534 |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Contributed                surplus - Canadian                GAAP                                                             |                          |   |   | 3,082,261   |   |   |   |   |   |   |   | 2,547,075   |   |   |   |   |   |   |   | 2,623,780 |   |
| Adjustment                to reclassify a                spin-off related amount                                              | (c)                           |   |   | -           |   |   |   |   |   |   |   | (309        | )      |   |   |   |   |   |   | - |   |
| Contributed                surplus - US                GAAP                                                                   |                          |   |   | 3,082,261   |   |   |   |   |   |   |   | 2,546,766   |   |   |   |   |   |   |   | 2,623,780 |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Opening                deficit - Canadian                GAAP                                                                 |                          |   |   | 19,629,463  |   |   |   |   |   |   |   | 15,841,543  |   |   |   |   |   |   |   | 12,197,259 |   |
| Net                historical adjustments                - US GAAP                                                            | (a)                           |   |   | 23,016,331  |   |   |   |   |   |   |   | 22,859,486  |   |   |   |   |   |   |   | 18,809,393 |   |
| Opening                deficit - US                GAAP                                                                       |                          |   |   | 42,645,794  |   |   |   |   |   |   |   | 38,701,029  |   |   |   |   |   |   |   | 31,006,652 |   |
|                                                                                                                          |                          |   |   |        |   |   |   |   |   |   |   |        |   |   |   |   |   |   |   |   |   |
| Accumulated                other comprehensive                income –CanadianGAAP                                      |                          |   |   | 549,606     |   |   |   |   |   |   |   | -           |   |   |   |   |   |   |   | - |   |
| Adjustment                to reflect net fair                value measurementsateach                year                end. | (c),                (d)       |   |   | (89,373     | )      |   |   |   |   |   |   | 307,977     |   |   |   |   |   |   |   | (10,562 | ) |
| Accumulated                other comprehensive                income - US GAAP                                                |                          |   |   | 460,233     |   |   |   |   |   |   |   | 307,977     |   |   |   |   |   |   |   | (10,562 | ) |

| Operations                Statements                                                                     | Note                reference |   | 2007   |      |   |   |   |   | 2006   |   |   |     |   |   | 2005   |   |
|----------------------------------------------------------------------------------------------------------|-------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|
|                                                                                                     |                          |   |   |      |   | $      |   |   |   |   |   |     | $      |   |   |   | $ |   |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |
| Other                miscellaneous income -                Canadian GAAP                                 |                          |   |   | 128,779   |   |   |   |   |   |   |   | 355,300  |   |   |   |   |   |   |   | 82,232 |   |
| Adjustment                to fair value certain                spin-off related items                    | (c)                           |   |   | -         |   |   |   |   |   |   |   | 498,427  |   |   |   |   |   |   |   | - |   |
| Other                miscellaneous income - US                GAAP                                       |                          |   |   | 128,779   |   |   |   |   |   |   |   | 853,727  |   |   |   |   |   |   |   | 82,232 |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| FIT                recovery - Canadian                GAAP                                               |                          |   |   | -         |   |   |   |   |   |   |   | 477,400  |   |   |   |   |   |   |   | 1,043,943 |   |
| Adjustment                to reinstate Canadian                FIT recovery to sharecapital              | (b)                           |   |   | -         |   |   |   |   |   |   |   | (477,400 | )      |   |   |   |   |   |   | (1,043,943 | ) |
| FIT                recovery under US                GAAP                                                 |                          |   |   | -         |   |   |   |   |   |   |   | -        |   |   |   |   |   |   |   | - |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Stock-based                compensation expense -                Canadian GAAP                           |                          |   |   | 576,605   |   |   |   |   |   |   |   | 220,964  |   |   |   |   |   |   |   | 683,671 |   |
| Adjustment                to fair value certain                spin-off related items                    | (c)                           |   |   | 151,944   |   |   |   |   |   |   |   | (53,132  | )      |   |   |   |   |   |   | - |   |
| Stock-based                compensation expense -                US GAAP                                 |                          |   |   | 728,549   |   |   |   |   |   |   |   | 167,832  |   |   |   |   |   |   |   | 683,671 |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Mineral                property costs written off                - Canadian GAAP                         |                          |   |   | 224,695   |   |   |   |   |   |   |   | 258,823  |   |   |   |   |   |   |   | 1,715,674 |   |
| Under                US GAAP such expenses not                initially capitalized                      | (a)                           |   |   | (224,695  | )      |   |   |   |   |   |   | (258,823 | )      |   |   |   |   |   |   | (1,715,674 | ) |
| Mineral                property costs written off                under US GAAP                           |                          |   |   | -         |   |   |   |   |   |   |   | -        |   |   |   |   |   |   |   | - |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Gain                on disposition of Toquima                underCanadian                GAAP           |                          |   |   | -         |   |   |   |   |   |   |   | 142,223  |   |   |   |   |   |   |   | - |   |
| Amount                considered a cost recovery                under US GAAP                            | (a)                           |   |   | -         |   |   |   |   |   |   |   | (142,223 | )      |   |   |   |   |   |   | - |   |
| Gain                on disposition of Toquima                underUS                GAAP                 |                          |   |   | -         |   |   |   |   |   |   |   | -        |   |   |   |   |   |   |   | - |   |
|                                                                                                     |                          |   |   |      |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |
| Mineral                property costs expensed -                Canadian GAAP                            |                          |   |   | 189,027   |   |   |   |   |   |   |   | 236,278  |   |   |   |   |   |   |   | 283,391 |   |
| Under                Canadian GAAPpolicy suchcosts                initially                deferred | (a)                           |   |   | 6,879,126 |   |   |   |   |   |   |   | (153,062 | )      |   |   |   |   |   |   | 4,861,824 |   |
| Net                mineral property costs                expensed –                US GAAP    |                          |   |   | 7,068,153 |   |   |   |   |   |   |   | 83,216   |   |   |   |   |   |   |   | 5,145,215 |   |

