----

----

|                                                                                                                                     |   | December 31,     |     |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|----------|
|                                                                                                                                     |   | 2010             |     |   | 2009 |   |
|                                                                                                                                     |   | (In thousands of |     |
|                                                                                                                                     |   | U.S. Dollars)    |     |
| ASSETS                                                                                                                                   |   |             |     |   |   |   |   |   |
| CURRENT                                                                                                                                  |   |             |     |   |   |   |   |   |
| Cash                                                                                                                                     |   | $                | 6,425    |   |   | $ | – |   |
| Restricted cash (Note 5)                                                                                                                 |   |             | 16,379   |   |   |   | 6,731 |   |
| Accounts receivable and other                                                                                                            |   |             | 3,379    |   |   |   | 1,690 |   |
| Prepaids                                                                                                                                 |   |             | 828      |   |   |   | 394 |   |
| Derivative instruments (Note 6)                                                                                                          |   |             | –  |   |   |   | 1,961 |   |
| Inventories (Note 7)                                                                                                                     |   |             | 9,927    |   |   |   | 8,189 |   |
| Investments (Note 8)                                                                                                                     |   |             | 3,440    |   |   |   | – |   |
| Total current assets                                                                                                                     |   |             | 40,378   |   |   |   | 18,965 |   |
| Derivative instruments (Note 6)                                                                                                          |   |             | –  |   |   |   | 4,844 |   |
| Inventories, long-term (Note 7)                                                                                                          |   |             | 3,552    |   |   |   | – |   |
| Investments, long-term (Note 8)                                                                                                          |   |             | 1,036    |   |   |   | 1,036 |   |
| Property, plant and equipment (Note 9)                                                                                                   |   |             | 198,423  |   |   |   | 116,171 |   |
| Investment in Montana Tunnels joint venture (Note 14)                                                                                    |   |             | –  |   |   |   | 3,440 |   |
| Restricted certificates of deposit (Note 5)                                                                                              |   |             | 18,028   |   |   |   | 14,805 |   |
| TOTAL ASSETS                                                                                                                             |   | $                | 261,417  |   |   | $ | 159,261 |   |
| LIABILITIES                                                                                                                              |   |             |     |   |   |   |   |   |
| CURRENT                                                                                                                                  |   |             |     |   |   |   |   |   |
| Bank indebtedness                                                                                                                        |   | $                | –  |   |   | $ | 328 |   |
| Accounts payable                                                                                                                         |   |             | 15,752   |   |   |   | 6,789 |   |
| Accrued liabilities                                                                                                                      |   |             | 5,334    |   |   |   | 2,129 |   |
| Derivative instruments (Note 6)                                                                                                          |   |             | –  |   |   |   | 12,571 |   |
| Current portion of deferred revenue (Note 10)                                                                                            |   |             | 6,180    |   |   |   | – |   |
| Current portion of long-term debt (Note 11)                                                                                              |   |             | 29,525   |   |   |   | 34,860 |   |
| Total current liabilities                                                                                                                |   |             | 56,791   |   |   |   | 56,677 |   |
| Accrued long-term liabilities                                                                                                            |   |             | 1,991    |   |   |   | 483 |   |
| Derivative instruments (Note 6)                                                                                                          |   |             | –  |   |   |   | 31,654 |   |
| Deferred revenue (Note 10)                                                                                                               |   |             | 50,120   |   |   |   | – |   |
| Long-term debt (Note 11)                                                                                                                 |   |             | 15,879   |   |   |   | 48,909 |   |
| Equity-linked financial instruments (Note 4(t))                                                                                          |   |             | 42,742   |   |   |   | 27,318 |   |
| Accrued site closure costs (Note 12)                                                                                                     |   |             | 5,307    |   |   |   | 5,345 |   |
| Future income tax liability (Note 18)                                                                                                    |   |             | 12,756   |   |   |   | 1,304 |   |
| TOTAL LIABILITIES                                                                                                                        |   |             | 185,586  |   |   |   | 171,690 |   |
|                                                                                                                                     |   |             |     |   |   |   |   |   |
| Commitments and contingencies (Note 21)                                                                                                  |   |             |     |   |   |   |   |   |
|                                                                                                                                     |   |             |     |   |   |   |   |   |
| SHAREHOLDERS’ EQUITY (DEFICIENCY)                                                                                                  |   |             |     |   |   |   |   |   |
| Common stock - Nil par value, unlimited shares authorized; 182,424,828 shares issued and outstanding (2009 – 66,050,232) (Note 13) |   |             | 349,725  |   |   |   | 202,769 |   |
| Additional paid-in capital                                                                                                               |   |             | 53,821   |   |   |   | 45,555 |   |
| Accumulated deficit                                                                                                                      |   |             | (327,715 | ) |   |   | (260,753 | ) |
| TOTAL SHAREHOLDERS’ EQUITY (DEFICIENCY)                                                                                            |   |             | 75,831   |   |   |   | (12,429 | ) |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)                                                                            |   | $                | 261,417  |   |   | $ | 159,261 |   |

|   | APPROVED ON BEHALF OF THE BOARD |
|--------|---------------------------------|
|   |                            |
|   | /s/ Wade K. Dawe                |
|   | Wade K. Dawe, Director          |
|   |                            |
|   | /s/ David W. Peat               |
|   | David W. Peat, Director         |

----

|                                                                                 |   | Year Ended December 31,                                         |    |
|--------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|---------|
|                                                                                 |   | 2010                                                            |    |   | 2009 |   |   | 2008 |   |
|                                                                                 |   | (U.S. dollars and shares in thousands,except per share amounts) |    |
| Revenue from sale of gold                                                            |   | $                                                               | 85,935  |   |   | $ | 47,008 |   |   | $ | – |   |
| Operating expenses                                                                   |   |                                                            |    |   |   |   |   |   |   |   |   |   |
| Direct operating costs                                                               |   |                                                            | 41,265  |   |   |   | 26,126 |   |   |   | – |   |
| Depreciation and amortization                                                        |   |                                                            | 13,672  |   |   |   | 6,978 |   |   |   | 100 |   |
| Accretion expense – accrued site closure costs                                 |   |                                                            | 646     |   |   |   | 369 |   |   |   | – |   |
| General and administrative expenses                                                  |   |                                                            | 12,647  |   |   |   | 4,875 |   |   |   | 3,696 |   |
| Impairment on exploration property (Note 15)                                         |   |                                                            | 2,414   |   |   |   | – |   |   |   | – |   |
| Exploration and business development                                                 |   |                                                            | 7,503   |   |   |   | 1,960 |   |   |   | 5,517 |   |
|                                                                                 |   |                                                            | 78,147  |   |   |   | 40,308 |   |   |   | 9,313 |   |
| Operating income (loss)                                                              |   |                                                            | 7,788   |   |   |   | 6,700 |   |   |   | (9,313 | ) |
| Other income (expenses)                                                              |   |                                                            |    |   |   |   |   |   |   |   |   |   |
| Interest income                                                                      |   |                                                            | 283     |   |   |   | 195 |   |   |   | 238 |   |
| Interest expense (Note 17)                                                           |   |                                                            | (11,470 | ) |   |   | (8,045 | ) |   |   | (4,868 | ) |
| Debt transaction costs (Note 11(a)(iii))                                             |   |                                                            | – |   |   |   | (1,249 | ) |   |   | (190 | ) |
| Loss on modification of debentures (Note 11(b))                                      |   |                                                            | (513    | ) |   |   | (1,969 | ) |   |   | – |   |
| Linear acquisition costs                                                             |   |                                                            | (3,338  | ) |   |   | – |   |   |   | – |   |
| Fair value change on equity-linked financial  instruments (Note 4(t))      |   |                                                            | (7,958  | ) |   |   | (10,720 | ) |   |   | – |   |
| (Loss) gain on derivative instruments                                                |   |                                                            | (51,811 | ) |   |   | (43,775 | ) |   |   | 3,958 |   |
| Foreign exchange (loss) gain and other                                               |   |                                                            | (774    | ) |   |   | 376 |   |   |   | (1,329 | ) |
|                                                                                 |   |                                                            | (75,581 | ) |   |   | (65,187 | ) |   |   | (2,191 | ) |
| Loss before income taxes and equity (loss) earnings in Montana Tunnels joint venture |   |                                                            | (67,793 | ) |   |   | (58,487 | ) |   |   | (11,504 | ) |
| Income taxes (Note 18)                                                               |   |                                                            | 1,532   |   |   |   | 73 |   |   |   | 2,380 |   |
| Equity (loss) earnings in Montana Tunnels joint venture (Note 14)                    |   |                                                            | (701    | ) |   |   | (3,236 | ) |   |   | 10,326 |   |
| Net (loss) income and comprehensive (loss) income                                    |   | $                                                               | (66,962 | ) |   | $ | (61,650 | ) |   | $ | 1,202 |   |
|                                                                                 |   |                                                            |    |   |   |   |   |   |   |   |   |   |
| Basic and diluted net (loss) income per share:                                       |   | $                                                               | (0.57   | ) |   | $ | (1.00 | ) |   | $ | 0.02 |   |
| Basic weighted-average number of shares outstanding                                  |   |                                                            | 116,516 |   |   |   | 61,351 |   |   |   | 46,265 |   |
| Diluted weighted-average number of shares outstanding (Note 19)                      |   |                                                            | 116,516 |   |   |   | 61,351 |   |   |   | 53,035 |   |

