| Title of Each Class:       | Name of Each Exchange On Which Registered: |
|----------------------------|--------------------------------------------|
| Common Stock, no par value | NYSE MKT LLC                               |

----

| Large accelerated filer  ̈ | Accelerated filer  ̈ | Non-accelerated filer þ |
|--------------------------------|--------------------------|------------------------------|
| U.S. GAAP  ̈ | International Financial Reporting Standards as issuedby the International Accounting Standards Board þ | Other  ̈ |
|------------------|-------------------------------------------------------------------------------------------------------------|--------------|

----

| NI 43-101 & Canadian Institute of Mining, Metallurgy and Petroleum Definitions |
|------------------------------------------------------------------------------------|
|                                                                               |   |
| Mineral Reserve                                                                    | The term "Mineral Reserve" refers to the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a preliminary feasibility study. The study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. |
|                                                                               |   |
| Proven Mineral Reserve                                                             | The term "Proven Mineral Reserve" refers to the economically mineable part of a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. |
|                                                                               |   |
| Probable Mineral Reserve                                                           | The term "Probable Mineral Reserve" refers to the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Mineral Resource          | The term "Mineral Resource" refers to a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, rare earth elements and industrial minerals in or on the earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.                                                                                                                            |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Measured Mineral Resource | The term "Measured Mineral Resource" refers to that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Indicated MineralResource | The term "Indicated Mineral Resource" refers to that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced                                                                                             |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

|                      | closely enough for geological and grade continuity to be reasonably assumed.                                                                                                                                                                                                                                                                                                                                                                             |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Inferred Mineral Resource | The term "Inferred Mineral Resource" refers to that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Qualified Person(1)       | The term "Qualified Person" refers to an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these, has experience relevant to the subject matter of the mineral project and the technical report and is a member in good standing of a professional association.                                            |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| SEC Industry Guide 7 Definitions |
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Reserve                          | The term "Reserve" refers to that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study(2) done to bankable standards that demonstrates the economic extraction. ("bankable standards" implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing.) A reserve includes adjustments to the in-situ tonnes and grade to include diluting materials and allowances for losses that might occur when the material is mined. |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Proven (Measured) Reserve    | The term "Proven (Measured) Reserve" refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well-defined that size, shape depth and mineral content of reserves are well-established.           |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Probable (Indicated) Reserve | The term "Probable (Indicated) Reserve" refers to reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation. |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Mineralized Material(3)      | The term "Mineralized Material" refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Non-Reserves                 | The term "Non-Reserves" refers to mineralized material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.                                                                                                                                                                                                                                                                   |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Exploration Stage            | An "Exploration Stage" prospect is one which is not in either the development or production stage.                                                                                                                                                                                                                                                                                                                                                                |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Development Stage            | A "Development Stage" project is one which is undergoing preparation of an established commercially mineable deposit for ore extraction but which is not yet in production. This stage occurs after completion of a feasibility study.                                                                                                                                                                                                                            |

----

| Production Stage | A "Production Stage" project is actively engaged in the process of extraction and beneficiation of Mineral Reserves to produce a marketable metal or mineral product. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Industry Guide 7 does not require designation of Qualified Person.                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                |
| (2)    | For Industry Guide 7 purposes, the feasibility study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. |
|   |                                                                                                                                                                                                                                                |
| (3)    | This category is substantially equivalent to the combined categories of Measured Mineral Resource and Indicated Mineral Resource specified in NI 43-101.                                                                                            |

----

----

----

----

----

|  | • | the timing, cost and success of future exploration activities, including, but not limited to, our proposed work programs; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------|

|  | • | risks and uncertainties relating to the interpretation of exploration results, geology, grade and continuity of our mineral deposits; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | • | risks related to differences between United States and Canadian practices for reporting mineral resources and reserves; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------|

|  | • | risks related to title to our mineral properties and the ability to obtain the required mining leases and permits to develop our mineral properties; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | risks related to governmental regulations, including environmental regulations and possible changes thereto; |
|--|---------|--------------------------------------------------------------------------------------------------------------|

|  | • | our ability to attract and retain qualified management and our dependence upon such management in the development of our mineral properties and potential conflicts of interest involving such management; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | risks related to the ability to maintain the listing of our common shares on the TSX Venture Exchange (the "TSXV") and NYSE MKT Exchange (the "NYSE MKT"); |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                | For the Fiscal Years Ended August 31, |   |
|-----------------------------------------------------|---------------------------------------|--------|
|                                                | 2014$                                 |   | 2013$ |   | 2012$ |   | 2011$ |   | 2010$ |   |
|  Operations:                                   |                                       |   |  |   |  |   |  |   |  |   |
|  Revenues                                      | Nil                                   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|  Mineral Exploration Costs                     | Nil                                   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|  Expenses                                      |                                  |   | (2,432,082 | ) |   |   | (3,093,770 | ) |   |   | (6,230,713 | ) |   | $ | (6,142,350 | ) |   | $ | (1,007,189 | ) |
|  Other items                                   |                                  |   | (9,926 | ) |   |   | (387,472 | ) |   |   | 121,400 |   |   | $ | 753,180 |   |   | $ | 46,529 |   |
|  Net loss before deferred income tax           |                                  |   | (2,442,008 | ) |   |   | (3,481,242 | ) |   |   | (6,109,313 | ) |   | $ | (5,389,170 | ) |   | $ | (960,660 | ) |
|  Deferred income tax                           | Nil                                   |   | Nil |   |   |   | (27,746 | ) |   | $ | 27,746 |   | Nil |   |
|  Net loss                                      |                                  |   | (2,442,008 | ) |   |   | (3,481,242 | ) |   |   | (6,137,059 | ) |   | $ | (5,361,424 | ) |   | $ | (960,660 | ) |
|  Other comprehensive loss                      |                                  |   | (2,390 | ) |   |   | (56,057 | ) |   |   | (223,536 | ) |   | $ | 176,496 |   |   | $ | (7,922 | ) |
|  Comprehensive loss                            |                                  |   | (2,444,398 | ) |   |   | (3,537,299 | ) |   |   | (6,360,595 | ) |   | $ | (5,184,928 | ) |   | $ | (968,582 | ) |
|  Basic and diluted loss per share              |                                  |   | (0.04 | ) |   |   | (0.06 | ) |   |   | (0.10 | ) |   | $ | (0.10 | ) |   | $ | (0.03 | ) |
|  Dividends per share                           | Nil                                   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|                                                |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Balance Sheet:                                |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Working capital                               |                                  |   | 5,403,122 |   |   |   | 5,094,986 |   |   |   | 9,267,844 |   |   | $ | 14,961,243 |   |   | $ | 4,551,360 |   |
|  Total assets                                  |                                  |   | 17,375,571 |   |   |   | 13,856,353 |   |   |   | 16,549,682 |   |   | $ | 18,093,878 |   |   | $ | 5,486,429 |   |
|  Total long-term liabilities                   | Nil                                   |   | Nil |   | Nil |   | Nil |   | Nil |   |
|  Total Shareholder's Equity                    |                                  |   | 16,443,733 |   |   | $ | 13,210,861 |   |   | $ | 15,766,705 |   |   | $ | 17,712,399 |   |   | $ | 5,350,457 |   |
|  Share Capital                                 |                                  |   | 25,910,384 |   |   | $ | 20,299,802 |   |   | $ | 19,808,552 |   |   | $ | 18,888,813 |   |   | $ | 5,757,155 |   |
|  Weighted Average Number of Shares Outstanding |                                  |   | 63,611,873 |   |   |   | 60,635,585 |   |   |   | 59,042,266 |   |   |   | 54,884,348 |   |   |   | 34,701,602 |   |

----

| Period                               | Average |
|-------------------------------------------|---------|
| September 1, 2013 – August 31, 2014 | 0.9276  |
| September 1, 2012 – August 31, 2013 | 0.9846  |
| September 1, 2011 – August 31, 2012 | 0.9929  |
| September 1, 2010 – August 31, 2011 | 1.0145  |
| September 1, 2009 – August 31, 2010 | 0.9528  |
| Month          | High   | Low    |
|----------------|--------|--------|
| October 2014   | 0.8981 | 0.8857 |
| September 2014 | 0.9206 | 0.8923 |
| August 2014    | 0.9211 | 0.9106 |
| July 2014      | 0.9405 | 0.9168 |
| June 2014      | 0.9367 | 0.9143 |
| May 2014       | 0.9228 | 0.9113 |

----

| · | international economic and political conditions, |
|--------|--------------------------------------------------|

| · | expectations of inflation or deflation, |
|--------|-----------------------------------------|

| · | international currency exchange rates, |
|--------|----------------------------------------|

| · | interest rates, |
|--------|-----------------|

| · | global or regional consumptive patterns, |
|--------|------------------------------------------|

| · | speculative activities, |
|--------|-------------------------|

| · | levels of supply and demand, |
|--------|------------------------------|

| · | increased production due to new mine developments, |
|--------|----------------------------------------------------|

| · | decreased production due to mine closures, |
|--------|--------------------------------------------|

| · | improved mining and production methods, |
|--------|-----------------------------------------|

| · | availability and costs of REE substitutes, |
|--------|--------------------------------------------|

| · | inventory levels of REE maintained by producers and others, and |
|--------|-----------------------------------------------------------------|

| · | inventory carrying costs. |
|--------|---------------------------|

----

----

----

----

----

----

----

----

----

----

----

| · | Preparation of a mineral concentrate with high REE recovery using wet magnetic separation; |
|--------|--------------------------------------------------------------------------------------------|

| · | Successful use of flotation to further upgrade this mineral concentrate; |
|--------|--------------------------------------------------------------------------|

| · | High recoveries and low sulphuric acid consumption achieved when leaching the mineral concentrate in an ambient temperature and atmospheric pressure environment; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Processing flow sheet now well defined for inclusion in the then ongoing preliminary economic assessment; and |
|--------|---------------------------------------------------------------------------------------------------------------|

| · | Potentially saleable nepheline/feldspar co-product with low iron content separated during physical concentrate preparation. |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|  Rare Earth Oxide | Forecast Demand 2016 (tonnes REO) | Forecast Demand 2020 (tonnes REO)  |
|------------------------|-----------------------------------|-----------------------------------------|
|  Cerium           | 70 – 80,0000                | 80 – 100,000                      |
|  Neodymium        | 25 – 30,000                 | 40 – 50,000                       |
|  Europium         | 350 – 400                   | 500 – 600                         |
|  Dysprosium       | 800 – 850                   | 1,000 – 1,100                     |
|  Terbium          | 450 – 500                   | 500 – 600                         |
|  Yttrium          | 9 – 10,000                  | 11 – 12,000                       |
|  Total Demand     | 150 – 170,000               | 200 – 240,000                     |

----

|  Rare Earth Element |  Commercial Uses              |   Price (US$/Kg) |   |
|--------------------------|------------------------------------|-----------------------|--------|
|  Scandium           |  Stadium lights               |   n/a            |   |   |
|  Yttrium            |  Lasers                       |   $19.04         |   |   |
|  Lanthanum          |  Electric car batteries       |   $6.41          |   |   |
|  Cerium             |  Lens polishes                |   $8.41          |   |   |
|  Praseodymium       |  Searchlights, aircraft parts |   $122.50        |   |   |
|  Neodymium          |  High strength magnets        |   $69.38         |   |   |
|  Promethium         |  Portable X-ray units         |    n/a      |   |   |
|  Samarium           |  Glass                        |   $8.00          |   |   |
|  Europium           |  Compact fluorescent bulbs    |   $906.72        |   |   |
|  Gadolinium         |  Neutron radiography          |   $46.50         |   |   |
|  Terbium            |  High strength magnets        |   $700.95        |   |   |
|  Dysprosium         |  High strength magnets        |   $532.18        |   |   |
|  Holmium            |  Glass tint                   |    n/a      |   |   |
|  Erbium             |  Metal alloys                 |    n/a      |   |   |
|  Thulium            |  Lasers                       |    n/a      |   |   |
|  Ytterbium          |  Stainless steel              |    n/a      |   |   |
|  Lutetium           |  None                         |    n/a      |   |   |

| · | The introduction of a Chinese government-controlled unified pricing system for light rare earths; |
|--------|---------------------------------------------------------------------------------------------------|

| · | The shutting down of small unsafe and illegal mining operations; |
|--------|------------------------------------------------------------------|

| · | A reduction in the number of rare earths mining and processing facilities; |
|--------|----------------------------------------------------------------------------|

| · | Increasingly tighter rare earths export quotas and the imposition of export tariffs ranging from 15-25%; and |
|--------|--------------------------------------------------------------------------------------------------------------|

| · | Chinese government is currently working towards the build-up of national strategic rare earths mineral reserves. |
|--------|------------------------------------------------------------------------------------------------------------------|

|   Year               | Annual Export Quota (tonnes REO) | Total  | Change in Total |
|---------------------------|----------------------------------|--------|-----------------|
|   Domestic Companies |   Foreign Companies         |
|   2005               | 48,040                           | 17,659 | 65,609          | n/a |
|   2006               | 45,752                           | 16,069 | 61,821          | -5.8% |
|   2007               | 43,574                           | 16,069 | 59,643          | -3.5% |
|   2008               | 40,987                           | 15,834 | 56,939          | -4.5% |
|   2009               | 33,300                           | 16,845 | 50,145          | -11.9% |
|   2010               | 22,512                           | 7,746  | 30,258          | -39.7% |
|   2011               | 22,983                           | 7,263  | 30,246          | 0.0% |
|   2012               | 22,406                           | 8,590  | 30,996          | +2.5% |
|   2013               | 22,299                           | 8,700  | 30,999          | 0.0% |
|   2014               | 22,792                           | 7,819  | 30,611          | -1.3% |

----

| · | The Minerals Act. |
|--------|-------------------|

| · | Minerals Ordinance. |
|--------|---------------------|

| · | The Act on the Continental Shelf. |
|--------|-----------------------------------|

| · | The Continental Shelf Ordinance. |
|--------|----------------------------------|

| · | The Certain Peat Deposits Act. |
|--------|--------------------------------|

| · | The Certain Peat Deposits Ordinance. |
|--------|--------------------------------------|

----

|     | Steps                                                                                                                                                   | Approval Required                                                                        |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| 1.  | Exploration permit (undersökningstillstånd) (survey of the bedrock)                                                                           | Mining Inspector                                                                         |
| 2.  | Exploration work (undersökningsarbete) (when the environment or land use is affected)                                                              | County Administrative Board etc; Landowner                                               |
| 3.  | Exploitation concession (bearbetningskoncession) (with environmental impact assessment and approval under chapters 3–4 of the Environmental Code) | Mining Inspector; County Administrative Board etc or Government in case of disagreement) |
| 4.  | Permission under the Environmental Code (Chapter 9 of the Code)                                                                                         | Environmental Court                                                                      |
| 5.  | Designation of land (markanvisning)                                                                                                                     | Landowner; Mining Inspector                                                              |
| 6.  | Building permit under the Planning and Building Act                                                                                                     | Local authority                                                                          |

| · | Every landowner in the area is to be notified of the decision to grant a permit. |
|--------|----------------------------------------------------------------------------------|

| · | The permit holder must give at least two weeks' notice of the exploration work. |
|--------|---------------------------------------------------------------------------------|

| · | Right to full compensation for damage and encroachment - the authorities are to decide if agreement cannot be reached. |
|--------|------------------------------------------------------------------------------------------------------------------------|

| · | The permit holder must provide security for compensation unless otherwise agreed by the landowner. |
|--------|----------------------------------------------------------------------------------------------------|

| · | No exploration work closer than 100 m to a site with a building; otherwise the landowner must be asked for permission. |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| · | US $1,465 million after-tax net present value ("NPV") at 8% discount rate. |
|--------|----------------------------------------------------------------------------|

| · | 45.6% after-tax internal rate of return ("IRR"). |
|--------|--------------------------------------------------|

| · | After-tax payback period of 2.5 years. |
|--------|----------------------------------------|

| · | US $10.9 billion in revenue over the 40 year life of mine. |
|--------|------------------------------------------------------------|

| · | Initial capital expenditures of US $266 million (including contingency of US $42.8 million). |
|--------|----------------------------------------------------------------------------------------------|

| · | Average annual operating expenses of $74.3 million or $10.93 per kg of mixed total rare earth oxide ("TREO") concentrate. |
|--------|---------------------------------------------------------------------------------------------------------------------------|

| · | Conservative basket price of US $51 per kg. |
|--------|---------------------------------------------|

|                            |             |        |        |                |                 |
|---------------------------------|-------------|--------|--------|----------------|-----------------|
|                            | Units       | Year 1 | Year 2 | Year 3-20(avg) | Year 21-40(avg) |
| Total Tonnes mined (ore+waste)  | Mt          | 2.91   | 2.54   | 2.82           | 2.58            |
| Strip Ratio                     | Waste : Ore | 2.86   | 1.24   | 0.87           | 0.75            |
| Tonnes processed                | Mt          | 752    | 1,133  | 1,504          | 1,458           |
| Grade TREO                      | %           | 0.53   | 0.56   | 0.58           | 0.60            |
| Grade ZrO2                      | %           | 1.61   | 1.60   | 1.64           | 1.77            |
| Recovery TREO                   | %           | 80%    | 80%    | 80%            | 80%             |
| Recovery ZrO2                   | %           | 60%    | 60%    | 60%            | 60%             |
| Mixed TREO concentrate          | Tonnes      | 3,165  | 5,067  | 6,946          | 7,004           |
| Zirconium Carbonate concentrate | Tonnes      | 7,260  | 10,893 | 14,831         | 15,492          |

----

|  | Cautionary Note to Investors Concerning Estimates of Inferred Resources This section uses the term "inferred mineral resources". We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that all or any part of an inferred resource exists, or is economically or legally mineable. |  |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

|  | Cautionary Note to U.S. Investors concerning estimates ofIndicated Resources This section uses the term "indicated resources". We advise U.S. investors that while that term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. U.S. Investors are cautioned not to assume that any part or all of an indicated resource will ever be converted into reserves. |  |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

|  | Classification | Tonnes Mt | TREO % | LREO % | HREO % | HREO/TREO % | ZrO2% | Tonnes of Contained TREO |  |
|--|----------------|-----------|--------|--------|--------|-------------|-------|--------------------------|--|
|  | Indicated      | 41.6      | 0.57   | 0.28   | 0.29   | 50.8        | 1.71  | 237,120                  |  |
|  | Inferred       | 16.5      | 0.64   | 0.33   | 0.31   | 48.4        | 1.70  | 105,600                  |  |

| 1. | Mineral resources that are not mineral reserves do not have demonstrated economic viability.  The PEA includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.  There is no certainty that the results projected in the PEA will be realized and actual results may vary substantially. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | TREO includes: La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3. |
|----|------------------------------------------------------------------------------------------------------------------------|

| 3. | Heavy Rare Earth Oxides ("HREO") includes: Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3. |
|----|-----------------------------------------------------------------------------------------------------------------|

