----

----

----

|                                               |   |   |                                 |   |
|----------------------------------------------------|--------|--------|--------------------------------------|--------|
| /s/ "David Adamson"                                |   |   | /s/  "Robert G. Lewis"          |   |
| Name:  David W. Adamson                       |   |   | Name:  Robert G. Lewis          |   |
| Title:  President and Chief Executive Officer |   |   | Title:  Chief Financial Officer |   |

----

----

|                                               |   |   |                                 |   |
|----------------------------------------------------|--------|--------|--------------------------------------|--------|
| /s/ "David Adamson"                                |   |   | /s/  "Robert G. Lewis"          |   |
| Name:  David W. Adamson                       |   |   | Name:  Robert G. Lewis          |   |
| Title:  President and Chief Executive Officer |   |   | Title:  Chief Financial Officer |   |

----

----

|                                                            |   | As at December 31 |
|-----------------------------------------------------------------|--------|-------------------|
|                                                            |   | 2010              |   |   | 2009 |
| Assets                                                          |   |              |   |
| Current assets                                                  |   |              |   |
| Cash and cash equivalents                                       |   | $                 | 11,967,867 |   |   | $ | 2,377,399 |   |
| Temporary investments (note 6)                                  |   |              | 52,413,576 |   |   |   | 125,418,231 |   |
| Marketable securities (note 7)                                  |   |              | 68,408 |   |   |   | 66,532 |   |
| Amounts receivable                                              |   |              | 2,111,463 |   |   |   | 1,108,511 |   |
| Prepaid expenses and supplier advances                          |   |              | 289,967 |   |   |   | 333,343 |   |
|                                                            |   |              | 66,851,281 |   |   |   | 129,304,016 |   |
|                                                            |   |              |   |   |   |   |   |   |
| Other investments (note 8)                                      |   |              | 1,248,472 |   |   |   | 1,127,819 |   |
| Buildings and equipment (note 9)                                |   |              | 5,031,532 |   |   |   | 987,245 |   |
| Mineral property costs (note 10)                                |   |              | 154,293,692 |   |   |   | 114,209,833 |   |
| Reclamation deposits (note 11)                                  |   |              | 498,000 |   |   |   | 498,000 |   |
|                                                            |   | $                 | 227,922,977 |   |   | $ | 246,126,913 |   |
| Liabilities                                                     |   |              |   |   |   |   |   |   |
| Current liabilities                                             |   |              |   |   |   |   |   |   |
| Accounts payable and accrued liabilities                        |   | $                 | 6,992,024 |   |   | $ | 4,038,999 |   |
| Corporate income tax payable (note 14)                          |   |              | 7,150 |   |   |   | - |   |
|                                                            |   |              | 6,999,174 |   |   |   | 4,038,999 |   |
| Long term liabilities                                           |   |              |   |   |   |   |   |   |
| Asset retirement obligations (note 11)                          |   |              | 124,007 |   |   |   | - |   |
| Future income taxes (note 14)                                   |   |              | 5,136,033 |   |   |   | 13,391,328 |   |
|                                                            |   |              | 5,260,040 |   |   |   | 13,391,328 |   |
| Shareholders’ equity                                      |   |              |   |   |   |   |   |   |
| Share capital (note 12(a))                                      |   |              | 248,482,600 |   |   |   | 246,391,590 |   |
| Contributed surplus (note 12(c))                                |   |              | 13,796,704 |   |   |   | 5,750,527 |   |
| Deficit                                                         |   |              | (46,709,395 | ) |   |   | (22,659,689 | ) |
| Accumulated other comprehensive income (loss) (note 13)         |   |              | 93,854 |   |   |   | (785,842 | ) |
|                                                            |   |              | 215,663,763 |   |   |   | 228,696,586 |   |
|                                                            |   | $                 | 227,922,977 |   |   | $ | 246,126,913 |   |
| See accompanying notes to the consolidated financial statements |   |              |   |   |   |   |   |   |

| Commitments (Note 16)                     |   |                      |
|-------------------------------------------|--------|---------------------------|
|                                      |   |                      |
| Approved by the Board of Directors:  |   |                      |
| "David  Adamson "                    |   | “Julian Kemp” |
| David Adamson, Director                   |   | Julian Kemp, CA, Director |

----

|                                                                |   | For the years ended December 31 |        |
|---------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                |   | 2010                            |        |   | 2009 |   |   | 2008 |   |
|                                                                |   |                            |        |   |   |   |   |   |   |
| Expenses                                                            |   |                            |        |   |   |   |   |   |   |
| Amortization                                                        |   | $                               | 22,698      |   |   | $ | 64,878 |   |   | $ | 70,391 |   |
| Consulting                                                          |   |                            | 543,178     |   |   |   | 9,207 |   |   |   | 74,259 |   |
| General mineral exploration                                         |   |                            | 144,006     |   |   |   | 212,265 |   |   |   | 232,932 |   |
| Insurance                                                           |   |                            | 510,962     |   |   |   | 176,657 |   |   |   | 104,262 |   |
| Investor relations                                                  |   |                            | 860,454     |   |   |   | 657,820 |   |   |   | 630,626 |   |
| Office and rent                                                     |   |                            | 245,950     |   |   |   | 177,769 |   |   |   | 151,433 |   |
| Part XII.6 tax on flow-through                                      |   |                            | (404        | ) |   |   | 26,102 |   |   |   | 159,279 |   |
| Professional fees                                                   |   |                            | 535,447     |   |   |   | 211,488 |   |   |   | 200,085 |   |
| Salaries                                                            |   |                            | 2,605,941   |   |   |   | 1,231,694 |   |   |   | 944,150 |   |
| Stock-based compensation (note 12(b))                               |   |                            | 5,585,969   |   |   |   | 1,638,405 |   |   |   | 659,806 |   |
| Transfer agent and regulatory filing fees                           |   |                            | 205,857     |   |   |   | 150,899 |   |   |   | 121,161 |   |
| Travel and accommodation                                            |   |                            | 358,060     |   |   |   | 136,026 |   |   |   | 138,534 |   |
|                                                                |   |                            |        |   |   |   |   |   |   |   |   |   |
| Loss before other items                                             |   |                            | (11,618,118 | ) |   |   | (4,693,210 | ) |   |   | (3,486,918 | ) |
| Write-off of mineral property costs                                 |   |                            | (21,163,834 | ) |   |   | - |   |   |   | - |   |
| Foreign exchange gains (losses)                                     |   |                            | 727,701     |   |   |   | 2,132,034 |   |   |   | (2,894,204 | ) |
| Interest and other income                                           |   |                            | 463,583     |   |   |   | 214,243 |   |   |   | 732,798 |   |
| Option and administration fees received in excess of property costs |   |                            | 505,865     |   |   |   | 249,070 |   |   |   | 578,664 |   |
| Loss on sale of investments                                         |   |                            | (366,418    | ) |   |   | (96,721 | ) |   |   | (222,491 | ) |
| Other (losses) gains                                                |   |                            | (114,449    | ) |   |   | 566 |   |   |   | (357,343 | ) |
| Loss on disposal of equipment                                       |   |                            | -           |   |   |   | (4,024 | ) |   |   | (4,475 | ) |
| Loss before income taxes                                            |   |                            | (31,565,670 | ) |   |   | (2,198,042 | ) |   |   | (5,653,969 | ) |
| Current income tax expense                                          |   |                            | (14,751     | ) |   |   | (3,902 | ) |   |   | (22,603 | ) |
| Future income tax recovery (note 14)                                |   |                            | 7,530,715   |   |   |   | 1,645,615 |   |   |   | 3,276,809 |   |
|                                                                |   |                            |        |   |   |   |   |   |   |   |   |   |
| Net loss for the year                                               |   |                            | (24,049,706 | ) |   |   | (556,329 | ) |   |   | (2,399,763 | ) |
| Deficit, beginning of the year                                      |   |                            | (22,659,689 | ) |   |   | (22,103,360 | ) |   |   | (19,703,597 | ) |
| Deficit, end of the year                                            |   | $                               | (46,709,395 | ) |   | $ | (22,659,689 | ) |   | $ | (22,103,360 | ) |
|                                                                |   |                            |        |   |   |   |   |   |   |   |   |   |
| Basic and  diluted loss per common share                  |   | $                               | (0.11       | ) |   | $ | (0.00 | ) |   | $ | (0.02 | ) |
| Weighted average number of common shares outstanding                |   |                            | 213,523,163 |   |   |   | 186,958,831 |   |   |   | 148,878,778 |   |

----

|                                                                                        |   | For the years ended December 31 |        |
|---------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                                        |   | 2010                            |        |   | 2009 |   |   | 2008 |   |
|                                                                                        |   |                            |        |   |   |   |   |   |   |
| Net loss for the year                                                                       |   | $                               | (24,049,706 | ) |   | $ | (556,329 | ) |   | $ | (2,399,763 | ) |
|                                                                                        |   |                            |        |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss) in the year                                               |   |                            |        |   |   |   |   |   |   |   |   |   |
| Fair value adjustments on available for sale financial instruments:                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Temporary investments                                                                       |   |                            | 28,761      |   |   |   | (75,432 | ) |   |   | 25,021 |   |
| Marketable securities and other investments                                                 |   |                            | 370,068     |   |   |   | 522,010 |   |   |   | (2,407,906 | ) |
| Realized losses on marketable securities and other investments reclassified to net income   |   |                            | 366,418     |   |   |   | 96,721 |   |   |   | 222,491 |   |
| Impairment losses on marketable securities and other investments reclassified to net income |   |                            | 114,449     |   |   |   | - |   |   |   | 281,647 |   |
|                                                                                        |   |                            | 850,935     |   |   |   | 618,731 |   |   |   | (1,903,768 | ) |
| Other comprehensive income (loss) in the year                                               |   |                            | 879,696     |   |   |   | 543,299 |   |   |   | (1,878,747 | ) |
| Comprehensive loss for the year                                                             |   |                            | (23,170,010 | ) |   |   | (13,030 | ) |   |   | (4,278,510 | ) |
|                                                                                        |   |                            |        |   |   |   |   |   |   |   |   |   |
| Accumulated comprehensive loss, beginning of the year                                       |   |                            | (23,445,531 | ) |   |   | (23,432,501 | ) |   |   | (19,153,991 | ) |
| Accumulated comprehensive loss, end of the year                                             |   | $                               | (46,615,541 | ) |   | $ | (23,445,531 | ) |   | $ | (23,432,501 | ) |
|                                                                                        |   |                            |        |   |   |   |   |   |   |   |   |   |

