----

----

----

----

| Vancouver, Canada | Chartered Accountants |
|-------------------|-----------------------|
|              |                  |
| March 27, 2012    |                  |

----

|                                                                                                                           |   | December 31, |        |   | December 31, |   |        | January 1, |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|--------------|--------|-------------|------------|--------|
|                                                                                                                           |   | 2011         |        |   | 2010         |   |        | 2010       |   |
|                                                                                                                           |   |         | $           |   |         |   | $           |       |   |   | $ |   |
| ASSETS                                                                                                                         |   |         |        |   |         |   |        |       |   |   |   |   |
| Current assets                                                                                                                 |   |         |        |   |         |   |        |       |   |   |   |   |
| Cash and cash equivalents                                                                                                      |   |         | 7,759,933   |   |         |   | 24,376,060  |       |   |   | 1,504,920 |   |
| Receivables (note 5)                                                                                                           |   |         | 2,776,834   |   |         |   | 515,405     |       |   |   | 11,173 |   |
| Prepaid expenses and other current assets                                                                                      |   |         | 2,050,481   |   |         |   | 656,726     |       |   |   | - |   |
|                                                                                                                           |   |         | 12,587,248  |   |         |   | 25,548,191  |       |   |   | 1,516,093 |   |
| Mineral properties (note4)                                                                                                     |   |         | 88,668,710  |   |         |   | 88,668,710  |       |   |   | - |   |
| Property, plant and equipment(note6)                                                                                           |   |         | 373,409     |   |         |   | 304,290     |       |   |   | - |   |
|                                                                                                                           |   |         | 101,629,367 |   |         |   | 114,521,191 |       |   |   | 1,516,093 |   |
| LIABILITIES                                                                                                                    |   |         |        |   |         |   |        |       |   |   |   |   |
| Current liabilities                                                                                                            |   |         |        |   |         |   |        |       |   |   |   |   |
| Payables and accrued liabilities (note 7)                                                                                      |   |         | 7,376,731   |   |         |   | 896,088     |       |   |   | 181,861 |   |
| Due to related parties (note 8)                                                                                                |   |         | 156,863     |   |         |   | 131,097     |       |   |   | 44,824 |   |
| Flow-through share premium obligation (note 9)                                                                                 |   |         | 216,460     |   |         |   | -           |       |   |   | - |   |
|                                                                                                                           |   |         | 7,750,054   |   |         |   | 1,027,185   |       |   |   | 226,685 |   |
|                                                                                                                           |   |         |        |   |         |   |        |       |   |   |   |   |
| SHAREHOLDERS’ EQUITY                                                                                                     |   |         |        |   |         |   |        |       |   |   |   |   |
| Share capital and warrants (notes 9 and 10)                                                                                    |   |         | 149,573,447 |   |         |   | 142,973,784 |       |   |   | 20,164,894 |   |
| Subscriptions received in advance                                                                                              |   |         | -           |   |         |   | -           |       |   |   | 1,500,000 |   |
| Other capital                                                                                                                  |   |         | 13,096,693  |   |         |   | 2,867,971   |       |   |   | 256,477 |   |
| Deficit                                                                                                                        |   |         | (68,790,827 | )      |         |   | (32,347,749 | )          |   |   | (20,631,963 | ) |
|                                                                                                                           |   |         | 93,879,313  |   |         |   | 113,494,006 |       |   |   | 1,289,408 |   |
|                                                                                                                           |   |         | 101,629,367 |   |         |   | 114,521,191 |       |   |   | 1,516,093 |   |
|                                                                                                                           |   |         |        |   |         |   |        |       |   |   |   |   |
|  Basis of preparation and nature of operations (note 1)Commitments and contingencies (note 18)Subsequent events (note 22) |   |         |        |   |         |   |        |       |   |   |   |   |

| “Bruce Humphrey” |   |   | “Brad Boland” |   |
|------------------------------|--------|--------|---------------------------|--------|
| Bruce HumphreyDirector       |   |   | Brad BolandDirector       |   |

----

|                                                                                 | Common shares |   | Share capital and warrants |   | Subscriptions received in advance | Other capital |   | Deficit      |   | Total        |
|--------------------------------------------------------------------------------------|---------------|--------|----------------------------|--------|-----------------------------------|---------------|--------|--------------|--------|--------------|
|                                                                                 | (number)      |   | $                          |   | $                                 | $             |   | $            |   | $            |
|                                                                                 |          |   |                       |   |                              |          |   |         |   |         |
| Balance – January 1, 2010                                                      | 9,279,081     |   | 20,164,894                 |   | 1,500,000                         | 256,477       |   | (20,631,963) |   | 1,289,408    |
| Fractional rounding from share consolidation (note 9)                                | (80)          |   | -                          |   | -                                 | -             |   | -            |   | -            |
| Issuance pursuant to acquisition of 0860132 BC Ltd. (note 4)                         | 5,000,000     |   | 9,000,000                  |   | -                                 | -             |   | -            |   | 9,000,000    |
| Issuance pursuant to acquisition of Kami Property (note 4)                           | 32,285,006    |   | 79,421,114                 |   | -                                 | -             |   | -            |   | 79,421,114   |
| Issuances pursuant to private placements, net of transaction costs (note 9)          | 29,125,000    |   | 29,702,400                 |   | (1,500,000)                       | -             |   | -            |   | 28,202,400   |
| Issuance pursuant to flow-through share agreement, net of transaction costs (note 9) | 1,818,182     |   | 4,080,017                  |   | -                                 | -             |   | -            |   | 4,080,017    |
| Issuances pursuant to the exercise of warrants (note 10)                             | 4,042,000     |   | 492,000                    |   | -                                 | -             |   | -            |   | 492,000      |
| Issuances pursuant to the exercise of stock options (note 11)                        | 40,000        |   | 113,359                    |   | -                                 | (53,359)      |   | -            |   | 60,000       |
| Share-based compensation costs                                                       | -             |   | -                          |   | -                                 | 2,664,853     |   | -            |   | 2,664,853    |
| Net loss                                                                             | -             |   | -                          |   | -                                 | -             |   | (11,715,786) |   | (11,715,786) |
| Balance – December 31, 2010                                                    | 81,589,189    |   | 142,973,784                |   | -                                 | 2,867,971     |   | (32,347,749) |   | 113,494,006  |
| Issuance pursuant to flow-through share agreement, net of transaction costs (note 9) | 2,000,000     |   | 4,344,910                  |   | -                                 | -             |   | -            |   | 4,344,910    |
| Issuances pursuant to the exercise of warrants (note 10)                             | 854,625       |   | 1,512,915                  |   | -                                 | -             |   | -            |   | 1,512,915    |
| Issuances pursuant to the exercise of stock options (note 11)                        | 273,700       |   | 741,838                    |   | -                                 | (345,918)     |   | -            |   | 395,920      |
| Share-based compensation costs                                                       | -             |   | -                          |   | -                                 | 10,574,640    |   | -            |   | 10,574,640   |
| Net loss                                                                             | -             |   | -                          |   | -                                 | -             |   | (36,443,078) |   | (36,443,078) |
| Balance – December 31, 2011                                                    | 84,717,514    |   | 149,573,447                |   | -                                 | 13,096,693    |   | (68,790,827) |   | 93,879,313   |