----

| 4. | "In-pit" Mineral Resources were estimated using the Whittle pit optimization software and preliminary economic parameters for commodity prices, metal recoveries and current operating expenses as presented in the PEA. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Mineral Resources are reported at a marginal cutoff grade of 0.17% TREO. |
|----|--------------------------------------------------------------------------|

| 6. | Resource estimate assumes mining recovery 95%, dilution 5%. |
|----|-------------------------------------------------------------|

| · | High recovery of REE in a low mass during combined flotation – magnetic separation tests, including 82.5% yttrium oxide (Y2O3) and 76.9% TREO recovered in only 25.2% of the original mass; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | High recovery of REE in magnetic separation tests on three major mineralized material types from Norra Kärr; |
|--------|-------------------------------------------------------------------------------------------------------------------|

| · | Eudialyte confirmed as the only REE-bearing mineral present in more than trace abundance in all mineralized material types; |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

| · | All major mineralized material types shown to be mineralogically indistinguishable when ground to 500 micron, suggesting geological variation across the mineralized material body is unlikely to affect processing behavior; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Flotation test work very successful in separating aegirine from eudialyte using commercial reagent; and |
|--------|---------------------------------------------------------------------------------------------------------|

| · | Low-iron nepheline/feldspar fraction identified as potential by-product; |
|--------|--------------------------------------------------------------------------|

|       |                                                                                                                                                                                                                                                                    |   TREO% |   HREO/  TREO% |   ZrO2% |   Dy2O3 ppm |   Y2O3 ppm |   Tb2O3 ppm |   Nd2O3 ppm |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-------------------------------|--------------|------------------|-----------------|------------------|------------------|
|   PGT |   Pegmatitic Grennaite                                                                                                                                                                                                                                             |   0.614 |   54.7%                  |   2.00  |   289       |   2300     |   42        |   662       |
|   GTM |   Migmatitic Grennite                                                                                                                                                                                                                                              |   0.490 |   45.0%                  |   1.52  |   184       |   1506     |   27        |   563       |
|   GTC |   Grennaite                                                                                                                                                                                                                                                        |   0.261 |   63.5%                  |   1.33  |   152       |   1056     |   20        |   233       |
|       | TREO = sum of La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3;HREO = sum of Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3;Most significant REO's by % are Y2O3, La2O3, Ce2O3, Nd2O3, Dy2O3 |

----

|  |                     | Mass | TREO Recovery | ZrO2 Recovery | Fe2O3Recovery |  |
|--|--------------------------|------|---------------|---------------|---------------|--|
|  | -100/+20 micron fraction | 53 % | 97 %          | 71%           | 99 %          |  |
|  | -20 micron fraction      | 23 % | 80 %          | 41%           | 91 %          |  |

----

----

----

----

|  | Cautionary Note to U.S. Investors concerning estimates ofIndicated Resources This section uses the terms "measured" and "indicated resources". We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. |  |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

|  TREO %  Cut-off |  Million   Tonnes |  TREO   % |  % of HREO  in TREO |  Dy2O3  ppm |  Y2O3  ppm |  Nd2O3  ppm |  Tonnes of Contained  TREO |            |
|----------------------------|----------------------------------|--------------------------|-------------------------------|-----------------------|----------------------|-----------------------|-------------------------------------------|-----------------|
|  0.7                  |  1.0                        |  0.89               |  32.3                    |  292             |  1800           |  1314            |  8,620                               |            |
|  0.6                  |  1.7                        |  0.78               |  32.9                    |  262             |  1610           |  1146            |  13,360                              |            |
|  0.5                  |  3.0                        |  0.68               |  33.3                    |  232             |  1420           |  996             |  20,650                              |            |
|  0.4                  |  4.5                        |  0.60               |  33.9                    |  209             |  1283           |  878             |  27,260                              |  BASE CASE |
|  0.3                  |  6.3                        |  0.53               |  34.4                    |  187             |  1146           |  769             |  33,530                              |            |
|  0.2                  |  7.7                        |  0.48               |  34.5                    |  0.017           |  1042           |  700             |  37,030                              |            |

|  | Cautionary Note to Investors Concerning Estimates of Inferred Resources        This section uses the term "inferred mineral resources". We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that all or any part of an inferred resource exists, or is economically or legally mineable. |  |
|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

|  TREO %   Cut-off |  Million  Tonnes |  TREO  % |  % of HREO  in TREO |  Dy2O3  ppm |  Y2O3  ppm |  Nd2O3  ppm |  Tonnes of  Contained  TREO |            |
|----------------------------------|----------------------------|--------------------|-------------------------------|-----------------------|----------------------|-----------------------|--------------------------------------------|-----------------|
|  0.7                        |  0.9                  |  0.85         |  31.8                    |  288             |  1667           |  1294            |  7,947                                |            |
|  0.6                        |  1.6                  |  0.77         |  32.5                    |  264             |  1547           |  1151            |  12,088                               |            |
|  0.5                        |  2.5                  |  0.69         |  33.6                    |  242             |  1445           |  1018            |  16,960                               |            |
|  0.4                        |  3.3                  |  0.63         |  33.7                    |  222             |  1320           |  925             |  20,770                               |  BASE CASE |
|  0.3                        |  4.2                  |  0.57         |  33.9                    |  202             |  1205           |  841             |  23,820                               |            |
|  0.2                        |  4.7                  |  0.54         |  33.9                    |  191             |  1134           |  790             |  25,050                               |            |

| 1. | TREO includes: La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3 |
|----|-----------------------------------------------------------------------------------------------------------------------|

----

| 2. | HREO includes: Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3 |
|----|------------------------------------------------------------------------------------|

| 3. | The calculated resource is sensitive to cut-off grade which will be influenced by metallurgical operating costs.  Bench scale metallurgical tests were completed on an Olserum composite sample in 2005.  Magnetic and gravity separation gave a mineral concentrate of 14% rare earth oxide in only 5% of the mass with a recovery of 59%. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The mineral resource estimate was completed by Mr. Geoffrey Reed, Senior Consulting Geologist of ReedLeyton Consultants Pty Ltd, and is based on geological and geochemical data supplied by us audited by Mr. Reed.  Mr. Reed is an independent qualified person for the purposes of NI 43-101 standards of disclosure for mineral projects of the Canadian Securities Administrators. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The resource estimate has been classified as an Indicated and Inferred Resource based on the distance-space between sample data within the current deposit outline.  Variograms were obtained from a variography study of TREO, with the continuity analysis showing a reasonable fit model in the major and semi major direction for the mineralised domains. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | The resource estimate is based on: |
|----|------------------------------------|

| § | A database of 31 'In Resource' drill holes totalling 5,297m of diamond drilling completed by Tasman and previous project owner IGE since 2004 where samples were composited on 1m lengths.  All assays by both Tasman and IGE were completed at laboratories in Vancouver, British Columbia. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| § | Specific gravity (SG) has an overall mean of 2.80 g/cc from 458 SG readings.  The mean of the mineralisation of 2.82 g/cc was used in the estimate and a mean of the host rock of 2.67 g/cc was used in the estimate |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| § | Block model was estimated by ordinary kriging interpolation method on blocks 5m (x) x 20m (y) x 10m (z). |
|--------|----------------------------------------------------------------------------------------------------------|

| § | Metallurgical test work at Olserum is in progress and no information was available at the time of this resource calculation. |
|--------|------------------------------------------------------------------------------------------------------------------------------|

| · | Stripping Cost $/tonne mined US $3.66 |
|--------|---------------------------------------|

| · | Mining Cost $/tonne mined US $3.66 |
|--------|------------------------------------|

| · | Processing Cost $/tonne mineralized material US $41.48 |
|--------|--------------------------------------------------------|

| · | REO Recovery 80.0% |
|--------|--------------------|

| · | Discount to TREO Basket Price 38.0% (accounts for REO separation charge) |
|--------|--------------------------------------------------------------------------|

| · | Discounted TREO Price US $31.0 kg |
|--------|-----------------------------------|

| · | 5 percent mining loss, 5 percent for mining dilution |
|--------|------------------------------------------------------|

----

| TREO % Cut-off | La2O3 | Ce203 | Pr203 | Nd203 | Sm203 | Eu203 | Gd203 | Tb203 | Dy203 | Ho203 | Er203 | Tm203 | Yb203 | Lu203 | Y203  |
|---------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|
| 0.7                 | 0.125 | 0.281 | 0.034 | 0.131 | 0.029 | 0.001 | 0.029 | 0.005 | 0.029 | 0.006 | 0.017 | 0.002 | 0.015 | 0.002 | 0.180 |
| 0.6                 | 0.109 | 0.244 | 0.030 | 0.115 | 0.026 | 0.001 | 0.026 | 0.004 | 0.026 | 0.005 | 0.015 | 0.002 | 0.014 | 0.002 | 0.161 |
| 0.5                 | 0.094 | 0.212 | 0.026 | 0.100 | 0.023 | 0.001 | 0.023 | 0.004 | 0.023 | 0.005 | 0.014 | 0.002 | 0.012 | 0.002 | 0.142 |
| 0.4                 | 0.083 | 0.186 | 0.023 | 0.088 | 0.020 | 0.001 | 0.021 | 0.004 | 0.021 | 0.004 | 0.012 | 0.002 | 0.011 | 0.002 | 0.128 |
| 0.3                 | 0.072 | 0.163 | 0.020 | 0.077 | 0.018 | 0.000 | 0.018 | 0.003 | 0.019 | 0.004 | 0.011 | 0.002 | 0.010 | 0.001 | 0.115 |
| 0.2                 | 0.065 | 0.147 | 0.018 | 0.070 | 0.016 | 0.000 | 0.017 | 0.003 | 0.017 | 0.004 | 0.010 | 0.001 | 0.009 | 0.001 | 0.104 |

| TREO % Cut-off | La2O3 | Ce203 | Pr203 | Nd203 | Sm203 | Eu203 | Gd203 | Tb203 | Dy203 | Ho203 | Er203 | Tm203 | Yb203 | Lu203 | Y203  |
|---------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|
| 0.7                 | 0.118 | 0.270 | 0.033 | 0.129 | 0.030 | 0.001 | 0.029 | 0.005 | 0.029 | 0.006 | 0.016 | 0.002 | 0.014 | 0.002 | 0.167 |
| 0.6                 | 0.105 | 0.241 | 0.030 | 0.115 | 0.027 | 0.001 | 0.026 | 0.005 | 0.026 | 0.005 | 0.015 | 0.002 | 0.013 | 0.002 | 0.155 |
| 0.5                 | 0.093 | 0.213 | 0.026 | 0.102 | 0.024 | 0.001 | 0.024 | 0.004 | 0.024 | 0.005 | 0.014 | 0.002 | 0.012 | 0.002 | 0.145 |
| 0.4                 | 0.084 | 0.194 | 0.024 | 0.093 | 0.022 | 0.001 | 0.022 | 0.004 | 0.022 | 0.005 | 0.013 | 0.002 | 0.011 | 0.002 | 0.132 |
| 0.3                 | 0.077 | 0.176 | 0.022 | 0.084 | 0.020 | 0.000 | 0.020 | 0.003 | 0.020 | 0.004 | 0.012 | 0.002 | 0.010 | 0.001 | 0.121 |
| 0.2                 | 0.072 | 0.166 | 0.020 | 0.079 | 0.018 | 0.000 | 0.019 | 0.003 | 0.019 | 0.004 | 0.011 | 0.002 | 0.010 | 0.001 | 0.113 |

----

|  |  Test |  Concentrate Mass  (Mass Pull) |  Ce Recovery  (%) |  La Recovery  (%) |  Y Recovery (%) |  |
|--|------------|------------------------------------------|-----------------------------|-----------------------------|----------------------|--|
|  |  3A   |  6.80%                              |  88.4 %                |  88.8 %                |  92.7 %         |  |
|  |  3B   |  8.42%                              |  89.6 %                |  90.1 %                |  93.8 %         |  |
|  |  8    |  5.99%                              |  87.9 %                |  85.3 %                |  91.2 %         |  |

----

----

----

----

| (i) | The determination of categories of financial assets and financial liabilities has been identified as an accounting policy which involves judgments or assessments made by management. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | Management is required to assess the functional currency of each entity of our company.  In concluding that the Canadian dollar is the functional currency of the parent and its subsidiary company, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which we operate.  As no single currency was clearly dominant we also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | Management is required to assess impairment in respect of intangible exploration and evaluation assets.  The triggering events are defined in IFRS 6.  In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves.  The nature of exploration and evaluation activity is such that only a proportion of projects are ultimately successful and some assets are likely to become impaired in future periods. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | Although we take steps to verify title to exploration and evaluation assets in which we have an interest, these procedures do not guarantee our title.  Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (i) | Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors.  We review the adequacy of these provisions at the end of the reporting period.  However, it is possible that at some future date an additional liability could result from audits by taxing authorities.  Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The assessment of any impairment of exploration and evaluation assets, and property, plant and equipment is dependent upon estimates of the recoverable amount that take into account factors such as reserves, economic and market conditions and the useful lives of assets.  As a result of this assessment, management has carried out an impairment test on certain other exploration and evaluation assets and an impairment charge of $46,636 was made in fiscal 2014. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|  | (i) | IFRS 10 Consolidated Financial Statements.  IFRS 10 defines a single concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of a parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | IFRS 11 Joint Arrangements.  IFRS 11 focuses on the rights and obligations of an arrangement rather than its legal form, as is currently the case.  The standard distinguishes between joint operations, where the joint operator accounts for the assets, liabilities, revenues, and expenses relating to its involvement, and joint ventures, which must be accounted for using the equity method. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | IFRS 12 Disclosure of Interests in Other Entities.  IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint operations, joint ventures, associates and unconsolidated structured entities. |
|--|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | IFRS 13 Fair Value Measurement.  IFRS 13 is a new standard that applies to both financial and non-financial items measured at fair value.  It defines fair value, sets out a single framework for measuring fair value and requires disclosures about fair value measurements.  Previously, a variety of fair value techniques and disclosures were possible under the requirements of separate applicable IFRSs. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | IFRS 9 Financial Instruments; tentatively effective for annual periods beginning on or after January 1, 2018.  IFRS 9 replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortized cost and fair value.  IFRS 9 prohibits reclassifications except in rare circumstances when the entity's business model changes.  The new standard removes the requirement to separate embedded derivatives from financial asset hosts.  It requires a hybrid contract to be classified in its entirety at either amortized cost or fair value. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | IFRS 15 Revenue from Contracts with Customers; is effective for annual periods beginning on or after January 1, 2017.  IFRS 15 specifies how and when to recognize revenue as well as requires entities to provide users of financial statements with more informative, relevant disclosures.  The standard supersedes IAS 18, Revenue, IAS 11, Construction Contracts, and a number of revenue-related interpretations.  The new standard will apply to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | incurred $124,990 (2013 - $126,793) for accounting and administration of which $58,300 (2013 - $48,650) was charged by Chase Management Ltd. ("Chase"), a private corporation controlled by Mr. Nick DeMare, our CFO and one of our directors, and $66,690 (2013 - $78,143) was charged for accounting service provided in Sweden; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | general exploration costs of $82,650 (2013 - $165,846) relating to general exploration and property due diligence in Sweden and Finland.  General exploration costs were lower during fiscal 2014 as we focused on the preparation of the PFS report on the Norra Kärr property; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $180,525 (2013 - $194,759) for travel expenses, primarily for our personnel to oversee our ongoing property exploration programs, attend international investment conferences and meet with consumers of REE production to establish working relationships; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | corporate development expenses increased by $39,831, from $109,449 in fiscal 2013 to $149,280 in fiscal 2014, due primarily to an increase in our participation in investor and trade conferences; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ● | incurred $475,484 (2013 - $583,023) for professional services, of which we incurred $278,410 (2013 - $307,742) by our directors and officers, $58,450 (2013 - $136,872) by consultants in Sweden and $138,624 (2013 - $138,409) by consultants for general corporate services; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $163,500 (2013 - $162,000) for management fees charged through Sierra Peru Pty ("Sierra") for remuneration of Mr. Mark Saxon, our President and CEO and one of our directors; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | salaries and benefits of $304,943 (2013 - $290,616) for employees in the exploration office in Sweden. |
|--------|--------------------------------------------------------------------------------------------------------|

----

| · | incurred $126,793 (2012 - $71,528) for accounting and administration of which $48,650 (2012 - $48,000) was charged by Chase, a private corporation controlled by Mr. Nick DeMare, our CFO and one of our directors, and $78,143 (2012 - $23,528) was charged by a third party accounting service in Sweden commencing June 1, 2012.  Prior to June 1, 2012 the accounting and administration services in Sweden were conducted by salaried employees; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | general exploration costs of $165,846 (2012 - $71,126) relating to general exploration and property due diligence in Sweden and Finland; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| · | $194,759 (2012 - $277,123) for travel expenses, primarily for our personnel to oversee our ongoing property exploration programs, attend international investment conferences and meet with consumers of REE production to establish working relationships.  Travel expenses were lower during fiscal 2013 compared to the fiscal 2012 period due to less corporate travel by management and directors; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | legal fees of $296,790 (2012 - $123,599) were incurred.  During fiscal 2013 legal services were mainly related to the base shelf prospectus whereas in fiscal 2012 legal services were related to obtaining a listing on the NYSE MKT; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | office expenses of $101,981 (2012 - $212,491) of which $61,785 (2012 - $163,058) was for the maintenance of the exploration office in Sweden.  During fiscal 2012, office expenses in Sweden were higher as we were incurring costs to set up a new exploration office; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we had retained Mining Interactive Corp. ("Mining Interactive") to provide market awareness and investor relation activities.  During fiscal 2013 we paid Mining Interactive $10,500 (2012 - $42,000).  Effective November 30, 2012 we terminated our arrangement with Mining interactive; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ● | incurred $583,023 (2012 - $718,443) for professional services, of which we incurred $307,741 (2012 - $302,759) by our directors and officers, $136,872 (2012 - $243,375) by consultants in Sweden and $138,409 (2012 - $172,309) by consultants for general corporate services; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $162,000 (2012 - $162,000) for management fees charged through Sierra for remuneration of Mr. Mark Saxon, our President and CEO; |
|--------|----------------------------------------------------------------------------------------------------------------------------------|

| · | audit fees of $41,947 (2012 - $72,091) for the year-end audit.  The change between fiscal 2013 and fiscal 2012 was solely due to the timing of billings by the auditors for services rendered in respect to auditing our year-end accounts; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | salaries and benefits of $290,616 (2012 - $204,970) for employees in the exploration office in Sweden.  The increase was due to increased personnel during fiscal 2013; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | corporate development expenses of $109,449 (2012 - $178,532) were incurred for services and costs relating to corporate development and market awareness.  These expenses were lower during fiscal 2013 compared to fiscal 2012 due to our scaling back on these activities during this current economic period; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | regulatory fees of $69,403 (2012 - $126,355) were incurred.  During fiscal 2012 we listed on the NYSE MKT in December 2011 and paid significant registration filing fees to list on the NYSE MKT; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | rent of $59,414 (2012 - $48,623) were incurred for offices in Canada and Sweden.  During fiscal 2013 we increased our office space in Sweden to accommodate additional consultants and salaried employees. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $76,328 (2011 - $85,175) for accounting, administration and rent charged by Chase, a private corporation controlled by Nick DeMare, our CFO and one of our directors; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | general exploration costs of $48,085 (2011 - $113,780) relating to general exploration and property due diligence in Sweden, Finland and Norway. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $277,123 for travel expenses (2011 - $177,338), primarily for increased travel by our personnel to oversee our ongoing property exploration programs, negotiate corporate financing activities and attend international investment conferences; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | legal fees of $123,599 (2011 - $86,530).  During fiscal 2012 significant legal fees were incurred for services relating to the listing on the NYSE MKT exchange; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | regulatory fees increased by $91,077 from $35,278 in fiscal 2011 to $126,355 in fiscal 2012 due to additional fees paid on our listing on the NYSE MKT; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | office expenses of $212,491 (2011 - $84,659) of which $163,058 (2011 - $48,828) was for the maintenance of the exploration office in Sweden; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