|                                                    | 2007                         | 2006   | 2005                   |
|---------------------------------------------------------|------------------------------|--------|------------------------|
|                                                    | Canadian                GAAP |   | US                GAAP | Canadian                GAAP |   | US                GAAP | Canadian                GAAP |   | US                GAAP |
|                                                    | $                            |   | $                      | $ |   | $ | $ |   | $ |
| Total                assets                             | 101,017,670                  |   | 78,355,914             | 31,885,579 |   | 17,898,837 | 33,320,369 |   | 10,358,726 |
| Total                liabilities                        | 15,659,418                   |   | 17,719,689             | 976,066 |   | 4,133,363 | 927,440 |   | 927,440 |
| Total                shareholders’ equity         | 85,358,252                   |   | 60,636,225             | 30,909,513 |   | 13,765,474 | 32,392,929 |   | 9,431,286 |
| Net                loss                                 | 2,216,381                    |   | 9,022,756              | 3,787,920 |   | 3,444,099 | 3,644,284 |   | 7,694,377 |
| Loss                per share                           | 0.02                         |   | 0.08                   | 0.05 |   | 0.05 | 0.06 |   | 0.13 |
| Net                cash flows to operating activities   | 1,534,976                    |   | 8,603,129              | 3,324,531 |   | 4,391,498 | 3,274,434 |   | 8,973,732 |
| Net                cash flows to investing activities   | 21,118,988                   |   | 14,050,834             | 3,855,447 |   | 193,929 | 9,714,134 |   | 3,359,596 |
| Net                cash flows from financing activities | 30,211,592                   |   | 30,211,592             | 11,603,155 |   | 9,008,604 | 8,857,223 |   | 8,201,983 |

----

| a)   | On                February 5th,                2008 the Company granted 1,535,000 incentive stock options to directors,                employees and contractors of the company at $1.04 per share, vesting                over                one year and expiring 5 years from the date of                grant. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Subsequent                to the year end, the Company issued 10,000 shares pursuant to the                exercise                of employee stock options for proceeds of                $7,400. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Subsequent                to the year end, Agnico-Eagle Mines Ltd. advised the Company that                it was                terminating its option on the DMC property and returning the property                to                the Company. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----