----

|                                                                  |   | Number ofShares                   |    |   | CommonStock |   |    | NoteWarrants |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |    |   | Total  |   |
|----------------------------------------------------------------------------|--------|----------------------------------------|---------|--------|-------------|--------|---------|--------------|--------|--------|--------------------------|--------|--------|--------------------|---------|--------|--------|--------|
|                                                                       |   | (U.S. dollars and shares in thousands) |    |
|                                                                       |   |                                   |    |   |        |   |    |         |   |   |                     |   |   |               |    |   |   |   |
| Balance, December 31, 2007                                                 |   |                                   | 39,062  |   |        | $      | 165,790 |         |   | $      | 2,292                    |   |   | $                  | 39,463  |   |   | $      | (198,774 | ) |   | $ | 8,771 |   |
|                                                                       |   |                                   |    |   |        |   |    |         |   |   |                     |   |   |               |    |   |   |   |   |   |   |   |   |   |
| Shares issued for services (Note 13(c)(i))                                 |   |                                   | 162     |   |        |   | 351     |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 351 |   |
| Units issued for cash and related compensation warrants (Note 13(c)(ii))   |   |                                   | 10,202  |   |        |   | 14,885  |         |   |   | –                  |   |   |               | 3,247   |   |   |   | – |   |   |   | 18,132 |   |
| Shares issued for cash and related compensation warrants (Note 13(c)(iii)) |   |                                   | 5,000   |   |        |   | 6,143   |         |   |   | –                  |   |   |               | 104     |   |   |   | – |   |   |   | 6,247 |   |
| Warrants issued for services (Note 13(c)(iv))                              |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 2,907   |   |   |   | – |   |   |   | 2,907 |   |
| Warrants exercised                                                         |   |                                   | 818     |   |        |   | 1,463   |         |   |   | (58                      | )      |   |               | (1      | )      |   |   | – |   |   |   | 1,404 |   |
| Conversion of debentures                                                   |   |                                   | 471     |   |        |   | 819     |         |   |   | –                  |   |   |               | 1,686   |   |   |   | – |   |   |   | 2,505 |   |
| Stock-based compensation                                                   |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 835     |   |   |   | – |   |   |   | 835 |   |
| Net income and comprehensive income                                        |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | – |   |   |   | 1,202 |   |   |   | 1,202 |   |
| Balance, December 31, 2008                                                 |   |                                   | 55,715  |   |        |   | 189,451 |         |   |   | 2,234                    |   |   |               | 48,241  |   |   |   | (197,572 | ) |   |   | 42,354 |   |
|                                                                       |   |                                   |    |   |        |   |    |         |   |   |                     |   |   |               |    |   |   |   |   |   |   |   |   |   |
| Cumulative effect of change in accounting principle (Note 4(t))            |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | (6,939  | )      |   |   | (1,531 | ) |   |   | (8,470 | ) |
| Shares issued for services (Note 13(b)(ii and iii))                        |   |                                   | 1,293   |   |        |   | 1,553   |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 1,553 |   |
| Shares issued in settlement of interest (Note 11(b) and Note 13(b)(iii))   |   |                                   | 611     |   |        |   | 772     |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 772 |   |
| Warrants issued for services (Note 11(a) and Note 13(b)(ii and iii))       |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 961     |   |   |   | – |   |   |   | 961 |   |
| Warrants exercised (Note 13(b)(i))                                         |   |                                   | 1,903   |   |        |   | 1,416   |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 1,416 |   |
| Shares issued for cash and related compensation warrants (Note 13(b)(iv))  |   |                                   | 6,528   |   |        |   | 9,577   |         |   |   | –                  |   |   |               | 294     |   |   |   | – |   |   |   | 9,871 |   |
| Expiration of note warrants                                                |   |                                   | – |   |        |   | – |         |   |   | (2,234                   | )      |   |               | 2,234   |   |   |   | – |   |   |   | – |   |
| Stock-based compensation                                                   |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 764     |   |   |   | – |   |   |   | 764 |   |
| Net loss and comprehensive loss                                            |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | – |   |   |   | (61,650 | ) |   |   | (61,650 | ) |
| Balance, December 31, 2009                                                 |   |                                   | 66,050  |   |        |   | 202,769 |         |   |   | –                  |   |   |               | 45,555  |   |   |   | (260,753 | ) |   |   | (12,429 | ) |
|                                                                       |   |                                   |    |   |        |   |    |         |   |   |                     |   |   |               |    |   |   |   |   |   |   |   |   |   |
| Shares issued for services (Note 13(a)(i and iii))                         |   |                                   | 2,465   |   |        |   | 3,378   |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 3,378 |   |
| Warrants issued for services (Note 10(b) and Note 13(a)(iii))              |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 149     |   |   |   | – |   |   |   | 149 |   |
| Options exercised                                                          |   |                                   | 569     |   |        |   | 554     |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 554 |   |
| Warrants exercised (Note 13(a)(ii))                                        |   |                                   | 2,209   |   |        |   | 2,221   |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 2,221 |   |
| Shares issued for cash (Notes 1 and 13(a)(iv))                             |   |                                   | 15,625  |   |        |   | 24,497  |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 24,497 |   |
| Shares cancelled (Notes 1 and 13(a)(iv))                                   |   |                                   | (15,625 | )      |        |   | (24,497 | )            |   |   | –                  |   |   |               | 5,121   |   |   |   | – |   |   |   | (19,376 | ) |
| Shares and options issued for acquisition of Linear (Notes 1 and 13(a)(v)) |   |                                   | 60,523  |   |        |   | 75,049  |         |   |   | –                  |   |   |               | 1,844   |   |   |   | – |   |   |   | 76,893 |   |
| Shares issued for cash and related compensation warrants (Note 13(a)(iv))  |   |                                   | 50,609  |   |        |   | 65,754  |         |   |   | –                  |   |   |               | – |   |   |   | – |   |   |   | 65,754 |   |
| Stock-based compensation                                                   |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | 1,152   |   |   |   | – |   |   |   | 1,152 |   |
| Net loss and comprehensive loss                                            |   |                                   | – |   |        |   | – |         |   |   | –                  |   |   |               | – |   |   |   | (66,962 | ) |   |   | (66,962 | ) |
| Balance, December 31, 2010                                                 |   |                                   | 182,425 |   |        | $      | 349,725 |         |   | $      | –                  |   |   | $                  | 53,821  |   |   | $      | (327,715 | ) |   | $ | 75,831 |   |