| · | we retained Mining Interactive to provide market awareness and investor relation activities.  During fiscal 2012, we paid Mining Interactive $42,000 (2011 - $41,500); |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | ● | paid $718,443 (2011 - $221,770) for professional services, of which we incurred $302,759 (2011 - $118,412) for professional services provided by directors and officers of our company.  The significant increase in fiscal 2012 occurred due to the appointment of a new position, Vice-President of Corporate Development, in July 2011 and the increase in services provided by consultants and consulting firms in fiscal 2012; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $162,000 (2011 - $158,250) for management and professional fees charged through Sierra for remuneration of Mr. Mark Saxon, our President and CEO; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| · | audit fees of $72,091 (2011 - $67,903) for the year-end audit.  The fluctuation between fiscal 2012 and fiscal 2011 is due to increased audit services provided for our year-end financial statements; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | salaries and benefits of $204,970 (2011 - $116,028) for employees in the exploration office in Sweden, reflecting increased personnel. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|                  |   | As at August 31, 2014 |    |   | As at August 31, 2013     |   |
|-----------------------|--------|-----------------------|---------|--------|---------------------------|--------|
|                  |   | AcquisitionCosts$     |    |   | DeferredExplorationCosts$ |   |   | Total$ |   |   | AcquisitionCosts$ |   |   | DeferredExplorationCosts$ |   |   | Total$ |   |
| Rare Earth Properties |   |                       |    |   |                           |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Norra Kärr       |   |                  | 92,797  |   |                      |   | 9,889,283 |   |   |   | 9,982,080 |   |   |   | 23,045 |   |   |   | 7,179,904 |   |   |   | 7,202,949 |   |
| Olserum               |   |                  | 143,357 |   |                      |   | 568,594 |   |   |   | 711,951 |   |   |   | 124,846 |   |   |   | 488,336 |   |   |   | 613,182 |   |
| Other                 |   |                  | 15,960  |   |                      |   | 4,758 |   |   |   | 20,718 |   |   |   | 49,088 |   |   |   | 15,860 |   |   |   | 64,948 |   |
| Other Properties      |   |                  | 112,853 |   |                      |   | 39,051 |   |   |   | 151,904 |   |   |   | 2,406 |   |   |   | 454 |   |   |   | 2,860 |   |
|                  |        |                       |         |        |                           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                  |   |                  | 364,967 |   |                      |   | 10,501,686 |   |   |   | 10,866,653 |   |   |   | 199,385 |   |   |   | 7,684,554 |   |   |   | 7,883,939 |   |

----

|                            |   | Rare Earth Element Properties |      |   | Other    |   |    |           |   |
|---------------------------------|--------|-------------------------------|-----------|--------|----------|--------|---------|-----------|--------|
|                            |   | Norra Kärr$              |      |   | Olserum$ |   |    | Otanmaki$ |   |   | Other$ |   |   | Properties$ |   |   | Total$ |   |
| Balance at August 31, 2012      |   |                          | 5,312,704 |   |     |   | 316,137 |      |   |   | 340,766 |   |   |   | 186,698 |   |   |   | 2,860 |   |   |   | 6,159,165 |   |
| Exploration costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consulting                      |   |                          | 400,543   |   |     |   | 186,511 |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 587,054 |   |
| Core cutting                    |   |                          | 13,837    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,837 |   |
| Database                        |   |                          | 3,707     |   |     |   | 3,698   |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,405 |   |
| Drilling                        |   |                          | 74,950    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 74,950 |   |
| Exploration site                |   |                          | 21,779    |   |     |   | 119     |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,898 |   |
| Fuel                            |   |                          | 1,253     |   |     |   | 668     |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,921 |   |
| Geochemical                     |   |                          | 385,093   |   |     |   | 35,306  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 420,399 |   |
| Geological                      |   |                          | 92,398    |   |     |   | 31,511  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 123,909 |   |
| Maps                            |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | 1,920 |   |   |   | - |   |   |   | 1,920 |   |
| Metallurgical consulting        |   |                          | 21,152    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,152 |   |
| Metallurgical testing           |   |                          | 692,637   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 692,637 |   |
| Preliminary economic assessment |   |                          | 27,559    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,559 |   |
| Pre-feasibility study           |   |                          | 117,594   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 117,594 |   |
| Salaries                        |   |                          | 13,486    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,486 |   |
| Sample preparation              |   |                          | -         |   |     |   | 17,791  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,791 |   |
| Travel                          |   |                          | 24,257    |   |     |   | 83      |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 24,340 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 1,890,245 |   |     |   | 275,687 |      |   |   | - |   |   |   | 1,920 |   |   |   | - |   |   |   | 2,167,852 |   |
| Acquisition costs               |   |                          |      |   |     |   |    |      |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mining rights                   |   |                          | -         |   |     |   | 21,358  |      |   |   | - |   |   |   | 33,678 |   |   |   | - |   |   |   | 55,036 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Impairment                      |   |                          | -         |   |     |   | -       |      |   |   | (340,766 | ) |   |   | (157,348 | ) |   |   | - |   |   |   | (498,114 | ) |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2013      |   |                          | 7,202,949 |   |     |   | 613,182 |      |   |   | - |   |   |   | 64,948 |   |   |   | 2,860 |   |   |   | 7,883,939 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Exploration costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consulting                      |   |                          | 532,787   |   |     |   | 72,570  |      |   |   | - |   |   |   | - |   |   |   | 33,436 |   |   |   | 638,793 |   |
| Database                        |   |                          | 2,424     |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 191 |   |   |   | 2,615 |   |
| Exploration site                |   |                          | 8,490     |   |     |   | 1,069   |      |   |   | - |   |   |   | - |   |   |   | 265 |   |   |   | 9,824 |   |
| Geochemical                     |   |                          | 94,079    |   |     |   | 3,723   |      |   |   | - |   |   |   | - |   |   |   | 4,192 |   |   |   | 101,994 |   |
| Geological                      |   |                          | 156,299   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 156,299 |   |
| Maps                            |   |                          | 1,442     |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 437 |   |   |   | 1,879 |   |
| Metallurgical testing           |   |                          | 429,895   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 429,895 |   |
| Pre-feasibility study           |   |                          | 1,364,575 |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,364,575 |   |
| Salaries                        |   |                          | 29,188    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,188 |   |
| Surface rights                  |   |                          | 76,364    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 76,364 |   |
| Travel                          |   |                          | 13,836    |   |     |   | 2,896   |      |   |   | - |   |   |   | - |   |   |   | 76 |   |   |   | 16,808 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 2,709,379 |   |     |   | 80,258  |      |   |   | - |   |   |   | - |   |   |   | 38,597 |   |   |   | 2,828,234 |   |
| Acquisition costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mining rights                   |   |                          | 16,832    |   |     |   | 18,511  |      |   |   | - |   |   |   | - |   |   |   | 16,353 |   |   |   | 51,696 |   |
| Issuance of common shares       |   |                          | 52,920    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 51,500 |   |   |   | 104,420 |   |
| Acquisition                     |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 69,752    |   |     |   | 18,511  |      |   |   | - |   |   |   | - |   |   |   | 112,853 |   |   |   | 201,116 |   |
| Impairment                      |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | (44,230 | ) |   |   | (2,406 | ) |   |   | (46,636 | ) |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2014      |   |                          | 9,982,080 |   |     |   | 711,951 |      |   |   | - |   |   |   | 20,718 |   |   |   | 151,904 |   |   |   | 10,866,653 |   |

----

----

|                                                                                     | Payments Due by Period |
|------------------------------------------------------------------------------------------|------------------------|
|   Contractual Obligations                                                      |  Total            | Less Than1 Year | 1-3 Years | 3-5 Years | More Than5 Years |
|  Purchase Obligations                                                               | None1                  | None1 | None | None | None |
|  Long-Term Debt Obligations                                                         | None                   | None | None | None | None |
|  Capital (Finance) Lease Obligations                                                | None                   | None | None | None | None |
|  Operating Lease Obligations                                                        | None                   | None | None | None | None |
|  Other Long-Term Liabilities Reflected on our Balance Sheet under   IFRS. | None                   | None | None | None | None |
|  Total                                                                              | None1                  | None1 | None | None | None |

----

| Name, Position, Municipality of Residence and Age(1)                                              | Principal Occupation orEmployment during the Past 5 years(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Director/OfficerSince(2)           |
|---------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|
| MARK SAXON President, Chief Executive Officer & DirectorVictoria, AustraliaAge: 44            | Professional Geologist. President and CEO of Tasman. Founding director of Flinders Resources Limited and Mawson Resources Limited ("Mawson").  Mr. Saxon is a Fellow of the Australasian Institute of Mining and Metallurgy and a member the Australian Institute of Geoscientists.                                                                                                                                                                                                                                                                                                              | Since October 22, 2009             |
|  NICK DEMARE Chief Financial Officer & DirectorBritish Columbia, CanadaAge: 60           |  Chartered Accountant.  President of Chase Management Ltd. since 1991.  Chase is a private company which provides accounting, management, securities regulatory compliance and corporate secretarial services to companies listed on the TSXV and The Toronto Stock Exchange and its predecessors.  He also serves as an officer and/or director of a number of publicly listed companies. Mr. DeMare holds a Bachelor of Commerce degree from the University of British Columbia and is a member in good standing of the Institute of Chartered Accountants of British Columbia. |  Since October 22, 2009       |
|  DAVID HENSTRIDGE(3)(4)(5)(6)Non-Executive Chairman & DirectorVictoria, AustraliaAge: 66 |  Self-employed professional geologist,Mr. Henstridge was the President & CEO of Tumi from January 2000 to January 2013. Founding director of Tasman, Tumi, Mawson and Tinka Resources Limited.  Mr. Henstridge has a B.Sc. (Hons) in Geology and is a Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the both the Australian Institute of Geoscientists and the Geological Society of Australia.                                                                                                                                                         |  Since October 22, 2009       |
|  MICHAEL HUDSON DirectorVictoria, AustraliaAge: 45                                           |  Professional Geologist.  President CEO, Chairman and a founding director of Mawson and founding director of Flinders. He is a Fellow of the Australasian Institute of Mining and Metallurgy and Member of both the Society for Economic Geologists and Australian Institute of Geoscientists.                                                                                                                                                                                                                                                                                              |  Since October 22, 2009       |
|  ROBERT G. ATKINSON(3)(4)(5)(6) DirectorBritish Columbia, CanadaAge: 74                      |  Self-employed businessman,Vice Chairman of Atlantic Gold Corp. (formerly, Spur Ventures Inc.).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  Since October 22, 2009  |

----

| Name, Position, Municipality of Residence and Age(1)                               | Principal Occupation orEmployment during the Past 5 years(1)                                                                                                                                                                                                                                                         | Director/OfficerSince(2)       |
|------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|
|  GILLYEARD (GIL) LEATHLEY(3)(4)(5)(6)Director British Columbia, CanadaAge: 77 |  Qualified Mine Surveyor and Industrial Engineer,Chief Operation Officer of Sunward Resources Ltd. since 2011.  Previously, independent mining consultant from January 2000 to November 2010.                                                                                                              |  Since September 13, 2011 |
|  JAMES POWELLVice President - Corporate DevelopmentOntario, CanadaAge: 40     |  President of Albis Capital Corp. since February 2012. Partner of Terre Partners from July 2011 to January 2012. Equity Research Analyst for Laurentian Bank Securities from April 2010 to July 2011; Northern Securities from November 2007 to March 2010; and GMP Securities from June 2004 to November 2007. |  Since July 15, 2011      |
|  MARIANA BERMUDEZCorporate SecretaryBritish Columbia, CanadaAge: 39           |  Employed by Mawson since April 2013.  Previously, employed by Tumi since January 2004. Corporate Secretary of Tinka, Mawson, Tasman, Flinders and Kola Mining Corp.                                                                                                                                  |  Since October 22, 2009   |

| (1) | The information as to country of residence and principal occupation, not being within our knowledge, has been furnished by the respective director or officer individually. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | We were formed on October 22, 2009 through the Amalgamation. |
|-----|--------------------------------------------------------------|

| (3) | Denotes member of the Audit Committee. |
|-----|----------------------------------------|

| (4) | Denotes member of the Compensation Committee. |
|-----|-----------------------------------------------|

| (5) | Denotes member of the Nominating Committee. |
|-----|---------------------------------------------|

| (6) | Denotes member of the Corporate Governance Committee |
|-----|------------------------------------------------------|

| (a) | was the subject of a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | was subject to a cease trade order or similar order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer of the relevant company and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a) | is, or during the ten years preceding the date of this annual report has been, a director or executive officer, of any company, including Tasman, that while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager, or trustee appointed to hold its assets; or |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | has, within the ten years preceding the date of this annual report, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | any other penalties or sanctions imposed by a court or regulatory body which would likely be considered important to a reasonable investor in making an investment decision. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  Name andprincipal position                                                       | Year(1)       | Salary($)(2)           | Option-based awards($)(3)  | All other compensation ($)     | Totalcompensation($)(2)  |
|---------------------------------------------------------------------------------------------|--------------------|-----------------------------|---------------------------------|-------------------------------------|-------------------------------|
|  Mark Saxon President & CEO                                                   | 201420132012  | 163,500162,000162,000  | NilNil432,000              | NilNilNil                      | 163,500162,000594,000    |
|  Nick DeMare  CFO                                                                 | 201420132012  | 36,00030,00030,000     | NilNil302,000              | 62,320(4)53,125(4)52,800(4)    | 98,32083,125384,800      |
|  James Powell(5)  Vice‐President of Corporate    Development | 201420132012  | NilNilNil              | Nil51,250(3)196,735        | 95,500(6)126,000(6)151,009(7)  | 95,500177,250349,744     |

| 1. | Financial years ended August 31.                                                                                                                                                                                                                                                                                                                                                                              |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | All amounts shown were paid in Canadian currency, our reporting currency.                                                                                                                                                                                                                                                                                                                                     |
| 3. | Figures represent the grant date fair value of the options.  We used the Black-Scholes option pricing model for calculating such fair value, as such model is commonly used by junior public companies.  Key assumptions used for fiscal 2013: Risk-free interest rate - 1.10%; estimated volatility - 98%; expected life - 3 years; estimated dividend yield - 0%; estimated forfeiture rate - 0%. |
| 4. | Billed by Chase, a private company owned by Mr. DeMare, for administrative, accounting and management services provided and office rent.                                                                                                                                                                                                                                                                      |
| 5. | Mr. Powell was appointed as Vice-President of Corporate Development on July 15, 2011.                                                                                                                                                                                                                                                                                                                         |
| 6. | Billed by Albis Capital corp.  ("Albis"), a private company owned by Mr. Powell, for professional services provided.                                                                                                                                                                                                                                                                                     |
| 7. | Of this amount, $73,009 was paid to 7531577 Canada Inc., a company of which by Mr. Powell is a former partner and $78,000 was paid to Albis.                                                                                                                                                                                                                                                                  |

----

|         |  Option-based Awards                                   |
|--------------|------------------------------------------------------------------|
| Name    |  Number ofsecuritiesunderlyingunexercised options (#)  | Optionexercise price($)  | Option expirationdate  | Value ofunexercised in-the-moneyoptions($)(1)  |
| Mark Saxon   | 300,000                                                          | 2.70 | January 9, 2015 | - |
| Nick DeMare  | 200,000(2)                                                       | 2.13 | January 9, 2015 | - |
| James Powell | 60,000125,000185,000                                             | 2.130.66 | January 9, 2015April 12, 2016 | --- |

| 1. | This amount is calculated as the difference between the market value of the securities underlying the options on August 31, 2014, being the last trading day of the Corporation's shares for the financial year,  August 29, 2014 which was $1.03, and the exercise price of the option. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name          |  Option-based awards –Value vested during the year ($)  |  Non-equity incentive plan compensation - Value earned during the year ($)  |
|--------------------|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|  Mark Saxon   | Nil                                                                     | N/A                                                                                   |
|  Nick DeMare  | Nil                                                                     | N/A                                                                                   |
|  James Powell | Nil                                                                     | N/A                                                                                   |

----

| Name                | FeesEarned ($)  | Option-based awards ($)  | All other compensation ($)  | Total ($)  |
|--------------------------|----------------------|-------------------------------|----------------------------------|-----------------|
|  David Henstridge   | 39,000               | -                             | -                                | 39,000          |
|  Michael Hudson     | 30,000               | -                             | -                                | 30,000          |
|  Robert G. Atkinson | 18,000               | -                             | -                                | 18,000          |
|  Gillyeard Leathley | 36,000               | -                             | -                                | 36,000          |
|  Mark Saxon         | See note(1)          | -                             | -                                | -               |
|  Nick DeMare        | See note(1)          | -                             | -                                | -               |

| 1. | Messrs. Saxon and DeMare are NEOs and their compensation is disclosed in the Summary Compensation Table above.  Messrs. Saxon and DeMare do not receive compensation for their services as directors. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                 |                                | Option-based Awards          |
|-----------------------------------------------------------|--------------------------------|------------------------------|
| Number ofsecuritiesunderlyingunexercised options(#)  | Option exercise price($)  | Option expiration date  | Value of unexercised in-the-money options ($)  |
|  David Henstridge                                    | 200,000                        | 2.70                         | January 9, 2015 | - |
|  Michael Hudson                                      | 200,000                        | 2.70                         | January 9, 2015 | - |
|  Robert G. Atkinson                                  | 50,00050,000100,000            | 2.131.87                     | January 9, 2015May 3, 2015 | --  |

----

| Name                                                 |                                | Option-based Awards          |
|-----------------------------------------------------------|--------------------------------|------------------------------|
| Number ofsecuritiesunderlyingunexercised options(#)  | Option exercise price($)  | Option expiration date  | Value of unexercised in-the-money options ($)  |
|  Gillyeard Leathley                                  | 50,00050,000100,000            | 2.131.87                     | January 9, 2015May 3, 2015 | --  |

| Name                     | Option-based awards - Value vested during the year ($) | Non-equity incentive plan compensation - Value earned during the year ($) |
|--------------------------|--------------------------------------------------------|---------------------------------------------------------------------------|
|  David Henstridge   | Nil                                                    | N/A                                                                       |
|  Michael Hudson     | Nil                                                    | N/A                                                                       |
|  Robert G. Atkinson | Nil                                                    | N/A                                                                       |
|  Gillyeard Leathley | Nil                                                    | N/A                                                                       |

| Plan Category                                                          | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(a) | Weighted‐Average Exercise Price of Outstanding Options, Warrants and Rights(b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(c) |
|-----------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
|  Equity Compensation Plans  Approved By  Securityholders (1) | 2,535,000                                                                                      | 1.92                                                                                 | 4,079,192                                                                                                                                      |
|  Equity Compensation Plans  Not Approved By  Securityholders | N/A                                                                                            | N/A                                                                                  | N/A                                                                                                                                            |
|  Total                                                                 | 2,535,000                                                                                      | 1.92                                                                                 | 4,079,192                                                                                                                                      |