----

|                                             |   | For the years ended December 31 |        |
|--------------------------------------------------|--------|---------------------------------|-------------|
|                                             |   | 2010                            |        |   | 2009 |   |   | 2008 |   |
| Cash Provided by (Used for):                     |   |                            |        |   |   |   |   |   |   |
| Operating Activities                             |   |                            |        |   |   |   |   |   |   |
| Net loss for the year                            |   | $                               | (24,049,706 | ) |   | $ | (556,329 | ) |   | $ | (2,399,763 | ) |
| Adjustment for items which do not involve cash:  |   |                            |        |   |   |   |   |   |   |   |   |   |
| Amortization                                     |   |                            | 22,698      |   |   |   | 64,878 |   |   |   | 70,391 |   |
| Stock-based compensation                         |   |                            | 5,585,969   |   |   |   | 1,638,405 |   |   |   | 659,806 |   |
| Write-off of mineral property costs              |   |                            | 21,163,835  |   |   |   | - |   |   |   | - |   |
| Loss on sale of investments                      |   |                            | 366,418     |   |   |   | 96,155 |   |   |   | 222,491 |   |
| Foreign exchange (gains) losses                  |   |                            | (724,580    | ) |   |   | (2,132,034 | ) |   |   | 2,894,204 |   |
| Other losses                                     |   |                            | 114,449     |   |   |   | 4,024 |   |   |   | 342,788 |   |
| Option receipt in excess of property costs       |   |                            | (201,181    | ) |   |   | (109,813 | ) |   |   | - |   |
| Interest and other income                        |   |                            | 166,981     |   |   |   | 64,639 |   |   |   | 43,458 |   |
| Future income tax recovery                       |   |                            | (7,530,715  | ) |   |   | (1,645,615 | ) |   |   | (3,276,809 | ) |
|                                             |   |                            | (5,085,832  | ) |   |   | (2,575,690 | ) |   |   | (1,443,434 | ) |
| Changes in non-cash working capital components:  |   |                            |        |   |   |   |   |   |   |   |   |   |
| Prepaid expenses                                 |   |                            | 43,376      |   |   |   | (223,586 | ) |   |   | (66,259 | ) |
| Amounts receivable                               |   |                            | (1,002,952  | ) |   |   | (937,451 | ) |   |   | 454,865 |   |
| Accounts payable and accrued liabilities         |   |                            | 1,632,855   |   |   |   | 640,418 |   |   |   | (147,039 | ) |
| Corporate income taxes payable                   |   |                            | 7,150       |   |   |   | (22,603 | ) |   |   | (51,397 | ) |
|                                             |   |                            | (4,405,403  | ) |   |   | (3,118,912 | ) |   |   | (1,253,264 | ) |
| Investing Activities*                            |   |                            |        |   |   |   |   |   |   |   |   |   |
| Temporary investments                            |   |                            | 72,866,435  |   |   |   | (121,546,149 | ) |   |   | 11,052,489 |   |
| Mineral property costs                           |   |                            | (56,444,420 | ) |   |   | (27,611,890 | ) |   |   | (16,893,521 | ) |
| Reclamation deposits                             |   |                            | -           |   |   |   | (493,000 | ) |   |   | - |   |
| Recovery of property costs incurred              |   |                            | 27,188      |   |   |   | 137,683 |   |   |   | 1,392,438 |   |
| Management and administration fees received      |   |                            | -           |   |   |   | - |   |   |   | 7,193 |   |
| Purchase of equipment                            |   |                            | (3,834,993  | ) |   |   | (960,010 | ) |   |   | (94,195 | ) |
| Proceeds of sale of investments                  |   |                            | 463,580     |   |   |   | 163,813 |   |   |   | 193,060 |   |
|                                             |   |                            | 13,077,790  |   |   |   | (150,309,553 | ) |   |   | (4,342,536 | ) |
| Financing Activities*                            |   |                            |        |   |   |   |   |   |   |   |   |   |
| Common shares issued                             |   |                            | 933,960     |   |   |   | 144,544,906 |   |   |   | 10,298,529 |   |
| Share issue costs                                |   |                            | (15,879     | ) |   |   | (7,492,791 | ) |   |   | (740,289 | ) |
|                                             |   |                            | 918,081     |   |   |   | 137,052,115 |   |   |   | 9,558,240 |   |
| Increase (decrease) in cash and cash equivalents |   |                            | 9,590,468   |   |   |   | (16,376,350 | ) |   |   | 3,962,440 |   |
| Cash and cash equivalents, beginning of the year |   |                            | 2,377,399   |   |   |   | 18,753,749 |   |   |   | 14,791,309 |   |
| Cash and cash equivalents, end of the year       |   | $                               | 11,967,867  |   |   | $ | 2,377,399 |   |   | $ | 18,753,749 |   |

----

| 1.   | NATURE AND CONTINUANCE OF OPERATIONS |
|----------------|--------------------------------------|

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----------------|--------------------------------------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
|----------------|--------------------------------------------------------|

----

| 2.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
|----------------|--------------------------------------------------------|

----

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
|----|--------------------------------------------------------|

----

| 3.   | CHANGES IN ACCOUNTING POLICIES |
|----------------|--------------------------------|

| 4.   | CAPITAL MANAGEMENT |
|----------------|--------------------|

| 5.   | FINANCIAL INSTRUMENTS |
|----------------|-----------------------|

----

| 5. | FINANCIAL INSTRUMENTS (continued) |
|----|-----------------------------------|

|                                     |   | Fair Value Level |   |   | 2010                            |   |       | 2009                                                                |   |
|------------------------------------------|--------|------------------|--------|--------|---------------------------------|--------|------------|---------------------------------------------------------------------|--------|
|                                     |   |             |   |   | Available for saleat fair value |   |       | Loans and receivables/ other financial liabilitiesat amortized cost |   |   | Available for saleat fair value |   |   | Loans and receivables/ other financial liabilitiesat amortized cost |   |
|                                     |   |             |   |   | $                               |   |       |                                                                | $      |   |   |   | $ |   |   |   | $ |   |   |
| Financial assets:                        |   |             |   |   |                            |   |       |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                |   |             | 1      |   |                            |   | 11,697,867 |                                                                |   |   | - |   |   |   | 2,377,399 |   |   |   | - |   |
| Temporary investments                    |   |             | 1      |   |                            |   | 52,413,576 |                                                                |   |   | - |   |   |   | 125,418,231 |   |   |   | - |   |
| Marketable securities                    |   |             | 1      |   |                            |   | 68,408     |                                                                |   |   | - |   |   |   | 66,532 |   |   |   | - |   |
| Amounts receivable                       |   |             |   |   |                            |   |       |                                                                |   |   | 2,111,463 |   |   |   | - |   |   |   | 1,108,510 |   |
| Other investments                        |   |             | 1      |   |                            |   | 1,248,472  |                                                                |   |   | - |   |   |   | 1,127,819 |   |   |   | - |   |
| Reclamation deposits                     |   |             | 2      |   |                            |   | 498,000    |                                                                |   |   | - |   |   |   | 498,000 |   |   |   | - |   |
|                                     |   |             |   |   |                            |   | 65,926,323 |                                                                |   |   | 2,111,463 |   |   |   | 129,487,981 |   |   |   | 1,108,510 |   |
| Financial liabilities:                   |   |             |   |   |                            |   |       |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities |   |             |   |   |                            |   | -          |                                                                |   |   | 6,992,024 |   |   |   | - |   |   |   | 4,038,999 |   |
|                                     |   |             |   |   |                            |   | -          |                                                                |   |   | 6,992,024 |   |   |   | - |   |   |   | 4,038,999 |   |

----

| 5. | FINANCIAL INSTRUMENTS (continued) |
|----|-----------------------------------|

| 6.   | TEMPORARY INVESTMENTS |
|----------------|-----------------------|

| 7.   | MARKETABLE SECURITIES |
|----------------|-----------------------|

----

| 8.   | OTHER INVESTMENTS |
|----------------|-------------------|

|                                           |   | 2010                     |      |   | 2009                     |   |
|------------------------------------------------|--------|--------------------------|-----------|--------|--------------------------|--------|
|                                           |   | Carrying andMarket Value |      |   | Carrying andMarket Value |   |
|                                           |   |                     |      |   |                     |   |
| Investments in companies spun-off (1)          |   | $                        | 2,311     |   |                     | $      | 168,694 |   |
| Investments in other public company shares (2) |   |                     | 1,246,161 |   |                     |   | 959,125 |   |
|                                           |   |                     |      |   |                     |   |   |   |
|                                           |   | $                        | 1,248,472 |   |                     | $      | 1,127,819 |   |

|   | (1) | Investment in companies spun-off consists of the net value of rights and obligations outstanding from options issued or revised at the December 2006 plan of arrangement.  The December 31, 2010, carrying value and fair value of $2,311 is attributable to the right to receive the proceeds from any exercise of Africo options or the underlying Africo shares. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Other investments in public company shares have aggregate carrying and fair value of $1,246,161 at December 31, 2010. Fair values were based on quoted prices in an active market. These shares were received as payments pursuant to mineral property option agreements and pursuant to prior year spin-out transactions. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.   | BUILDINGS AND EQUIPMENT |
|----------------|-------------------------|

|                      |   | 2010   |      |   | 2009         |   |
|---------------------------|--------|--------|-----------|--------|--------------|--------|
|                      |   |   |      |   | Accumulated  |   |   | Net Book |   |   |   |   |   | Accumulated |   |   | Net Book |   |
|                      |   | Cost   |      |   | Amortization |   |   | Value |   |   | Cost |   |   | Amortization |   |   | Value |   |
|                      |   |   |      |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets under construction |   | $      | 2,750,427 |   |         | $      | - |   |   | $ | 2,750,427 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Computer equipment        |   |   | 252,715   |   |         |   | 127,356 |   |   |   | 125,359 |   |   |   | 204,193 |   |   |   | 84,132 |   |   |   | 120,061 |   |
| Furniture and fixtures    |   |   | 167,592   |   |         |   | 91,783 |   |   |   | 75,809 |   |   |   | 164,569 |   |   |   | 73,267 |   |   |   | 91,302 |   |
| Software                  |   |   | 280,650   |   |         |   | 173,608 |   |   |   | 107,042 |   |   |   | 191,757 |   |   |   | 111,012 |   |   |   | 80,745 |   |
| Leasehold improvements    |   |   | 12,291    |   |         |   | 10,140 |   |   |   | 2,151 |   |   |   | 12,291 |   |   |   | 9,218 |   |   |   | 3,073 |   |
| Field equipment           |   |   | 1,347,978 |   |         |   | 183,455 |   |   |   | 1,164,523 |   |   |   | 263,219 |   |   |   | 27,920 |   |   |   | 235,299 |   |
| Trucks                    |   |   | 187,959   |   |         |   | 46,161 |   |   |   | 141,798 |   |   |   | 70,459 |   |   |   | 10,569 |   |   |   | 59,890 |   |
| Buildings                 |   |   | 714,284   |   |         |   | 49,861 |   |   |   | 664,423 |   |   |   | 411,352 |   |   |   | 14,477 |   |   |   | 396,875 |   |
|                      |   |   |      |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   | $      | 5,713,896 |   |         | $      | 682,364 |   |   | $ | 5,031,532 |   |   | $ | 1,317,840 |   |   | $ | 330,595 |   |   | $ | 987,245 |   |