----

|                                                                                                |   | Year Ended December 31,        |    |
|-----------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                                |   | 2010                           |    |   | 2009 |   |   | 2008 |   |
|                                                                                                |   | (In thousands of U.S. dollars) |    |
| Operating Activities                                                                                |   |                           |    |   |   |   |   |   |   |
| Net (loss) income for the year                                                                      |   | $                              | (66,962 | ) |   | $ | (61,650 | ) |   | $ | 1,202 |   |
| Items not affecting cash:                                                                           |   |                           |    |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                       |   |                           | 13,672  |   |   |   | 6,978 |   |   |   | 100 |   |
| Amortization of deferred financing costs                                                            |   |                           | 351     |   |   |   | 87 |   |   |   | 160 |   |
| Stock-based compensation                                                                            |   |                           | 1,152   |   |   |   | 764 |   |   |   | 835 |   |
| Shares and warrants issued for services and payment of interest                                     |   |                           | 2,516   |   |   |   | 4,020 |   |   |   | – |   |
| Accretion expense – accrued site closure costs                                                |   |                           | 646     |   |   |   | 369 |   |   |   | – |   |
| Accretion expense – amortization of debt discount                                             |   |                           | 6,447   |   |   |   | 2,719 |   |   |   | – |   |
| Accretion expense – convertible debentures                                                    |   |                           | 524     |   |   |   | 1,433 |   |   |   | 4,382 |   |
| Interest paid on convertible debentures                                                             |   |                           | (1,158  | ) |   |   | (567 | ) |   |   | (1,016 | ) |
| Write-down of exploration property                                                                  |   |                           | 2,264   |   |   |   | – |   |   |   | – |   |
| Non-cash losses on derivative instruments                                                           |   |                           | 34,959  |   |   |   | 37,972 |   |   |   | 1,549 |   |
| Net change in value of equity-linked financial instruments                                          |   |                           | 7,958   |   |   |   | 10,720 |   |   |   | – |   |
| Unrealized foreign exchange loss and other                                                          |   |                           | 1,026   |   |   |   | (1,138 | ) |   |   | 1,283 |   |
| Deferred income taxes                                                                               |   |                           | (1,532  | ) |   |   | (73 | ) |   |   | (2,380 | ) |
| Net change in non-cash operating working capital items (Note 23)                                    |   |                           | 2,202   |   |   |   | (1,611 | ) |   |   | (1,634 | ) |
| Net payments on early settlement of derivative instruments                                          |   |                           | (72,379 | ) |   |   | – |   |   |   | – |   |
| Deferred revenue from sale of gold stream                                                           |   |                           | 56,300  |   |   |   | – |   |   |   | – |   |
| Equity investment in Montana Tunnels joint venture                                                  |   |                           | 589     |   |   |   | 3,236 |   |   |   | (10,326 | ) |
| Earnings distribution from Montana Tunnels joint venture                                            |   |                           | – |   |   |   | 132 |   |   |   | 8,555 |   |
| Net cash (used in) provided by operating activities                                                 |   |                           | (11,425 | ) |   |   | 3,391 |   |   |   | 2,710 |   |
|                                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Investing Activities                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment expenditures                                                          |   |                           | (22,911 | ) |   |   | (55,591 | ) |   |   | (29,826 | ) |
| Net cash acquired in the Linear acquisition via the issuance of common shares, warrants and options |   |                           | 15,426  |   |   |   | – |   |   |   | – |   |
| Restricted cash and certificates of deposit, and other long-term assets                             |   |                           | (12,324 | ) |   |   | (2,395 | ) |   |   | (12,054 | ) |
| Net cash used in investing activities                                                               |   |                           | (19,809 | ) |   |   | (57,986 | ) |   |   | (41,880 | ) |
|                                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Financing Activities                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Proceeds on issuance of shares to Linear                                                            |   |                           | 24,497  |   |   |   | – |   |   |   | – |   |
| Proceeds on issuance of other shares and warrants                                                   |   |                           | 69,551  |   |   |   | 10,739 |   |   |   | 26,263 |   |
| Proceeds from exercise of warrants and options                                                      |   |                           | 2,775   |   |   |   | 1,416 |   |   |   | 1,404 |   |
| Proceeds from debt                                                                                  |   |                           | 14,711  |   |   |   | 66,534 |   |   |   | 21,105 |   |
| Repayments of debt                                                                                  |   |                           | (73,578 | ) |   |   | (23,643 | ) |   |   | (9,694 | ) |
| Net cash provided by financing activities                                                           |   |                           | 37,956  |   |   |   | 55,046 |   |   |   | 39,078 |   |
|                                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                             |   |                           | (297    | ) |   |   | (451 | ) |   |   | (1,242 | ) |
|                                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash                                                                     |   |                           | 6,425   |   |   |   | – |   |   |   | (1,334 | ) |
| Cash, beginning of year                                                                             |   |                           | – |   |   |   | – |   |   |   | 1,334 |   |
| Cash, end of year                                                                                   |   | $                              | 6,425   |   |   | $ | – |   |   | $ | – |   |
|                                                                                                |   |                           |    |   |   |   |   |   |   |   |   |   |
| Supplemental cash flow information                                                                  |   |                           |    |   |   |   |   |   |   |   |   |   |
| Interest paid                                                                                       |   | $                              | 5,743   |   |   | $ | 5,555 |   |   | $ | 1,504 |   |
| Income taxes paid                                                                                   |   | $                              | – |   |   | $ | 35 |   |   | $ | 95 |   |

----

| 1. | BUSINESS COMBINATION WITH LINEAR GOLD |
|----|---------------------------------------|

| Purchase of Linear shares (60,523,014 Brigus common shares) |   | $      | 75,049 |   |
|-------------------------------------------------------------|--------|--------|--------|--------|
| Fair value of options and warrants issued                   |   |   | 7,422  |   |
| Purchase consideration                                      |   | $      | 82,471 |   |

----

| Net working capital acquired (including cash of $15.4 million)                            |   | $      | 10,749  |   |
|-------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Equity investment in Brigus                                                               |   |   | 19,375  |   |
| Property, plant and equipment (including mineral exploration properties of $60.6 million) |   |   | 62,892  |   |
| Other assets                                                                              |   |   | 35      |   |
| Future income tax liability                                                               |   |   | (10,580 | )      |
| Net identifiable assets                                                                   |   | $      | 82,471  |   |

|                                 |   | Year ended December 31,(unaudited) |    |
|--------------------------------------|--------|------------------------------------|---------|
|                                 |   | 2010                               |    |   | 2009 |   |
| Revenue from the sale of gold        |   | $                                  | 85,935  |   |   | $ | 47,008 |   |
| Net loss                             |   |                               | (65,289 | ) |   |   | (61,678 | ) |
|                                 |   |                               |    |   |   |   |   |   |
| Basic and diluted net loss per share |   |                               | (0.46   | ) |   |   | (0.51 | ) |

| 2. | CONTINUING OPERATIONS |
|----|-----------------------|

----

| 3. | NATURE OF OPERATIONS |
|----|----------------------|

| 4. | SIGNIFICANT ACCOUNTING POLICIES |
|----|---------------------------------|

| (a) | Principles of consolidation |
|-----|-----------------------------|

----

| (b) | Measurement uncertainties |
|-----|---------------------------|

| (c) | Foreign currency transactions and translation |
|-----|-----------------------------------------------|

| (d) | Cash |
|-----|------|

| (e) | Financial Instruments |
|-----|-----------------------|

| (f) | Investments |
|-----|-------------|

| (g) | Inventories |
|-----|-------------|

----

| (h) | Property, plant and equipment |
|-----|-------------------------------|

| (i) | Mineral rights |
|-----|----------------|

| (j) | Stripping costs |
|-----|-----------------|

| (k) | Exploration expenditures |
|-----|--------------------------|

----

| (l) | Property evaluations |
|-----|----------------------|

| (m) | Derivative instruments |
|-----|------------------------|

| (n) | Deferred Revenue |
|-----|------------------|

| (o) | Reclamation and closure costs |
|-----|-------------------------------|

| (p) | Revenue recognition |
|-----|---------------------|

----

| (q) | Stock incentive plans |
|-----|-----------------------|

| (r) | Income taxes |
|-----|--------------|

| (s) | Income (loss) per share |
|-----|-------------------------|

----

| (t) | Equity-linked financial instruments |
|-----|-------------------------------------|

| (u) | Adoption of recently issued accounting pronouncements |
|-----|-------------------------------------------------------|

----

|   | Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2 | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (v) | Future Guidance |
|-----|-----------------|

| 5. | RESTRICTED CASH AND RESTRICTED CERTIFICATES OF DEPOSIT |
|----|--------------------------------------------------------|

|                                            |   | 2010   |   |   | 2009   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Restricted cash, current                        |   |   |   |   |   |   |
| Project Facility (a)                            |   | $      | 5,194  |   |   | $      | 2,108 |   |
| Unexpended flow-through funds (b)               |   |   | 11,185 |   |   |   | 4,623 |   |
|                                            |   | $      | 16,379 |   |   | $      | 6,731 |   |
| Restricted certificates of deposit, non-current |   |   |   |   |   |   |   |   |
| Site closure obligations – Black Fox (c)  |   | $      | 18,028 |   |   | $      | 14,805 |   |

| (a) | Project Facility |
|-----|------------------|

| (b) | Proceeds from flow-through share offering |
|-----|-------------------------------------------|

| (c) | Site closure obligation – Black Fox |
|-----|-------------------------------------------|

----

| 6. | DERIVATIVE INSTRUMENTS |
|----|------------------------|

|                               |   | December 31, 2010 |    |   | December 31, 2009 |   |
|------------------------------------|--------|-----------------------------|---------|--------|-----------------------------|--------|
|                               |   | CostBasis                   |    |   | UnrealizedGain (Loss)  |   |   | FairValue |   |   | CostBasis |   |   | UnrealizedGain (Loss) |   |   | FairValue |   |
| Assets                             |   |                        |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Canadian dollar purchase contracts |   | $                           | – |   |                        | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | 6,805 |   |   | $ | 6,805 |   |
| Gold forward purchase contracts    |   |                        | – |   |                        |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Less:  Current portion   |   |                        | – |   |                        |   | – |   |   |   | – |   |   |   | – |   |   |   | (1,961 | ) |   |   | (1,961 | ) |
| Long-term portion                  |   | $                           | – |   |                        | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | 4,844 |   |   | $ | 4,844 |   |
|                               |   |                        |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                        |   |                        |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gold forward sales contracts       |   | $                           | – |   |                        | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | (44,225 | ) |   | $ | (44,225 | ) |
| Less:  Current portion   |   |                        | – |   |                        |   | – |   |   |   | – |   |   |   | – |   |   |   | 12,571 |   |   |   | 12,571 |   |
| Long-term portion                  |   | $                           | – |   |                        | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | (31,654 | ) |   | $ | (31,654 | ) |