----

| (1) | We currently have in place a "rolling" stock option plan whereby the maximum number of common shares that may be reserved for issuance pursuant to the stock option plan will not exceed 10% of the issued shares of the Corporation at the time of the stock option grant. See "Item 6. Directors, Senior Management and Employees – Share Ownership – Stock Option Plan" for further particulars of the stock option plan. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (a) | reviewing and approving any corporate governance report to be made in accordance with applicable securities laws and stock exchange regulations for inclusion in our management information circular, annual report and/or annual information form; and |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | reviewing and approving our disclosure of the Corporate Governance Committee Charter and any information regarding the Corporate Governance Committee and its activities, when required, in our annual information form, management information circular and/or annual report. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | shareholder and investor issues including the adoption of shareholders rights plans and related matters; |
|--|-----|----------------------------------------------------------------------------------------------------------|

|  | (b) | policies regarding management serving on outside boards; |
|--|-----|----------------------------------------------------------|

|  | (c) | retirement policy for directors based upon age, health or other considerations; |
|--|-----|---------------------------------------------------------------------------------|

|  | (d) | our charitable and political donation policies; |
|--|-----|-------------------------------------------------|

|  | (e) | our Code of Business Conduct and Ethics and compliance therewith, including the granting of any waivers from the application of the Code; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | our Stock Trading Policy and compliance therewith, including reviewing systems for ensuring that all directors and officers of our company who are required to file insider reports pursuant to the Stock Trading Policy do so; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | our Corporate Disclosure Policy and compliance therewith; |
|--|-----|-----------------------------------------------------------|

|  | (h) | the retainer, subject to the Corporate Governance Committee's approval and at the expense of our company, of outside advisors for individual members of the Board in appropriate circumstances and the procedures relating thereto; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | policies regarding director responsibilities; |
|--|-----|-----------------------------------------------|

|  | (j) | policies regarding director access to management; and |
|--|-----|-------------------------------------------------------|

|  | (k) | policies regarding management succession. |
|--|-----|-------------------------------------------|

|  | (a) | reviewing our overall compensation philosophy; |
|--|-----|------------------------------------------------|

|  | (b) | addressing matters related to compensation of the Chief Executive Officer (the "CEO"); |
|--|-----|----------------------------------------------------------------------------------------|

|  | (c) | making recommendations to the Board with respect to non-CEO and director compensation, incentive-compensation plans and equity-based plans; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | reviewing executive compensation disclosure before we publicly disclose this information; and |
|--|-----|-----------------------------------------------------------------------------------------------|

|  | (e) | performing any other duties or responsibilities expressly delegated to the Compensation Committee by the Board from time-to-time relating to our compensation programs. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | reviewing and approving corporate goals and objectives relevant to CEO compensation; |
|--|-----|--------------------------------------------------------------------------------------|

|  | (b) | evaluating the CEO's performance in light of those corporate goals and objectives; and |
|--|-----|----------------------------------------------------------------------------------------|

|  | (c) | determining or making recommendations to the Board with respect to the CEO's compensation level based on this evaluation. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------|

----

|  | (a) | conducting an analysis of the collection of tangible and intangible skills and qualities necessary for an effective Board given our current operational and financial condition, the industry in which we operate and our strategic outlook; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | periodically comparing the tangible and intangible skills and qualities of the existing Board members with the analysis of required skills and identifying opportunities for improvement; and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | recommending, as required, changes to the selection criteria used by the Board to reflect the needs of the Board. |
|--|-----|-------------------------------------------------------------------------------------------------------------------|

|  | (a) | identifying individuals qualified to become new Board members, including those recommended by security holders and others, and recommending to the Board the new director nominees for the next annual meeting of shareholders; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | defining roles and expectations of Board members; |
|--|-----|---------------------------------------------------|

|  | (c) | identifying and maintaining a list of potential directors that possess the qualifications established by the Nominating Committee; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | if applicable, or required by law or exchange policies, the Nominating Committee shall adopt an appropriate process for security holders to submit recommendations for candidates for the Board. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | the competencies and skills that the Board considers to be necessary for the Board, as a whole, to possess; |
|--|-----|-------------------------------------------------------------------------------------------------------------|

|  | (b) | the competencies and skills that the Board considers each existing director to possess; and |
|--|-----|---------------------------------------------------------------------------------------------|

|  | (c) | the competencies and skills each new nominee will bring to the boardroom. |
|--|-----|---------------------------------------------------------------------------|

----

| 1. | Serve as an independent and objective party to monitor our financial reporting and internal control system and review our financial statements. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Review and appraise the performance of our external auditors. |
|----|---------------------------------------------------------------|

| 3. | Provide an open avenue of communication among our auditors, financial and senior management and the Board of Directors. |
|----|-------------------------------------------------------------------------------------------------------------------------|

| 4. | Be directly responsible for: |
|----|------------------------------|

| a. | the selection of a firm of external auditors, including the decision to retain any existing external auditors, to be proposed for election as our external auditors; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | the oversight of the work of our external auditors (including the resolution of disagreements between our management and the external auditor regarding financial reporting); |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | subject to grant by the shareholders of authority to do so, if required, fixing the compensation of our external auditors; and |
|----|--------------------------------------------------------------------------------------------------------------------------------|

| d. | Oversee our accounting and financial reporting processes and the audits of our financial statements. |
|----|------------------------------------------------------------------------------------------------------|

|  | a. | Review and update the Audit Committee Charter annually. |
|--|----|---------------------------------------------------------|

|  | b. | Review our financial statements, MD&A and any annual and interim earnings, and press releases before we publicly disclose this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c. | Review and discuss the audited financial statements with management. |
|--|----|----------------------------------------------------------------------|

|  | d. | Recommend to the Board of Directors that the annual audited financial statements be included in our regulatory filings based upon the Audit Committee's review and discussion of the financial statements with management and the external auditor, its discussions with the external auditor regarding the matters required to be discussed by auditing standards, and its discussions regarding the external auditors' independence. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | a. | Review annually, the performance of the external auditors. |
|--|----|------------------------------------------------------------|

|  | b. | Be directly responsible for: |
|--|----|------------------------------|

|  | 1. | the selection of a firm of external auditors, including the decision to retain any existing external auditors, to be proposed for election as our external auditors; |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | the oversight of the work of our external auditors (including the resolution of disagreements between our management and the external auditor regarding financial reporting); |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | subject to grant by the shareholders of authority to do so, if required, fixing the compensation of our external auditors. |
|--|----|----------------------------------------------------------------------------------------------------------------------------|

|  | c. | Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | d. | Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any permitted non-audit services and the fees and other compensation related thereto, provided by our external auditors. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |  |  |
|--|--|--|

|  |  |  |
|--|--|--|

|  |  |  |
|--|--|--|

|  |  |  |
|--|--|--|

----

|  |  |  |
|--|--|--|

|  |  |  |
|--|--|--|

|  | e. | Provided the pre-approval of the permitted non-audit services is presented to the Audit Committee's first scheduled meeting following such approval such authority may be delegated by the Audit Committee to one or more independent members of the Audit Committee. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | f. | Ensure the receipt from the external auditors of a formal written statement delineating all relationships between us and our external auditor, consistent with applicable accounting and auditing standards, including Independence Board Standard No. 1, and engage in discussions with the external auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the external auditor. If applicable, discuss with the external auditors the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | g. | Take, or recommending that the full Board of Directors take, appropriate action to oversee the independence of the external auditor. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------|

|  | h. | Obtain confirmation from the external auditor that they will report directly to the Audit Committee. |
|--|----|------------------------------------------------------------------------------------------------------|

|  | 3. | Financial Reporting Processes |
|--|----|-------------------------------|

|  | a. | In consultation with the external auditors, review with management the integrity of our financial reporting process, both internal and external. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | Consider the external auditors' judgments about the quality and appropriateness of our accounting principles as applied in our financial reporting. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c. | Consider and approve, if appropriate, changes to our auditing and accounting principles and practices as suggested by the external auditors and management. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | d. | Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | e. | Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | f. | Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | g. | Establish procedures for: |
|--|----|---------------------------|

|  | 1. | the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters; and |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. |
|--|----|----------------------------------------------------------------------------------------------------------------------------|

|  | h. | Review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters. |
|--|----|------------------------------------------------------------------------------------------------------------------------|

|  | i. | Review certification process. |
|--|----|-------------------------------|

|  | 4. | Other |
|--|----|-------|

|  | a. | Review any related-party transactions. |
|--|----|----------------------------------------|

----

|   Title of Class  |   Name of Owner |  Shares and Rights Beneficially Owned or Controlled (1) |   Percent of Class (1) |
|----------------------------------|---------------------------|--------------------------------------------------------------|----------------------------------|
| Common Shares                    | Mark Saxon                | 3,031,632(2)                                                 | 4.56%                            |
| Common Shares                    | Nick DeMare               | 2,927,809(3)                                                 | 4.41%                            |
| Common Shares                    | David Henstridge          | 2,875,812(4)                                                 | 4.33%                            |
| Common Shares                    | Michael Hudson            | 2,886,652(5)                                                 | 4.35%                            |
| Common Shares                    | Robert Atkinson           | 725,272(6)                                                   | 1.09%                            |
| Common Shares                    | Gillyeard Leathley        | 122,000(7)                                                   | 0.18%                            |
| Common Shares                    | James Powell              | 231,000(8)                                                   | 0.35%                            |
| Common Shares                    | Mariana Bermudez          | 80,500(9)                                                    | 0.12%                            |

| (1) | Where persons listed on this table have the right to obtain additional shares of common stock through the exercise of outstanding options or warrants within 60 days from October 31, 2014, these additional shares are deemed to be outstanding for the purpose of computing the percentage of common stock owned by such persons, but are not deemed to be outstanding for the purpose of computing the percentage owned by any other person.  Based on 66,141,922 shares of common stock outstanding as of October 31, 2014. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes 285,000 shares held by Mr. Saxon, 2,436,632 shares held by Mr. Saxon's family trusts, vested options held by Mr. Saxon to acquire 300,000 shares at a price of $2.70 per share which expire on January 9, 2015, and 10,000 warrants held by Mr. Saxon to acquire 10,000 shares at a price of $1.50 per share which expire on February 11, 2017. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes 2,703,809 shares held by Mr. DeMare, 24,000 shares owned by DNG Capital Corp. and vested options held by Mr. DeMare to acquire 150,000 shares at a price of $2.13 per share and options held by Chase to acquire 50,000 shares at a price of $2.13 per share, all of which expire on January 9, 2015. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes 2,655,088 shares held by Mr. Henstridge, 20,724 shares held by Mr. Henstridge's spouse, vested options held by Mr. Henstridge to acquire 200,000 shares at a price of $2.70 per share which expire on January 9, 2015. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes 275,000 shares held by Mr. Hudson, 2,411,652 shares held by Mr. Hudson's family trusts and vested options held by Mr. Hudson to acquire 200,000 shares at a price of $2.70 per share which expire on January 9, 2015. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Includes 575,272 shares held by Mr. Atkinson, vested options held by Mr. Atkinson to acquire 100,000 shares at a price of $1.87 per share as to 50,000 options expiring on May 3, 2015 and at a price of $2.13 per share as to 50,000 which expire on January 9, 2015 and 50,000 warrants to acquire 50,000 shares at a price of $1.50 per share which expire on February 11, 2017. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Includes 22,000 shares held by Mr. Leathley and vested options held by Mr. Leathley to acquire 100,000 shares at a price of $2.13 per share as to 50,000 options which expire on January 9, 2015 and at a price of $1.87 per share as to 50,000 options that expire on May 3, 2015. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Includes 23,000 shares held by Mr. Powell, vested options to acquire to acquire 185,000 shares at a price of $2.13 per share as to 60,000 options that expire on January 9, 2015 and at a price of $0.66 as to 125,000 options which expire on April 12, 2016 and 23,000 warrants to acquire 23,000 shares at a price of $1.50 per share expiring on February 11, 2017. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Includes 5,500 shares held by Ms. Bermudez in retirement accounts and vested options held by Ms. Bermudez to acquire 75,000 shares at a price of $2.13 per share which expire on January 9, 2015. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a) | The maximum number of common shares that may be issued upon exercise of stock options granted under the Plan will be that number of shares which is 10% of our issued and outstanding shares. Any outstanding options will form a part of the foregoing 10%. The exercise price of the stock options, as determined by the Board in its sole discretion, shall not be less than the closing price of our shares traded through the facilities of the TSXV on the date prior to the date of grant, less allowable discounts, in accordance with the policies of the TSXV. In any event, the exercise price per share will not be less than $0.10, being the minimum exercise price allowable under the Policies of the TSXV. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The maximum aggregate number of shares that may be reserved for issuance under options granted to insiders (as a group) pursuant to the Plan may not exceed 10% of our issued and outstanding shares at the date of the grant, unless disinterested shareholder approval is obtained. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The maximum aggregate number of options granted to insiders (as a group) under the Plan together with any other share compensation arrangement within a 12 month period may not exceed 10% of our issued and outstanding shares at the date of the grant, unless disinterested shareholder approval is obtained. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | The maximum aggregate number of shares that may be reserved for issuance under options pursuant to the Plan together with any other share compensation arrangement to any one person (and companies wholly owned by that person) within a 12 month period shall not exceed 5% of our issued and outstanding shares at the date of the grant, unless disinterested shareholder approval is obtained. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | The maximum aggregate number of shares that may be reserved under the Plan or any other share compensation arrangement for issuance to any one consultant within a 12 month period shall not exceed 2% of our issued and outstanding shares at the date of the grant. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | The maximum aggregate number of shares that may be reserved under the Plan or any other share compensation arrangement for issuance to persons who are conducting investor relations activities within a 12 month period shall not exceed 2% of our issued and outstanding shares at the date of the grant. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | The aggregate number of options granted and outstanding to Eligible Charitable Organizations must not at any time exceed 1% of our issued and outstanding shares as calculated immediately subsequent to the grant of any options to Eligible Charitable Organizations. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (h) | Upon expiry of the option, or in the event an option is otherwise terminated for any reason, without having been exercised in full, the number of shares in respect of the expired or terminated option shall again be available for the purposes of the Plan. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | All options granted under the Plan may not have an expiry date exceeding ten years from the date on which the Board grants and announces the granting of the option. The Plan provides for the automatic extension of the expiration date of an option by ten business days if such expiry date falls within a blackout period formally imposed by us during which we prohibit optionees from exercising their options pursuant to our internal trading policies as a result of the bona fide existence of undisclosed material information. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | If the option holder ceases to be a director of our company or ceases to be employed by us (other than by reason of death or termination for cause), as the case may be, then the option granted shall expire within 90 days following the date that the option holder ceases to be a director or ceases to be employed by us, or for those holders engaged in providing investor relations services, the options granted shall expire within 30 days following the date that the option holder ceases to provide such investor relations services, unless the Board or committee of the Board, at its own discretion, extends the expiry of the option. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        |      Number     Outstanding(1)  |   | ExercisePrice$ |   | Expiry Date                                 |
|--------|------------------------------------------------------------------------------|--------|----------------|--------|--------------------------------------------------|
|   |                                                                              |        |                |        |                                                  |
|        | 275,000                                                                      |   | 1.40           |   | December 6, 2014                                 |
|        | 250,000                                                                      |   | 1.40           |   | January 9, 2015                                  |
|        | 435,000                                                                      |   | 2.13           |   | January 9, 2015                                  |
|        | 700,000                                                                      |   | 2.70           |   | January 9, 2015                                  |
|        | 50,000                                                                       |   | 1.40           |   | February 27, 2015                                |
|        | 200,000                                                                      |   | 1.87           |   | May 3, 2015                                      |
|        | 50,000                                                                       |   | 1.40           |   | September 13, 2015                               |
|        | 25,000                                                                       |   | 1.44           |   | October 31, 2015                                 |
|        | 30,000                                                                       |   | 1.07           |   | February 11, 2016                                |
|        | 125,00060,00085,000                                                          |   | 0.660.650.76   |   | April 12, 2016September 2, 2016September 23,2016 |
|        | 40,000                                                                       |   | 0.95           |   | January 3, 2017                                  |
|        | 100,000                                                                      |   | 1.47           |   | April 7, 2017                                    |
|        | 135,000                                                                      |   | 0.60           |   | October 7, 2017                                  |
|        |                                                                              |   |           |   |                                             |
|   | 2,560,000                                                                    |        |                |        |                                                  |

----

| (1) | Each stock option is exercisable to purchase one Common Share. |
|-----|----------------------------------------------------------------|

----

|                            | 2014$    |   | 2013$   |
|---------------------------------|---------------|--------|---------|
| Management fees - President     | 163,500       |   | 162,000 |
| Professional fees – VPCD  | 95,500        |   | 126,000 |
| Professional fees – CFO   | 36,000        |   | 30,000  |
|                            |          |   |    |
| Share-based compensation - VPCD | -             |   | 51,250  |
|                            |          |   |    |
|                            |  295,000 |   | 369,250 |

|  | (i) | During fiscal 2014 and 2013 the following amounts were incurred with respect to our current and former non-management directors and/or officers: |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |    2014   $ |   |       2013      $ |
|--------------------------------------------------|---------------------------------|--------|-----------------------------------------------------------|
| Professional fees - David Henstridge, director   | 39,000                          |   | 48,000                                                    |
| Professional fees - Robert G. Atkinson, director | 18,000                          |   | 18,000                                                    |
| Professional fees - Gil Leathley, director       | 36,000                          |   | 30,000                                                    |
| Professional fees - Michael Hudson, director     | 30,000                          |   | 30,000                                                    |
|                                             |  123,000                   |   | 126,000                                                   |

----

|  | (ii) | In addition, during fiscal 2014 we incurred a total of $58,300 (2013 - $48,650) to Chase for accounting and administration services provided by Chase personnel, excluding the CFO, and $4,020 (2013 - $4,475) for rent.  Chase is a private corporation controlled by Nick DeMare, our CFO and a director of Tasman. As at August 31, 2014, $3,335 (2013 - $4,085) remained unpaid. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | During fiscal 2014, we incurred $23,251 (2013 - $25,110) for shared administration costs with Tumi Resources Limited and Mawson Resources Limited, public companies with common directors.  Nick DeMare is the CFO and a director of Mawson and Tumi. Michael Hudson is the Chairman, President, CEO and a director of Mawson.  Mark Saxon is a director of Mawson. David Henstridge is a director of Mawson and Tumi. As at August 31, 2014, $363 (2013 - $2,640) of the amount remained unpaid. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | During fiscal 2014, we recorded a recovery of $36,844 (2013 - $96,625) for shared office personnel and costs from Mawson and Flinders, public companies with common directors.  Nick DeMare is the CFO and a director of Mawson and Flinders. Each of Michael Hudson, Mark Saxon and Robert Atkinson are directors of Flinders.  Michael Hudson is also the Chairman, President, CEO and a director of Mawson.  Mark Saxon is also a director of Mawson.  As at August 31, 2014, $nil (2013 - $9,821) of the amount remained outstanding. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | On October 7, 2013, we entered into a letter agreement with Tumi and acquired a 100% interest in seven exploration licenses located in south-central Sweden by paying $45,000 cash and issuing 50,000 of our common shares at a fair value of $51,500.  A further 50,000 common shares are issuable upon commencement of production from any of the Tungsten Projects.  Nick DeMare is the CFO and a director of Tumi. David Henstridge is a director of Tumi.  See "Item 4. Information on the Company – Property, Plant and Equipment – Other Projects – Tungsten Projects." |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | During fiscal 2014, we completed a private placement of 4,919,940 units at $1.10 per unit, of which directors and officers purchased a total of 83,000 units as follows; Mr. Saxon - 10,000 units; Mr. Powell - 22,000 units;  and Mr. Atkinson - 50,000 units. See "Item 4. Information on the Company – Three Year History – Year Ended August 31, 2014." |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Consolidated Statements and Other Financial Information                                      |   |  Page |
|----------------------------------------------------------------------------------------------------|--------|------------|
|  Audited Consolidated Financial Statements for the Years Ended August 31, 2014, 2013 and 2012 |   |  F-1  |