----

|                                                         |   |               Years ended December 31, |        |
|--------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|-------------|
|                                                         |   | 2011                                                                                                    |        |   | 2010 |   |
|                                                         |   |                                                                                                    | $           |   |   |   | $ |   |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Operating expenses                                           |   |                                                                                                    |        |   |   |   |   |   |
| Exploration and evaluation expenses                          |   |                                                                                                    | 21,201,210  |   |   |   | 7,419,390 |   |
| General and administrative expenses                          |   |                                                                                                    | 15,182,005  |   |   |   | 4,921,135 |   |
| Environmental, aboriginal, government and community expenses |   |                                                                                                    | 1,356,780   |   |   |   | 73,954 |   |
|                                                         |   |                                                                                                    | 37,739,995  |   |   |   | 12,414,479 |   |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Loss from operations                                         |   |                                                                                                    | (37,739,995 | ) |   |   | (12,414,479 | ) |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Finance income                                               |   |                                                                                                    | 233,377     |   |   |   | 62,329 |   |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Loss before income taxes                                     |   |                                                                                                    | (37,506,618 | ) |   |   | (12,352,150 | ) |
| Income tax recovery (note 13)                                |   |                                                                                                    | 1,063,540   |   |   |   | 636,364 |   |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Net loss and comprehensive loss                              |   |                                                                                                    | (36,443,078 | ) |   |   | (11,715,786 | ) |
|                                                         |   |                                                                                                    |        |   |   |   |   |   |
| Net loss per share (note 14)                                 |   |                                                                                                    |        |   |   |   |   |   |
| Basic and diluted                                            |   |                                                                                                    | (0.44       | ) |   |   | (0.32 | ) |
| Weighted average number of shares outstanding (note 14)      |   |                                                                                                    |        |   |   |   |   |   |
| Basic and diluted                                            |   |                                                                                                    | 82,615,947  |   |   |   | 36,624,142 |   |

----

|                                                                                                                                                      |   |                          Years ended December 31, |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
|                                                                                                                                                      |   | 2011                                                                                                                                                                      |        |   | 2010 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      | $           |   |   |   | $ |   |
| Cash flows from operating activities                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Net loss                                                                                                                                                  |   |                                                                                                                                                                      | (36,443,078 | ) |   |   | (11,715,786 | ) |
|   Adjustments for:                                                                                                                              |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Share-based compensation costs                                                                                                                            |   |                                                                                                                                                                      | 10,574,640  |   |   |   | 2,664,853 |   |
| Depreciation                                                                                                                                              |   |                                                                                                                                                                      | 40,853      |   |   |   | 39,935 |   |
| Finance income                                                                                                                                            |   |                                                                                                                                                                      | (233,377    | ) |   |   | (62,329 | ) |
| Gain on disposal of property, plant and equipment                                                                                                         |   |                                                                                                                                                                      | (1,009      | ) |   |   | - |   |
| Income tax recovery (note 13)                                                                                                                             |   |                                                                                                                                                                      | (1,063,540  | ) |   |   | (636,364 | ) |
| Amortization of prepaid expenses and other non-cash items                                                                                                 |   |                                                                                                                                                                      | 759,441     |   |   |   | 476,810 |   |
| Changes in operating assets and liabilities (note 15)                                                                                                     |   |                                                                                                                                                                      | 2,131,585   |   |   |   | (978,384 | ) |
| Interest income received                                                                                                                                  |   |                                                                                                                                                                      | 193,576     |   |   |   | 62,329 |   |
| Net cash used in operating activities                                                                                                                     |   |                                                                                                                                                                      | (24,040,909 | ) |   |   | (10,148,936 | ) |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash flows from investing activities                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Purchases of property, plant and equipment, net of disposals                                                                                              |   |                                                                                                                                                                      | (108,963    | ) |   |   | (344,225 | ) |
| Acquisition costs for 0860132 BC Ltd. (note 4)                                                                                                            |   |                                                                                                                                                                      | -           |   |   |   | (106,480 | ) |
| Net cash used in investing activities                                                                                                                     |   |                                                                                                                                                                      | (108,963    | ) |   |   | (450,705 | ) |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash flows from financing activities                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Proceeds from private placement issuances of common shares, net of    cash transaction costs of $1,872,017 (note 9)                   |   |                                                                                                                                                                      | -           |   |   |   | 28,202,400 |   |
| Proceeds from the issuance of flow-through shares, net of cash transaction costs    of $375,090 in 2011 and $283,619 in 2010 (note 9) |   |                                                                                                                                                                      | 5,624,910   |   |   |   | 4,716,381 |   |
| Proceeds from the exercise of warrants (note 10)                                                                                                          |   |                                                                                                                                                                      | 1,512,915   |   |   |   | 492,000 |   |
| Proceeds from the exercise of stock options (note 11)                                                                                                     |   |                                                                                                                                                                      | 395,920     |   |   |   | 60,000 |   |
| Net cash provided by financing activities                                                                                                                 |   |                                                                                                                                                                      | 7,533,745   |   |   |   | 33,470,781 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Net change in cash and cash equivalents                                                                                                                   |   |                                                                                                                                                                      | (16,616,127 | ) |   |   | 22,871,140 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash and cash equivalents at the beginning of the year                                                                                                    |   |                                                                                                                                                                      | 24,376,060  |   |   |   | 1,504,920 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash and cash equivalents at the end of the year                                                                                                          |   |                                                                                                                                                                      | 7,759,933   |   |   |   | 24,376,060 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash and cash equivalents components:                                                                                                                     |   |                                                                                                                                                                      |        |   |   |   |   |   |
| Cash                                                                                                                                                      |   |                                                                                                                                                                      | 3,363,933   |   |   |   | 641,395 |   |
| Cash equivalents                                                                                                                                          |   |                                                                                                                                                                      | 4,396,000   |   |   |   | 23,734,665 |   |
|                                                                                                                                                      |   |                                                                                                                                                                      | 7,759,933   |   |   |   | 24,376,060 |   |

|   | Supplemental disclosure of cash flow information (note 15) |
|--------|------------------------------------------------------------|

----

| 1 | Summary of business, reporting entity, basis of preparation and nature of operations and significant accounting policies |
|---|--------------------------------------------------------------------------------------------------------------------------|

----

----

| Category                      | Useful life (years) |
|-------------------------------|---------------------|
| Building                      | 25                  |
| Furniture and fixtures        | 5                   |
| Exploration equipment         | 5                   |
| Computer and office equipment | 3                   |
| Computer software             | 3                   |
| Leasehold improvements        | Over the lease term |

----

|   | (a) | Classification |
|--------|-----|----------------|

----

----

----

----

----

----

|                         |            $ |
|------------------------------|---------------------------------------------------------------------|
| Total purchase price         |                                                                |
| Common shares issued         | 9,000,000                                                           |
| Acquisition costs            | 106,480                                                             |
|                         | 9,106,480                                                           |
|                         |                                                                |
| Allocation of purchase price |                                                                |
| Mineral properties           | 9,247,596                                                           |
| Accounts receivable          | 5,820                                                               |
| Accounts payable             | (146,936)                                                           |
|                         | 9,106,480                                                           |