----

|                                                          |   | Asset Derivatives      |   |   | Liability Derivatives  |    |
|--------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|---------|
|                                                               |   | December 31, 2010 |   |   | December 31, 2009 |    |   | December 31, 2010 |   |   | December 31, 2009 |   |
|                                                               |   | BalanceSheetLocation        |   |   | FairValue                   |    |   | BalanceSheetLocation |   |   | FairValue |   |   | BalanceSheetLocation |   |   | FairValue |   |   | BalanceSheetLocation |   |   | FairValue |   |
| Derivatives not designated as hedging instruments under ASC 815-20 |   |                        |   |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gold forward contracts(1)                                          |   | Derivative instruments      |   |   | $                           | 22,193  |   |   | n/a |   |   | $ | – |   |   | Derivative instruments |   |   | $ | 22,193 |   |   | Derivative instruments |   |   | $ | 44,225 |   |
| Canadian currency forward contracts                                |   | n/a                         |   |   |                        | – |   |   | Derivative instruments |   |   |   | 6,805 |   |   | n/a |   |   |   | – |   |   | n/a |   |   |   | – |   |
| Total derivatives                                                  |   |                        |   |   |                        | $       | 22,193 |   |   |   |   |   |   | $ | 6,805 |   |   |   |   |   |   | $ | 22,193 |   |   |   |   |   |   | $ | 44,225 |   |

| 7. | INVENTORIES |
|----|-------------|

|                                       |   | 2010   |   |   | 2009   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current portion of inventory               |   |   |   |   |   |   |
| Doré inventory                        |   | $      | 3,427  |   |   | $      | 3,186 |   |
| In-circuit gold inventory                  |   |   | 1,588  |   |   |   | 1,561 |   |
| Stockpiled ore inventory                   |   |   | 3,437  |   |   |   | 2,633 |   |
| Materials and supplies                     |   |   | 1,475  |   |   |   | 809 |   |
|                                       |   |   | 9,927  |   |   |   | 8,189 |   |
| Long-term – stockpiled ore inventory |   |   | 3,552  |   |   |   | – |   |
|                                       |   | $      | 13,479 |   |   | $      | 8,189 |   |

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

|                                    |   | December 31,2010 |   |   | December 31,2009 |   |
|-----------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|
| Notes receivable (current) (a)          |   | $                     | 3,440  |   |                  | $      | – |   |
| Auction rate securities (long-term) (b) |   |                  | 1,036  |   |                  |   | 1,036 |   |
|                                    |   | $                     | 4,476  |   |                  | $      | 1,036 |   |

----

| (a) | Notes Receivable |
|-----|------------------|

| (b) | Auction Rate Securities |
|-----|-------------------------|

| 9. | PROPERTY, PLANT AND EQUIPMENT |
|----|-------------------------------|

|                                                          |   | 2010   |    |   | 2009                    |   |
|---------------------------------------------------------------|--------|--------|---------|--------|-------------------------|--------|
|                                                          |   | Cost   |    |   | AccumulatedDepreciation |   |   | Net BookValue |   |   | Cost |   |   | AccumulatedDepreciation |   |   | Net BookValue |   |
| Mine assets                                                   |   |   |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Building, plant and equipment                                 |   | $      | 98,817  |   |                    | $      | 14,745 |   |   | $ | 84,072 |   |   | $ | 79,345 |   |   | $ | 5,137 |   |   | $ | 74,208 |   |
| Mining properties and development costs                       |   |   | 52,401  |   |                    |   | 5,334 |   |   |   | 47,067 |   |   |   | 35,606 |   |   |   | 1,961 |   |   |   | 33,645 |   |
|                                                          |   |   | 151,218 |   |                    |   | 20,079 |   |   |   | 131,139 |   |   |   | 114,951 |   |   |   | 7,098 |   |   |   | 107,853 |   |
| Mineral rights                                                |   |   | 68,348  |   |                    |   | 1,064 |   |   |   | 67,284 |   |   |   | 8,715 |   |   |   | 397 |   |   |   | 8,318 |   |
| Total property, plant and equipment                           |   | $      | 219,566 |   |                    | $      | 21,143 |   |   | $ | 198,423 |   |   | $ | 123,666 |   |   | $ | 7,495 |   |   | $ | 116,171 |   |
| Leased assets included above in Building, plant and equipment |   | $      | 28,775  |   |                    | $      | 3,538 |   |   | $ | 25,237 |   |   | $ | 16,139 |   |   | $ | 615 |   |   | $ | 15,524 |   |

----

| 10. | DEFERRED REVENUE |
|-----|------------------|

| 11. | LONG-TERM DEBT |
|-----|----------------|

|                                    |   | December 31,2010 |    |   | December 31,2009 |   |
|-----------------------------------------|--------|-----------------------|---------|--------|-----------------------|--------|
| Black Fox Project Facility (a)          |   | $                     | 20,738  |   |                  | $      | 62,514 |   |
| Convertible debentures (b)              |   |                  | – |   |                  |   | 4,926 |   |
| Capital leases (c)                      |   |                  | 23,659  |   |                  |   | 15,320 |   |
| Notes payable and other (d)             |   |                  | 1,007   |   |                  |   | 1,009 |   |
| Total debt                              |   |                  | 45,404  |   |                  |   | 83,769 |   |
| Less: current portion of long-term debt |   |                  | (29,525 | )      |                  |   | (34,860 | ) |
| Total long-term debt                    |   | $                     | 15,879  |   |                  | $      | 48,909 |   |

----

|                                    |   | Black FoxProjectFacility |    |   | Capitalleases |   |    | Notespayableandother |   |   | Total   |   |
|-----------------------------------------|--------|-------------------------------|---------|--------|---------------|--------|---------|----------------------|--------|--------|---------|--------|
| 2011                                    |   | $                             | 22,000  |   |          | $      | 9,132   |                 |   | $      | 1,007   |   |   | $ | 32,139 |   |
| 2012                                    |   |                          | – |   |          |   | 8,032   |                 |   |   | – |   |   |   | 8,032 |   |
| 2013                                    |   |                          | – |   |          |   | 6,934   |                 |   |   | – |   |   |   | 6,934 |   |
| 2014                                    |   |                          | – |   |          |   | 2,232   |                 |   |   | – |   |   |   | 2,232 |   |
| Total payments due under long-term debt |   |                          | 22,000  |   |          |   | 26,330  |                 |   |   | 1,007   |   |   |   | 49,337 |   |
| Less: imputed interest                  |   |                          | – |   |          |   | (2,671  | )                    |   |   | – |   |   |   | (2,671 | ) |
| Less: unamortized debt discount         |   |                          | (1,262  | )      |          |   | – |                 |   |   | – |   |   |   | (1,262 | ) |
| Total debt                              |   |                          | 20,738  |   |          |   | 23,659  |                 |   |   | 1,007   |   |   |   | 45,404 |   |
| Less: current portion of long-term debt |   |                          | (20,738 | )      |          |   | (7,780  | )                    |   |   | (1,007  | )      |   |   | (29,525 | ) |
| Total long-term debt                    |   | $                             | – |   |          | $      | 15,879  |                 |   | $      | – |   |   | $ | 15,879 |   |

| (a) | Black Fox Project Facility |
|-----|----------------------------|

|   | (i) | Financing agreement |
|--------|-----|---------------------|

----

|   | (ii) | Derivative program in connection with the Project Facility |
|--------|------|------------------------------------------------------------|

|   | (iii) | Additional debt transaction costs resulting from the Project Facility |
|--------|-------|-----------------------------------------------------------------------|

| (b) | Convertible debentures |
|-----|------------------------|

----

| (c) | Notes payable and other debt |
|-----|------------------------------|

| 12. | ACCRUED SITE CLOSURE COSTS |
|-----|----------------------------|

| Balance, December 31, 2007                           |   | $      | 447   |   |
|------------------------------------------------------|--------|--------|-------|--------|
| Accretion                                            |   |   | 23    |   |
| Acquisition of Black Fox mill                        |   |   | 1,210 |   |
| Additions, changes in estimates and foreign exchange |   |   | (282  | )      |
| Balance, December 31, 2008                           |   |   | 1,398 |   |
| Additions, changes in estimates and foreign exchange |   |   | 3,578 |   |
| Accretion                                            |   |   | 369   |   |
| Balance, December 31, 2009                           |   |   | 5,345 |   |
| Changes in estimates and foreign exchange            |   |   | (684  | )      |
| Accretion                                            |   |   | 646   |   |
| Balance, December 31, 2010                           |   | $      | 5,307 |   |

| 13. | SHAREHOLDERS’ EQUITY |
|-----|----------------------------|

| (a) | Shares issued in 2010 |
|-----|-----------------------|

----

| (b) | Shares issued in 2009 |
|-----|-----------------------|

----

| (c) | Shares issued in 2008 |
|-----|-----------------------|

----

----

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

|                                                        |   | Number of Warrantsand Shares Issuableupon Exercise |       |
|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|
| Balance, December 31, 2007                                  |   |                                                                        | 7,839,329  |   |
| Warrants issued                                             |   |                                                                        | 16,686,537 |   |
| Warrants exercised                                          |   |                                                                        | (815,334   | ) |
| Warrants expired                                            |   |                                                                        | (279,090   | ) |
| Balance, December 31, 2008                                  |   |                                                                        | 23,431,442 |   |
| Warrants issued                                             |   |                                                                        | 9,742,668  |   |
| Warrants exercised                                          |   |                                                                        | (1,903,009 | ) |
| Warrants expired                                            |   |                                                                        | (2,760,709 | ) |
| Balance, December 31, 2009                                  |   |                                                                        | 28,510,392 |   |
| Warrants issued in connection with the Arrangement (Note 1) |   |                                                                        | 11,191,677 |   |
| Other warrants issued                                       |   |                                                                        | 3,509,191  |   |
| Warrants exercised                                          |   |                                                                        | (2,208,750 | ) |
| Warrants expired                                            |   |                                                                        | (255,000   | ) |
| Balance, December 31, 2010                                  |   |                                                                        | 40,747,510 |   |