----

|  |                | Sales Price ($) |        |           |
|--|---------------------|-----------------|--------|-----------|
|  |  Year Ended    |  High      |   |  Low |   |  |
|  | August 31, 2014     | 2.08            |   | 0.70      |   |  |
|  | August 31, 2013     | 1.97            |   | 0.51      |  |  |
|  | August 31, 2012     | 3.99            |   | 1.26      |  |  |
|  | August 31, 2011     | 5.98            |   | 1.11      |  |  |
|  | August 31, 2010 (1) | 1.50            |   | 0.40      |  |  |

|              |                | Sales Price ($) |        |
|--------------|---------------------|-----------------|--------|
|    |  Quarter Ended |  High      |   |  Low |  |
|              | Fiscal 2014         |            |   |   |  |
|              | August 31,2014      | 1.33            |   | 0.88 |  |
|              | May 31, 2014        | 2.08            |   | 1.04 |  |
|              | February 28, 2014   | 1.65            |   | 0.80 |  |
|              | November 30, 2013   | 1.13            |   | 0.70 |  |
|              |                |            |   |   |  |
|              | Fiscal 2013         |            |   |   |  |
|              | August 31, 2013     | 0.95            |   | 0.53 |  |
|              | May 31, 2013        | 1.10            |   | 0.51 |  |
|              | February 28, 2013   | 1.24            |   | 0.90 |  |
|              | November 30, 2012   | 1.97            |   | 0.98 |  |

|  |               |  | Sales Price ($)  |        |
|--|-------------------------|--|------------------|--------|
|  |   Month Ended |  |   High |   |   Low |  |
|  | October 31, 2014        |  | 0.85             |   | 0.61 |  |
|  | September 30, 2014      |  | 1.05             |   | 0.64 |  |
|  | August 31, 2014         |  | 1.17             |   | 1.00 |  |
|  | July 31, 2014           |  | 1.33             |   | 1.03 |  |
|  | June 30, 2014           |  | 1.20             |   | 0.88 |  |
|  | May 31, 2014            |  | 1.69             |   | 1.04 |  |

----

|  |                |  | Sales Price (US$) |        |
|--|---------------------|--|-------------------|--------|
|  |  Year Ended    |  |  High        |   |  Low |  |
|  | August 31, 2014     |  | 1.89              |   | 0.66 |  |
|  | August 31, 2013     |  | 2.04              |   | 0.50 |  |
|  | August 31, 2012 (1) |  | 2.85              |   | 1.24 |  |
|  | August 31, 2011     |  | N/A               |   | N/A |  |
|  | August 31, 2010     |  | N/A               |   | N/A |  |

|  |                |  | Sales Price (US$) |        |
|--|---------------------|--|-------------------|--------|
|  |  Quarter Ended |  |  High        |   |  Low |  |
|  | Fiscal 2014         |  |              |   |   |  |
|  | August 31, 2014     |  | 1.24              |   | 0.80 |  |
|  | May 31, 2013        |  | 1.89              |   | 0.95 |  |
|  | February 28, 2014   |  | 1.58              |   | 0.81 |  |
|  | November 30, 2013   |  | 1.09              |   | 0.66 |  |
|  |                |  |              |   |   |  |
|  | Fiscal 2013         |  |              |   |   |  |
|  | August 31, 2013     |  | 0.91              |   | 0.50 |  |
|  | May 31, 2013        |  | 1.08              |   | 0.50 |  |
|  | February 28, 2013   |  | 1.40              |   | 0.90 |  |
|  | November 30, 2012   |  | 2.04              |   | 0.96 |  |

|  |               |  | Sales Price (US$) |        |
|--|--------------------|--|-------------------|--------|
|  |  Month Ended  |  |  High        |   |  Low |  |
|  | October 31, 2014   |  | 0.75              |   | 0.55 |  |
|  | September 30, 2014 |  | 0.97              |   | 0.57 |  |
|  | August 31, 2014    |  | 1.10              |   | 0.87 |  |
|  | July 31, 2014      |  | 1.24              |   | 0.95 |  |
|  | June 30, 2014      |  | 1.08              |   | 0.80 |  |
|  | May 31, 2014       |  | 1.50              |   | 0.95 |  |

----

| 1. | Director's power to vote on a proposal, arrangement or contract in which the director is materially interested. |
|----|-----------------------------------------------------------------------------------------------------------------|

| · | the situation that would otherwise constitute a disclosable interest arose before the coming into force of the BCBCA, and the interest was disclosed and approved under, or was not required to be disclosed under legislation that applied to us before the coming into effect of the BCBCA; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | both Tasman and the other party to the contract or transaction are wholly-owned subsidiaries of the same corporation; |
|--------|-----------------------------------------------------------------------------------------------------------------------|

| · | we are a wholly‐owned subsidiary of the other party to the contract or transaction; |
|--------|-------------------------------------------------------------------------------------------|

| · | the other party to the contract or transaction is a wholly‐owned subsidiary of our company; or |
|--------|------------------------------------------------------------------------------------------------------|

| · | the director or senior officer is the sole shareholder of Tasman or of a corporation of which we are a wholly‐owned subsidiary. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|

| · | the contract or transaction is an arrangement by way of a security granted by us for money loaned to, or obligations undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit of us or our affiliates; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the contract or transaction relates to an indemnity or insurance under the BCBCA; |
|--------|-----------------------------------------------------------------------------------|

| · | the contract or transaction relates to the remuneration of the director or senior officer, in that person's capacity as director, officer, employee or agent of our company or of one of our affiliates; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the contract or transaction relates to a loan to us, and the director or senior officer, or a person in whom the director or senior officer has a material interest, is or is to be a guarantor of some or all of the loan; or |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with us and the director or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2. | Directors' power, in the absence of an independent quorum, to vote compensation to themselves or any members of their body. |
|----|-----------------------------------------------------------------------------------------------------------------------------|

| 3. | Borrowing powers exercisable by the directors and how such borrowing powers may be varied. |
|----|--------------------------------------------------------------------------------------------|

| · | borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that the directors consider appropriate; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| · | issue bonds, debentures and other debt obligations either outright or as security for any of our liabilities or obligations or any liabilities or obligations of any other person and at such discounts or premiums and on such other terms as the directors consider appropriate; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | guarantee the repayment of money by any other person or the performance of any obligation of any other person; and |
|--------|--------------------------------------------------------------------------------------------------------------------|

| · | mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of our company. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Retirement and non‐retirement of directors under an age limit requirement. |
|----|----------------------------------------------------------------------------------|

| 5. | Number of Common Shares required for a director's qualification. |
|----|------------------------------------------------------------------|

----

| · | a share of our company; |
|--------|-------------------------|

| · | a security of our company convertible into shares of our company; |
|--------|-------------------------------------------------------------------|

| · | any other security of our company which must be subject to restrictions on transfer in order for us to satisfy the requirement for restrictions on transfer under the "private issuer" exemption of Canadian securities legislation or under any other exemption from prospectus or registration requirements of Canadian securities legislation similar in scope and purpose to the "private issuer" exemption. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| • | state the business to be transacted at the meeting (including the wording of any special resolution or exception resolution) in 1,000 words or less; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | must be signed by and include the names and mailing addresses of all the requisitioning shareholders; |
|---------|-------------------------------------------------------------------------------------------------------|

| • | may be made in a single record or may consist of several records, each of which is signed by one or more of the requisitioning shareholders; |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------|

| • | must be delivered to the delivery address or mailed to the mailing address of our registered office. |
|---------|------------------------------------------------------------------------------------------------------|

----

| · | on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter shall have one vote; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| · | on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy. If a poll is demanded at a meeting of shareholders, the poll must be taken at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs or in the manner, at the time and place that the chair directs.  The demand for a poll may be withdrawn by the person who demanded it. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| · | A U.S. Holder must include in gross income as dividend income the gross amount of any distribution (including the amount of any foreign withholding tax thereon) paid by us out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) with respect to our common shares.  Such distributions are taxable to a U.S. Holder when the U.S. Holder actually or constructively receives the distribution. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | If we are a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends received by non-corporate U.S. Holders generally will be subject to U.S. federal income tax at ordinary income tax rates. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | If we are not a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends paid to a non-corporate U.S. Holder in a taxable year will be taxed to such U.S. Holder at the rates applicable to long-term capital gains as "qualified dividend income" so long as our common shares are readily tradable on an established securities exchange within the United States or we are eligible for benefits under the U.S.-Canada income tax treaty (the "Treaty").  We will be eligible for benefits under the Treaty if the principal class of our shares is primarily and regularly traded on or more recognized stock exchanges.  However, dividend income will not be qualified dividend income (and will be taxed at ordinary income rates) if (i) the U.S. Holder has not held its common shares for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date; (ii) our common shares are not readily tradable on an established securities market; (iii) the company is a PFIC for the taxable year in which the dividend is paid or in the preceding taxable year; or, (iv) we are not eligible for benefits under the Treaty and our stock is not readily tradable on an established securities exchange within the United States. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Dividends paid to a corporate U.S. Holder will be taxed as ordinary income and will not generally be eligible for the dividends received deduction. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Distributions in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will be treated as a non-taxable return of capital to the extent of the U.S. Holder's adjusted tax basis in its common shares and thereafter as capital gain. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The amount of any distribution paid in foreign currency (including the amount of any foreign withholding tax thereon) generally will be includible in the gross income of a U.S. Holder in an amount equal to the U.S. dollar value of the foreign currency, calculated by reference to the spot rate in effect on the date of receipt by the U.S. Holder, regardless of whether the foreign currency is converted into U.S. dollars on such date.  Special rules govern and specific elections are available to accrual method taxpayers to determine the U.S. dollar amount includible in income in the case of taxes withheld in a foreign currency.  Accrual basis taxpayers are therefore urged to consult their own tax advisors regarding the requirements and elections applicable in this regard. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | For foreign tax credit limitation purposes, dividends paid by us generally will be income from sources outside the United States.  The use of foreign tax credits is subject to complex conditions and limitations.  In lieu of a credit, a U.S. Holder who itemizes deductions may elect to deduct all of such holder's foreign taxes in the taxable year such foreign taxes are paid or deemed paid.  A deduction does not reduce U.S. tax on a dollar-for-dollar basis like a tax credit, but the deduction for foreign taxes is not subject to the same limitations applicable to foreign tax credits.  U.S. Holders are urged to consult their own tax advisors regarding the availability of foreign tax credits. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|  Financial Year Ended | Audit Fees                 | Audit Related Fees | Tax Fees | All Other Fees |   |
|----------------------------|----------------------------|--------------------|----------|----------------|--------|
| August 31, 2014            | $35,000*                   | -                  | -        | -              |   |
| August 31, 2013            | $45,229     | 10,582             | -        | -              |   |

----

----

|                                                                                         |   |  Page |
|----------------------------------------------------------------------------------------------|--------|------------|
| Audited Consolidated Financial Statements for the Years Ended August 31, 2014, 2013 and 2012 |   | F-1        |

----

| ExhibitNumber |   |  Description                                                                                                                               |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                            |
| 1.1*          |   | Certificate of Amalgamation                                                                                                                     |
| 1.2*          |   | Amalgamation Application and Notice of Articles                                                                                                 |
| 1.3*          |   | Articles dated October 22, 2009                                                                                                                 |
| 4.1****       |   | Management Agreement between Tasman Metals Ltd. and Sierra Peru Pty Ltd. dated October 1, 2010.                                                 |
| 4.2           |   | Letter Agreement dated September 8, 2014, amending Management Agreement between Tasman Metals Ltd. and Sierra Peru Pty Ltd.                     |
| 4.3           |   | Tasman Metals Ltd. Amended and Restated Stock Option Plan dated June 12, 2014                                                                   |
|  4.4     |        | Tasman Metals Ltd. Amendment to Stock Option Plan dated August 18, 2014                                                                         |
| 8.1           |   | List of Subsidiaries                                                                                                                            |
| 11.1**        |   | Code of Business Conduct and Ethics                                                                                                             |
| 12.1          |   | Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act                                                           |
| 12.2          |   | Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act                                                           |
| 13.1          |   | Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 13.2          |   | Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 15.1          |   | Consent of D&H Group LLP, Chartered Accountants                                                                                             |
| 15.2          |   | Consent of Geoffrey C. Reed, B App Sc                                                                                                           |
| 15.3          |   | Consent of Craig F. Horlacher                                                                                                                   |
| 15.4          |   | Consent of Paul A. Gates                                                                                                                        |
| 15.5          |   | Consent of Runge Inc. d.b.a. RungePinockMinarco                                                                                                 |
| 15.6          |   | Consent of John Litz and J.E. Litz and Associates, LLC                                                                                          |
| 15.7          |   | Consent of ReedLeyton Consulting                                                                                                                |
| 15.8***       |   | Audit Committee Charter                                                                                                                         |
|          |   |                                                                                                                                            |

----

|                             | TASMAN METALS LTD.                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Dated:  November 26, 2014   |   /s/ Nick DeMare                                                                  Nick Demare, Chief Financial Officer  |

----

----

----

|                                       |   | Notes  |                |          | August 31,2014$ |      |        | August 31,2013$ |   |
|--------------------------------------------|--------|--------|---------------------|---------------|-----------------|-----------|-------------|-----------------|--------|
| ASSETS                                     |   |        |                |          |                 |      |        |                 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |
| Current assets                             |   |        |                |          |                 |      |        |                 |   |
| Cash                                       |   |        |                |          |            | 6,136,271 |        |            |   | 5,601,492 |   |
| Amounts receivable                         |   |        |                |          |            | 4,582     |        |            |   | 13,444 |   |
| GST/VAT receivables                        |   |        |                |          |            | 117,813   |        |            |   | 56,240 |   |
| Prepaids                                   |   |        |                |          |            | 76,294    |        |            |   | 69,302 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |
| Total current assets                       |   |        |                |          |            | 6,334,960 |        |            |   | 5,740,478 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |
| Non-current assets                         |   |        |                |          |            |      |        |            |   |   |   |
| Investments                                |   |   | 5    |          |            |      | 39,018      |            |   |   | 24,805 |   |
| Property, plant and equipment              |   |   | 6    |     |            |      | 103,075     |            |   |   | 175,485 |   |
| Exploration and evaluation assets          |   |   | 7    |     |            |      | 10,866,653  |            |   |   | 7,883,939 |   |
| Bond deposit                               |   |   |                |          |            |      | 31,865      |            |   |   | 31,646 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| Total non-current assets                   |   |   |                |          |            |      | 11,040,611  |            |   |   | 8,115,875 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| TOTAL ASSETS                               |   |   |                |          |            |      | 17,375,571  |            |   |   | 13,856,353 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| LIABILITIES                                |   |   |                |          |            |      |        |            |   |   |   |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| Current liabilities                        |   |   |                |          |            |      |        |            |   |   |   |   |
| Accounts payable and accrued liabilities   |   |   |                |          |            |      | 931,838     |            |   |   | 645,492 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| TOTAL LIABILITIES                          |   |   |                |          |            |      | 931,838     |            |   |   | 645,492 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| SHAREHOLDERS' EQUITY                       |   |   |                |          |            |      |        |            |   |   |   |   |
| Share capital                              |   |   | 8    |          |            |      | 25,910,384  |            |   |   | 20,299,802 |   |
| Share-based payments reserve               |   |   |                |          |            |      | 9,122,790   |            |   |   | 9,056,102 |   |
| Deficit                                    |   |   |                |          |            |      | (18,476,032 | )               |   |   | (16,034,024 | ) |
| Accumulated other comprehensive loss       |   |   |                |          |            |      | (113,409    | )               |   |   | (111,019 | ) |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| TOTAL SHAREHOLDERS' EQUITY                 |   |   |                |          |            |      | 16,443,733  |            |   |   | 13,210,861 |   |
|                                       |        |        |                     |               |                 |           |             |                 |        |  |  |  |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |   |   |                |          |            |      | 17,375,571  |            |   |   | 13,856,353 |   |