----

|                                                                 |            $ |
|----------------------------------------------------------------------|---------------------------------------------------------------------|
|                                                                 |                                                                |
| Common shares issued to Altius                                       | 79,421,114                                                          |
| Mineral properties capitalized pursuant to the acquisition of Privco | 9,247,596                                                           |
|                                                                 | 88,668,710                                                          |

|                        |   | As of December 31, 2011 |      |   | As of December 31, 2010 |   |    | As of January 1, 2010 |   |
|-----------------------------|--------|------------------------------|-----------|--------|-------------------------|--------|---------|-----------------------|--------|
|                        |   |                         | $    |   |                    |   | $  |                  |   |   | $  |   |
|                        |   |                         |      |   |                    |   |    |                  |   |   |   |   |
| Sales tax credits           |   |                         | 2,477,485 |   |                    |   | 509,015 |                  |   |   | 11,173 |   |
| Deposits due from suppliers |   |                         | 240,367   |   |                    |   | -       |                  |   |   | - |   |
| Interest receivable         |   |                         | 39,801    |   |                    |   | -       |                  |   |   | - |   |
| Other                       |   |                         | 19,181    |   |                    |   | 6,390   |                  |   |   | - |   |
|                        |   |                         | 2,776,834 |   |                    |   | 515,405 |                  |   |   | 11,173 |   |

----

|                                                |   | Land and buildings |    |   | Exploration equipment |   |    | Computer and office equipment |   |   | Computer software |   |   | Furniture and fixtures |    |   | Total  |   |
|-----------------------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|---------|-------------------------------|--------|--------|-------------------|--------|--------|-----------------------------|---------|--------|--------|--------|
|                                                |   |               | $  |   |                  |   | $  |                          |   |   | $            |   |   |                        | $  |   |   |   | $  |   |   |   | $  |   |
|                                                |   |               |    |   |                  |   |    |                          |   |   |              |   |   |                        |    |   |   |   |   |   |   |   |   |   |
| Historical cost – January 1, 2010             |   |               | -       |   |                  |   | -       |                          |   |   | -                 |   |   |                        | -       |   |   |   | - |   |   |   | - |   |
| Additions                                           |   |               | 180,000 |   |                  |   | 118,396 |                          |   |   | 10,058            |   |   |                        | 32,781  |   |   |   | 2,990 |   |   |   | 344,225 |   |
| Historical cost – December 31, 2010           |   |               | 180,000 |   |                  |   | 118,396 |                          |   |   | 10,058            |   |   |                        | 32,781  |   |   |   | 2,990 |   |   |   | 344,225 |   |
| Accumulated depreciation – January 1, 2010    |   |               | -       |   |                  |   | -       |                          |   |   | -                 |   |   |                        | -       |   |   |   | - |   |   |   | - |   |
| Depreciation expense                                |   |               | 5,400   |   |                  |   | 20,709  |                          |   |   | 2,429             |   |   |                        | 10,880  |   |   |   | 517 |   |   |   | 39,935 |   |
| Accumulated depreciation – December 31, 2010  |   |               | 5,400   |   |                  |   | 20,709  |                          |   |   | 2,429             |   |   |                        | 10,880  |   |   |   | 517 |   |   |   | 39,935 |   |
| Carrying value – December  31, 2010 |   |               | 174,600 |   |                  |   | 97,687  |                          |   |   | 7,629             |   |   |                        | 21,901  |   |   |   | 2,473 |   |   |   | 304,290 |   |

|                                                |   | Land and buildings |    |   | Exploration equipment |   |    | Computer and office equipment |   |   | Computer software |   |   | Furniture and fixtures |   |   | LeaseholdImprovements |   |   | Total  |   |
|-----------------------------------------------------|--------|--------------------|---------|--------|-----------------------|--------|---------|-------------------------------|--------|--------|-------------------|--------|--------|-----------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                                                |   |               | $       |   |                  |   | $       |                          |   |   | $                 |   |   |                        | $      |   |                  |   | $      |   |   |   | $ |   |   |   | $ |   |
|                                                |   |               |    |   |                  |   |    |                          |   |   |              |   |   |                        |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Historical cost – January 1, 2011             |   |               | 180,000 |   |                  |   | 118,396 |                          |   |   | 10,058            |   |   |                        | 32,781 |   |                  |   | 2,990  |   |   |   | - |   |   |   | 344,225 |   |
| Additions                                           |   |               | -       |   |                  |   | 27,999  |                          |   |   | -                 |   |   |                        | -      |   |                  |   | 32,571 |   |   |   | 57,792 |   |   |   | 118,362 |   |
| Disposals                                           |   |               | -       |   |                  |   | (9,699  | )                             |   |   | -                 |   |   |                        | -      |   |                  |   | -      |   |   |   | - |   |   |   | (9,699 | ) |
| Historical cost – December 31, 2011           |   |               | 180,000 |   |                  |   | 136,696 |                          |   |   | 10,058            |   |   |                        | 32,781 |   |                  |   | 35,561 |   |   |   | 57,792 |   |   |   | 452,888 |   |
| Accumulated depreciation –January 1, 2011     |   |               | 5,400   |   |                  |   | 20,709  |                          |   |   | 2,429             |   |   |                        | 10,880 |   |                  |   | 517    |   |   |   | - |   |   |   | 39,935 |   |
| Depreciation expense                                |   |               | 5,800   |   |                  |   | 20,050  |                          |   |   | 1,845             |   |   |                        | 7,194  |   |                  |   | 5,964  |   |   |   | - |   |   |   | 40,853 |   |
| Disposals                                           |   |               | -       |   |                  |   | (1,309  | )                             |   |   | -                 |   |   |                        | -      |   |                  |   | -      |   |   |   | - |   |   |   | (1,309 | ) |
| Accumulated depreciation –December 31, 2011   |   |               | 11,200  |   |                  |   | 39,450  |                          |   |   | 4,274             |   |   |                        | 18,074 |   |                  |   | 6,481  |   |   |   | - |   |   |   | 79,479 |   |
| Carrying value – December  31, 2011 |   |               | 168,800 |   |                  |   | 97,246  |                          |   |   | 5,784             |   |   |                        | 14,707 |   |                  |   | 29,080 |   |   |   | 57,792 |   |   |   | 373,409 |   |

|                                           |   | As of December 31, 2011 |      |   | As of December 31, 2010 |   |    | As of January 1,2010 |   |
|------------------------------------------------|--------|-------------------------|-----------|--------|-------------------------|--------|---------|----------------------|--------|
|                                           |   |                    | $         |   |                    |   | $  |                 |   |   | $  |   |
| Trade accounts payable                         |   |                    | 5,356,802 |   |                    |   | 729,093 |                 |   |   | 64,293 |   |
| Accrued salaries and benefits                  |   |                    | 852,500   |   |                    |   | -       |                 |   |   | - |   |
| Accrued drilling expenses                      |   |                    | 565,431   |   |                    |   | -       |                 |   |   | - |   |
| Other accrued evaluation and exploration costs |   |                    | 477,055   |   |                    |   | 61,668  |                 |   |   | 61,668 |   |
| Accrued audit fees                             |   |                    | 65,000    |   |                    |   | 63,910  |                 |   |   | 10,000 |   |
| Other accrued liabilities                      |   |                    | 59,943    |   |                    |   | 41,417  |                 |   |   | 45,900 |   |
|                                           |   |                    | 7,376,731 |   |                    |   | 896,088 |                 |   |   | 181,861 |   |