| Date Issued |   |   |   | Number of Warrantsand Shares Issuableupon Exercise |       |   | Exercise Price |                | Expiry Date |   |         |
|------------------|--------|--------|--------|-----------------------------------------------------------------------------|------------|--------|---------------------|---------------------|------------------|--------|--------------|
|             |   |   |   |                                                                        |       |   | Exercisable in US$  |                |             |   |         |
| Feb 26, 2010     |   |   |   |                                                                        | 536,250    |   |                |                | 2.00             |   | Feb 23, 2011 |   | (4) |
|             |   |   |   |                                                                        |       |   |                | Exercisable in Cdn$ |             |   |         |   |
| Feb 20, 2009     |   |   |   |                                                                        | 579,475    |   |                |                | 1.024            |   | Feb 20, 2011 |   | (5) |
| Jun 25, 2010     |   | (1)    |   |                                                                        | 3,178,769  |   |                |                | 1.096            |   | Mar 19, 2011 |   | (5) |
| Jul 15, 2009     |   |   |   |                                                                        | 391,665    |   |                |                | 0.960            |   | Jul 15, 2011 |   |   |
| Jul 24, 2008     |   |   |   |                                                                        | 5,100,813  |   |                |                | 2.600            |   | Jul 24, 2011 |   |   |
| Jun 25, 2010     |   | (1)    |   |                                                                        | 891,316    |   |                |                | 1.571            |   | Nov 19, 2011 |   |   |
| Jul 24, 2008     |   | (2)    |   |                                                                        | 612,098    |   |                |                | 2.400            |   | Jul 24, 2012 |   |   |
| Jul 29, 2010     |   |   |   |                                                                        | 700,000    |   |                |                | 1.400            |   | Jul 29, 2012 |   |   |
| Oct 19, 2010     |   | (3)    |   |                                                                        | 2,272,941  |   |                |                | 1.500            |   | Oct 19, 2012 |   |   |
| Dec 10, 2008     |   |   |   |                                                                        | 10,653,563 |   |                |                | 0.884            |   | Dec 10, 2012 |   |   |
| Feb 20, 2009     |   |   |   |                                                                        | 8,709,028  |   |                |                | 1.008            |   | Feb 20, 2013 |   |   |
| Jun 25, 2010     |   | (1)    |   |                                                                        | 7,121,592  |   |                |                | 2.192            |   | Nov 19, 2014 |   |   |
|             |   |   |   |                                                                        | 40,211,260 |   |                |                |             |   |         |   |   |
|             |   |   |   |                                                                        | 40,747,510 |   |                |                |             |   |         |   |   |

| (1) | Issued in connection with the Arrangement (Note 1) |
|-----|----------------------------------------------------|

| (2) | Upon exercise of each of these warrants, the warrant holder is entitled to one-half of one warrant, with each whole warrant exercisable into one common share of the Company at Cdn$3.12 expiring on July 24, 2012. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Upon exercise of each of these warrants, the warrant holder is entitled to one-quarter of one warrant, with each whole warrant exercisable into one common share of the Company at Cdn$2.19 expiring on November 19, 2014. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | On February 23, 2011, all of these warrants expired. |
|-----|-----------------------------------------------------------|

| (5) | These warrants were exercised prior to expiration. |
|-----|----------------------------------------------------|

----

| (e) | Stock options |
|-----|---------------|

|                                                        |   | Number ofCommonShares |       |   | WeightedAverageExercisePrice |   |
|-------------------------------------------------------------|--------|----------------------------|------------|--------|------------------------------|--------|
| Balance, December 31, 2007                                  |   |                       | 1,556,876  |   |                         |   | 3.22 |   |
| Options granted                                             |   |                       | 557,184    |   |                         |   | 2.58 |   |
| Options forfeited                                           |   |                       | (43,733    | )      |                         |   | 2.44 |   |
| Balance, December 31, 2008                                  |   |                       | 2,070,327  |   |                         |   | 3.06 |   |
| Options granted                                             |   |                       | 932,952    |   |                         |   | 1.34 |   |
| Options forfeited                                           |   |                       | (104,686   | )      |                         |   | 2.08 |   |
| Balance, December 31, 2009                                  |   |                       | 2,898,593  |   |                         |   | 2.55 |   |
| Options granted in connection with the Arrangement (Note 1) |   |                       | 3,448,746  |   |                         |   | 1.25 |   |
| Other options granted                                       |   |                       | 4,953,163  |   |                         |   | 1.27 |   |
| Options exercised                                           |   |                       | (568,969   | )      |                         |   | 1.00 |   |
| Options forfeited                                           |   |                       | (362,605   | )      |                         |   | 1.90 |   |
| Balance, December 31, 2010                                  |   |                       | 10,368,928 |   |                         | $      | 1.65 |   |

|                              |   | Options Outstanding |       |   | Options Exercisable                                           |   |
|-----------------------------------|--------|--------------------------|------------|--------|--------------------------------------------------------------------|--------|
| Range of ExercisePrices |   | NumberOutstanding        |       |   | Weighted AverageRemainingContractual Life(in years) |   |   | Weighted AverageExercisePrice |   |   | NumberExercisable |   |   | WeightedAverageExercisePrice |   |
| $0.50 to $1.00                    |   |                     | 1,210,239  |   |                                                               |   | 3.0 |   |   | $ | 0.77 |   |   |   | 1,210,239 |   |   | $ | 0.77 |   |
| $1.00 to $1.50                    |   |                     | 4,806,540  |   |                                                               |   | 4.4 |   |   | $ | 1.16 |   |   |   | 1,123,568 |   |   | $ | 1.14 |   |
| $1.50 to $2.00                    |   |                     | 1,755,342  |   |                                                               |   | 4.7 |   |   | $ | 1.70 |   |   |   | 354,337 |   |   | $ | 1.71 |   |
| $2.00 to $2.50                    |   |                     | 1,612,069  |   |                                                               |   | 2.4 |   |   | $ | 2.23 |   |   |   | 1,612,069 |   |   | $ | 2.23 |   |
| $2.50+                            |   |                     | 984,738    |   |                                                               |   | 2.5 |   |   | $ | 4.09 |   |   |   | 984,738 |   |   | $ | 4.09 |   |
|                              |   |                     | 10,368,928 |   |                                                               |   | 3.8 |   |   | $ | 1.65 |   |   |   | 5,284,951 |   |   | $ | 1.98 |   |

----

| (f) | Stock-based compensation |
|-----|--------------------------|

|                    |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Risk-free interest rate |   |   | 1.8    | %      |   |   | 1.9    | %      |   |   | 2.9 | % |
| Dividend yield          |   |   | 0      | %      |   |   | 0      | %      |   |   | 0 | % |
| Volatility              |   |   | 74     | %      |   |   | 77     | %      |   |   | 67 | % |
| Expected life in years  |   |   | 3.3    |   |   |   | 6.0    |   |   |   | 6.0 |   |

| 14. | MONTANA TUNNELS JOINT VENTURE |
|-----|-------------------------------|

|                                             |   | December 31,2009 |    |
|--------------------------------------------------|--------|------------------|---------|
| Cash and cash equivalents                        |   | $                | 256     |   |
| Other non-cash current assets                    |   |             | 1,808   |   |
| Current assets                                   |   |             | 2,064   |   |
| Property, plant and equipment                    |   |             | 10,264  |   |
| Restricted certificates of deposit               |   |             | 16,374  |   |
| Total assets                                     |   |             | 28,702  |   |
|                                             |   |             |    |   |
| Current liabilities                              |   |             | 2,044   |   |
| Accrued site closure costs                       |   |             | 19,778  |   |
| Other long-term liabilities                      |   |             | – |   |
| Total liabilities                                |   |             | 21,822  |   |
|                                             |   |             |    |   |
| Total equity                                     |   |             | 6,880   |   |
| Less: Elkhorn equity interest in Montana Tunnels |   |             | (3,440  | ) |
| Brigus equity investment in Montana Tunnels      |   | $                | 3,440   |   |

----

|                                                 |   | Year endedDecember 31,2010 |    |   | Year endedDecember 31,2009 |   |   | Year endedDecember 31,2008 |   |
|------------------------------------------------------|--------|--------------------------------------|---------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
| Revenue from sale of minerals                        |   | $                                    | – |   |                                 | $      | 20,422 |                                 |   | $ | 92,774 |   |
| Direct operating costs                               |   |                                 | – |   |                                 |   | 23,576 |                                 |   |   | 67,664 |   |
| Depreciation and amortization                        |   |                                 | – |   |                                 |   | 1,282  |                                 |   |   | 2,540 |   |
| Impairment                                           |   |                                 | 701     |   |                                 |   | 558    |                                 |   |   | – |   |
| Accretion expense – accrued site closure costs |   |                                 | – |   |                                 |   | 1,448  |                                 |   |   | 1,436 |   |
|                                                 |   |                                 | 701     |   |                                 |   | 26,864 |                                 |   |   | 71,640 |   |
| Operating (loss) income                              |   |                                 | (701    | )      |                                 |   | (6,442 | )                                    |   |   | 21,134 |   |
| Interest income                                      |   |                                 | – |   |                                 |   | 78     |                                 |   |   | 286 |   |
| Interest expense                                     |   |                                 | – |   |                                 |   | (108   | )                                    |   |   | (768 | ) |
| Net (loss) income                                    |   | $                                    | (701    | )      |                                 | $      | (6,472 | )                                    |   | $ | 20,652 |   |
|                                                 |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |
| Less: Elkhorn equity share of net (loss) income      |   |                                 | – |   |                                 |   | (3,236 | )                                    |   |   | 10,326 |   |
| Brigus equity (loss) income in Montana Tunnels       |   | $                                    | (701    | )      |                                 | $      | (3,236 | )                                    |   |   | 10,326 |   |