| 10.   | MINERAL PROPERTY INTERESTS |
|-----------------|----------------------------|

|                            |   | Balance December 31 2008 |       |   | Gross Expenditures 2009 |   |       | Recoveries2009 |   |   | Balance December 31 2009 |   |   | Gross Expenditures 2010 |       |   | Recoveries and Write-Offs2010 |   |       | Balance December 31 2010 |   |
|---------------------------------|--------|--------------------------|------------|--------|-------------------------|--------|------------|----------------|--------|--------|--------------------------|--------|--------|-------------------------|------------|--------|-------------------------------|--------|------------|--------------------------|--------|
| CANADA                          |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |       |   |                          |   |       |                     |   |
| ONTARIO                         |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |       |   |                          |   |       |                     |   |
| RED LAKE MINING DIVISION        |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |       |   |                          |   |       |                     |   |
| Phoenix Gold Project            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |       |   |                          |   |       |                     |   |
| Acquisition and option payments |   | $                        | 4,055,284  |   |                    | $      | 561,229    |           |   | $      | -                        |   |   | $                       | 4,616,513  |   |                          | $      | 412,417    |                     |   | $ | - |   |   | $ | 5,028,930 |   |
| Exploration costs:              |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |       |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Geological and geochemical      |   |                     | 2,164,953  |   |                    |   | 1,299,196  |           |   |   | -                        |   |   |                    | 3,464,149  |   |                          |   | 3,281,788  |                     |   |   | - |   |   |   | 6,745,937 |   |
| Surface drilling                |   |                     | 19,314,229 |   |                    |   | 10,815,628 |           |   |   | -                        |   |   |                    | 30,129,857 |   |                          |   | 11,560,136 |                     |   |   | - |   |   |   | 41,689,993 |   |
| Geophysical                     |   |                     | 456,262    |   |                    |   | 57,435     |           |   |   | -                        |   |   |                    | 513,697    |   |                          |   | 104,900    |                     |   |   | - |   |   |   | 618,597 |   |
| Travel and accommodation        |   |                     | 305,140    |   |                    |   | 97,632     |           |   |   | -                        |   |   |                    | 402,772    |   |                          |   | 95,847     |                     |   |   | - |   |   |   | 498,619 |   |
| Other                           |   |                     | 109,735    |   |                    |   | 622,979    |           |   |   | -                        |   |   |                    | 732,714    |   |                          |   | 2,364,741  |                     |   |   | - |   |   |   | 3,097,455 |   |
| Underground exploration         |   |                     | 734,849    |   |                    |   | 16,966,760 |           |   |   | -                        |   |   |                    | 17,701,609 |   |                          |   | 40,048,462 |                     |   |   | - |   |   |   | 57,750,071 |   |
| Amortization                    |   |                     | -          |   |                    |   | 80,979     |           |   |   | -                        |   |   |                    | 80,979     |   |                          |   | 329,170    |                     |   |   | - |   |   |   | 410,149 |   |
| Asset rehabilitation obligation |   |                     | -          |   |                    |   | -          |           |   |   | -                        |   |   |                    | -          |   |                          |   | 124,007    |                     |   |   | - |   |   |   | 124,007 |   |
|                            |   |                     | 27,140,452 |   |                    |   | 30,501,838 |           |   |   | -                        |   |   |                    | 57,642,290 |   |                          |   | 58,321,468 |                     |   |   | - |   |   |   | 115,963,758 |   |

----

| 10.   | MINERAL PROPERTY INTERESTS (continued) |
|-----------------|----------------------------------------|

|                            |   | Balance December 31 2008 |       |   | Gross Expenditures 2009 |   |       | Recoveries2009 |   |   | Balance December 31 2009 |   |   | Gross Expenditures 2010 |        |   | Recoveries and Write-Offs2010 |   |       | Balance December 31 2010 |   |
|---------------------------------|--------|--------------------------|------------|--------|-------------------------|--------|------------|----------------|--------|--------|--------------------------|--------|--------|-------------------------|-------------|--------|-------------------------------|--------|------------|--------------------------|--------|
|                            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |
| Other Red Lake Properties       |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |
| Acquisition and option payments |   | $                        | 610,068    |   |                    | $      | 166,844    |           |   | $      | (120,282                 | )      |   | $                       | 656,630     |   |                          | $      | 321,743    |                     |   | $ | (14,621 | ) |   | $ | 963,752 |   |
| Exploration costs:              |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Geological and geochemical      |   |                     | 1,873,454  |   |                    |   | -          |           |   |   | -                        |   |   |                    | 1,873,454   |   |                          |   | 92,711     |                     |   |   | - |   |   |   | 1,966,165 |   |
| Surface drilling                |   |                     | 4,090,189  |   |                    |   | 51,204     |           |   |   | -                        |   |   |                    | 4,141,393   |   |                          |   | 1,267,352  |                     |   |   | - |   |   |   | 5,408,745 |   |
| Geophysical                     |   |                     | 361,650    |   |                    |   | 165,862    |           |   |   | -                        |   |   |                    | 527,512     |   |                          |   | 573,093    |                     |   |   | (27,190 | ) |   |   | 1,073,415 |   |
| Travel and accommodation        |   |                     | 157,784    |   |                    |   | -          |           |   |   | -                        |   |   |                    | 157,784     |   |                          |   | 7,634      |                     |   |   | - |   |   |   | 165,418 |   |
| Other                           |   |                     | 75,800     |   |                    |   | 1,258      |           |   |   | -                        |   |   |                    | 77,058      |   |                          |   | 9,110      |                     |   |   | - |   |   |   | 86,168 |   |
| Administration fees (earned)    |   |                     | (724,425   | )      |                    |   | -          |           |   |   | -                        |   |   |                    | (724,425    | )      |                          |   | -          |                     |   |   | - |   |   |   | (724,425 | ) |
|                            |   |                     | 6,444,520  |   |                    |   | 385,168    |           |   |   | (120,282                 | )      |   |                    | 6,709,406   |   |                          |   | 2,271,643  |                     |   |   | (41,811 | ) |   |   | 8,939,238 |   |
|                            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| UNITED STATES OF AMERICA        |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| ALASKA                          |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Alaska Properties               |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Acquisition and option payments |   |                     | 37,200,284 |   |                    |   | -          |           |   |   | -                        |   |   |                    | 37,200,284  |   |                          |   | -          |                     |   |   | (17,836,488 | ) |   |   | 19,363,796 |   |
| Exploration costs               |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Geological and geochemical      |   |                     | 1,814,908  |   |                    |   | 38,155     |           |   |   | -                        |   |   |                    | 1,853,063   |   |                          |   | 16,085     |                     |   |   | (962,447 | ) |   |   | 906,701 |   |
| Surface drilling                |   |                     | 2,371,509  |   |                    |   | -          |           |   |   | -                        |   |   |                    | 2,371,509   |   |                          |   | -          |                     |   |   | (1,354,383 | ) |   |   | 1,017,126 |   |
| Travel and accommodation        |   |                     | 26,230     |   |                    |   | -          |           |   |   | -                        |   |   |                    | 26,230      |   |                          |   | -          |                     |   |   | (9,374 | ) |   |   | 16,856 |   |
| Claim rental                    |   |                     | 825,255    |   |                    |   | 425,168    |           |   |   | -                        |   |   |                    | 1,250,423   |   |                          |   | 659,549    |                     |   |   | (1,001,142 | ) |   |   | 908,830 |   |
|                            |   |                     | 42,238,186 |   |                    |   | 463,323    |           |   |   | -                        |   |   |                    | 42,701,509  |   |                          |   | 675,634    |                     |   |   | (21,163,834 | ) |   | $ | 22,213,309 |   |
|                            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| NEVADA                          |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Nevada Properties               |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Acquisition and option payments |   |                     | 6,177,535  |   |                    |   | -          |           |   |   | -                        |   |   |                    | 6,177,535   |   |                          |   | -          |                     |   |   | - |   |   |   | 6,177,535 |   |
| Exploration costs               |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Geological and geochemical      |   |                     | 296,977    |   |                    |   | 110,444    |           |   |   | -                        |   |   |                    | 407,421     |   |                          |   | 20,759     |                     |   |   | - |   |   |   | 428,180 |   |
| Geophysics                      |   |                     | 562,658    |   |                    |   | 7,269      |           |   |   | -                        |   |   |                    | 569,927     |   |                          |   | -          |                     |   |   | - |   |   |   | 569,927 |   |
| Other                           |   |                     | 1,745      |   |                    |   | -          |           |   |   | -                        |   |   |                    | 1,745       |   |                          |   | -          |                     |   |   | - |   |   |   | 1,745 |   |
|                            |   |                     | 7,038,915  |   |                    |   | 117,713    |           |   |   | -                        |   |   |                    | 7,156,628   |   |                          |   | 20,759     |                     |   |   | - |   |   |   | 7,177,387 |   |
|                            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |
| Mineral Property Costs          |   | $                        | 82,862,073 |   |                    | $      | 31,468,042 |           |   | $      | (120,282                 | )      |   | $                       | 114,209,833 |   |                          | $      | 61,289,504 |                     |   | $ | (21,205,645 | ) |   | $ | 154,293,692 |   |
|                            |   |                     |       |   |                    |   |       |           |   |   |                     |   |   |                    |        |   |                          |   |       |                     |   |   |   |   |   |   |   |   |

|                                                       |   | 2008   |    |   | 2009   |   |    | 2010   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Alaska properties written off                              |   | $      | -       |   |   | $      | -       |   |   | $ | 21,163,834 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Aggregate cost recoveries and administration fees received |   |   | 527,747 |   |   |   | 120,282 |   |   |   | 41,811 |   |
| Total write-offs and  recoveries                 |   | $      | 527,747 |   |   | $      | 120,282 |   |   | $ | 21,205,645 |   |