----

|                                                       |   |      Years ended December 31, |       |
|------------------------------------------------------------|--------|---------------------------------------------------|------------|
|                                                       |   | 2011                                              |       |   | 2010 |   |
|                                                       |   |                                              | $          |   |   |   | $  |   |
| Share-based compensation                                   |   |                                              | 8,232,689  |   |   |   | 1,929,261 |   |
| Short-term benefits*                                       |   |                                              | 1,280,698  |   |   |   | 494,572 |   |
| Incentive compensation other than share-based compensation |   |                                              | 1,171,075  |   |   |   | 505,000 |   |
| Termination benefits                                       |   |                                              | 200,000    |   |   |   | - |   |
| Other                                                      |   |                                              | 30,000     |   |   |   | - |   |
|                                                       |   |                                              | 10,914,462 |   |   |   | 2,928,833 |   |

|   | * | include base salaries, pursuant to contractual employment or consultancy arrangements, Directors’ fees, applicable payroll taxes and other non-post-retirement benefits. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        |   | Years ended December 31, |      |
|-------------|--------|--------------------------|-----------|
|        |   | 2011                     |      |   | 2010 |   |
|        |   |                     | $         |   |   |   | $  |   |
| Forbes West |   |                     | 1,625,232 |   |   |   | 1,107,027 |   |
| F&M     |   |                     | 236,750   |   |   |   | 90,000 |   |
| Emprise     |   |                     | -         |   |   |   | 15,000 |   |
|        |   |                     | 1,861,982 |   |   |   | 1,212,027 |   |

|            |   |     As of December 31, 2011 |    |   |     As of December 31, 2010 |   |    | As of January 1, 2010 |   |
|-----------------|--------|--------------------------------------------|---------|--------|--------------------------------------------|--------|---------|----------------------------|--------|
|            |   |                                       | $       |   |                                       |   | $  |                       |   |   | $  |   |
| Forbes West     |   |                                       | 156,863 |   |                                       |   | 131,097 |                       |   |   | 5,250 |   |
| Emprise Capital |   |                                       | -       |   |                                       |   | -       |                       |   |   | 15,702 |   |
| Other           |   |                                       | -       |   |                                       |   | -       |                       |   |   | 23,872 |   |
|            |   |                                       | 156,863 |   |                                       |   | 131,097 |                       |   |   | 44,824 |   |

----

----

|                       | Years ended December 31,                                                                                                                                                                                                                                                                          |
|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       | 2011                                                                                                                                                                                                                                                                                              |   | 2010 |
|                       |                                                 Number | Weighted average exercise price$ |   |                                                Number | Weighted average exercise price$ |
|                       |                                                                                                                                                                                                                                                                                              |   |   |   |   |
| Balance, beginning of year | 5,604,410                                                                                                                                                                                                                                                                                         | 2.61 |   | 3,000,000 | 0.10 |
| Granted                    | 128,112                                                                                                                                                                                                                                                                                           | 2.80 |   | 6,646,410 | 2.23 |
| Exercised                  | (854,625)                                                                                                                                                                                                                                                                                         | 1.77 |   | (4,042,000) | 0.12 |
|                       |                                                                                                                                                                                                                                                                                              |   |   |   |   |
| Balance, end of year       | 4,877,897                                                                                                                                                                                                                                                                                         | 2.76 |   | 5,604,410 | 2.61 |

|                 | Warrants outstanding and currently exercisable                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exercise price  |                                                                      Number | Weighted average remaining contractuallife (years) | Global      intrinsic     value     $     |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
| 2.20                 | 291,275                                                                                                                                                                                                                                                                                                                                                                                                                         | 0.96 | 139,812 |
| 2.75                 | 90,910                                                                                                                                                                                                                                                                                                                                                                                                                          | 0.23 | - |
| 2.80                 | 4,495,712                                                                                                                                                                                                                                                                                                                                                                                                                       | 0.96 | - |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |
|                 | 4,877,897                                                                                                                                                                                                                                                                                                                                                                                                                       | 0.95 | 139,812 |

----

|                           | February 2010Finder’s Warrants | March 2010Finder’s Warrants | December 2010Broker’s Warrants | Flow-through Finder’s Warrants |
|--------------------------------|--------------------------------------|-----------------------------------|--------------------------------------|--------------------------------------|
| Number of equivalent shares    | 445,500                              | 1,000,000                         | 547,500                              | 90,910                               |
| Market-value per share price   | $0.88                                | $1.80                             | $2.90                                | $2.39                                |
| Exercise price                 | $1.00                                | $0.15                             | $2.80                                | $2.75                                |
| Risk-free annual interest rate | 1.20%                                | 1.20%                             | 1.70%                                | 1.20%                                |
| Expected volatility            | 94.3%                                | 94.3%                             | 94.3%                                | 94.3%                                |
| Expected life (years)          | 1.0                                  | 0.8                               | 2.0                                  | 2.0                                  |
| Expected dividend yield        | 0.0%                                 | 0.0%                              | 0.0%                                 | 0.0%                                 |
| Fair value of warrants         | $127,466                             | $1,651,610                        | $814,084                             | $100,866                             |

----

|                       |   | Years ended December 31, |       |
|----------------------------|--------|--------------------------|------------|
|                       |   | 2011                     |       |   | 2010 |   |
|                       |   | Number                   |       |   | Weighted average exercise price$ |   |   | Number |   |   | Weighted average exercise price$ |   |
|                       |   |                     |       |   |   |   |   |   |   |   |   |   |
| Balance, beginning of year |   |                     | 5,085,000  |   |   |   | 1.88 |   |   |   | 17,500 |   |   |   | 3.40 |   |
| Granted                    |   |                     | 6,825,000  |   |   |   | 3.04 |   |   |   | 5,125,000 |   |   |   | 1.88 |   |
| Exercised                  |   |                     | (273,700   | ) |   |   | 1.45 |   |   |   | (40,000 | ) |   |   | 1.50 |   |
| Forfeited                  |   |                     | -          |   |   |   | - |   |   |   | (17,500 | ) |   |   | 3.40 |   |
|                       |   |                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, end of year       |   |                     | 11,636,300 |   |   |   | 2.57 |   |   |   | 5,085,000 |   |   |   | 1.88 |   |