| 15. | HUIZOPA SALES AGREEMENT |
|-----|-------------------------|

| 16. | EMPLOYEE BENEFIT PLAN |
|-----|-----------------------|

----

| 17. | INTEREST EXPENSE |
|-----|------------------|

|                                     |   | 2010   |   |   | 2009   |   |    | 2008   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Accretion on convertible debentures      |   | $      | 524    |   |   | $      | 1,433   |   |   | $ | 4,382 |   |
| Amortization of debt discount            |   |   | 6,447  |   |   |   | 2,719   |   |   |   | – |   |
| Amortization of deferred financing costs |   |   | 351    |   |   |   | 87      |   |   |   | 160 |   |
| Capital leases and other                 |   |   | 4,584  |   |   |   | 3,806   |   |   |   | 326 |   |
| Capitalized interest                     |   |   | (436   | )      |   |   | – |   |   |   | – |   |
|                                     |   | $      | 11,470 |   |   | $      | 8,045   |   |   | $ | 4,868 |   |

| 18. | INCOME TAXES |
|-----|--------------|

|                                                                |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|---------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Statutory tax rate                                                  |   |   | 28.98   | %      |   |   | 30.72   | %      |   |   | 30.67 | % |
| Provision for (recovery of) income taxes computed at standard rates |   | $      | (19,853 | )      |   | $      | (18,961 | )      |   | $ | (361 | ) |
| Differences due to foreign tax rates                                |   |   | 1,649   |   |   |   | (330    | )      |   |   | 1,026 |   |
| Prior year over/under accrual                                       |   |   | 5,315   |   |   |   | (3,372  | )      |   |   | 3,737 |   |
| Change in valuation allowance                                       |   |   | (3,867  | )      |   |   | 29,340  |   |   |   | (14,155 | ) |
| Sale of previously unrecognized tax attributes                      |   |   | 16,605  |   |   |   | – |   |   |   | – |   |
| Permanent differences and other                                     |   |   | (1,381  | )      |   |   | (6,750  | )      |   |   | 7,373 |   |
|                                                                |   | $      | (1,532  | )      |   | $      | (73     | )      |   | $ | (2,380 | ) |

|                                       |   | 2010   |    |   | 2009   |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|
| Deferred Tax Assets                        |   |   |    |   |   |   |
| Net operating losses carried forward       |   | $      | 50,458  |   |   | $      | 47,982 |   |
| Deductible temporary differences and other |   |   | 21,531  |   |   |   | 25,995 |   |
| Exploration and development expenses       |   |   | 7,754   |   |   |   | 4,723 |   |
| Property, plant and equipment              |   |   | 2,343   |   |   |   | 83 |   |
| Accrued site closure costs                 |   |   | 1,788   |   |   |   | 4,986 |   |
|                                       |   |   | 83,874  |   |   |   | 83,769 |   |
| Deferred Tax Liabilities                   |   |   |    |   |   |   |   |   |
| Capital lease obligations                  |   |   | 949     |   |   |   | 1,004 |   |
| Exploration and development expenses       |   |   | 15,096  |   |   |   | – |   |
| Other                                      |   |   | 2,379   |   |   |   | 1,996 |   |
|                                       |   |   | 18,424  |   |   |   | 3,000 |   |
| Less: Valuation allowance                  |   |   | (78,206 | )      |   |   | (82,073 | ) |
| Net future income tax liabilities          |   | $      | 12,756  |   |   | $      | 1,304 |   |

----

|   |   | Canada |    |   | Mexico |   |    | DominicanRepublic |   |   | United Statesof America |   |   | Total  |    |
|--------|--------|--------|---------|--------|--------|--------|---------|-------------------|--------|--------|-----------------------------------|--------|--------|--------|---------|
| 2013   |   | $      | – |   |   | $      | 2,641   |              |   | $      | –                           |   |   | $      | – |   |   | $ | 2,641 |   |
| 2014   |   |   | 4,263   |   |   |   | 2,848   |              |   |   | 126                               |   |   |   | – |   |   |   | 7,237 |   |
| 2015   |   |   | 7,576   |   |   |   | 1,989   |              |   |   | 138                               |   |   |   | – |   |   |   | 9,703 |   |
| 2016   |   |   | – |   |   |   | 4,216   |              |   |   | –                           |   |   |   | – |   |   |   | 4,216 |   |
| 2017   |   |   | – |   |   |   | 6,022   |              |   |   | –                           |   |   |   | – |   |   |   | 6,022 |   |
| 2018   |   |   | – |   |   |   | 5,140   |              |   |   | –                           |   |   |   | 936     |   |   |   | 6,076 |   |
| 2019   |   |   | – |   |   |   | 4,194   |              |   |   | –                           |   |   |   | 4,897   |   |   |   | 9,091 |   |
| 2020   |   |   | – |   |   |   | 2,091   |              |   |   | –                           |   |   |   | – |   |   |   | 2,091 |   |
| 2021   |   |   | – |   |   |   | 282     |              |   |   | –                           |   |   |   | – |   |   |   | 282 |   |
| 2022   |   |   | – |   |   |   | – |              |   |   | –                           |   |   |   | 5,734   |   |   |   | 5,734 |   |
| 2023   |   |   | – |   |   |   | – |              |   |   | –                           |   |   |   | 4,583   |   |   |   | 4,583 |   |
| 2024   |   |   | – |   |   |   | – |              |   |   | –                           |   |   |   | 4,315   |   |   |   | 4,315 |   |
| 2025   |   |   | – |   |   |   | – |              |   |   | –                           |   |   |   | 10,721  |   |   |   | 10,721 |   |
| 2026   |   |   | 5,977   |   |   |   | – |              |   |   | –                           |   |   |   | 2,043   |   |   |   | 8,020 |   |
| 2027   |   |   | 5,608   |   |   |   | – |              |   |   | –                           |   |   |   | 289     |   |   |   | 5,897 |   |
| 2028   |   |   | 11,057  |   |   |   | – |              |   |   | –                           |   |   |   | 15      |   |   |   | 11,072 |   |
| 2029   |   |   | – |   |   |   | – |              |   |   | –                           |   |   |   | 748     |   |   |   | 748 |   |
| 2030   |   |   | 73,711  |   |   |   | – |              |   |   | –                           |   |   |   | 770     |   |   |   | 74,481 |   |
|   |   | $      | 108,192 |   |   | $      | 29,423  |              |   | $      | 264                               |   |   | $      | 35,051  |   |   | $ | 172,930 |   |

----

| 19. | EARNINGS (LOSS) PER SHARE |
|-----|---------------------------|

|                                                                                                                                                                                                         |   | 2010   |        |   | 2009   |   |       | 2008   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|------------|--------|--------|
| Net (loss) income                                                                                                                                                                                            |   | $      | (66,962     | )      |   | $      | (61,650    | )      |   | $ | 1,202 |   |
| Weighted average number of shares, basic                                                                                                                                                                     |   |   | 116,515,660 |   |   |   | 61,351,119 |   |   |   | 46,264,679 |   |
| Dilutive securities:                                                                                                                                                                                         |   |   |        |   |   |   |       |   |   |   |   |   |
| Options                                                                                                                                                                                                      |   |   | –     |   |   |   | –    |   |   |   | 62,364 |   |
| Warrants                                                                                                                                                                                                     |   |   | –     |   |   |   | –    |   |   |   | 6,707,764 |   |
| Weighted average number of shares, diluted                                                                                                                                                                   |   |   | 116,515,660 |   |   |   | 61,351,119 |   |   |   | 53,034,808 |   |
| Basic and diluted earnings (loss) per share                                                                                                                                                                  |   | $      | (0.57       | )      |   | $      | (1.00      | )      |   | $ | 0.02 |   |
|                                                                                                                                                                                                         |   |   |        |   |   |   |       |   |   |   |   |   |
| Options and warrants outstanding but not included in computation of diluted weighted average number of shares (“OWNI”) because the strike prices exceeded the average price of the common shares |   |   | 18,619,530  |   |   |   | 7,952,924  |   |   |   | 12,780,393 |   |
| Average exercise price of OWNI                                                                                                                                                                               |   | $      | 2.27        |   |   | $      | 2.47       |   |   | $ | 2.37 |   |
| Shares issuable for convertible debentures excluded from calculation of EPS because their effect would have been anti-dilutive                                                                               |   |   | –     |   |   |   | 2,145,000  |   |   |   | 3,719,050 |   |
| Average conversion price of anti-dilutive convertible securities                                                                                                                                             |   | $      | n/a         |   |   | $      | 2.00       |   |   | $ | 2.00 |   |

| 20. | FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
|-----|---------------------------------------------------------|

| (a) | Capital risk management |
|-----|-------------------------|

----

| (b) | The estimated fair values of the Company’s financial instruments were as follows: |
|-----|-----------------------------------------------------------------------------------------|