----

| 10.   | MINERAL PROPERTY INTERESTS (continued) |
|-----------------|----------------------------------------|

| (i)   | Water Claims Agreement |
|-----------------|------------------------|

| (ii)   | Land Claims Agreement |
|------------------|-----------------------|

| (iii)   | Unpatented Claim |
|-------------------|------------------|

----

| 10.   | MINERAL PROPERTY INTERESTS (continued) |
|-----------------|----------------------------------------|

| Property              |   | Interest   |   | Description                 | Location in Ontario                   |
|-----------------------|--------|------------|--------|-----------------------------|---------------------------------------|
| Adams Lake            |   |       | 100%   |                        | 35 unpatented mining claims           | Balmer and Bateman townships |
| Advance               |   |       | 100%   |                        | 13 patented mining claims             | Todd township |
| DMC                   |   |       | 100%   |                        | 130 unpatented mining claims          |  Dome, McDonough, Bateman and Fairlie townships |
| East Bay              |   |       | 100%   |                        | 43 unpatented mining claims           | Bateman and Blackbear townships |
| Humlin Property       |   |       | 100%   |                        | 31 unpatented mining claims           | Fairlie township |
| McCuaig Joint Venture |   |       | 60%    |                        | 3 unpatented mining claims            | Dome township |
| Red Lake North        |   |       | 100%   |                        | 48 unpatented mining claims           | Bateman, Black Bear Lake, McDonough and Coli Lake townships |
| Slate Bay             |   |       | 100%   |                        | 30 unpatented mining claims           | McDonough, Dome and Graves townships |
| Westend               |   | 50 to 100% |   | 23 unpatented claims        | Ball, Todd and Hammell Lake townships |
| Wolf Bay              |   | 50 to 100% |   | 23 unpatented mining claims | Todd and Hammell Lake townships       |

----

| 10. | MINERAL PROPERTY INTERESTS (continued) |
|-----|----------------------------------------|

| Property            |   | Interest            |   | Description                                         | Location                                       |
|---------------------|--------|---------------------|--------|-----------------------------------------------------|------------------------------------------------|
| New Horizon, Alaska |   |                | 100%   |                                                | Approximately 195,280 acres (79,027 hectares)  | Goodpaster Mining District |
| Nevada – Utah |   | Majority 100% owned |   | Approximately 225,000 acres (91,054 hectares)  | Elko County, Nevada and Box Elder County, Utah |

| 11.   | ASSET RETIREMENT OBLIGATIONS |
|-----------------|------------------------------|

----

| 12.   | SHARE CAPITAL |
|-----------------|---------------|

| (a)   | Authorized share capital consists of unlimited common shares without par value. |
|-----------------|---------------------------------------------------------------------------------|

|                                                                      |   | 2010             |        |   | 2009   |   |        | 2008   |             |
|---------------------------------------------------------------------------|--------|------------------|-------------|--------|--------|--------|-------------|--------|------------------|
|                                                                      |   | Number of Shares |        |   | $      |   |        |   | Number of Shares |   |   | $ |   |   |   | Number of Shares |   |   | $ |   |   |
| Balance, beginning of year                                                |   |             | 213,218,014 |   |   |   | 246,391,590 |   |             |   | 156,151,871 |   |   |   | 109,912,429 |   |   |   | 147,871,501 |   |   |   | 103,572,229 |   |
| Public offerings                                                          |   |             | -           |   |   |   | (15,879     | )      |             |   | 18,975,000 |   |   |   | 81,398,435 |   |   |   | - |   |   |   | - |   |
| Private placements                                                        |   |             | -           |   |   |   | -           |   |             |   | 25,000,000 |   |   |   | 37,445,025 |   |   |   | 8,166,670 |   |   |   | 9,460,640 |   |
| Stock options exercised (1)                                               |   |             | 931,000     |   |   |   | 1,477,750   |   |             |   | 2,408,300 |   |   |   | 3,255,186 |   |   |   | 113,700 |   |   |   | 155,349 |   |
| Consideration for propertyacquisition                                     |   |             | 54,054      |   |   |   | 215,135     |   |             |   | 10,682,843 |   |   |   | 16,024,265 |   |   |   | - |   |   |   | - |   |
| Consideration issued to satisfyfirst nations benefit agreementobligations |   |             | 91,606      |   |   |   | 414,004     |   |             |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Flow-through renunciation                                                 |   |             | -           |   |   |   | -           |   |             |   | - |   |   |   | (1,643,750 | ) |   |   | - |   |   |   | (3,275,789 | ) |
| Balance, end of year                                                      |   |             | 214,294,674 |   |   |   | 248,482,600 |   |             |   | 213,218,014 |   |   |   | 246,391,590 |   |   |   | 156,151,871 |   |   |   | 109,912,429 |   |

| (1)   | Inclusive of the original $543,790 (2009 - $1,070,796, 2008 - $57,750) fair value of these options re-allocated from contributed surplus to share capital on exercise. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Stock Options |
|-----------------|---------------|

----

| 12. | SHARE CAPITAL (continued) |
|-----|---------------------------|

|                           |   | 2010             |      |   | 2009                            |   |   | 2008            |   |
|--------------------------------|--------|------------------|-----------|--------|---------------------------------|--------|--------|-----------------|--------|
|                           |   | Number of Shares |      |   | Weighted Average Exercise Price |   |   | Number ofShares |   |   | Weighted Average Exercise Price |   |   | Number ofShares |   |   | Weighted Average Exercise Price |   |
|                           |   |             |      |   |                            |   |   |            | $      |   |   |   |   |   | $ |   |   |   | $ |   |   |
| Balance at beginning of year   |   |             | 5,755,000 |   |                            |   | 1.46   |            |   |   | 4,733,300 |   |   |   | 0.93 |   |   |   | 3,328,250 |   |   |   | 0.87 |   |
| Granted                        |   |             | 3,059,000 |   |                            |   | 5.02   |            |   |   | 3,485,000 |   |   |   | 1.80 |   |   |   | 1,617,500 |   |   |   | 1.03 |   |
| Exercised                      |   |             | (931,000  | )      |                            |   | 1.00   |            |   |   | (2,408,300 | ) |   |   | 0.91 |   |   |   | (113,700 | ) |   |   | 0.86 |   |
| Expired/cancelled              |   |             | (305,000  | )      |                            |   | 4.81   |            |   |   | (55,000 | ) |   |   | 1.31 |   |   |   | (98,750 | ) |   |   | 1.10 |   |
| Outstanding at end of year (1) |   |             | 7,578,000 |   |                            |   | 2.82   |            |   |   | 5,755,000 |   |   |   | 1.46 |   |   |   | 4,733,300 |   |   |   | 0.93 |   |
| Exercisable at end of year     |   |             | 6,281,000 |   |                            |   | 2.37   |            |   |   | 3,792,500 |   |   |   | 1.12 |   |   |   | 3,965,800 |   |   |   | 0.91 |   |

| (1)   | At December 31, 2010, the weighted-average remaining contractual life of stock options outstanding is 3.12 years (2009 – 3.39 years, 2008 – 2.60 years). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                        |   | 2010       |   |   | 2009       |   |   | 2008    |   |
|-----------------------------|--------|------------|--------|--------|------------|--------|--------|---------|--------|
| Risk-free interest rate (%) |   |       | 2.32%  |   |       |   | 2.01%  |    |   |   | 3.67% |   |
| Expected life (years)       |   | 3.49 Years |   |   | 4.24 Years |   |   | 5 years |   |
| Expected volatility (%)     |   |       | 77%    |   |       |   | 66%    |    |   |   | 64 |   |
| Expected dividend yield (%) |   |       | 0      |   |       |   | 0      |    |   |   | 0 |   |

----

| 12. | SHARE CAPITAL (continued) |
|-----|---------------------------|

| December 31, 2010   |          |   |               |      |      |                   |   |   |                         |   |   |       |       |
|---------------------|---------------|--------|--------------------|-----------|-----------|------------------------|--------|--------|------------------------------|--------|--------|------------|------------|
| Option Price Range  |          |   | Number Outstanding |      |      | Weighted Average Price |   |   |   Weighted Average Life |   |   |       |       |
|                |          |   |               |      |      |  $                |   |   |                         | Years  |   |       |       |   |
|                | $0.74-$0.76   |   |               |      | 640,000   |                   |   |   | 0.74                         |   |   |       | 1.01  |   |   |   |   |   |
|                | $1.04         |   |               |      | 1,090,000 |                   |   |   | 1.04                         |   |   |       | 2.12  |   |   |   |   |   |
|                | $1.31 - $1.46 |   |               |      | 2,034,000 |                   |   |   | 1.31                         |   |   |       | 3.02  |   |   |   |   |   |
|                | $1.68 - $3.13 |   |               |      | 790,000   |                   |   |   | 2.51                         |   |   |       | 2.71  |   |   |   |   |   |
|                | $3.96 - $4.53 |   |               |      | 645,000   |                   |   |   | 4.18                         |   |   |       |  4.21 |   |   |   |   |   |
|                | $5.22         |   |               |      | 2,379,000 |                   |   |   | 5.22                         |   |   |       | 4.04  |   |   |   |   |   |
| Total Stock Options |          |   |               | 7,578,000 |      |                   |   | 2.82   |                         |   |   | 3.12  |       |   |   |   |   |

|                                                               |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Balance at beginning of year                                       |   | $      | 5,750,527  |   |   | $      | 4,012,933  |   |   | $ | 3,082,261 |   |
| Stock-based compensation – administration                    |   |   | 5,413,733  |   |   |   | 1,638,405  |   |   |   | 761,890 |   |
| Stock-based compensation – mineral property costs            |   |   | 3,176,234  |   |   |   | 1,169,985  |   |   |   | 209,941 |   |
| Stock-based compensation - options granted by spin-out companies   |   |   | -          |   |   |   | -          |   |   |   | 16,591 |   |
| Fair value of stock options allocated to shares issued on exercise |   |   | (543,790   | )      |   |   | (1,070,796 | )      |   |   | (57,750 | ) |
| Balance at end of year                                             |   | $      | 13,796,704 |   |   | $      | 5,750,527  |   |   | $ | 4,012,933 |   |

| 13.   | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
|-----------------|-----------------------------------------------|

|                                                                                             |   | 2010   |     |   | 2009   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Accumulated other comprehensive loss, beginning of the year                                      |   | $      | (785,842 | )      |   | $      | (1,329,141 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Other comprehensive income for the year                                                          |   |   | 879,696  |   |   |   | 543,299 |   |
|                                                                                             |   |   |     |   |   |   |   |   |
| Accumulated other comprehensive income (loss), end of the year                                   |   | $      | 93,854   |   |   | $      | (785,842 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
| Components of accumulated other comprehensive income (loss) end of the year:                     |   |   |     |   |   |   |   |   |
|                                                                                             |   |   |     |   |   |   |   |   |
| Unrealized losses on temporary investments                                                       |   | $      | (41,501  | )      |   | $      | (70,262 | ) |
| Unrealized gains (losses) on marketable securities and other investments - public company shares |   |   | 135,355  |   |   |   | (715,580 | ) |
|                                                                                             |   |   |     |   |   |   |   |   |
|                                                                                             |   | $      | 93,854   |   |   | $      | (785,842 | ) |