|                 | Options outstanding as of December 31, 2011                                                                                                                                                                                                                         |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exercise price  |                                            Number | Weighted average remainingcontractuallife(years) | Weightedaverageexerciseprice |                                       Global                                             intrinsic                                            value                                            $     |
|                 |                                                                                                                                                                                                                                                                |   |   |   |
| 1.20 - 2.00          | 3,636,300                                                                                                                                                                                                                                                           | 3.58 | 1.55 | 4,098,704 |
| 2.21 - 2.62          | 2,675,000                                                                                                                                                                                                                                                           | 4.68 | 2.47 | 567,250 |
| 2.78 - 3.27          | 2,825,000                                                                                                                                                                                                                                                           | 4.36 | 3.04 | - |
| 3.30 - 3.80          | 2,500,000                                                                                                                                                                                                                                                           | 4.16 | 3.64 | - |
|                 |                                                                                                                                                                                                                                                                |   |   |   |
|                 | 11,636,300                                                                                                                                                                                                                                                          | 4.15 | 2.57 | 4,665,954 |
|                 |  Options exercisable as of December 31, 2011                                                                                                                                                                                                                   |
| Exercise price  |                                           Number       | Weighted average remainingcontractuallife(years) | Weightedaverageexerciseprice |                                         Global                                                intrinsic                                              value                                              $     |
|                 |                                                                                                                                                                                                                                                                |   |   |   |
| 1.20 - 2.00          | 2,480,050                                                                                                                                                                                                                                                           | 3.47 | 1.55 | 2,792,454 |
| 2.21 - 2.62          | 200,000                                                                                                                                                                                                                                                             | 4.45 | 2.62 | 12,000 |
| 2.78 - 3.27          | 587,500                                                                                                                                                                                                                                                             | 3.99 | 3.00 | - |
| 3.30 - 3.80          | 575,000                                                                                                                                                                                                                                                             | 4.13 | 3.67 | - |
|                 |                                                                                                                                                                                                                                                                |   |   |   |
|                 | 3,842,550                                                                                                                                                                                                                                                           | 3.70 | 2.15 | 2,804,454 |

----

|                                                |                           Years ended December 31,                                                                                                                                                                                         |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |                                                             2011 |                                           2010 |
|                                                |                                                                                                                                                                                                                                                                                                                                                                    |   |
| Expected dividend yield (a)                         | 0.0%                                                                                                                                                                                                                                                                                                                                                                    | 0.0% |
| Estimated volatility (b)                            | 94.3%                                                                                                                                                                                                                                                                                                                                                                   | 94.3% |
| Weighted average risk-free annual interest rate (c) | 1.64%                                                                                                                                                                                                                                                                                                                                                                   | 1.40% |
| Weighted average expected life (years) (d)          | 4.0                                                                                                                                                                                                                                                                                                                                                                     | 5.0 |
| Estimated forfeiture rate (e)                       | 5.42%                                                                                                                                                                                                                                                                                                                                                                   | 3.51% |
| Grant date fair value                               | $2.09                                                                                                                                                                                                                                                                                                                                                                   | $1.40 |

| (a)   | The Company has not paid dividends nor does it intend to pay dividends in the foreseeable future. |
|-----------------|---------------------------------------------------------------------------------------------------|

| (b)   | Based on the volatility of comparable company stock prices over the most recent period consistent with the expected life of the stock options, as well as on management’s future expectations. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Based on the yield on a zero-coupon Canadian Treasury Bill with a term that is consistent with the expected life of the stock options. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Based on historical data related to the exercise of stock options, on post-vesting employment terminations and on future expectations related to exercise behaviour. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Based on historical data related to the forfeiture of stock options. |
|-----------------|----------------------------------------------------------------------|

| 12 | Operating expenses |
|----|--------------------|

|   | Components of the Company’s operating expenses include the following: |
|--------|-----------------------------------------------------------------------------|

|                                               |   |            Years ended December 31, |       |
|----------------------------------------------------|--------|---------------------------------------------------------------------------------------|------------|
|                                               |   | 2011                                                                                  |       |   | 2010 |   |
|                                               |   |                                                                                  | $          |   |   |   | $  |   |
| Share-based compensation costs                     |   |                                                                                  | 10,574,640 |   |   |   | 2,664,853 |   |
| Salaries, employment taxes and short-term benefits |   |                                                                                  | 3,567,604  |   |   |   | 1,072,837 |   |
| Total employee benefits expenses                   |   |                                                                                  | 14,142,244 |   |   |   | 3,737,690 |   |
|                                               |   |                                                                                  |       |   |   |   |   |   |
| Goods and services*                                |   |                                                                                  | 20,474,997 |   |   |   | 6,975,421 |   |
| Consulting, professional and legal fees            |   |                                                                                  | 2,926,232  |   |   |   | 1,535,448 |   |
| Building rental, services and maintenance          |   |                                                                                  | 151,001    |   |   |   | 98,485 |   |
| Depreciation                                       |   |                                                                                  | 40,853     |   |   |   | 39,935 |   |
| Other                                              |   |                                                                                  | 4,668      |   |   |   | 27,500 |   |
| Total operating expenses, by nature                |   |                                                                                  | 37,739,995 |   |   |   | 12,414,479 |   |

----

| 13 | Income taxes |
|----|--------------|

|                                                      | Years ended December 31,                               |
|-----------------------------------------------------------|--------------------------------------------------------|
|                                                      | 2011                                                   | 2010 |
|                                                      |                                                   |   |
| Combined federal and provincial statutory income tax rate |          26.9% |         28.5% |

|                                                                       |   | Years ended December 31, |       |
|----------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                       |   | 2011                     |       |   | 2010 |   |
|                                                                       |   |                     | $          |   |   |   | $  |   |
| Income tax recovery based on statutory income tax rate                     |   |                     | 10,089,280 |   |   |   | 3,520,363 |   |
| Change in valuation allowance                                              |   |                     | (8,015,000 | ) |   |   | (1,598,000 | ) |
| Share-based compensation costs                                             |   |                     | (2,844,578 | ) |   |   | (759,483 | ) |
| Investment tax credits                                                     |   |                     | 982,775    |   |   |   | 156,866 |   |
| Change in renounced expenditures pursuant to flow-through share agreements |   |                     | (182,796   | ) |   |   | (613,636 | ) |
| Impact of future income tax rates applied versus current statutory rate    |   |                     | 925,037    |   |   |   | (524,324 | ) |
| Share issue expenses not affecting earnings                                |   |                     | 108,822    |   |   |   | 454,578 |   |
|                                                                       |   |                     |       |   |   |   |   |   |
|                                                                       |   |                     | 1,063,540  |   |   |   | 636,364 |   |

|                                                    |            Years ended December 31,                                                                                                                                                              |
|---------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |                                         2011    |                                                   2010 |
|                                                    |                                          $ |                                                    $ |
|            |                                                                                                                                                                                                                                               |   |
| Temporary differences attributable to:                  |                                                                                                                                                                                                                                               |   |
| Mineral properties                                      | 7,784,000                                                                                                                                                                                                                                          | 2,225,000 |
| Non-capital losses                                      | 3,424,000                                                                                                                                                                                                                                          | 1,038,000 |
| Share-issue expenses                                    | 405,000                                                                                                                                                                                                                                            | 369,000 |
| Allowable capital losses                                | 136,000                                                                                                                                                                                                                                            | 118,000 |
| Property, plant and equipment                           | 22,000                                                                                                                                                                                                                                             | 10,000 |
|                                                    | 11,775,000                                                                                                                                                                                                                                         | 3,760,000 |