----

|                                                 |   |          |      |   | Year Ended August 31 |    |
|------------------------------------------------------|--------|----------|-----------|--------|----------------------|---------|
|                                                 |   | Notes    |      |   | 2014$           |    |   |  2013$  |   |   |  2012$(Note 3) |   |
| Expenses                                             |   |          |      |   |                      |    |   |  |   |   |  |   |
| Accounting and administration                        |   | 9(b)(ii) |      |   |                 | 124,990 |   |   |   | 126,793 |   |   |   | 71,528 |   |
| Audit                                                |   |          |      |   |                 | 51,072  |   |   |   | 41,947 |   |   |   | 72,091 |   |
| Corporate development                                |   |          |      |   |                 | 149,280 |   |   |   | 109,449 |   |   |   | 178,532 |   |
| Depreciation                                         |   |     | 6         |   |                 |    | 54,635 |   |   |   | 56,229 |   |   |   | 40,191 |   |
| General exploration                                  |   |     |      |   |                 |    | 82,650 |   |   |   | 165,846 |   |   |   | 71,126 |   |
| Insurance                                            |   |     |      |   |                 |    | 100,765 |   |   |   | 110,807 |   |   |   | 96,535 |   |
| Investor relations                                   |   |     |      |   |                 |    | - |   |   |   | 10,500 |   |   |   | 42,000 |   |
| Legal                                                |   |     |      |   |                 |    | 246,118 |   |   |   | 296,790 |   |   |   | 123,599 |   |
| Management fees                                      |   |     | 9(a)      |   |                 |    | 163,500 |   |   |   | 162,000 |   |   |   | 162,000 |   |
| Office                                               |   |     |      |   |                 |    | 91,905 |   |   |   | 101,981 |   |   |   | 212,491 |   |
| Professional fees                                    |   |     | 9         |   |                 |    | 475,484 |   |   |   | 583,023 |   |   |   | 718,443 |   |
| Regulatory fees                                      |   |     |      |   |                 |    | 71,001 |   |   |   | 69,403 |   |   |   | 126,355 |   |
| Rent                                                 |   | 9(b)(ii) |      |   |                 | 47,048  |   |   |   | 59,414 |   |   |   | 48,623 |   |
| Salaries and benefits                                |   |     |      |   |                 |    | 304,999 |   |   |   | 290,616 |   |   |   | 204,970 |   |
| Shareholder costs                                    |   |     |      |   |                 |    | 26,158 |   |   |   | 35,056 |   |   |   | 43,381 |   |
| Share-based compensation                             |   |     | 8(d),9(a) |   |                 |    | 225,200 |   |   |   | 654,705 |   |   |   | 3,699,139 |   |
| Transfer agent                                       |   |     |      |   |                 |    | 36,752 |   |   |   | 24,452 |   |   |   | 42,586 |   |
| Travel                                               |   |     |      |   |                 |    | 180,525 |   |   |   | 194,759 |   |   |   | 277,123 |   |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |     |      |   |                 |    | 2,432,082 |   |   |   | 3,093,770 |   |   |   | 6,230,713 |   |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Loss before other items                              |   |     |      |   |                 |    | (2,432,082 | ) |   |   | (3,093,770 | ) |   |   | (6,230,713 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Other items                                          |   |     |      |   |                 |    |   |   |   |   |   |   |   |   |   |   |
| (Loss) gain on sale of property, plant and equipment |   |     |      |   |                 |    | (9,345 | ) |   |   | 1,921 |   |   |   | - |   |
| Impairment of exploration and evaluation assets      |   |     | 7(a)      |   |                 |    | (46,636 | ) |   |   | (498,114 | ) |   |   | - |   |
| Interest and other income                            |   |     |      |   |                 |    | 105,160 |   |   |   | 95,935 |   |   |   | 151,298 |   |
| Foreign exchange                                     |   |     |      |   |                 |    | (59,105 | ) |   |   | 12,786 |   |   |   | (29,898 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |     |      |   |                 |    | (9,926 | ) |   |   | (387,472 | ) |   |   | 121,400 |   |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Loss before deferred income tax                      |   |     |      |   |                 |    | (2,442,008 | ) |   |   | (3,481,242 | ) |   |   | (6,109,313 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Deferred income tax                                  |   |     | 10        |   |                 |    | - |   |   |   | - |   |   |   | (27,746 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Net loss for the year                                |   |     |      |   |                 |    | (2,442,008 | ) |   |   | (3,481,242 | ) |   |   | (6,137,059 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Other comprehensive loss, net of deferred income tax |   |     |      |   |                 |    | (2,390 | ) |   |   | (56,057 | ) |   |   | (223,536 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Comprehensive loss for the year                      |   |     |      |   |                 |    | (2,444,398 | ) |   |   | (3,537,299 | ) |   |   | (6,350,595 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Basic and diluted loss per common share              |   |     |      |   |                 |    | (0.04 | ) |   |   | (0.06 | ) |   |   | (0.10 | ) |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
|                                                 |        |          |           |        |                      |         |  |  |  |  |  |  |  |  |  |  |
| Weighted average number of common shares outstanding |   |     |      |   |                 |    | 63,611,873 |   |   |   | 60,635,585 |   |   |   | 59,042,266 |   |

----

|                                                            |            | Year Ended August 31, 2014 |       |
|-----------------------------------------------------------------|-----------------|----------------------------|------------|
|                                                            |            | Share Capital              |       |   |  |   |   |  |   |   | Accumulated |   |   |  |   |
|                                                            | Number ofShares |                       |       | Amount$ |   |   | Share-BasedPaymentsReserve$ |   |   | Deficit$ |   |   | OtherComprehensiveLoss$ |   |   | TotalEquity$ |   |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at September 1, 2013                                    |            |                       | 60,850,982 |   |   |   | 20,299,802 |   |   |   | 9,056,102 |   |   |   | (16,034,024 | ) |   |   | (111,019 | ) |   |   | 13,210,861 |   |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Common shares issued for:                                       |            |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cash - private placement          |            |                       | 4,919,940  |   |   |   | 5,411,934 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,411,934 |   |
|      Cash - exercise of share options  |            |                       | 285,000    |   |   |   | 351,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 351,000 |   |
|      Exploration and evaluation assets |            |                       | 86,000     |   |   |   | 104,420 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 104,420 |   |
| Share issue costs                                               |            |                       | -          |   |   |   | (643,672 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (643,672 | ) |
| Share-based compensation on share options                       |            |                       | -          |   |   |   | - |   |   |   | 225,200 |   |   |   | - |   |   |   | - |   |   |   | 225,200 |   |
| Share-based compensation on finder's option                     |            |                       | -          |   |   |   | - |   |   |   | 218,316 |   |   |   | - |   |   |   | - |   |   |   | 218,316 |   |
| Share-based compensation on finders' warrants                   |            |                       |       |   |   |   |   |   |   |   | 10,072 |   |   |   | - |   |   |   | - |   |   |   | 10,072 |   |
| Transfer on exercise of share options                           |            |                       |       |   |   |   | 386,900 |   |   |   | (386,900 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrealized loss on investments                                  |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,390 | ) |   |   | (2,390 | ) |
| Net loss for the year                                           |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (2,442,008 | ) |   |   | - |   |   |   | (2,442,008 | ) |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2014                                      |            |                       | 66,141,922 |   |   |   | 25,910,384 |   |   |   | 9,122,790 |   |   |   | (18,476,032 | ) |   |   | (113,409 | ) |   |   | 16,443,733 |   |
|                                                            |            | Year Ended August 31, 2013 |       |
|-----------------------------------------------------------------|-----------------|----------------------------|------------|
|                                                            |            | Share Capital              |       |   |  |   |   |  |   |   | Accumulated |   |   |  |   |
|                                                            | Number ofShares |                       |       | Amount$ |   |   | Share-BasedPaymentsReserve$ |   |   | Deficit$ |   |   | OtherComprehensiveLoss$ |   |   | TotalEquity$ |   |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at September 1, 2012 (Note 3)                           |            |                       | 59,570,982 |   |   |   | 19,808,552 |   |   |   | 8,565,897 |   |   |   | (12,552,782 | ) |   |   | (54,962 | ) |   |   | 15,766,705 |   |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Common shares issued for:                                       |            |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cash - exercise of share options  |            |                       | 1,250,000  |   |   |   | 301,250 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 301,250 |   |
|      Exploration and evaluation assets |            |                       | 30,000     |   |   |   | 25,500 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 25,500 |   |
| Share-based compensation on share options                       |            |                       | -          |   |   |   | - |   |   |   | 654,705 |   |   |   | - |   |   |   | - |   |   |   | 654,705 |   |
| Transfer on exercise of share options                           |            |                       | -          |   |   |   | 164,500 |   |   |   | (164,500 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrealized loss on investment                                   |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (56,057 | ) |   |   | (56,057 | ) |
| Net loss for the year                                           |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (3,481,242 | ) |   |   | - |   |   |   | (3,481,242 | ) |
|                                                            |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2013                                      |            |                       | 60,850,982 |   |   |   | 20,299,802 |   |   |   | 9,056,102 |   |   |   | (16,034,024 | ) |   |   | (111,019 | ) |   |   | (13,210,861 | ) |
|                                                                              |            | Year Ended August 31, 2012 |       |
|-----------------------------------------------------------------------------------|-----------------|----------------------------|------------|
|                                                                              |            | Share Capital              |       |   |  |   |   |  |   |   | Accumulated |   |   |  |   |
|                                                                              | Number ofShares |                       |       | Amount$ |   |   | Share-BasedPaymentsReserve$ |   |   | Deficit$ |   |   | OtherComprehensiveGain (Loss)$ |   |   | TotalEquity$ |   |
|                                                                              |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at September 1, 2011 (Note 3)                                             |            |                       | 58,480,289 |   |   |   | 18,888,813 |   |   |   | 5,070,735 |   |   |   | (6,415,723 | ) |   |   | 168,574 |   |   |   | 17,712,399 |   |
|                                                                              |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Common shares issued for:                                                         |            |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cash - exercise of warrants                         |            |                       | 983,275    |   |   |   | 613,675 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 613,675 |   |
|      Cash - exercise of share options                    |            |                       | 69,672     |   |   |   | 6,967 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,967 |   |
|      Exploration and evaluation assets                   |            |                       | 37,746     |   |   |   | 95,120 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 95,120 |   |
| Share-based compensation on share options                                         |            |                       | -          |   |   |   | - |   |   |   | 3,699,139 |   |   |   | - |   |   |   | - |   |   |   | 3,699,139 |   |
| Transfer on exercise of agent's warrants                                          |            |                       | -          |   |   |   | 203,977 |   |   |   | (203,977 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrealized loss on investment                                                     |            |                       | -          |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | (251,282 | ) |   |   | (251,282 | ) |
| Deferred income tax on unrealized     loss on investment |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,746 |   |   |   | 27,746 |   |
| Net loss for the year                                                             |            |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (6,137,059 | ) |   |   | - |   |   |   | (6,137,059 | ) |
|                                                                              |                 |                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2012 (Note 3)                                               |            |                       | 59,570,982 |   |   |   | 19,808,552 |   |   |   | 8,565,897 |   |   |   | (12,552,782 | ) |   |   | (54,962 | ) |   |   | 15,766,705 |   |

----

|                                                                                          |   | Year Ended August 31 |       |
|-----------------------------------------------------------------------------------------------|--------|----------------------|------------|
|                                                                                          |   | 2014$           |       |   | 2013$  |   |   | 2012$(Note 3) |   |
| Operating activities                                                                          |   |                      |       |   |  |   |   |  |   |
| Net loss for the year                                                                         |   |                 | (2,442,008 | ) |   |   | (3,481,242 | ) |   |   | (6,137,059 | ) |
| Adjustments for:                                                                              |   |                 |       |   |   |   |   |   |   |   |   |   |
|      Depreciation                                                    |   |                 | 54,635     |   |   |   | 56,229 |   |   |   | 40,191 |   |
|      Share-based compensation                                        |   |                 | 225,200    |   |   |   | 654,705 |   |   |   | 3,699,139 |   |
|      Loss (gain) on sale of property, plant and equipment            |   |                 | 9,345      |   |   |   | (1,921 | ) |   |   | - |   |
|      Impairment of exploration and evaluation assets                 |   |                 | 46,636     |   |   |   | 498,114 |   |   |   | - |   |
|      Deferred income tax                                             |   |                 | -          |   |   |   | - |   |   |   | 27,746 |   |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
|                                                                                          |   |                 | (2,106,192 | ) |   |   | (2,274,115 | ) |   |   | (2,369,983 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Changes in non-cash working capital items:                                                    |   |                 |       |   |   |   |   |   |   |   |   |   |
|      Decrease (increase) in amounts receivable                       |   |                 | 8,862      |   |   |   | 31,137 |   |   |   | (32,893 | ) |
|      (Increase) decrease in GST/VAT receivables                      |   |                 | (61,573    | ) |   |   | 102,031 |   |   |   | (98,498 | ) |
|      (Increase) decrease in prepaids                                 |   |                 | (6,992     | ) |   |   | 627 |   |   |   | (15,764 | ) |
|      (Decrease) increase in accounts payable and accrued liabilities |   |                 | (337,035   | ) |   |   | 228,066 |   |   |   | (75,490 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
|                                                                                          |   |                 | (396,738   | ) |   |   | 361,861 |   |   |   | (222,645 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Net cash used in operating activities                                                         |   |                 | (2,502,930 | ) |   |   | (1,912,254 | ) |   |   | (2,592,628 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Investing activities                                                                          |   |                 |       |   |   |   |   |   |   |   |   |   |
| Proceeds from sale of property, plant and equipment                                           |   |                 | 14,985     |   |   |   | 25,545 |   |   |   | - |   |
| Additions to exploration and evaluation assets                                                |   |                 | (2,301,549 | ) |   |   | (2,562,939 | ) |   |   | (3,299,991 | ) |
| Additions to property, plant and equipment                                                    |   |                 | (6,555     | ) |   |   | - |   |   |   | (166,875 | ) |
| Increase in bond deposits                                                                     |   |                 | (219       | ) |   |   | (28,150 | ) |   |   | (204 | ) |
| Increase in investments                                                                       |   |                 | (16,603    | ) |   |   | - |   |   |   | - |   |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Net cash used in investing activities                                                         |   |                 | (2,309,941 | ) |   |   | (2,565,544 | ) |   |   | (3,467,070 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Financing activities                                                                          |   |                 |       |   |   |   |   |   |   |   |   |   |
| Issuance of common shares                                                                     |   |                 | 5,762,934  |   |   |   | 301,250 |   |   |   | 620,642 |   |
| Share issue costs                                                                             |   |                 | (415,284   | ) |   |   | - |   |   |   | - |   |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Net cash provided by financing activities                                                     |   |                 | 5,347,650  |   |   |   | 301,250 |   |   |   | 620,642 |   |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Net change in cash                                                                            |   |                 | 534,779    |   |   |   | (4,176,548 | ) |   |   | (5,439,056 | ) |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Cash at beginning of year                                                                     |   |                 | 5,601,492  |   |   |   | 9,778,040 |   |   |   | 15,217,096 |   |
|                                                                                          |        |                      |            |  |  |  |  |  |  |  |  |  |
| Cash at end of year                                                                           |   |                 | 6,136,271  |   |   |   | 5,601,492 |   |   |   | 9,778,040 |   |

----

| 1. | Nature of Operations |
|----|----------------------|

| 2. | Basis of Preparation |
|----|----------------------|

----

| 3. | Change in Accounting Policy |
|----|-----------------------------|

----

| 3. | Change in Accounting Policy (continued) |
|----|-----------------------------------------|

|                                                 |                     | Year Ended August 31, 2012 |        |
|------------------------------------------------------|--------------------------|----------------------------|-------------|
|                                                 |                     | As previouslyreported$     |        |   | Effect of changein accountingpolicy$ |   |   | Asrestated$ |   |
| Mineral exploration costs                            |                     |                       | 3,736,978   |   |   |   | (3,736,978 | ) |   |   | - |   |
|                                                 |                     |                       |        |   |   |   |   |   |   |   |   |   |
|  Expenses                                       |      |                       |        |   |   |   |   |   |   |   |   |   |
| Accounting and administration                        |                     |                       | 71,528      |   |   |   | - |   |   |   | 71,528 |   |
| Audit                                                |                     |                       | 72,091      |   |   |   | - |   |   |   | 72,091 |   |
| Corporate development                                |                     |                       | 178,532     |   |   |   | - |   |   |   | 178,532 |   |
| Depreciation                                         |                     |                       | 40,191      |   |   |   | - |   |   |   | 40,191 |   |
| General exploration                                  |                     |                       | 71,126      |   |   |   | - |   |   |   | 71,126 |   |
| Insurance                                            |                     |                       | 96,535      |   |   |   | - |   |   |   | 96,535 |   |
| Investor relations                                   |                     |                       | 42,000      |   |   |   | - |   |   |   | 42,000 |   |
| Legal                                                |                     |                       | 123,599     |   |   |   | - |   |   |   | 123,599 |   |
| Management fees                                      |                     |                       | 162,000     |   |   |   | - |   |   |   | 162,000 |   |
| Office                                               |                     |                       | 212,491     |   |   |   | - |   |   |   | 212,491 |   |
| Professional fees                                    |                     |                       | 718,443     |   |   |   | - |   |   |   | 718,443 |   |
| Regulatory fees                                      |                     |                       | 126,355     |   |   |   | - |   |   |   | 126,355 |   |
| Rent                                                 |                     |                       | 48,623      |   |   |   | - |   |   |   | 48,623 |   |
| Salaries and benefits                                |                     |                       | 204,970     |   |   |   | - |   |   |   | 204,970 |   |
| Shareholder costs                                    |                     |                       | 43,381      |   |   |   | - |   |   |   | 43,381 |   |
| Share-based compensation                             |                     |                       | 3,699,139   |   |   |   | - |   |   |   | 3,699,139 |   |
| Transfer agent                                       |                     |                       | 42,586      |   |   |   | - |   |   |   | 42,586 |   |
| Travel                                               |                     |                       | 277,123     |   |   |   | - |   |   |   | 277,123 |   |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
|                                                 |                     |                       | 6,230,713   |   |   |   | - |   |   |   | 6,230,713 |   |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Loss before other items                              |                     |                       | (9,967,691  | ) |   |   | 3,736,978 |   |   |   | (6,230,713 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Other items                                          |                     |                       |        |   |   |   |   |   |   |   |   |   |
| Interest income                                      |                     |                       | 151,298     |   |   |   | - |   |   |   | 151,298 |   |
| Foreign exchange                                     |                     |                       | (29,898     | ) |   |   | - |   |   |   | (29,898 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
|                                                 |                     |                       | 121,400     |   |   |   | - |   |   |   | 121,400 |   |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Loss before deferred income tax                      |                     |                       | (9,846,291  | ) |   |   | 3,736,978 |   |   |   | (6,109,313 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Deferred income tax                                  |                     |                       | (27,746     | ) |   |   | - |   |   |   | (27,746 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Net loss for the year                                |                     |                       | (9,874,037  | ) |   |   | 3,736,978 |   |   |   | (6,137,059 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Other comprehensive loss, net of deferred income tax |                     |                       | (223,536    | ) |   |   | - |   |   |   | (223,536 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Comprehensive loss for the year                      |                     |                       | (10,097,573 | ) |   |   | 3,736,978 |   |   |   | (6,350,595 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Basic and diluted loss per common share              |                     |                       | (0.17       | ) |   |   |   |   |   |   | (0.10 | ) |
|                                                 |                          |                            |             |  |  |  |  |  |  |  |  |  |
| Weighted average number of common shares outstanding |                     |                       | 59,042,266  |   |   |   |   |   |   |   | 59,042,266 |   |