----

| 14.   | INCOME TAXES |
|-----------------|--------------|

|                                                                 |   | 2010   |        |   | 2009   |   |       | 2008   |   |
|----------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|------------|--------|--------|
|                                                                 |   | $      |        |   |   | $      |       |   |   | $ |   |   |
|                                                                 |   |   |        |   |   |   |       |   |   |   |   |   |
| Net loss for the year, before taxes                                  |   |   | (31,565,670 | )      |   |   | (2,198,042 | )      |   |   | (5,653,969 | ) |
|                                                                 |   |   |        |   |   |   |       |   |   |   |   |   |
| Expected income tax recovery                                         |   |   | (9,466,644  | )      |   |   | (725,354   | )      |   |   | (1,724,460 | ) |
| Net adjustment for current, deductible and non-deductible amounts    |   |   | 7,235,851   |   |   |   | (824,715   | )      |   |   | 930,654 |   |
| Future income tax recovery due to write-off of mineral property cost |   |   | (7,530,715  | )      |   |   | -          |   |   |   | - |   |
| Change in valuation allowance                                        |   |   | 2,245,544   |   |   |   | (91,644    | )      |   |   | (2,460,400 | ) |
| Income tax recoveries, net                                           |   |   | (7,515,964  | )      |   |   | (1,641,713 | )      |   |   | (3,254,206 | ) |

|                                                                                             |   | 2010   |        |   | 2009   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                             |   | $      |        |   |   | $      |   |   |
| Future income tax assets (liabilities):                                                          |   |   |        |   |   |   |   |   |
|       Net mineral property carrying amounts in excess of tax pools |   |   | (11,805,598 | )      |   |   | (19,865,008 | ) |
| Equipment and intangible tax pools in excess of carrying value                                   |   |   | 402,563     |   |   |   | 330,263 |   |
| Investment tax base in excess of carrying value                                                  |   |   | (21,230     | )      |   |   | 93,062 |   |
| Share issue cost pool                                                                            |   |   | 1,262,830   |   |   |   | 1,865,695 |   |
| Tax loss carry-forwards                                                                          |   |   | 5,984,174   |   |   |   | 5,249,437 |   |
|                                                                                             |   |   | (4,177,261  | )      |   |   | (12,326,551 | ) |
| Valuation allowance                                                                              |   |   | (958,772    | )      |   |   | (1,064,777 | ) |
| Net future tax liabilities                                                                       |   |   | (5,136,033  | )      |   |   | (13,391,328 | ) |

| 15.   | RELATED PARTY TRANSACTIONS |
|-----------------|----------------------------|

----

| 16.   | COMMITMENTS |
|-----------------|-------------|

| (a)   | At December 31, 2010, the Company has the following lease, rental and contractual commitments, made for the Company’s office premises, staff accommodations and various contractual obligations made for the acquisition of equipment and to further develop the Company’s Phoenix Gold project: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                         |   | Due within One Year |      |   | Due One to Three Years |   |    | Total  |   |
|------------------------------|--------|---------------------|-----------|--------|------------------------|--------|---------|--------|--------|
| Lease and Rental Commitments |   | $                   | 187,405   |   |                   | $      | 185,325 |   |   | $ | 372,730 |   |
| Contractual Commitments      |   |                | 3,508,545 |   |                   |   | -       |   |   |   | 3,508,545 |   |
| Total                        |   | $                   | 3,695,950 |   |                   | $      | 185,325 |   |   | $ | 3,881,275 |   |

| (b)   | The Company is required to make certain cash 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. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 17.   | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|-----------------|------------------------------------------------------------------------|

|                                                          |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                          |   | $      |    |   |   | $      |    |   |   | $ |   |   |
| During the year, the Company paid and received the following: |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest received                                             |   |   | 349,119 |   |   |   | 149,604 |   |   |   | 689,250 |   |
| Interest paid                                                 |   |   | 4,207   |   |   |   | 2,525   |   |   |   | 22,351 |   |
| Income taxes paid                                             |   |   | 7,601   |   |   |   | 26,505  |   |   |   | 74,000 |   |

| 18.   | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) |
|-----------------|------------------------------------------------------------------------------------------------|

| (a)   | Mineral property interests and deferred exploration costs |
|-----------------|-----------------------------------------------------------|

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| (b)   | Flow-through shares |
|-----------------|---------------------|

| (c)   | Investment in companies spun-off |
|-----------------|----------------------------------|

| (d)   | Income taxes |
|-----------------|--------------|

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| (e)   | Exploration stage company |
|-----------------|---------------------------|

| (f)   | Consolidated statement of cash flows |
|-----------------|--------------------------------------|

| (g)   | Recently adopted accounting standards |
|-----------------|---------------------------------------|

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| (h)   | Recent Accounting Pronouncements |
|-----------------|----------------------------------|

| (i)   | The impact of these differences in respect to these financial statements is quantified below as they apply to financial statement line items |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| Balance Sheets                                                      | Note reference |   | 2010   |         |   | 2009   |   |        | 2008   |   |
|---------------------------------------------------------------------|----------------|--------|--------|--------------|--------|--------|--------|-------------|--------|--------|
|                                                                |           |   | $      |         |   |   | $      |        |   |   | $ |   |   |
| Investments - companies spun off - Canadian GAAP                    |           |   |   | 2,311        |   |   |   | 168,694     |   |   |   | 153,400 |   |
| Net fair value and related adjustments                              | (c)            |   |   | -            |   |   |   | -           |   |   |   | - |   |
| Investment in companies spun off - US GAAP                          |           |   |   | 2,311        |   |   |   | 168,694     |   |   |   | 153,400 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Mineral property costs - Canadian GAAP                              |           |   |   | 154,293,692  |   |   |   | 114,209,833 |   |   |   | 82,862,073 |   |
| Mineral property costs expensed under US GAAP                       | (a)            |   |   | (128,753,553 | )      |   |   | (70,833,206 | )      |   |   | (39,485,443 | ) |
| Mineral property costs - US GAAP                                    |           |   |   | 25,540,139   |   |   |   | 43,376,627  |   |   |   | 43,376,630 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Other liabilities - Canadian GAAP                                   |           |   |   | -            |   |   |   | -           |   |   |   | - |   |
| Aggregate liabilities assumed on spin-off transaction               | (c)            |   |   | -            |   |   |   | 5,289       |   |   |   | 13,753 |   |
| Other liabilities - US GAAP                                         |           |   |   | -            |   |   |   | 5,289       |   |   |   | 13,753 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Flow-through share tax liability – Canadian GAAP              |           |   |   | -            |   |   |   | -           |   |   |   | - |   |
| Future tax related to premium on flow-through financing             | (b)            |   |   | -            |   |   |   | -           |   |   |   | 1,217,593 |   |
| Flow-through share tax liability – US GAAP                    |           |   |   | -            |   |   |   | -           |   |   |   | 1,217,593 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Share capital - Canadian GAAP                                       |           |   |   | 248,482,600  |   |   |   | 246,391,590 |   |   |   | 109,912,429 |   |
| Adjustment to reverse entry for spin-off of Paragon assets          | (a)            |   |   | 6,979,704    |   |   |   | 6,979,704   |   |   |   | 6,979,704 |   |
| Future tax related to premium on flow-through financing             | (b)            |   |   | (3,007,245   | )      |   |   | (3,007,245  | )      |   |   | (3,007,245 | ) |
| Adjustment to reinstate Canadian GAAP FIT recovery to share capital | (b)            |   |   | 6,440,882    |   |   |   | 6,440,882   |   |   |   | 4,797,132 |   |
| Share capital – US GAAP                                       |           |   |   | 258,895,941  |   |   |   | 256,804,931 |   |   |   | 118,682,020 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Opening deficit - Canadian GAAP                                     |           |   |   | 22,659,689   |   |   |   | 22,103,360  |   |   |   | 19,703,597 |   |
| Net historical adjustments - US GAAP                                | (a)            |   |   | 81,251,836   |   |   |   | 49,486,380  |   |   |   | 31,344,349 |   |
| Opening deficit - US GAAP                                           |           |   |   | 103,911,525  |   |   |   | 71,589,740  |   |   |   | 51,047,946 |   |
|                                                                |           |   |   |         |   |   |   |        |   |   |   |   |   |
| Accumulated other comprehensive income (loss) – Canadian GAAP |           |   |   | 93,854       |   |   |   | (785,842    | )      |   |   | (1,329,141 | ) |
| Adjustment to reflect net fair value measurements at each year end. | (c)            |   |   | -            |   |   |   | -           |   |   |   | - |   |
| Accumulated other comprehensive income (loss) - US GAAP             |           |   |   | 93,854       |   |   |   | (785,842    | )      |   |   | (1,329,141 | ) |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| Operations Statements                                          | Notereference |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|----------------------------------------------------------------|---------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                           |          |   | $      |       |   |   | $      |       |   |   | $ |   |   |
| FIT recovery - Canadian GAAP                                   |          |   |   | 7,530,715  |   |   |   | 1,645,615  |   |   |   | 3,276,809 |   |
| Adjustments to FIT recoveries                                  | (b)           |   |   | -          |   |   |   | (426,157   | )      |   |   | (1,486,137 | ) |
| FIT (expensed) recovery under US GAAP                          |          |   |   | 7,530,715  |   |   |   | 1,219,458  |   |   |   | 1,790,672 |   |
|                                                           |          |   |   |       |   |   |   |       |   |   |   |   |   |
| Stock-based compensation expense - Canadian GAAP               |          |   |   | 5,585,969  |   |   |   | 1,638,418  |   |   |   | 659,806 |   |
| Adjustment to fair value certain spin-off related items        | (c)           |   |   | (5,289     | )      |   |   | (8,461     | )      |   |   | (256,869 | ) |
| Stock-based compensation expense - US GAAP                     |          |   |   | 5,580,680  |   |   |   | 1,629,957  |   |   |   | 402,937 |   |
|                                                           |          |   |   |       |   |   |   |       |   |   |   |   |   |
| Mineral property costs written off - Canadian GAAP             |          |   |   | 21,163,835 |   |   |   | -          |   |   |   | - |   |
| Under US GAAP such expenses not initially capitalized          | (a)           |   |   | (3,327,346 | )      |   |   | -          |   |   |   | - |   |
| Mineral property costs written off under US GAAP               |          |   |   | 17,836,489 |   |   |   | -          |   |   |   | - |   |
|                                                           |          |   |   |       |   |   |   |       |   |   |   |   |   |
| Mineral property costs expensed - Canadian GAAP                |          |   |   | 144,006    |   |   |   | 212,265    |   |   |   | 232,932 |   |
| Under Canadian GAAP policy such costs initially deferred       | (a)           |   |   | 61,247,693 |   |   |   | 31,347,760 |   |   |   | 16,705,015 |   |
| Net mineral property costs expensed  – US GAAP |          |   |   | 61,391,699 |   |   |   | 31,560,025 |   |   |   | 16,937,947 |   |