----

|                                                                                                                               | Years ended December 31,                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                               |                                                     2011 |                                                           2010 |
| Basic weighted average number of shares outstanding                                                                                | 82,615,947                                                                                                                                                                                                                                                                                                              | 36,624,142 |
| Potentially dilutive effect of warrants                                                                                            | 4,369,290                                                                                                                                                                                                                                                                                                               | 7,554 |
| Potentially dilutive effect of stock options                                                                                       | 1,391,182                                                                                                                                                                                                                                                                                                               | 912 |
| Potentially diluted weighted average number of           shares outstanding | 88,376,419                                                                                                                                                                                                                                                                                                              | 36,632,608 |

|          | Years ended December 31,                                                                                                                                                                                                                                                                                                                                    |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                           2011 | 2010         |
| Stock options | 5,489,251                                                                                                                                                                                                                                                                                                                                                   | 2,952,783 |

----

| 15 | Supplemental disclosure of cash flow information |
|----|--------------------------------------------------|

|                                        | Years ended December 31,                                                                                                                                                                                                                                                                  |
|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                2011 |                                                     2010 |
|                                        |                                                $    |                                                       $ |
| Changes in operating assets and liabilities |                                                                                                                                                                                                                                                                                      |   |
| Receivables                                 | (2,221,628)                                                                                                                                                                                                                                                                               | (498,412) |
| Prepaid expenses and other current assets   | (2,170,473)                                                                                                                                                                                                                                                                               | (1,133,536) |
| Payables and accrued liabilities            | 6,497,920                                                                                                                                                                                                                                                                                 | 630,719 |
| Due to related parties                      | 25,766                                                                                                                                                                                                                                                                                    | 22,845 |
|                                        | 2,131,585                                                                                                                                                                                                                                                                                 | (978,384) |

----

| December 31, 2011                         |   | Loans and receivables |      |   | Other financial liabilities |   |       | Total  |   |
|-------------------------------------------|--------|-----------------------|-----------|--------|-----------------------------|--------|------------|--------|--------|
|                                      |   |                  | $         |   |                        |   | $          |   |   |   | $ |   |
|                                      |   |                  |      |   |                        |   |       |   |   |   |   |   |
| Cash and cash equivalents                 |   |                  | 7,759,933 |   |                        |   | -          |   |   |   | 7,759,933 |   |
| Receivables (note 5)                      |   |                  | 299,349   |   |                        |   | -          |   |   |   | 299,349 |   |
| Payables and accrued liabilities (note 7) |   |                  | -         |   |                        |   | (7,376,291 | )      |   |   | (7,376,291 | ) |
| Due to related parties (note 8)           |   |                  | -         |   |                        |   | (156,863   | )      |   |   | (156,863 | ) |
|                                      |   |                  | 8,059,282 |   |                        |   | (7,533,154 | )      |   |   | 526,128 |   |

| December 31, 2010                         |   | Loans and receivables |       |   | Other financial liabilities |   |       | Total  |   |
|-------------------------------------------|--------|-----------------------|------------|--------|-----------------------------|--------|------------|--------|--------|
|                                      |   |                  | $     |   |                        |   | $     |   |   |   | $  |   |
|                                      |   |                  |       |   |                        |   |       |   |   |   |   |   |
| Cash and cash equivalents                 |   |                  | 24,376,060 |   |                        |   | -          |   |   |   | 24,376,060 |   |
| Receivables (note 5)                      |   |                  | 6,390      |   |                        |   | -          |   |   |   | 6,390 |   |
| Payables and accrued liabilities (note 7) |   |                  | -          |   |                        |   | (895,648   | )      |   |   | (895,648 | ) |
| Due to related parties (note 8)           |   |                  | -          |   |                        |   | (131,097   | )      |   |   | (131,097 | ) |
|                                      |   |                  | 24,382,450 |   |                        |   | (1,026,745 | )      |   |   | 23,355,705 |   |
| January 1, 2010                           |   | Loans and receivables |       |   | Other financial liabilities |   |       | Total  |   |
|                                      |   |                  | $     |   |                        |   | $     |   |   |   | $  |   |
|                                      |   |                  |       |   |                        |   |       |   |   |   |   |   |
| Cash and cash equivalents                 |   |                  | 1,504,920  |   |                        |   | -          |   |   |   | 1,504,920 |   |
| Payables and accrued liabilities (note 7) |   |                  | -          |   |                        |   | (146,861   | )      |   |   | (146,861 | ) |
| Due to related parties (note 8)           |   |                  | -          |   |                        |   | (44,824    | )      |   |   | (44,824 | ) |
|                                      |   |                  | 1,504,920  |   |                        |   | (191,685   | )      |   |   | (1,313,235 | ) |

----

|   | Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities. |
|--------|-----------------|---------------------------------------------------------------------------------|

|   | Level 2 – | Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices). |
|--------|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 – | Inputs for an asset or liability that are not based on observable market data (unobservable inputs). |
|--------|-----------------|------------------------------------------------------------------------------------------------------|

----

| Reconciliation of shareholders’ equity           |   |   | As ofDecember 31,2010 |        |
|--------------------------------------------------------|--------|--------|-----------------------|-------------|
|                                                   |   |   |                  | $      |   |
| Shareholders’ equity under Canadian GAAP         |   |   |                  | 122,349,092 |   |
| IFRS adjustments attributable to:                      |   |   |                  |        |   |
| Exploration and evaluation expenditures                | (a)    |   |                  | (7,091,549  | ) |
| Deferred taxation related to the acquisition of Privco | (b)    |   |                  | (1,763,537  | ) |
| Shareholders’ equity under IFRS                  |   |   |                  | 113,494,006 |   |

----

| Reconciliation of comprehensive loss                                       |   |   |     Year ended December 31, 2010 |        |
|----------------------------------------------------------------------------|--------|--------|-------------------------------------------------|-------------|
|                                                                       |   |   |                                            | $      |   |
| Comprehensive loss under Canadian GAAP                                     |   |   |                                            | (1,560,410  | ) |
| IFRS adjustments attributable to:                                          |   |   |                                            |        |   |
| Exploration and evaluation expenditures                                    | (a)    |   |                                            | (7,091,549  | ) |
| Deferred taxation related to the acquisition of Privco                     | (b)    |   |                                            | (1,763,537  | ) |
| Deferred taxation related to the March 2010 Flow-Through Private Placement | (c)    |   |                                            | (613,636    | ) |
| Share-based compensation costs                                             | (d)    |   |                                            | (686,654    | ) |
| Comprehensive loss under IFRS                                              |   |   |                                            | (11,715,786 | ) |

| (a)   | Exploration and evaluation expenditures |
|-----------------|-----------------------------------------|