|                                  |   | December 31, |    |
|---------------------------------------|--------|-------------------|---------|
|                                  |   | 2010              |    |   | 2009 |   |
|                                  |   | CarryingAmount    |    |   | FairValue |   |   | CarryingAmount |   |   | FairValue |   |
| Derivative instruments - Assets       |   | $                 | – |   |   | $ | – |   |   | $ | 6,805 |   |   | $ | 6,805 |   |
| Restricted cash                       |   |              | 16,379  |   |   |   | 16,379 |   |   |   | 6,731 |   |   |   | 6,731 |   |
| Accounts receivable and other         |   |              | 3,379   |   |   |   | 3,379 |   |   |   | 1,690 |   |   |   | 1,690 |   |
| Investments                           |   |              | 4,476   |   |   |   | 4,600 |   |   |   | 1,036 |   |   |   | 1,121 |   |
|                                  |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable                      |   |              | 15,752  |   |   |   | 15,752 |   |   |   | 6,789 |   |   |   | 6,789 |   |
| Accrued liabilities                   |   |              | 5,334   |   |   |   | 5,334 |   |   |   | 2,129 |   |   |   | 2,129 |   |
| Derivative instruments - Liabilities  |   |              | – |   |   |   | – |   |   |   | 44,225 |   |   |   | 44,225 |   |
| Long-term debt                        |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current portion of long-term debt     |   |              | 29,525  |   |   |   | 30,787 |   |   |   | 34,860 |   |   |   | 38,361 |   |
| Non-current portion of long-term debt |   |              | 15,879  |   |   |   | 15,879 |   |   |   | 48,909 |   |   |   | 52,922 |   |
| Equity-linked financial instruments   |   |              | 42,742  |   |   |   | 42,742 |   |   |   | 27,318 |   |   |   | 27,318 |   |

| (c) | Market risk |
|-----|-------------|

| (d) | Credit risk |
|-----|-------------|

----

| (e) | Liquidity risk |
|-----|----------------|

|                                                        |   | Payments Due by PeriodAs of December 31, 2010 |   |   | As ofDecember 31,2009 |   |
|-------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|--------|---------------------------------|--------|
|                                                        |   | Within1 Year                                                                |   |   | 1-3Years                        |   |   | 3-5Years |   |   | Over5 Years |   |   | Total |   |   | Total |   |
| Bank indebtedness, accounts payable and accrued liabilities |   | $                                                                                | 21,086 |   |                            | $      | – |   |   | $ | – |   |   | $ | – |   |   | $ | 21,086 |   |   | $ | 9,246 |   |
| Long-term debt (Note 11)                                    |   |                                                                             | 32,139 |   |                            |   | 14,966 |   |   |   | 2,232 |   |   |   | – |   |   |   | 49,337 |   |   |   | 93,895 |   |
| Operating lease obligations                                 |   |                                                                             | 656    |   |                            |   | 728 |   |   |   | 57 |   |   |   | – |   |   |   | 1,441 |   |   |   | 442 |   |
| Capital expenditures                                        |   |                                                                             | 21,819 |   |                            |   | 496 |   |   |   | – |   |   |   | – |   |   |   | 22,315 |   |   |   | – |   |
|                                                        |   | $                                                                                | 75,700 |   |                            | $      | 16,190 |   |   | $ | 2,289 |   |   | $ | – |   |   | $ | 94,179 |   |   | $ | 103,583 |   |

| (f) | Currency risk |
|-----|---------------|

| (g) | Interest rate risk |
|-----|--------------------|

----

| (h) | Fair value estimation |
|-----|-----------------------|

| 21. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| (a) | Commitments |
|-----|-------------|

| (b) | Royalties |
|-----|-----------|

| (c) | Environmental |
|-----|---------------|

----

| (d) | Mexican mining tax |
|-----|--------------------|

| (e) | Litigation and claims |
|-----|-----------------------|

| (f) | Indemnification obligations |
|-----|-----------------------------|

----

| 22. | LEASE COMMITMENTS |
|-----|-------------------|

|   |   | OperatingLeases |   |
|--------|--------|-----------------|--------|
| 2011   |   | $               | 656    |   |
| 2012   |   |            | 465    |   |
| 2013   |   |            | 263    |   |
| 2014   |   |            | 52     |   |
| 2015   |   |            | 5      |   |
|   |   | $               | 1,441  |   |

| 23. | SUPPLEMENTAL CASH FLOW INFORMATION |
|-----|------------------------------------|

| (a) | Net changes in non-cash operating working capital items for the years ended December 31 are: |
|-----|----------------------------------------------------------------------------------------------|

|                          |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (Increase) decrease in:       |   |   |   |   |   |   |   |   |   |
| Accounts receivable and other |   | $      | (2,101 | )      |   | $      | (546   | )      |   | $ | (1,112 | ) |
| Prepaids                      |   |   | 858    |   |   |   | 826    |   |   |   | 354 |   |
| Inventories                   |   |   | (5,291 | )      |   |   | (8,189 | )      |   |   | – |   |
| Increase (decrease) in:       |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable              |   |   | 8,417  |   |   |   | 4,642  |   |   |   | 310 |   |
| Accrued liabilities           |   |   | 319    |   |   |   | 1,656  |   |   |   | (1,186 | ) |
|                          |   | $      | 2,202  |   |   | $      | (1,611 | )      |   | $ | (1,634 | ) |

----

| (b) | Non-cash transactions for the years ended December 31 are: |
|-----|------------------------------------------------------------|

|                                                                                                                                                                                                     |   | 2010   |    |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Increase in property, plant and equipment due to assets acquired via issuance of trade and notes payable                                                                                                 |   | $      | 12,602  |   |   | $      | 14,709 |   |   | $ | 11,941 |   |
| Increase in prepaid assets due to financing a portion of the Company’s insurance program via the issuance of notes payable                                                                         |   |   | 1,232   |   |   |   | 785    |   |   |   | 416 |   |
| Decrease in accrued liabilities via the issuance of common shares of the Company                                                                                                                         |   |   | 423     |   |   |   | -      |   |   |   | - |   |
| Increase in contributed surplus for the issuance of share purchase warrants to the Banks in connection with the Project Facility (Note 11(a)) and a corresponding decrease in debt for the debt discount |   |   | -       |   |   |   | 7,395  |   |   |   | - |   |
| Increase in property, plant and equipment for capitalized expenses at Black Fox due to increase in equity related to issuance of shares in connection with the Bridge Facility                           |   |   | -       |   |   |   | -      |   |   |   | 2,907 |   |
| Non-cash transactions resulting from the Linear acquisition via the issuance of common shares, warrants and options                                                                                      |   |   |    |   |   |   |   |   |   |   |   |   |
| Increase in current assets excluding cash                                                                                                                                                                |   |   | 284     |   |   |   | -      |   |   |   | - |   |
| Increase in property, plant and equipment                                                                                                                                                                |   |   | 62,892  |   |   |   | -      |   |   |   | - |   |
| Increase in restricted certificates of deposit                                                                                                                                                           |   |   | 35      |   |   |   | -      |   |   |   | - |   |
| Increase in current liabilities                                                                                                                                                                          |   |   | (3,388  | )      |   |   | -      |   |   |   | - |   |
| Increase in long-term liabilities                                                                                                                                                                        |   |   | (1,614  | )      |   |   | -      |   |   |   | - |   |
| Increase in future income tax liability                                                                                                                                                                  |   |   | (10,580 | )      |   |   | -      |   |   |   | - |   |
| Increases in financial statement components related to the acquisition of the Black Fox mill in 2008:                                                                                                    |   |   |    |   |   |   |   |   |   |   |   |   |
| Equity due to the issuance of common shares for services rendered related to acquisition financing costs                                                                                                 |   |   | -       |   |   |   | -      |   |   |   | 351 |   |
| Accrued site closure costs due to the assumption of a related reclamation liability                                                                                                                      |   |   | -       |   |   |   | -      |   |   |   | 1,210 |   |
| Increase in future income tax liability                                                                                                                                                                  |   |   | -       |   |   |   | -      |   |   |   | 447 |   |

| 24. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

|                                                                                          |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Legal fees paid to two law firms, a partner of which was a director or officer of the Company |   | $      | 555    |   |   | $      | 428    |   |   | $ | 512 |   |
| Reimbursement for services  provided to Linear Metals Corporation                   |   |   | 67     |   |   |   | -      |   |   |   | - |   |