| Statements of Cash Flows                                             | Notereference |   | 2010   |        |   | 2009   |   |         | 2008   |   |
|----------------------------------------------------------------------|---------------|--------|--------|-------------|--------|--------|--------|--------------|--------|--------|
|                                                                 |          |   | $      |        |   |   | $      |         |   |   | $ |   |   |
| Cash provided by (used in) operating activities, under Canadian GAAP |          |   |   | (4,405,403  | )      |   |   | (3,118,912   | )      |   |   | (1,253,264 | ) |
| Adjustment for mineral properties and deferred exploration           | (g)           |   |   | (56,444,420 | )      |   |   | (27,611,890  | )      |   |   | (16,893,521 | ) |
| Cash used in operating activities, under US GAAP                     |          |   |   | (60,849,823 | )      |   |   | (30,730,802  | )      |   |   | (18,146,785 | ) |
|                                                                 |          |   |   |        |   |   |   |         |   |   |   |   |   |
| Cash provided by (used in) investing activities, under Canadian GAAP |          |   |   | 13,077,790  |   |   |   | (150,309,553 | )      |   |   | (4,342,536 | ) |
| Adjustment for mineral properties and deferred exploration           | (g)           |   |   | 56,444,420  |   |   |   | 27,611,890   |   |   |   | 16,893,521 |   |
| Cash provided by (used in) investing activities, under US GAAP       |          |   |   | 69,522,210  |   |   |   | (122,697,663 | )      |   |   | 12,550,985 |   |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| Statements of Cash Flows                                       | Notereference |   | 2010   |       |   | 2009   |   |        | 2008   |   |
|----------------------------------------------------------------|---------------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|
|                                                           |          |   | $      |       |   |   | $      |        |   |   | $ |   |   |
| Cash provided by financing activities, under Canadian GAAP     |          |   |   | 918,081    |   |   |   | 137,052,115 |   |   |   | 9,558,240 |   |
| Change in restricted cash from issuance of flow-through shares | (b)           |   |   | -          |   |   |   | -           |   |   |   | 4,254,955 |   |
| Cash provided by financing activities, under US GAAP           |          |   |   | 918,081    |   |   |   | 137,052,115 |   |   |   | 13,813,195 |   |
|                                                           |          |   |   |       |   |   |   |        |   |   |   |   |   |
| Cash and cash equivalents, end of year, Canadian GAAP          |          |   |   | 11,967,867 |   |   |   | 2,377,398   |   |   |   | 18,753,749 |   |
| Restricted cash from issue of flow-through shares              | (b)           |   |   | -          |   |   |   | -           |   |   |   | (5,730,041 | ) |
| Cash and cash equivalents, end of year, US GAAP                |          |   |   | 11,967,867 |   |   |   | 2,377,398   |   |   |   | 13,023,708 |   |

|                                              |   | 2010          |        |   | 2009    |   |        | 2008          |   |
|---------------------------------------------------|--------|---------------|-------------|--------|---------|--------|-------------|---------------|--------|
|                                              |   |          |        |   |    |   |        |          |   |   |   |   |
|                                              |   | Canadian GAAP |        |   | US GAAP |   |        | Canadian GAAP |   |   | US GAAP |   |   | Canadian GAAP |   |   | US GAAP |   |
|                                              |   | $             |        |   |    | $      |        |          |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |
| Total assets                                      |   |          | 227,922,977 |   |    |   | 99,169,424  |          |   |   | 246,126,913 |   |   |   | 175,293,707 |   |   |   | 106,834,083 |   |   |   | 67,348,640 |   |
| Total liabilities                                 |   |          | 12,259,214  |   |    |   | 12,259,214  |          |   |   | 17,430,327 |   |   |   | 17,435,616 |   |   |   | 16,341,222 |   |   |   | 17,572,568 |   |
| Total shareholders’ equity                  |   |          | 215,663,763 |   |    |   | 86,910,210  |          |   |   | 228,696,586 |   |   |   | 157,858,091 |   |   |   | 90,492,861 |   |   |   | 49,776,072 |   |
| Net loss                                          |   |          | (24,049,706 | )      |    |   | (81,964,764 | )             |   |   | (556,329 | ) |   |   | (32,321,785 | ) |   |   | (2,399,763 | ) |   |   | (20,334,046 | ) |
| Loss per share                                    |   |          | (0.11       | )      |    |   | (0.32       | )             |   |   | (0.00 | ) |   |   | (0.17 | ) |   |   | (0.02 | ) |   |   | (0.14 | ) |
| Net cash flows to  operating activities |   |          | (4,405,403  | )      |    |   | (60,849,825 | )             |   |   | (3,118,912 | ) |   |   | (30,730,802 | ) |   |   | (1,253,264 | ) |   |   | (18,146,785 | ) |
| Net cash flows (to)from investing activities      |   |          | 13,077,790  |   |    |   | 69,522,210  |          |   |   | (150,309,553 | ) |   |   | (122,697,663 | ) |   |   | (4,342,536 | ) |   |   | 12,550,985 |   |
| Net cash flows from financing activities          |   |          | 918,081     |   |    |   | 918,081     |          |   |   | 137,052,115 |   |   |   | 137,052,115 |   |   |   | 9,558,240 |   |   |   | 13,813,195 |   |

| (j)   | Development stage enterprise |
|-----------------|------------------------------|

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

|                                         |   | From March 4, 1996 (inception) to December 31, 2010 |         |
|----------------------------------------------|--------|-----------------------------------------------------|--------------|
|                                         |   |                                                |         |
| Mineral property exploration costs           |   | $                                                   | 166,065,081  |   |
| General and administration                   |   |                                                | 26,000,869   |   |
| Other income                                 |   |                                                | (6,189,661   | ) |
|                                         |   |                                                |         |   |
| Net Loss and Deficit as at December 31, 2010 |   | $                                                   | (185,876,289 | ) |

|                                               |   | From March 4, 1996 (inception) to December 31, 2010 |         |
|----------------------------------------------------|--------|-----------------------------------------------------|--------------|
| Cash Provided by (Used for):                       |   |                                                |         |
| Operating Activities                               |   | $                                                   | (167,743,237 | ) |
| Investing Activities                               |   |                                                | (56,720,550  | ) |
| Financing Activities                               |   |                                                | 236,431,654  |   |
|                                               |   |                                                | 11,967,867   |   |
| Cash at beginning of period                        |   |                                                | -            |   |
| Cash and cash equivalents, as at December 31, 2010 |   | $                                                   | 11,967,867   |   |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

|                                    |   | Common Shares    |       |   |   |   |       |                |   |   |                                        |   |   |    |   |
|-----------------------------------------|--------|------------------|------------|--------|--------|--------|------------|---------------------|--------|--------|---------------------------------------------|--------|--------|---------|--------|
|                                    |   | Number of shares |       |   | Amount |   |       | Contributed surplus |   |   | Accumulated othercomprehensiveincome (loss) |   |   | Deficit |   |   | Total Shareholders’ Equity |   |
|                                    |   |             |       |   | $      |   |       |                | $      |   |                                        |   | $      |    |   |   | $ |   |   |   | $ |   |   |
| Balance March 4, 1996 Incorporation     |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | - |   |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Issued for cash                         |   |             | 3,380,000  |   |   |   | 1,466,750  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,466,750 |   |
| Issued for mineral property             |   |             | 2,845,000  |   |   |   | 711,250    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 711,250 |   |
| Share issuance costs                    |   |             | -          |   |   |   | (8,736     | )                   |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | (8,736 | ) |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (1,475,999 | ) |   |   | (1,475,999 | ) |
| Balance December 31, 1996               |   |             | 6,225,000  |   |   |   | 2,169,264  |                |   |   | -                                           |   |   |    | -      |   |   |   | (1,475,999 | ) |   |   | 693,265 |   |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Flow though shares issued for cash      |   |             | 1,300,000  |   |   |   | 1,365,000  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,365,000 |   |
| Public offering                         |   |             | 1,720,000  |   |   |   | 1,418,215  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,418,215 |   |
| Private Placement                       |   |             | 907,630    |   |   |   | 988,884    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 988,884 |   |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (2,475,147 | ) |   |   | (2,475,147 | ) |
| Balance December 31, 1997               |   |             | 10,152,630 |   |   |   | 5,941,363  |                |   |   | -                                           |   |   |    | -      |   |   |   | (3,951,146 | ) |   |   | 1,990,217 |   |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Issued for cash                         |   |             | 1,582,145  |   |   |   | 549,859    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 549,859 |   |
| Issued for mineral property             |   |             | 50,000     |   |   |   | 20,000     |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 20,000 |   |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (1,947,546 | ) |   |   | (1,947,546 | ) |
| Balance December 31, 1998               |   |             | 11,784,775 |   |   |   | 6,511,222  |                |   |   | -                                           |   |   |    | -      |   |   |   | (5,898,692 | ) |   |   | 612,530 |   |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Issued for cash                         |   |             | 2,357,427  |   |   |   | 1,180,364  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,180,364 |   |
| Warrants exercised                      |   |             | 1,301,307  |   |   |   | 546,549    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 546,549 |   |
| Flow through benefit related to premium |   |             | -          |   |   |   | (24,436    | )                   |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | (24,436 | ) |
| Issued for Mineral Property             |   |             | 150,000    |   |   |   | 60,000     |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 60,000 |   |
| Investments revalued                    |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | 1,500  |   |   |   | - |   |   |   | 1,500 |   |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (2,584,680 | ) |   |   | (2,584,680 | ) |
| Balance December 31, 1999               |   |             | 15,593,509 |   |   |   | 8,273,699  |                |   |   | -                                           |   |   |    | 1,500  |   |   |   | (8,483,372 | ) |   |   | (208,173 | ) |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Issued for cash                         |   |             | 2,840,000  |   |   |   | 1,044,140  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,044,140 |   |
| Warrants exercised                      |   |             | 900,000    |   |   |   | 590,000    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 590,000 |   |
| Issued for mineral property             |   |             | 175,000    |   |   |   | 98,500     |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 98,500 |   |
| Flow through benefit related to premium |   |             | -          |   |   |   | (134,000   | )                   |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | (134,000 | ) |
| Revaluation of investments              |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | (6,101 | ) |   |   | - |   |   |   | (6,101 | ) |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (252,646 | ) |   |   | (252,646 | ) |
| Balance December 31, 2000               |   |             | 19,508,509 |   |   |   | 9,872,339  |                |   |   | -                                           |   |   |    | (4,601 | ) |   |   | (8,736,018 | ) |   |   | 1,131,720 |   |
|                                    |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Issued for cash                         |   |             | 3,427,858  |   |   |   | 1,058,942  |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 1,058,942 |   |
| Warrants exercised                      |   |             | 337,500    |   |   |   | 135,000    |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 135,000 |   |
| Issued for mineral property             |   |             | 125,000    |   |   |   | 57,250     |                |   |   | -                                           |   |   |    | -      |   |   |   | - |   |   |   | 57,250 |   |
| Revaluation of investments              |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | 5,101  |   |   |   | - |   |   |   | 5,101 |   |
| Loss for the year                       |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -      |   |   |   | (1,333,672 | ) |   |   | (1,333,672 | ) |
| Balance December 31, 2001               |   |             | 23,398,867 |   |   |   | 11,123,531 |                |   |   | -                                           |   |   |    | 500    |   |   |   | (10,069,690 | ) |   |   | 1,054,341 |   |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