----

| 3. | Change in Accounting Policy (continued) |
|----|-----------------------------------------|

|                                                                                          |   | Year Ended August 31, 2012 |       |
|-----------------------------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                                          |   | As previouslyreported$     |       |   | Effect of changein accountingpolicy$ |   |   | Asrestated$ |   |
| Operating activities                                                                          |   |                            |       |   |  |   |   |  |   |
| Net loss for the year                                                                         |   |                       | (9,874,037 | ) |   |   | 3,736,978 |   |   |   | (6,137,059 | ) |
| Adjustments for:                                                                              |   |                       |       |   |   |   |   |   |   |   |   |   |
|      Depreciation                                                    |   |                       | 40,191     |   |   |   | - |   |   |   | 40,191 |   |
|      Share-based compensation                                        |   |                       | 3,699,139  |   |   |   | - |   |   |   | 3,699,139 |   |
|      Deferred income tax                                             |   |                       | 27,746     |   |   |   | - |   |   |   | 27,746 |   |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
|                                                                                          |   |                       | (6,106,961 | ) |   |   | 3,736,978 |   |   |   | (2,369,983 | ) |
| Changes in non-cash working capital items:                                                    |   |                       |       |   |   |   |   |   |   |   |   |   |
|      Increase in amounts receivable                                  |   |                       | (131,391   | ) |   |   | - |   |   |   | (131,391 | ) |
|      Increase in prepaids                                            |   |                       | (15,764    | ) |   |   | - |   |   |   | (15,764 | ) |
|      Increase (decrease) in accounts payable and accrued liabilities |   |                       | 401,498    |   |   |   | (476,988 | ) |   |   | (75,490 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
|                                                                                          |   |                       | 254,343    |   |   |   | (476,988 | ) |   |   | (222,645 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Net cash used in operating activities                                                         |   |                       | (5,852,618 | ) |   |   | 3,259,990 |   |   |   | (2,592,628 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Investing activities                                                                          |   |                       |       |   |   |   |   |   |   |   |   |   |
| Additions to property, plant and equipment                                                    |   |                       | (166,875   | ) |   |   | - |   |   |   | (166,875 | ) |
| Additions to exploration and evaluation assets                                                |   |                       | (40,001    | ) |   |   | (3,259,990 | ) |   |   | (3,299,991 | ) |
| Additions to bond deposits                                                                    |   |                       | (204       | ) |   |   | - |   |   |   | (204 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Net cash used in investing activities                                                         |   |                       | (207,080   | ) |   |   | (3,259,990 | ) |   |   | (3,467,070 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Financing activity                                                                            |   |                       |       |   |   |   |   |   |   |   |   |   |
| Issuance of common shares                                                                     |   |                       | 620,642    |   |   |   | - |   |   |   | 620,642 |   |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Net cash provided by financing activity                                                       |   |                       | 620,642    |   |   |   | - |   |   |   | 620,642 |   |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Net change in cash                                                                            |   |                       | (5,439,056 | ) |   |   | - |   |   |   | (5,439,056 | ) |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Cash at beginning of year                                                                     |   |                       | 15,217,096 |   |   |   | - |   |   |   | 15,217,096 |   |
|                                                                                          |        |                            |            |  |  |  |  |  |  |  |  |  |
| Cash at end of year                                                                           |   |                       | 9,778,040  |   |   |   | - |   |   |   | 9,778,040 |   |

| 4. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|  | (i) | The determination of categories of financial assets and financial liabilities has been identified as an accounting policy which involves judgments or assessments made by management. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Management is required to assess the functional currency of each entity of the Company.  In concluding that the Canadian dollar is the functional currency of the parent and its subsidiary company, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates.  As no single currency was clearly dominant the Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | Management is required to assess impairment in respect of intangible exploration and evaluation assets.  The triggering events are defined in IFRS 6.  In making the assessment, management is required to make judgments on the status of each project and the future plans towards finding commercial reserves.  The nature of exploration and evaluation activity is such that only a proportion of projects are ultimately successful and some assets are likely to become impaired in future periods. |
|--|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | Although the Company takes steps to verify title to exploration and evaluation assets in which it has an interest, these procedures do not guarantee the Company's title.  Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. |
|--|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors.  The Company reviews the adequacy of these provisions at the end of the reporting period.  However, it is possible that at some future date an additional liability could result from audits by taxing authorities.  Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | The assessment of any impairment of exploration and evaluation assets, and property, plant and equipment is dependent upon estimates of the recoverable amount that take into account factors such as reserves, economic and market conditions and the useful lives of assets.  As a result of this assessment, management has carried out an impairment test on certain exploration and evaluation assets and an impairment charge of $46,636 was made in fiscal 2014.  See also Note 7. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|  | Discount rates using a risk-free rate that reflects the time value of money are used to calculate the net present value.  The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.  As at August 31, 2014 and 2013 the Company does not have any decommissioning obligations. |
|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|  | (i) | IFRS 10 Consolidated Financial Statements.  IFRS 10 defines a single concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of a parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | IFRS 11 Joint Arrangements.  IFRS 11 focuses on the rights and obligations of an arrangement rather than its legal form, as is currently the case.  The standard distinguishes between joint operations, where the joint operator accounts for the assets, liabilities, revenues, and expenses relating to its involvement, and joint ventures, which must be accounted for using the equity method. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | IFRS 12 Disclosure of Interests in Other Entities.  IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint operations, joint ventures, associates and unconsolidated structured entities. |
|--|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | IFRS 13 Fair Value Measurement.  IFRS 13 is a new standard that applies to both financial and non-financial items measured at fair value.  It defines fair value, sets out a single framework for measuring fair value and requires disclosures about fair value measurements.  Previously, a variety of fair value techniques and disclosures were possible under the requirements of separate applicable IFRSs. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|  | (i) | IFRS 9 Financial Instruments; tentatively effective for annual periods beginning on or after January 1, 2018.  IFRS 9 replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortized cost and fair value.  IFRS 9 prohibits reclassifications except in rare circumstances when the entity's business model changes.  The new standard removes the requirement to separate embedded derivatives from financial asset hosts.  It requires a hybrid contract to be classified in its entirety at either amortized cost or fair value. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | IFRS 15 Revenue from Contracts with Customers; is effective for annual periods beginning on or after January 1, 2017.  IFRS 15 specifies how and when to recognize revenue as well as requires entities to provide users of financial statements with more informative, relevant disclosures.  The standard supersedes IAS 18, Revenue, IAS 11, Construction Contracts, and a number of revenue-related interpretations.  The new standard will apply to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Investments |
|----|-------------|

|                               |   | August 31, 2014 |      |
|------------------------------------|--------|-----------------|-----------|
|                               |   | Numberof Shares |      |   | Cost$ |   |   | AccumulatedCompre-hensiveLoss$ |   |   | Carrying Value$ |   |
| Hannans Reward Limited ("Hannans") |   |            | 2,647,059 |   |   |   | 135,824 |   |   |   | (108,977 | ) |   |   | 26,847 |   |
| Thomson Resources Ltd. ("Thomson") |   |            | 600,000   |   |   |   | 16,603 |   |   |   | (4,432 | ) |   |   | 12,171 |   |
|                               |        |                 |           |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               |   |            |      |   |   |   | 152,427 |   |   |   | (113,409 | ) |   |   | 39,018 |   |
|    |   | August 31, 2013 |      |
|---------|--------|-----------------|-----------|
|    |   | Numberof Shares |      |   | Cost$ |   |   | AccumulatedCompre-hensiveLoss$ |   |   | Carrying Value$ |   |
|    |   |                 |      |   |  |   |   |  |   |   |  |   |
| Hannans |   |            | 2,647,059 |   |   |   | 135,824 |   |   |   | (111,019 | ) |   |   | 24,805 |   |

|  | (a) | The Company had received common shares of Hannans, a public company listed on the Australian Stock Exchange, from the option of certain of its iron ore properties, as described in Note 7(b)(i).  As at August 31, 2014 the quoted market value of the Hannans shares was $26,847. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | During fiscal 2014 the Company received 600,000 common shares of Thomson, at a fair value of $16,603, on the sale of exploration data which had been generated by the Company.  Thomson is a public company listed on the Australian Stock Exchange.  As at August 31, 2014 the quoted market value of the Thomson shares was $12,171. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   Cost:               |   | Computers$ |    |   | Office FurnitureandEquipment$ |   |    | FieldEquipment$ |   |   | Vehicles$ |   |   | Total$ |    |
|---------------------------------|--------|------------|---------|--------|-------------------------------|--------|---------|-----------------|--------|--------|-----------|--------|--------|--------|---------|
| Balance at August 31, 2012      |   |       | 18,032  |   |                          |   | 19,767  |            |   |   | 98,081    |   |   |   | 166,689 |   |   |   | 302,569 |   |
| Disposal                        |   |       | -       |   |                          |   | -       |            |   |   | -         |   |   |   | (32,214 | ) |   |   | (32,214 | ) |
| Balance at August 31, 2013      |   |       | 18,032  |   |                          |   | 19,767  |            |   |   | 98,081    |   |   |   | 134,475 |   |   |   | 270,355 |   |
| Addition                        |   |       | -       |   |                          |   | -       |            |   |   | 6,555     |   |   |   | -       |   |   |   | 6,555 |   |
| Disposal                        |   |       | -       |   |                          |   | -       |            |   |   | -         |   |   |   | (44,168 | ) |   |   | (44,168 | ) |
|                            |   |       |    |   |                          |   |    |            |   |   |      |   |   |   |    |   |   |   |   |   |
| Balance at August 31, 2014      |   |       | 18,032  |   |                          |   | 19,767  |            |   |   | 104,636   |   |   |   | 90,307  |   |   |   | 232,742 |   |
|  Accumulated Depreciation: |   |       |    |   |                          |   |    |            |   |   |      |   |   |   |    |   |   |   |   |   |
|                            |        |            |         |        |                               |        |         |                 |        |        |           |        |        |        |         |  |  |  |  |  |
| Balance at August 31, 2012      |   |       | (5,035  | )      |                          |   | (3,201  | )               |   |   | (13,822   | )      |   |   | (25,173 | ) |   |   | (47,231 | ) |
| Depreciation                    |   |       | (3,507  | )      |                          |   | (3,842  | )               |   |   | (20,265   | )      |   |   | (28,615 | ) |   |   | (56,229 | ) |
| Disposal                        |   |       | -       |   |                          |   | -       |            |   |   | -         |   |   |   | 8,590   |   |   |   | 8,590 |   |
|                            |        |            |         |        |                               |        |         |                 |        |        |           |        |        |        |         |  |  |  |  |  |
| Balance at August 31, 2013      |   |       | (8,542  | )      |                          |   | (7,043  | )               |   |   | (34,087   | )      |   |   | (45,198 | ) |   |   | (94,870 | ) |
| Depreciation                    |   |       | (3,500  | )      |                          |   | (3,833  | )               |   |   | (20,888   | )      |   |   | (26,414 | ) |   |   | (54,635 | ) |
| Disposal                        |   |       | -       |   |                          |   | -       |            |   |   | -         |   |   |   | 19,838  |   |   |   | 19,838 |   |
|                            |        |            |         |        |                               |        |         |                 |        |        |           |        |        |        |         |  |  |  |  |  |
| Balance at August 31, 2014      |   |       | (12,042 | )      |                          |   | (10,876 | )               |   |   | (54,975   | )      |   |   | (51,774 | ) |   |   | (129,667 | ) |
|  Carrying Value:           |   |       |    |   |                          |   |    |            |   |   |      |   |   |   |    |   |   |   |   |   |
|                            |        |            |         |        |                               |        |         |                 |        |        |           |        |        |        |         |  |  |  |  |  |
| Balance at August 31, 2013      |   |       | 9,490   |   |                          |   | 12,724  |            |   |   | 63,994    |   |   |   | 89,277  |   |   |   | 175,485 |   |
|                            |        |            |         |        |                               |        |         |                 |        |        |           |        |        |        |         |  |  |  |  |  |
| Balance at August 31, 2014      |   |       | 5,990   |   |                          |   | 8,891   |            |   |   | 49,661    |   |   |   | 38,533  |   |   |   | 103,075 |   |

----

| 7. | Exploration and Evaluation Assets |
|----|-----------------------------------|

|                  |   | August 31, 2014   |    |
|-----------------------|--------|-------------------|---------|
|                  |   | AcquisitionCosts$ |    |   | DeferredExploration Costs$ |   |   | Total$ |   |
| Rare Earth Properties |   |                   |    |   |  |   |   |  |   |
| Norra Kärr       |   |              | 92,797  |   |   |   | 9,889,283 |   |   |   | 9,982,080 |   |
| Olserum               |   |              | 143,357 |   |   |   | 568,594 |   |   |   | 711,951 |   |
| Other                 |   |              | 15,960  |   |   |   | 4,758 |   |   |   | 20,718 |   |
|                  |        |                   |         |  |  |  |  |  |  |  |  |  |
| Other Properties      |   |              | 112,853 |   |   |   | 39,051 |   |   |   | 151,904 |   |
|                  |        |                   |         |  |  |  |  |  |  |  |  |  |
|                  |   |              | 364,967 |   |   |   | 10,501,686 |   |   |   | 10,866,653 |   |
|                  |   | August 31, 2013   |    |
|-----------------------|--------|-------------------|---------|
|                  |   | AcquisitionCosts$ |    |   | DeferredExploration Costs$ |   |   | Total$ |   |
| Rare Earth Properties |   |                   |    |   |  |   |   |  |   |
| Norra Kärr       |   |              | 23,045  |   |   |   | 7,179,904 |   |   |   | 7,202,949 |   |
| Olserum               |   |              | 124,846 |   |   |   | 488,336 |   |   |   | 613,182 |   |
| Other                 |   |              | 49,088  |   |   |   | 15,860 |   |   |   | 64,948 |   |
|                  |        |                   |         |  |  |  |  |  |  |  |  |  |
| Other Properties      |   |              | 2,406   |   |   |   | 454 |   |   |   | 2,860 |   |
|                  |        |                   |         |  |  |  |  |  |  |  |  |  |
|                  |   |              | 199,385 |   |   |   | 7,684,554 |   |   |   | 7,883,939 |   |

----

|                            |   | Rare Earth Element Properties |      |   | Other    |   |    |           |   |
|---------------------------------|--------|-------------------------------|-----------|--------|----------|--------|---------|-----------|--------|
|                            |   | Norra Kärr$              |      |   | Olserum$ |   |    | Otanmaki$ |   |   | Other$ |   |   | Properties$ |   |   | Total$ |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2012      |   |                          | 5,312,704 |   |     |   | 316,137 |      |   |   | 340,766 |   |   |   | 186,698 |   |   |   | 2,860 |   |   |   | 6,159,165 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Exploration costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consulting                      |   |                          | 400,543   |   |     |   | 186,511 |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 587,054 |   |
| Core cutting                    |   |                          | 13,837    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,837 |   |
| Database                        |   |                          | 3,707     |   |     |   | 3,698   |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,405 |   |
| Drilling                        |   |                          | 74,950    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 74,950 |   |
| Exploration site                |   |                          | 21,779    |   |     |   | 119     |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,898 |   |
| Fuel                            |   |                          | 1,253     |   |     |   | 668     |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,921 |   |
| Geochemical                     |   |                          | 385,093   |   |     |   | 35,306  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 420,399 |   |
| Geological                      |   |                          | 92,398    |   |     |   | 31,511  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 123,909 |   |
| Maps                            |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | 1,920 |   |   |   | - |   |   |   | 1,920 |   |
| Metallurgical consulting        |   |                          | 21,152    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 21,152 |   |
| Metallurgical testing           |   |                          | 692,637   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 692,637 |   |
| Preliminary economic assessment |   |                          | 27,559    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,559 |   |
| Pre-feasibility study           |   |                          | 117,594   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 117,594 |   |
| Salaries                        |   |                          | 13,486    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,486 |   |
| Sample preparation              |   |                          | -         |   |     |   | 17,791  |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,791 |   |
| Travel                          |   |                          | 24,257    |   |     |   | 83      |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 24,340 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 1,890,245 |   |     |   | 275,687 |      |   |   | - |   |   |   | 1,920 |   |   |   | - |   |   |   | 2,167,852 |   |
| Acquisition costs               |   |                          |      |   |     |   |    |      |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mining rights                   |   |                          | -         |   |     |   | 21,358  |      |   |   | - |   |   |   | 33,678 |   |   |   | - |   |   |   | 55,036 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Impairment                      |   |                          | -         |   |     |   | -       |      |   |   | (340,766 | ) |   |   | (157,348 | ) |   |   | - |   |   |   | (498,114 | ) |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2013      |   |                          | 7,202,949 |   |     |   | 613,182 |      |   |   | - |   |   |   | 64,948 |   |   |   | 2,860 |   |   |   | 7,883,939 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Exploration costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consulting                      |   |                          | 532,787   |   |     |   | 72,570  |      |   |   | - |   |   |   | - |   |   |   | 33,436 |   |   |   | 638,793 |   |
| Database                        |   |                          | 2,424     |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 191 |   |   |   | 2,615 |   |
| Exploration site                |   |                          | 8,490     |   |     |   | 1,069   |      |   |   | - |   |   |   | - |   |   |   | 265 |   |   |   | 9,824 |   |
| Geochemical                     |   |                          | 94,079    |   |     |   | 3,723   |      |   |   | - |   |   |   | - |   |   |   | 4,192 |   |   |   | 101,994 |   |
| Geological                      |   |                          | 156,299   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 156,299 |   |
| Maps                            |   |                          | 1,442     |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 437 |   |   |   | 1,879 |   |
| Metallurgical testing           |   |                          | 429,895   |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 429,895 |   |
| Pre-feasibility study           |   |                          | 1,364,575 |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,364,575 |   |
| Salaries                        |   |                          | 29,188    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 29,188 |   |
| Surface rights                  |   |                          | 76,364    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 76,364 |   |
| Travel                          |   |                          | 13,836    |   |     |   | 2,896   |      |   |   | - |   |   |   | - |   |   |   | 76 |   |   |   | 16,808 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 2,709,379 |   |     |   | 80,258  |      |   |   | - |   |   |   | - |   |   |   | 38,597 |   |   |   | 2,828,234 |   |
| Acquisition costs               |   |                          |      |   |     |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mining rights                   |   |                          | 16,832    |   |     |   | 18,511  |      |   |   | - |   |   |   | - |   |   |   | 16,353 |   |   |   | 51,696 |   |
| Issuance of common shares       |   |                          | 52,920    |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 51,500 |   |   |   | 104,420 |   |
| Acquisition                     |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | - |   |   |   | 45,000 |   |   |   | 45,000 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                            |   |                          | 69,752    |   |     |   | 18,511  |      |   |   | - |   |   |   | - |   |   |   | 112,853 |   |   |   | 201,116 |   |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Impairment                      |   |                          | -         |   |     |   | -       |      |   |   | - |   |   |   | (44,230 | ) |   |   | (2,406 | ) |   |   | (46,636 | ) |
|                            |        |                               |           |        |          |        |         |           |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at August 31, 2014      |   |                          | 9,982,080 |   |     |   | 711,951 |      |   |   | - |   |   |   | 20,718 |   |   |   | 151,904 |   |   |   | 10,866,653 |   |

----

|  | (a) | Rare Earth Element Properties |
|--|-----|-------------------------------|

|  | (b) | Other Properties |
|--|-----|------------------|

|  | (i) | Iron Ore Properties |
|--|-----|---------------------|

|  | (ii) | Tungsten Properties |
|--|------|---------------------|

----

|  | (iii) | Other |
|--|-------|-------|

| 8. | Share Capital |
|----|---------------|

|  | (b) | Reconciliation of Changes in Share Capital |
|--|-----|--------------------------------------------|

|  | (i) | In February 2014 the Company completed the first tranche of a private placement of 3,875,863 units at a price of $1.10 per unit for gross proceeds of $4,263,449.  Each unit comprised one common share and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase an additional common share at a price of $1.50 per share on or before February 11, 2017.  The Company paid a finders' fee of $168,735 cash and issued finders' warrants which entitles the holder to purchase 15,495 common shares at a price of $1.50 per share on or before February 11, 2017.  The fair value of the finders' warrants, estimated using the Black-Scholes option pricing model, is $10,072.  The assumptions used were: a risk-free interest rate of 1.39%; an estimated volatility of 88%; an expected life of 3 years; an expected dividend yield of 0%; and an estimated forfeiture rate of 0%.  The Company also issued 192,000 compensation options exercisable into units with each unit having the same terms as the units issued under the private placement.  The fair value of the compensation options, estimated using the Black-Scholes option pricing model, is $124,800.  The assumptions used were: a risk-free interest rate of 1.39%; an estimated volatility of 88%; an expected life of 3 years; an expected dividend yield of 0%; and an estimated forfeiture rate of 0%. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|      | (ii) | No equity financings were conducted by the Company during fiscal 2013 and 2012.  See also Note 7(a). |
|--------------------------|------|----------------------------------------------------------------------------------------------------------------|