----

| (b)   | Deferred income taxes related to the acquisition of Privco |
|-----------------|------------------------------------------------------------|

| (c)   | Deferred income taxes related to flow-through share arrangements |
|-----------------|------------------------------------------------------------------|

| (d)   | Share-based payments |
|-----------------|----------------------|

----

| (e)   | Warrants |
|-----------------|----------|

----

| Canadian GAAP accounts                   |   | Canadian GAAP balances |        |   |   |   |   | IFRS adjustments |    |   |        |   |   | IFRS reclassifications |   |    |   |   |     | IFRSbalances |   |   | IFRS accounts |   |
|------------------------------------------|--------|------------------------|-------------|--------|--------|--------|--------|------------------|---------|--------|-------------|--------|--------|------------------------|--------|---------|--------|--------|----------|--------------|--------|--------|---------------|--------|
|                                     |   |  $                |        |   |   |   |   |             |  $ |   |        |   |   |                   |   |  $ |   |   |     |         |   |   |  $       |   |   |   |   |   |
| ASSETS                                   |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   | ASSETS |   |
| Current                                  |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   | Current assets |   |
| Cash and cash equivalents                |   |                   | 24,376,060  |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 24,376,060 |   |   | Cash and cash equivalents |   |
| Receivables                              |   |                   | 515,405     |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 515,405 |   |   | Receivables |   |
| Prepaids                                 |   |                   | 656,726     |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 656,726 |   |   | Prepaid expenses and other current assets |   |
|                                     |   |                   | 25,548,191  |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 25,548,191 |   |   |   |   |   |
| Resource properties                      |   |                   | 98,797,975  |   |   |   |   |             |    |   | (10,129,265 | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 88,668,710 |   |   | Mineral properties |   |
| Equipment                                |   |                   | 304,290     |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 304,290 |   |   | Property, plant and equipment |   |
|                                     |   |                   | 124,650,456 |   |   |   |   |             |    |   | (10,129,265 | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 114,521,191 |   |   |   |   |   |
|                                     |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   |   |   |   |   |   |   |   |
| LIABILITIES                              |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   |   |   |   |   | LIABILITIES |   |
| Current                                  |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   |   |   |   |   | Current liabilities |   |
| Accounts payable and accrued liabilities |   |                   | 896,088     |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 896,088 |   |   | Payables and accrued liabilities |   |
| Due to related parties                   |   |                   | 131,097     |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 131,097 |   |   | Due to related parties |   |
|                                     |   |                   | 1,027,185   |   |   |   |   |             |    |   | -           |   |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 1,027,185 |   |   |   |   |   |
| Future income tax liability              |   |                   | 1,274,179   |   |   |   |   |             |    |   | (1,274,179  | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | - |   |   |   |   |   |
|                                     |   |                   | 2,301,364   |   |   |   |   |             |    |   | (1,274,179  | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 1,027,185 |   |   |   |   |   |
| SHAREHOLDERS’ EQUITY               |   |                   |        |   |   |   |   |             |    |   |        |   |   |                   |   |    |   |   |     |         |   |   |          |   |   |   |   |   |   | SHAREHOLDERS’ EQUITY |   |
| Share capital                            |   |                   | 136,596,977 |   |   |   |   |             |    |   | 5,684,163   |   |   |                   |   |    |   |   | 692,644  |         |   |   |          |   |   |   | 142,973,784 |   |   | Share capital and warrants |   |
| Contributed surplus                      |   |                   | 7,944,488   |   |   |   |   |             |    |   | (4,383,873  | )      |   |                   |   |    |   |   | (692,644 | )            |   |   |          |   |   |   | 2,867,971 |   |   | Other capital |   |
| Deficit                                  |   |                   | (22,192,373 | )      |   |   |   |             |    |   | (10,155,376 | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | (32,347,749 | ) |   | Deficit |   |
|                                     |   |                   | 122,349,092 |   |   |   |   |             |    |   | (8,855,086  | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 113,494,006 |   |   |   |   |   |
|                                     |   |                   | 124,650,456 |   |   |   |   |             |    |   | (10,129,265 | )      |   |                   |   |    |   |   | -        |         |   |   |          |   |   |   | 114,521,191 |   |   |   |   |   |

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| Canadian GAAP accounts                        |                           | Canadian GAAP balances |      | IFRS adjustments  |      | IFRS reclassifications |                | IFRSbalances  |      | IFRS accounts                                 |
|-----------------------------------------------|--------------------------------|------------------------|-----------|-------------------|-----------|------------------------|---------------------|---------------|-----------|-----------------------------------------------|
|                                          |                           | $                      |      | $       |      | $       |      | $   |      |                                          |
| Administrative expenses                       |                           |                   |      |              |      |                   |                |          |      | Operating expenses                            |
|                                          | Accounting and audit fees      |                   | 143,298   |              | -         |                   | (143,298)           |          | -         |                                          |   |
|                                          | Amortization                   |                   | 39,935    |              | -         |                   | (39,935)            |          | -         |                                          |   |
|                                          | Bank charges and interest      |                   | 11,479    |              | -         |                   | (11,479)            |          | -         |                                          |   |
|                                          | Consulting fees                |                   | 525,007   |              | -         |                   | (525,007)           |          | -         |                                          |   |
|                                          | Insurance                      |                   | 12,865    |              | -         |                   | (12,865)            |          | -         |                                          |   |
|                                          | Investor relations             |                   | 300,996   |              | -         |                   | (300,996)           |          | -         |                                          |   |
|                                          | Legal fees                     |                   | 143,626   |              | -         |                   | (143,626)           |          | -         |                                          |   |
|                                          | Management fees                |                   | 152,706   |              | -         |                   | (152,706)           |          | -         |                                          |   |
|                                          | Office and administration      |                   | 591,670   |              | -         |                   | (591,670)           |          | -         |                                          |   |
|                                          | Rent                           |                   | 96,971    |              | -         |                   | (96,971)            |          | -         |                                          |   |
|                                          | Share-based compensation       |                   | 1,978,198 |              | 686,654   |                   | (2,664,852)         |          | -         |                                          |   |
|                                          | Transfer agent and filing fees |                   | 72,902    |              | -         |                   | (72,902)            |          | -         |                                          |   |
|                                          | Travel                         |                   | 217,309   |              | -         |                   | (217,309)           |          | -         |                                          |   |
|                                          | Wages                          |                   | 349,314   |              | -         |                   | (349,314)           |          | -         |                                          |   |
|                                          |                           |                   | -         |              | -         |                   | 4,921,135           |          | 4,921,135 |                                          | General and administrative expenses |
|                                          |                           |                   | -         |              | 7,091,549 |                   | 327,841             |          | 7,419,390 |                                          | Exploration and evaluation expenses |
|                                          |                           |                   | -         |              | -         |                   | 73,954              |          | 73,954    |                                          | Environmental, aboriginal, government and community expenses |
|                                          |                           | 4,636,276              |      | 7,778,203         |      | -                      |                | 12,414,479    |      |                                          |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |
| Loss before other items                       |                           | (4,636,276)            |      | (7,778,203)       |      | -                      |                | (12,414,479)  |      | Loss from operations                          |
| Other items                                   |                           |                   |      |              |      |                   |                |          |      |                                          |
| Interest                                      |                           | 62,329                 |      | -                 |      | -                      |                | 62,329        |      | Finance income                                |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |
| Loss before income taxes                      |                           |  (4,573,947)      |      |  (7,778,203) |      | -                      |                | (12,352,150)  |      | Loss before income taxes                      |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |
| Future income tax recovery                    |                           | 3,013,537              |      | (2,377,173)       |      | -                      |                | 636,364       |      | Income tax recovery                           |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |
| Net loss and comprehensive loss for the year  |                           | (1,560,410)            |      | (10,155,376)      |      | -                      |                | (11,715,786)  |      | Net loss and comprehensive loss               |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |
| Net loss per share                            |                           |                   |      |              |      |                   |                |          |      | Net loss per share                            |
| Basic and diluted                             |                           | (0.04)                 |      | (0.28)            |      | -                      |                | (0.32)        |      | Basic and diluted                             |
| Weighted average number of shares outstanding |                           |                   |      |              |      |                   |                |          |      | Weighted average number of shares outstanding |
| Basic and diluted                             |                           | 36,624,142             |      | -                 |      | -                      |                | 36,624,142    |      | Basic and diluted                             |
|                                          |                           |                   |      |              |      |                   |                |          |      |                                          |