|                                                   |   | Common Shares    |       |   |   |   |       |                |   |   |                                        |   |   |    |     |
|--------------------------------------------------------|--------|------------------|------------|--------|--------|--------|------------|---------------------|--------|--------|---------------------------------------------|--------|--------|---------|----------|
|                                                   |   | Number of shares |       |   | Amount |   |       | Contributed surplus |   |   | Accumulated othercomprehensiveincome (loss) |   |   | Deficit |     |   | Total Shareholders’Equity |   |
|                                                   |   |             |       |   |   | $      |       |                |   | $      |                                        |   |   | $       |     |   | $ |   |   |   | $ |   |   |
| Issued for cash                                        |   |             | 5,368,463  |   |   |   | 3,568,885  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 3,568,885 |   |
| Stock options exercised                                |   |             | 167,500    |   |   |   | 64,725     |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 64,725 |   |
| Warrants exercised                                     |   |             | 3,671,393  |   |   |   | 2,165,488  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 2,165,488 |   |
| Issued for mineral property                            |   |             | 1,426,028  |   |   |   | 1,656,612  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 1,656,612 |   |
| Stock based compensation charge                        |   |             | -          |   |   |   | -          |                |   |   | 145,355                                     |   |   |    | -        |   |   |   | - |   |   |   | 145,355 |   |
| Stock based property payment                           |   |             | -          |   |   |   | -          |                |   |   | 52,130                                      |   |   |    | -        |   |   |   | - |   |   |   | 52,130 |   |
| Revaluation of investments                             |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | (813     | ) |   |   | - |   |   |   | (813 | ) |
| Loss for the year                                      |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -        |   |   |   | (7,832,016 | ) |   |   | (7,832,016 | ) |
| Balance December 31, 2002                              |   |             | 34,032,251 |   |   |   | 18,579,241 |                |   |   | 197,485                                     |   |   |    | (313     | ) |   |   | (17,901,706 | ) |   |   | 874,707 |   |
|                                                   |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |     |   |   |   |   |   |   |   |   |   |
| Issued for cash                                        |   |             | 13,979,329 |   |   |   | 14,389,958 |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 14,389,958 |   |
| Stock options exercised                                |   |             | 1,547,500  |   |   |   | 583,125    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 583,125 |   |
| Warrants exercised                                     |   |             | 2,022,740  |   |   |   | 1,489,488  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 1,489,488 |   |
| Issued for mineral property                            |   |             | 602,811    |   |   |   | 711,381    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 711,381 |   |
| Stock based compensation charge                        |   |             | -          |   |   |   | -          |                |   |   | 556,046                                     |   |   |    | -        |   |   |   | - |   |   |   | 556,046 |   |
| Flow through benefit related to premium                |   |             | -          |   |   |   | (480,000   | )                   |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | (480,000 | ) |
| Revaluation of investments                             |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | 36,491   |   |   |   | - |   |   |   | 36,491 |   |
| Loss for the year                                      |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -        |   |   |   | (6,851,099 | ) |   |   | (6,851,099 | ) |
| Balance December 31, 2003                              |   |             | 52,184,631 |   |   |   | 35,273,193 |                |   |   | 753,531                                     |   |   |    | 36,178   |   |   |   | (24,752,805 | ) |   |   | 11,310,097 |   |
|                                                   |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    | -        |   |   |   | - |   |   |   |   |   |
| Issued for cash                                        |   |             | 2,093,412  |   |   |   | 2,398,702  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 2,398,702 |   |
| Stock options exercised                                |   |             | 79,000     |   |   |   | 80,685     |                |   |   | (12,465                                     | )      |   |    | -        |   |   |   | - |   |   |   | 68,220 |   |
| Warrants exercised                                     |   |             | 525,161    |   |   |   | 629,333    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 629,333 |   |
| Issued for mineral property                            |   |             | 123,827    |   |   |   | 164,372    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 164,372 |   |
| Stock based compensation charge                        |   |             | -          |   |   |   | -          |                |   |   | 1,100,980                                   |   |   |    | -        |   |   |   | - |   |   |   | 1,100,980 |   |
| Flow through benefit related to premium                |   |             | -          |   |   |   | (367,665   | )                   |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | (367,665 | ) |
| Share issuance costs                                   |   |             | -          |   |   |   | -          |                |   |   | 118,417                                     |   |   |    | -        |   |   |   | - |   |   |   | 118,417 |   |
| Revaluation of investments                             |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | (238,665 | ) |   |   | - |   |   |   | (238,665 | ) |
| Loss for the year                                      |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -        |   |   |   | (6,253,847 | ) |   |   | (6,253,847 | ) |
| Balance December 31, 2004                              |   |             | 55,006,031 |   |   |   | 38,178,620 |                |   |   | 1,960,463                                   |   |   |    | (202,487 | ) |   |   | (31,006,652 | ) |   |   | 8,929,944 |   |
|                                                   |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |     |   |   |   |   |   |   |   |   |   |
| Issued for cash                                        |   |             | 10,232,000 |   |   |   | 6,420,989  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 6,420,989 |   |
| Issued for mineral property                            |   |             | 159,000    |   |   |   | 151,520    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 151,520 |   |
| Stock options exercised                                |   |             | 300,000    |   |   |   | 338,087    |                |   |   | (97,837                                     | )      |   |    | -        |   |   |   | - |   |   |   | 240,250 |   |
| Warrants exercised                                     |   |             | 482,493    |   |   |   | 559,318    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 559,318 |   |
| Stock based compensation charge                        |   |             | -          |   |   |   | -          |                |   |   | 683,671                                     |   |   |    | -        |   |   |   | - |   |   |   | 683,671 |   |
| Flow through benefit related to premium                |   |             | -          |   |   |   | (140,000   | )                   |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | (140,000 | ) |
| Share issuance costs                                   |   |             | -          |   |   |   | -          |                |   |   | 77,483                                      |   |   |    | -        |   |   |   | - |   |   |   | 77,483 |   |
| Revaluation of investments                             |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | 191,925  |   |   |   | - |   |   |   | 191,925 |   |
| Loss for the year                                      |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | -        |   |   |   | (7,694,377 | ) |   |   | (7,694,377 | ) |
| Balance December 31, 2005                              |   |             | 66,179,524 |   |   |   | 45,508,534 |                |   |   | 2,623,780                                   |   |   |    | (10,562  | ) |   |   | (38,701,029 | ) |   |   | 9,420,723 |   |
|                                                   |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |     |   |   |   |   |   |   |   |   |   |
| Issued for cash                                        |   |             | 7,640,560  |   |   |   | 10,431,265 |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 10,431,265 |   |
| Issued for mineral property                            |   |             | 101,000    |   |   |   | 130,720    |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 130,720 |   |
| Stock options exercised                                |   |             | 760,628    |   |   |   | 1,114,599  |                |   |   | (297,314                                    | )      |   |    | -        |   |   |   | - |   |   |   | 817,285 |   |
| Warrants exercised                                     |   |             | 2,128,813  |   |   |   | 1,779,452  |                |   |   | -                                           |   |   |    | -        |   |   |   | - |   |   |   | 1,779,452 |   |
| Stock based compensation charge – administration |   |             | -          |   |   |   | -          |                |   |   | 220,964                                     |   |   |    | -        |   |   |   | - |   |   |   | 220,964 |   |
| Stock based compensation charge – property       |   |             | -          |   |   |   | -          |                |   |   | 22,062                                      |   |   |    | -        |   |   |   | - |   |   |   | 22,062 |   |
| Spun-off of properties                                 |   |             | -          |   |   |   | (5,908,711 | )                   |   |   | (309                                        | )      |   |    | -        |   |   |   | - |   |   |   | (5,909,020 | ) |
| Option granted by spun-off companies                   |   |             |       |   |   |   |       |                |   |   | (22,417                                     | )      |   |    | -        |   |   |   | - |   |   |   | (22,417 | ) |
| Revaluation of investments                             |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    | 318,539  |   |   |   | - |   |   |   | 318,539 |   |
| Loss for the year                                      |   |             | -          |   |   |   | -          |                |   |   | -                                           |   |   |    |     |   |   |   | (3,944,765 | ) |   |   | (3,944,765 | ) |
| Balance December 31, 2006                              |   |             | 76,810,525 |   |   |   | 53,055,859 |                |   |   | 2,546,766                                   |   |   |    | 307,977  |   |   |   | (42,645,794 | ) |   |   | 13,264,808 |   |
|                                                   |   |             |       |   |   |   |       |                |   |   |                                        |   |   |    |     |   |   |   |   |   |   |   |   |   |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