----

| 8. | Share Capital (continued) |
|----|---------------------------|

|  | (c) | Compensation Options |
|--|-----|----------------------|

|                        |   | 2014   |    |   | 2013                          |   |   | 2012   |   |
|-----------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|--------|--------|
|                        |   | Number |    |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |
| Balance, beginning of year  |   |   | -       |   |                          |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Issued on private placement |   |   | 295,907 |   |                          |   | 1.10   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                        |        |        |         |        |                               |        |        |        |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance, end of year        |   |   | 295,907 |   |                          |   | 1.10   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| NumberOutstanding |    |   | ExercisePrice$ |   | Expiry Date  |
|-------------------|---------|--------|----------------|--------|-------------------|
|              | 192,000 |   |           |   | 1.10              |   | February 11, 2017 |
|              | 103,907 |   |           |   | 1.10              |   | March 31, 2017 |
|              |         |        |                |        |                   |  |  |
|              | 295,907 |   |           |   |              |   |    |

|  | (d) | Warrants |
|--|-----|----------|

|                        |   | 2014   |       |   | 2013                          |   |   | 2012   |   |
|-----------------------------|--------|--------|------------|--------|-------------------------------|--------|--------|--------|--------|
|                        |   | Number |       |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |
| Balance, beginning of year  |   |   | 2,090,667  |   |                          |   | 1.85   |   |   |   | 2,177,607 |   |   |   | 1.85 |   |   |   | 3,160,882 |   |   |   | 1.47 |   |
| Issued on private placement |   |   | 4,935,435  |   |                          |   | 1.50   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                   |   |   | -          |   |                          |   | -      |   |   |   | - |   |   |   | - |   |   |   | (983,275 | ) |   |   | 0.62 |   |
| Expired                     |   |   | (2,090,667 | )      |                          |   | 1.85   |   |   |   | (86,940 | ) |   |   | 1.85 |   |   |   | - |   |   |   | - |   |
|                        |        |        |            |        |                               |        |        |        |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance, end of year        |   |   | 4,935,435  |   |                          |   | 1.50   |   |   |   | 2,090,667 |   |   |   | 1.85 |   |   |   | 2,177,607 |   |   |   | 1.85 |   |
| NumberOutstanding |      |   | ExercisePrice$ |   | Expiry Date       |
|-------------------|-----------|--------|----------------|--------|------------------------|
|              | 3,891,358 |   |           |   | 1.50    |   | February 11, 2017 |
|              | 1,044,077 |   |           |   | 1.50    |   | March 31, 2017 |
|              |           |        |                |        |                        |  |  |
|              | 4,935,435 |   |           |   |                   |   |    |

----

| 8. | Share Capital (continued) |
|----|---------------------------|

|                      | 2014          | 2013              | 2012              |
|---------------------------|---------------|-------------------|-------------------|
| Risk-free interest rate   | 1.26% - 1.46% | 1.09% - 1.26%     | 0.97% - 1.21%     |
| Estimated volatility      | 87% - 96%     | 86% - 130%        | 105% - 145%       |
| Expected life             | 3 years       | 2 years - 3 years | 2 years - 3 years |
| Expected dividend yield   | 0%            | 0%                | 0%                |
| Estimated forfeiture rate | 0%            | 0%                | 0%                |
|                       |   | 2014   |       |   | 2013                          |   |   | 2012   |   |
|----------------------------|--------|--------|------------|--------|-------------------------------|--------|--------|--------|--------|
|                       |   | Number |       |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |   | Number |   |   | WeightedAverageExercisePrice$ |   |
| Balance, beginning of year |   |   | 3,781,500  |   |                          |   | 2.01   |   |   |   | 5,181,500 |   |   |   | 2.09 |   |   |   | 3,041,172 |   |   |   | 1.98 |   |
| Granted                    |   |   | 360,000    |   |                          |   | 0.96   |   |   |   | 230,000 |   |   |   | 0.96 |   |   |   | 2,270,000 |   |   |   | 2.35 |   |
| Exercised                  |   |   | (285,000   | )      |                          |   | 1.23   |   |   |   | (1,250,000 | ) |   |   | 0.24 |   |   |   | (69,672 | ) |   |   | 0.10 |   |
| Expired                    |   |   | (1,321,500 | )      |                          |   | 2.07   |   |   |   | (380,000 | ) |   |   | 2.32 |   |   |   | (60,000 | ) |   |   | 2.96 |   |
|                       |   |   |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, end of year       |   |   | 2,535,000  |   |                          |   | 1.92   |   |   |   | 3,781,500 |   |   |   | 2.01 |   |   |   | 5,181,500 |   |   |   | 2.09 |   |

----

| NumberOutstanding |      |   | ExercisePrice$ |   | Expiry Date  |
|-------------------|-----------|--------|----------------|--------|-------------------|
|              | 100,000   |   |           |   | 3.37              |   | September 13, 2014 |
|              | 275,000   |   |           |   | 1.40              |   | December 6, 2014 |
|              | 250,000   |   |           |   | 1.40              |   | January 9, 2015 |
|              | 445,000   |   |           |   | 2.13              |   | January 9, 2015 |
|              | 700,000   |   |           |   | 2.70              |   | January 9, 2015 |
|              | 50,000    |   |           |   | 1.40              |   | February 27, 2015 |
|              | 200,000   |   |           |   | 1.87              |   | May 3, 2015 |
|              | 50,000    |   |           |   | 1.40              |   | September 13, 2015 |
|              | 25,000    |   |           |   | 1.44              |   | October 31, 2015 |
|              | 30,000    |   |           |   | 1.07              |   | February 11, 2016 |
|              | 125,000   |   |           |   | 0.66              |   | April 12, 2016 |
|              | 60,000    |   |           |   | 0.65              |   | September 2, 2016 |
|              | 85,000    |   |           |   | 0.76              |   | September 23, 2016 |
|              | 40,000    |   |           |   | 0.95              |   | January 3, 2017 |
|              | 100,000   |   |           |   | 1.47              |   | April 7, 2017 |
|              |           |        |                |        |                   |  |  |
|              | 2,535,000 |   |           |   |              |   |    |

| 9. | Related Party Disclosures |
|----|---------------------------|

|  | (a) | Transactions with Key Management Personnel |
|--|-----|--------------------------------------------|

|                     |   | 2014$  |    |   | 2013$  |   |    | 2012$  |   |
|--------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Management fees          |   |   | 163,500 |   |   |   | 162,000 |   |   |   | 162,000 |   |
| Professional fees        |   |   | 131,500 |   |   |   | 156,000 |   |   |   | 181,009 |   |
| Share-based compensation |   |   | -       |   |   |   | 51,250  |   |   |   | 930,736 |   |
|                     |        |        |         |        |        |        |         |        |        |  |  |  |
|                     |   |   | 295,000 |   |   |   | 369,250 |   |   |   | 1,273,745 |   |

----

| 9. | Related Party Disclosures (continued) |
|----|---------------------------------------|

|  | (i) | During fiscal 2014, 2013 and 2012 the following amounts were incurred with respect to the Company's non-management directors of the Company: |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|        |                     |   | 2014$  |    |   | 2013$  |   |    | 2012$  |   |
|--------|--------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|        | Professional fees        |   |   | 123,000 |   |   |   | 126,000 |   |   |   | 121,750 |   |
|        | Share-based compensation |   |   | -       |   |   |   | -       |   |   |   | 1,534,250 |   |
|   |                          |        |        |         |        |        |        |         |        |        |  |  |  |
|        |                     |   |   | 123,000 |   |   |   | 126,000 |   |   |   | 1,656,000 |   |

|  | (ii) | During fiscal 2014 the Company incurred a total of $58,300 (2013 - $48,650;  2012 - $48,000) to Chase Management Ltd. ("Chase") for accounting and administration services provided by Chase personnel, excluding the CFO and $4,020 (2013 - $4,475;  2012 - $4,800) for rent.  Chase is a private corporation owned by the CFO of the Company.  As at August 31, 2014, $3,335 (2013 - $4,085) remained unpaid and has been included in accounts payable and accrued liabilities. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | During fiscal 2014 the Company incurred $23,251 (2013 - $25,110;  2012 - $7,068) for shared administration costs with public companies with common directors and officers.  As at August 31, 2014, $363 (2013 - $2,640) of the amount remained unpaid and has been included in accounts payable and accrued liabilities. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | During fiscal 2014 the Company recorded a recovery of $36,844 (2013 - $96,625;  2012 - $36,441) for shared office personnel and costs from public companies with common directors and officers.  As at August 31, 2014, $nil (2013 - $9,821) of the amount remained outstanding and has been included in amounts receivable. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | See also Notes 7(b)(ii) and 8(b)(i). |
|--|-----|--------------------------------------|

|  |                                                 |   | 2014$  |       |   | 2013$  |   |
|--|------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|  |                                                 |   |        |       |   |        |   |
|  | Deferred income tax assets                           |   |        |       |   |        |   |
|  |      Losses carried forward |   |   | 3,054,300  |   |   |   | 2,533,700 |   |
|  |      Other                  |   |   | 114,800    |   |   |   | 65,700 |   |
|  |                                                 |   |   |       |   |   |   |   |   |
|  |                                                 |   |   | 3,169,100  |   |   |   | 2,599,400 |   |
|  | Valuation allowance                                  |   |   | (3,169,100 | )      |   |   | (2,599,400 | ) |
|  |                                                 |        |        |            |        |        |        |  |  |
|  | Net deferred income tax asset                        |   |   | -          |   |   |   | - |   |

----

|        |                                            |   | 2014$  |     |   | 2013$  |   |     | 2012$  |   |
|--------|-------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|        | Income tax rate reconciliation                  |   |        |     |   |        |   |     |        |   |
|   |                                                 |        |        |          |        |        |        |          |        |        |
|        | Combined federal and provincial income tax rate |   |   | 26.0     | %      |   |   | 25.0     | %      |   |   | 25.5 | % |
|   |                                                 |        |        |          |        |        |        |          |        |        |  |  |  |
|        | Expected income tax recovery                    |   |   | 634,900  |   |   |   | 870,300  |   |   |   | 1,557,900 |   |
|        | Effect of income tax rate changes               |   |   | 75,400   |   |   |   | (24,900  | )      |   |   | (46,600 | ) |
|        | Foreign income tax rate differences             |   |   | (34,000  | )      |   |   | 16,100   |   |   |   | 6,400 |   |
|        | Non-deductible share-based compensation         |   |   | (58,500  | )      |   |   | (163,700 | )      |   |   | (943,300 | ) |
|        | Other                                           |   |   | 45,400   |   |   |   | 23,600   |   |   |   | 27,400 |   |
|        | Unrecognized benefit of income tax losses       |   |   | (663,200 | )      |   |   | (721,400 | )      |   |   | (629,546 | ) |
|   |                                                 |        |        |          |        |        |        |          |        |        |  |  |  |
|        | Actual income tax (expense) recovery            |   |   | -        |   |   |   | -        |   |   |   | (27,746 | ) |
|                              |   | August 31, 2014 |      |
|-----------------------------------|--------|-----------------|-----------|
|                              |   | Canada$         |      |   | Scandinavia$ |   |   | Total$ |   |
| Current assets                    |   |            | 5,945,775 |   |   |   | 389,185 |   |   |   | 6,334,960 |   |
| Investments                       |   |            | 39,018    |   |   |   | - |   |   |   | 39,018 |   |
| Property, plant and equipment     |   |            | -         |   |   |   | 103,075 |   |   |   | 103,075 |   |
| Exploration and evaluation assets |   |            | -         |   |   |   | 10,866,653 |   |   |   | 10,866,653 |   |
| Bond deposit                      |   |            | -         |   |   |   | 31,865 |   |   |   | 31,865 |   |
|                              |   |            |      |   |   |   |   |   |   |   |   |   |
|                              |   |            | 5,984,793 |   |   |   | 11,390,778 |   |   |   | 17,375,571 |   |
|                              |   | August 31, 2013 |      |
|-----------------------------------|--------|-----------------|-----------|
|                              |   | Canada$         |      |   | Scandinavia$ |   |   | Total$ |   |
| Current assets                    |   |            | 5,518,107 |   |   |   | 222,371 |   |   |   | 5,740,478 |   |
| Investment                        |   |            | 24,805    |   |   |   | - |   |   |   | 24,805 |   |
| Property, plant and equipment     |   |            | -         |   |   |   | 175,485 |   |   |   | 175,485 |   |
| Exploration and evaluation assets |   |            | -         |   |   |   | 7,883,939 |   |   |   | 7,883,939 |   |
| Bond deposit                      |   |            | -         |   |   |   | 31,646 |   |   |   | 31,646 |   |
|                              |   |            |      |   |   |   |   |   |   |   |   |   |
|                              |   |            | 5,542,912 |   |   |   | 8,313,441 |   |   |   | 13,856,353 |   |

----

| 12. | Financial Instruments and Risk Management |
|-----|-------------------------------------------|

|  | Financial Instrument                | Category         |   | August 31,2014$ |      |   | August 31,2013$ |   |
|--|------------------------------------------|-----------------------|--------|-----------------|-----------|--------|-----------------|--------|
|  | Cash                                     | FVTPL                 |   |            | 6,136,271 |   |            |   | 5,601,492 |   |
|  | Investments                              | Available-for-sale    |   |            | 39,018    |   |            |   | 24,805 |   |
|  | Amounts receivable                       | Loans and receivables |   |            | 4,582     |   |            |   | 13,444 |   |
|  | Accounts payable and accrued liabilities | Other liabilities     |   |            | (931,838  | )      |            |   | (645,492 | ) |

|  | Level 1 - | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.  Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis. |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Level 2 - | Pricing inputs are other than quoted prices in active markets included in Level 1.  Prices in Level 2 are either directly or indirectly observable as of the reporting date.  Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the market place. |
|--|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | Level 3 - | Valuations in this level are those with inputs for the asset or liability that are not based on observable market data. |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------|

----

| 12. | Financial Instruments and Risk Management (continued) |
|-----|-------------------------------------------------------|

|                                                                  |   | Contractual Maturity Analysis at August 31, 2014 |      |
|-----------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                  |   | Less than3 Months$                               |      |   | 3 - 12Months$ |   |   | 1 - 5Years$ |   |   | Over5 Years$ |   |   | Total$ |   |
| Cash                                                                  |   |                                             | 6,136,271 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,136,271 |   |
| Investments                                                           |   |                                             | -         |   |   |   | - |   |   |   | 39,018 |   |   |   | - |   |   |   | 39,018 |   |
| Amounts receivable                                                    |   |                                             | 4,582     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,582 |   |
| Accounts payable and     accrued liabilities |   |                                             | (931,838  | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (931,838 | ) |
|                                                                  |   | Contractual Maturity Analysis at August 31, 2013 |      |
|-----------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                  |   | Less than3 Months$                               |      |   | 3 - 12Months$ |   |   | 1 - 5Years$ |   |   | Over5 Years$ |   |   | Total$ |   |
| Cash                                                                  |   |                                             | 5,601,492 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,601,492 |   |
| Investment                                                            |   |                                             | -         |   |   |   | - |   |   |   | 24,805 |   |   |   | - |   |   |   | 24,805 |   |
| Amounts receivable                                                    |   |                                             | 13,444    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,444 |   |
| Accounts payable and     accrued liabilities |   |                                             | (645,492  | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (645,492 | ) |

|  | (a) | Interest Rate Risk |
|--|-----|--------------------|

|  | (b) | Foreign Currency Risk |
|--|-----|-----------------------|

|                                     |   | SwedishKronors |       |   | CDN $Equivalent |   |
|------------------------------------------|--------|----------------|------------|--------|-----------------|--------|
| Cash                                     |   |           | 1,604,158  |   |            |   | 249,480 |   |
| Amounts receivable                       |   |           | 16,349     |   |            |   | 2,543 |   |
| VAT receivable                           |   |           | 681,610    |   |            |   | 106,005 |   |
| Accounts payable and accrued liabilities |   |           | (3,096,716 | )      |            |   | (481,604 | ) |
|                                     |        |                |            |        |                 |        |  |  |
|                                     |   |           | (794,599   | )      |            |   | (123,576 | ) |

----

| 12. | Financial Instruments and Risk Management (continued) |
|-----|-------------------------------------------------------|

|                                                                               |   | 2014$  |     |   | 2013$  |   |     | 2012$  |   |
|------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Operating activity                                                                 |   |        |     |   |        |   |     |        |   |
|      Increase in accounts payable and accrued liabilities |   |   | 734,818  |   |   |   | 111,437  |   |   |   | 476,988 |   |
|                                                                               |        |        |          |        |        |        |          |        |        |  |  |  |
| Financing activities                                                               |   |   |     |   |   |   |     |   |   |   |   |   |
|      Issuance of common shares                            |   |   | 104,420  |   |   |   | 190,000  |   |   |   | 299,097 |   |
|      Share issue costs                                    |   |   | (228,388 | )      |   |   | -        |   |   |   | - |   |
|      Share-based payments reserve                         |   |   | 228,388  |   |   |   | (164,500 | )      |   |   | (203,977 | ) |
|                                                                               |        |        |          |        |        |        |          |        |        |  |  |  |
|                                                                               |   |   | 104,420  |   |   |   | 25,500   |   |   |   | 95,120 |   |
| Investing activities                                                               |   |   |     |   |   |   |     |   |   |   |   |   |
|      Additions to exploration and evaluation assets       |   |   | (839,238 | )      |   |   | (136,937 | )      |   |   | (572,108 | ) |

|  | (i) | the Company granted share options to consultants to purchase 135,000 common shares of the Company at an exercise price of $0.60 per share, expiring October 7, 2017; and |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | share options to purchase 100,000 common shares of the Company at $3.37 per share and 10,000 common shares at $2.13 per share expired without exercise. |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ExhibitNumber |   |  Description                                                                                                                               |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |                                                                                                                                            |
| 1.1*          |   | Certificate of Amalgamation                                                                                                                     |
| 1.2*          |   | Amalgamation Application and Notice of Articles                                                                                                 |
| 1.3*          |   | Articles dated October 22, 2009                                                                                                                 |
| 4.1****       |   | Management Agreement between Tasman Metals Ltd. and Sierra Peru Pty Ltd. dated October 1, 2010.                                                 |
| 4.2           |   | Letter Agreement dated September 8, 2014, amending Management Agreement between Tasman Metals Ltd. and Sierra Peru Pty Ltd.                     |
| 4.3           |   | Tasman Metals Ltd. Amended and Restated Stock Option Plan dated June 12, 2014                                                                   |
|  4.4     |        | Tasman Metals Ltd. Amendment to Stock Option Plan dated August 18, 2014                                                                         |
| 8.1           |   | List of Subsidiaries                                                                                                                            |
| 11.1**        |   | Code of Business Conduct and Ethics                                                                                                             |
| 12.1          |   | Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act                                                           |
| 12.2          |   | Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act                                                           |
| 13.1          |   | Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 13.2          |   | Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 15.1          |   | Consent of D&H Group LLP, Chartered Accountants                                                                                             |
| 15.2          |   | Consent of Geoffrey C. Reed, B App Sc                                                                                                           |
| 15.3          |   | Consent of Craig F. Horlacher                                                                                                                   |
| 15.4          |   | Consent of Paul A. Gates                                                                                                                        |
| 15.5          |   | Consent of Runge Inc. d.b.a. RungePinockMinarco                                                                                                 |
| 15.6          |   | Consent of John Litz and J.E. Litz and Associates, LLC                                                                                          |
| 15.7          |   | Consent of ReedLeyton Consulting                                                                                                                |
| 15.8***       |   | Audit Committee Charter                                                                                                                         |
|          |   |                                                                                                                                            |