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| Canadian GAAP accounts                                                                                                |   | Canadian GAAP balances |   | IFRS adjustments |   | IFRS adjustments |   | IFRSbalances                                                  |   | IFRS accounts                                                                                        |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|------------------|--------|------------------|--------|---------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|
|                                                                                                                  |   | $            |   | $      |   | $      |   | $                                                   |   |                                                                                                 |
| Cash flows used in operating activities                                                                               |   |                   |   |             |   |             |   |                                                          |   | Cash flows from operating activities                                                                 |
| Net loss for the year                                                                                                 |   | (1,560,410)            |   | (10,155,376)     |   | -                |   | (11,715,786)                                                  |   | Net loss                                                                                             |
| Items not affecting cash                                                                                              |   |                   |   |             |   |             |   |                                                          |   | Adjustments for:                                                                                     |
| Share-based compensation                                                                                              |   | 1,978,199              |   | 686,654          |   | -                |   | 2,664,853                                                     |   | Share-based compensation costs                                                                       |
| Amortization                                                                                                          |   | 39,935                 |   | -                |   | -                |   | 39,935                                                        |   | Depreciation                                                                                         |
|                                                                                                                  |   | -                      |   | -                |   | (62,329)         |   | (62,329)                                                      |   | Finance income                                                                                       |
| Income tax recovery                                                                                                   |   | (3,013,537)            |   | 2,377,173        |   | -                |   | (636,364)                                                     |   | Income tax recovery                                                                                  |
| Amortization of prepaid expenses and other non-cash items                                                             |   | 476,810                |   | -                |   | -                |   |          476,810 |   | Amortization of prepaid expenses and other non-cash items                                            |
|                                                                                                                  |   |                   |   |             |   |             |   |                                                          |   |                                                                                                 |
|                                                                                                                  |   | -                      |   | -                |   | 62,329           |   | 62,329                                                        |   | Interest income received                                                                             |
| Net change in working capital items:                                                                                  |   |                   |   |             |   |             |   |                                                          |   | Changes in operating assets and liabilities:                                                         |
| Receivables                                                                                                           |   | (498,412)              |   | -                |   | -                |   | (498,412)                                                     |   |     Receivables                                                                  |
| Prepaids                                                                                                              |   | (1,119,805)            |   | -                |   |             |   | (1,133,536)                                                   |   |     Prepaid expenses and other current assets                                    |
| Accounts payable and accrued liabilities                                                                              |   | 69,340                 |   | 547,648          |   | -                |   | 630,719                                                       |   |     Payables and accrued liabilities                                             |
| Due to related parties                                                                                                |   | 22,845                 |   | -                |   | -                |   | 22,845                                                        |   |     Due to related parties                                                       |
| Cash used in operating activities                                                                                     |   | (3,605,035)            |   | (6,543,901)      |   | -                |   | (10,148,936)                                                  |   | Net cash used in operating activities                                                                |
|                                                                                                                  |   |                   |   |             |   |             |   |                                                          |   |                                                                                                 |
| Cash flows from investing activities                                                                                  |   |                   |   |             |   |             |   |                                                          |   | Cash flows from investing activities                                                                 |
| Resource property costs                                                                                               |   | (6,543,901)            |   | 6,543,901        |   | -                |   | -                                                             |   |                                                                                                 |
| Acquisition of equipment                                                                                              |   | (344,225)              |   | -                |   | -                |   | (344,225)                                                     |   | Purchases of property, plant and equipment                                                           |
| Acquisition costs for 0860132 BC Ltd.                                                                                 |   | (106,480)              |   | -                |   | -                |   | (106,480)                                                     |   | Acquisition costs for 0860132 BC Ltd.                                                                |
| Cash used in investing activities                                                                                     |   | (6,994,606)            |   | 6,543,901        |   | -                |   | (450,705)                                                     |   | Net cash used in investing activities                                                                |
|                                                                                                                  |   |                   |   |             |   |             |   |                                                          |   |                                                                                                 |
| Cash flows from financing activities                                                                                  |   |                   |   |             |   |             |   |                                                          |   | Cash flows from financing activities                                                                 |
| Proceeds from private placement issuances of   common shares, net of  cash transaction costs |   | 28,202,400             |   | -                |   | -                |   | 28,202,400                                                    |   | Proceeds from private placement issuances of common shares, net of  cash transaction costs |
| Proceeds from the issuance of flow-through   shares, net of transaction costs                          |   | 4,716,381              |   | -                |   | -                |   | 4,716,381                                                     |   | Proceeds from the issuance of flow-through shares, net of transaction costs                          |
| Proceeds from the exercise of warrants                                                                                |   | 492,000                |   | -                |   | -                |   | 492,000                                                       |   | Proceeds from the exercise of warrants                                                               |
| Proceeds from the exercise of stock options                                                                           |   | 60,000                 |   | -                |   | -                |   | 60,000                                                        |   | Proceeds from the exercise of stock options                                                          |
| Cash provided by financing activities                                                                                 |   | 33,470,781             |   | -                |   | -                |   | 33,470,781                                                    |   | Net cash provided by financing activities                                                            |
| Increase in cash and cash equivalents                                                                                 |   | 22,871,140             |   | -                |   | -                |   | 22,871,140                                                    |   | Net change in cash and cash equivalents                                                              |
| Cash and cash equivalents, beginning of the year                                                                      |   | 1,504,920              |   | -                |   | -                |   | 1,504,920                                                     |   | Cash and cash equivalents at the beginning of the year                                               |
| Cash and cash equivalents, end of the year                                                                            |   | 24,376,060             |   | -                |   | -                |   | 24,376,060                                                    |   | Cash and cash equivalents at the end of the year                                                     |

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