|                                                   |   | Common Shares    |        |   |   |   |        |                |   |   |                                        |   |   |    |       |
|--------------------------------------------------------|--------|------------------|-------------|--------|--------|--------|-------------|---------------------|--------|--------|---------------------------------------------|--------|--------|---------|------------|
|                                                   |   | Number of shares |        |   | Amount |   |        | Contributed surplus |   |   | Accumulated othercomprehensiveincome (loss) |   |   | Deficit |       |   | Total Shareholders’Equity |   |
|                                                   |   |             |        |   | $      |   |        |                | $      |   |                                        |   | $      |    |       |   | $ |   |   |   | $ |   |   |
| Issued for cash                                        |   |             | 26,265,462  |   |   |   | 24,165,197  |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 24,165,197 |   |
| Issued for mineral property                            |   |             | 40,000,000  |   |   |   | 28,000,000  |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 28,000,000 |   |
| Stock options exercised                                |   |             | 1,547,374   |   |   |   | 1,476,765   |                |   |   | (377,399                                    | )      |   |    | -          |   |   |   | - |   |   |   | 1,099,366 |   |
| Warrants exercised                                     |   |             | 3,152,792   |   |   |   | 1,451,905   |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 1,451,905 |   |
| Stock based compensation charge – administration |   |             | -           |   |   |   | -           |                |   |   | 576,606                                     |   |   |    | -          |   |   |   | - |   |   |   | 576,606 |   |
| Stock based compensation charge – property       |   |             | -           |   |   |   | -           |                |   |   | 335,979                                     |   |   |    | -          |   |   |   | - |   |   |   | 335,979 |   |
| Spun-off of properties                                 |   |             | -           |   |   |   | 2,290,988   |                |   |   | 309                                         |   |   |    | -          |   |   |   | - |   |   |   | 2,291,297 |   |
| Flow through benefit related to premium                |   |             | -           |   |   |   | (643,551    | )                   |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | (643,551 | ) |
| Agent commissions                                      |   |             | 393,262     |   |   |   | 700,006     |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 700,006 |   |
| Shares returned to treasury                            |   |             | (297,914    | )      |   |   | (213,545    | )                   |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | (213,545 | ) |
| Revaluation of investments                             |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | 152,256    |   |   |   | - |   |   |   | 152,256 |   |
| Loss for the year                                      |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | -          |   |   |   | (8,402,152 | ) |   |   | (8,402,152 | ) |
| Balance December 31, 2007                              |   |             | 147,871,501 |   |   |   | 110,283,624 |                |   |   | 3,082,261                                   |   |   |    | 460,233    |   |   |   | (51,047,946 | ) |   |   | 62,778,172 |   |
|                                                   |   |             |        |   |   |   |        |                |   |   |                                        |   |   |    |       |   |   |   |   |   |   |   |   |   |
| Issued for cash                                        |   |             | 8,166,670   |   |   |   | 9,460,640   |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 9,460,640 |   |
|  Stock options exercised                          |   |             | 113,700     |   |   |   | 155,349     |                |   |   | (57,750                                     | )      |   |    | -          |   |   |   | - |   |   |   | 97,599 |   |
|                                                   |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | - |   |
| Stock based compensation charge – administration |   |             | -           |   |   |   | -           |                |   |   | 761,890                                     |   |   |    | -          |   |   |   | - |   |   |   | 761,890 |   |
| Stock based compensation charge – property       |   |             | -           |   |   |   | -           |                |   |   | 209,941                                     |   |   |    | -          |   |   |   | - |   |   |   | 209,941 |   |
| Option granted by spun-off companies                   |   |             | -           |   |   |   | -           |                |   |   | 16,591                                      |   |   |    | -          |   |   |   | - |   |   |   | 16,591 |   |
| Flow through benefit related to premium                |   |             | -           |   |   |   | (1,217,593  | )                   |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | (1,217,593 | ) |
| Revaluation of investments                             |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | (1,789,374 | ) |   |   | - |   |   |   | (1,789,374 | ) |
| Loss for the year                                      |   |             |        |   |   |   | -           |                |   |   | -                                           |   |   |    | -          |   |   |   | (20,541,794 | ) |   |   | (20,541,794 | ) |
| Balance December 31, 2008                              |   |             | 156,151,871 |   |   |   | 118,682,020 |                |   |   | 4,012,933                                   |   |   |    | (1,329,141 | ) |   |   | (71,589,740 | ) |   |   | 49,776,072 |   |
|                                                   |   |             |        |   |   |   |        |                |   |   |                                        |   |   |    |       |   |   |   |   |   |   |   |   |   |
| Issued for cash                                        |   |             | 18,975,000  |   |   |   | 81,398,435  |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 81,398,435 |   |
| Issued for cash                                        |   |             | 25,000,000  |   |   |   | 37,445,025  |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 37,445,025 |   |
| Stock options exercised                                |   |             | 2,408,300   |   |   |   | 3,255,186   |                |   |   | (1,070,796                                  | )      |   |    | -          |   |   |   | - |   |   |   | 2,184,390 |   |
| Warrants exercised                                     |   |             | 10,682,843  |   |   |   | 16,024,265  |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 16,024,265 |   |
| Stock based compensation charge – administration |   |             | -           |   |   |   | -           |                |   |   | 1,638,405                                   |   |   |    | -          |   |   |   | - |   |   |   | 1,638,405 |   |
| Stock based compensation charge – property       |   |             | -           |   |   |   | -           |                |   |   | 1,169,985                                   |   |   |    | -          |   |   |   | - |   |   |   | 1,169,985 |   |
| Revaluation of investments                             |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | 543,299    |   |   |   | - |   |   |   | 543,299 |   |
| Loss for the year                                      |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | -          |   |   |   | (32,321,785 | ) |   |   | (32,321,785 | ) |
| Balance December 31, 2009                              |   |             | 213,218,014 |   |   |   | 256,804,931 |                |   |   | 5,750,527                                   |   |   |    | (785,842   | ) |   |   | (103,911,525 | ) |   |   | 157,858,091 |   |
|                                                   |   |             |        |   |   |   |        |                |   |   |                                        |   |   |    |       |   |   |   |   |   |   |   |   |   |
| Share issuance costs                                   |   |             | -           |   |   |   | (15,879     | )                   |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | (15,879 | ) |
| Issued for mineral property                            |   |             | 54,054      |   |   |   | 215,135     |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 215,135 |   |
| Stock options exercised                                |   |             | 931,000     |   |   |   | 1,477,750   |                |   |   | (543,790                                    | )      |   |    | -          |   |   |   | - |   |   |   | 933,960 |   |
| Issued for mineral property                            |   |             | 91,606      |   |   |   | 414,004     |                |   |   | -                                           |   |   |    | -          |   |   |   | - |   |   |   | 414,004 |   |
| Stock based compensation charge – administration |   |             | -           |   |   |   | -           |                |   |   | 5,413,733                                   |   |   |    | -          |   |   |   | - |   |   |   | 5,413,733 |   |
| Stock based compensation charge – property       |   |             | -           |   |   |   | -           |                |   |   | 3,176,234                                   |   |   |    | -          |   |   |   | - |   |   |   | 3,176,234 |   |
| Revaluation of investments                             |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | 879,696    |   |   |   | - |   |   |   | 879,696 |   |
| Loss for the year                                      |   |             | -           |   |   |   | -           |                |   |   | -                                           |   |   |    | -          |   |   |   | (81,964,764 | ) |   |   | (81,964,764 | ) |
| Balance December 31, 2010                              |   |             | 214,294,674 |   |   |   | 258,895,941 |                |   |   | 13,796,704                                  |   |   |    | 93,854     |   |   |   | (185,876,289 | ) |   |   | 86,910,210 |   |

----

| 18. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued) |
|-----|------------------------------------------------------------------------------------------------------------|

| (k)   | Accounts payable and accrued liabilities |
|-----------------|------------------------------------------|

|                                    |   | 2010   |      |   | 2009   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                    |   |   |      |   |   |   |
| Operating payables                      |   | $      | 3,226,369 |   |   | $      | 1,165,979 |   |
| Minerals property payables              |   |   | 3,459,552 |   |   |   | 2,873,020 |   |
| Liability for stock appreciation rights |   |   | 306,103   |   |   |   | - |   |
|                                    |   | $      | 6,992,024 |   |   | $      | 4,038,999 |   |

| (l)   | Accumulated other comprehensive income |
|-----------------|----------------------------------------|

|   | (1) | Total gains for securities with net gains included in accumulated other comprehensive income amounted to $473,477 (2009 – 504,366). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Total losses for securities with net losses included in accumulated other comprehensive income amounted to $333,036 (2009 – 617,482). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   | 2010       |       |   | 2009                        |   |
|-----------------------|--------|------------|------------|--------|-----------------------------|--------|
| Investment            |   | Fair value |       |   | Aggregate Unrealized Losses |   |   | Fair value |   |   | Aggregate Unrealized Losses |   |
| Treasury bills        |   | $          | 47,923,015 |   |                        | $      | 36,522 |   |   | $ | 124,395,204 |   |   | $ | 71,419 |   |
| Public company shares |   |       | 426,546    |   |                        |   | 333,036 |   |   |   | 140,260 |   |   |   | 617,482 |   |
|                  |   | $          | 48,349,561 |   |                        | $      | 369,558 |   |   | $ | 124,535,464 |   |   | $ | 688,901 |   |

| (m)   | Stock based compensation and other share based payments |
|-----------------|---------------------------------------------------------|

|   | (1) | Stock based compensation for service based awards with graded vesting is calculated separately for each vesting portion and recorded over the service period of each vesting portion. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Life of option was estimated based on historical experience of the Company for similar awards. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (3) | Volatility of Company shares was estimated based on the Company’s historical volatility over periods commensurate with the option estimated life. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | The total intrinsic value of all options outstanding at year end was $21,672,120 (2009 – $20,366,000). |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

|   | (5) | The total intrinsic value of options exercised during the year was $3,919,125 (2009 - $7,462,454). |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (6) | The total fair value of amounts not yet expensed for unvested options, outstanding at year end, was $129,567 (2009 - $724,183) and have a weighted average time to vesting of 3.9 months (2009 -7.25 months). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Stock based compensation for employees on the statement of operations included in the line “Stock based compensation” would be included in the line “General and administration”, under USGAAP. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|