| 25. | SEGMENTED INFORMATION |
|-----|-----------------------|

----

|                                 |   | BlackFoxCanada |    |   | GoldfieldsProjectCanada |   |    | OtherExplorationProperties |   |   | Corporate |   |   | Total  |    |
|--------------------------------------|--------|----------------|---------|--------|-------------------------|--------|---------|----------------------------|--------|--------|-----------|--------|--------|--------|---------|
| Current assets                       |   | $              | 14,067  |   |                    | $      | 64      |                       |   | $      | 38        |   |   | $      | 26,209  |   |   | $ | 40,378 |   |
| Property, plant, and equipment       |   |           | 134,467 |   |                    |   | 40,833  |                       |   |   | 23,010    |   |   |   | 113     |   |   |   | 198,423 |   |
| Restricted certificates of deposit   |   |           | 17,984  |   |                    |   | – |                       |   |   | –   |   |   |   | 44      |   |   |   | 18,028 |   |
| Other long-term assets               |   |           | 3,552   |   |                    |   | – |                       |   |   | –   |   |   |   | 1,036   |   |   |   | 4,588 |   |
| Total assets                         |   | $              | 170,070 |   |                    | $      | 40,897  |                       |   | $      | 23,048    |   |   | $      | 27,402  |   |   | $ | 261,417 |   |
|                                 |   |           |    |   |                    |   |    |                       |   |   |      |   |   |   |    |   |   |   |   |   |
| Current liabilities                  |   | $              | 49,434  |   |                    | $      | 305     |                       |   | $      | 4         |   |   | $      | 7,048   |   |   | $ | 56,791 |   |
| Debt and other long-term liabilities |   |           | 15,879  |   |                    |   | 1,614   |                       |   |   | –   |   |   |   | 377     |   |   |   | 17,870 |   |
| Equity-linked financial instruments  |   |           | – |   |                    |   | – |                       |   |   | –   |   |   |   | 42,742  |   |   |   | 42,742 |   |
| Deferred revenue, long-term portion  |   |           | 50,120  |   |                    |   | – |                       |   |   | –   |   |   |   | – |   |   |   | 50,120 |   |
| Accrued site closure costs           |   |           | 5,307   |   |                    |   | – |                       |   |   | –   |   |   |   | – |   |   |   | 5,307 |   |
| Future income tax liabilities        |   |           | 459     |   |                    |   | 11,081  |                       |   |   | –   |   |   |   | 1,216   |   |   |   | 12,756 |   |
| Total liabilities                    |   | $              | 121,199 |   |                    | $      | 13,000  |                       |   | $      | 4         |   |   | $      | 51,383  |   |   | $ | 185,586 |   |

|                                        |   | BlackFox |    |   | Corporateand Other |   |    | Total  |   |
|---------------------------------------------|--------|----------|---------|--------|-------------------------|--------|---------|--------|--------|
| Current assets                              |   | $        | 14,020  |   |                    | $      | 4,945   |   |   | $ | 18,965 |   |
| Derivative instruments – long-term    |   |     | – |   |                    |   | 4,844   |   |   |   | 4,844 |   |
| Property, plant, and equipment              |   |     | 113,167 |   |                    |   | 3,004   |   |   |   | 116,171 |   |
| Investment in Montana Tunnels joint venture |   |     | – |   |                    |   | 3,440   |   |   |   | 3,440 |   |
| Other long-term assets                      |   |     | 14,798  |   |                    |   | 1,043   |   |   |   | 15,841 |   |
| Total assets                                |   | $        | 141,985 |   |                    | $      | 17,276  |   |   | $ | 159,261 |   |
|                                        |   |     |    |   |                    |   |    |   |   |   |   |   |
| Current liabilities                         |   | $        | 36,153  |   |                    | $      | 20,524  |   |   | $ | 56,677 |   |
| Derivative instruments                      |   |     | – |   |                    |   | 31,654  |   |   |   | 31,654 |   |
| Equity-linked financial instruments         |   |     | – |   |                    |   | 27,318  |   |   |   | 27,318 |   |
| Accrued site closure costs                  |   |     | 5,345   |   |                    |   | – |   |   |   | 5,345 |   |
| Debt and other long-term liabilities        |   |     | 50,213  |   |                    |   | 483     |   |   |   | 50,696 |   |
| Total liabilities                           |   | $        | 91,711  |   |                    | $      | 79,979  |   |   | $ | 171,690 |   |

----

|                                                                                   |   | Year Ended December 31, 2010 |    |
|----------------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                                   |   | BlackFoxCanada                                   |    |   | GoldfieldsProjectCanada |   |   | OtherExplorationProperties |   |   | Corporate |   |   | Total |   |
| Revenue from sale of gold                                                              |   | $                                                | 85,935  |   |   | $ | – |   |   | $ | – |   |   | $ | – |   |   | $ | 85,935 |   |
| Direct operating costs                                                                 |   |                                             | 41,265  |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 41,265 |   |
| Depreciation and amortization                                                          |   |                                             | 13,628  |   |   |   |   |   |   |   | – |   |   |   | 44 |   |   |   | 13,672 |   |
| Accrued site closure costs – accretion expense                                   |   |                                             | 646     |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 646 |   |
| General and administrative expenses                                                    |   |                                             | – |   |   |   | – |   |   |   | – |   |   |   | 12,647 |   |   |   | 12,647 |   |
| Impairment on exploration property                                                     |   |                                             | – |   |   |   | – |   |   |   | 2,414 |   |   |   | – |   |   |   | 2,414 |   |
| Exploration and business development                                                   |   |                                             | 5,463   |   |   |   | 1,161 |   |   |   | 879 |   |   |   | – |   |   |   | 7,503 |   |
|                                                                                   |   |                                             | 61,002  |   |   |   | 1,161 |   |   |   | 3,293 |   |   |   | 12,691 |   |   |   | 78,147 |   |
| Operating income (loss)                                                                |   |                                             | 24,933  |   |   |   | (1,161 | ) |   |   | (3,293 | ) |   |   | (12,691 | ) |   |   | 7,788 |   |
| Interest income                                                                        |   |                                             | – |   |   |   | – |   |   |   | – |   |   |   | 283 |   |   |   | 283 |   |
| Interest expense                                                                       |   |                                             | (10,531 | ) |   |   | – |   |   |   | – |   |   |   | (939 | ) |   |   | (11,470 | ) |
| Loss on modification of debentures                                                     |   |                                             | – |   |   |   |   |   |   |   | – |   |   |   | (513 | ) |   |   | (513 | ) |
| Linear acquisition costs                                                               |   |                                             | – |   |   |   | – |   |   |   | – |   |   |   | (3,338 | ) |   |   | (3,338 | ) |
| Fair value change on equity-linked financial instruments                               |   |                                             | – |   |   |   | – |   |   |   | – |   |   |   | (7,958 | ) |   |   | (7,958 | ) |
| Loss on derivative instruments                                                         |   |                                             | – |   |   |   | – |   |   |   | – |   |   |   | (51,811 | ) |   |   | (51,811 | ) |
| Foreign exchange gain (loss) and other                                                 |   |                                             | 93      |   |   |   | – |   |   |   | – |   |   |   | (867 | ) |   |   | (774 | ) |
| Income (loss) before income taxes and equity earnings in Montana Tunnels joint venture |   | $                                                | 14,495  |   |   | $ | (1,161 | ) |   | $ | (3,293 | ) |   | $ | (77,834 | ) |   | $ | (67,793 | ) |
|                                                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investing activities                                                                   |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment expenditures                                             |   | $                                                | 22,763  |   |   | $ |   |   |   | $ |   |   |   | $ | 148 |   |   | $ | 22,911 |   |

|                                                                                   |   | Year Ended December 31, 2009 |    |
|----------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                   |   | BlackFox                     |    |   | Corporateand Other |   |   | Total |   |
| Revenue from sale of gold                                                              |   | $                            | 47,008  |   |   | $ | – |   |   | $ | 47,008 |   |
| Direct operating costs                                                                 |   |                         | 26,126  |   |   |   | – |   |   |   | 26,126 |   |
| Depreciation and amortization                                                          |   |                         | 6,940   |   |   |   | 38 |   |   |   | 6,978 |   |
| Accrued site closure costs – accretion expense                                   |   |                         | 369     |   |   |   | – |   |   |   | 369 |   |
| General and administrative expenses                                                    |   |                         | – |   |   |   | 4,875 |   |   |   | 4,875 |   |
| Exploration and business development                                                   |   |                         | 1,185   |   |   |   | 775 |   |   |   | 1,960 |   |
|                                                                                   |   |                         | 34,620  |   |   |   | 5,688 |   |   |   | 40,308 |   |
| Operating income (loss)                                                                |   |                         | 12,388  |   |   |   | (5,688 | ) |   |   | 6,700 |   |
| Interest income                                                                        |   |                         | – |   |   |   | 195 |   |   |   | 195 |   |
| Interest expense                                                                       |   |                         | (6,484  | ) |   |   | (1,561 | ) |   |   | (8,045 | ) |
| Debt transaction costs                                                                 |   |                         | – |   |   |   | (1,249 | ) |   |   | (1,249 | ) |
| Loss on modification of debentures                                                     |   |                         | – |   |   |   | (1,969 | ) |   |   | (1,969 | ) |
| Fair value change on equity-linked financial instruments                               |   |                         | – |   |   |   | (10,720 | ) |   |   | (10,720 | ) |
| Loss on derivative instruments                                                         |   |                         | – |   |   |   | (43,775 | ) |   |   | (43,775 | ) |
| Foreign exchange gain and other                                                        |   |                         | – |   |   |   | 376 |   |   |   | 376 |   |
| Income (loss) before income taxes and equity earnings in Montana Tunnels joint venture |   | $                            | 5,904   |   |   | $ | (64,391 | ) |   | $ | (58,487 | ) |
|                                                                                   |   |                         |    |   |   |   |   |   |   |   |   |   |
| Investing activities                                                                   |   |                         |    |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment expenditures                                             |   | $                            | 55,591  |   |   | $ | – |   |   | $ | 55,591 |   |

----

|                                                                          |   | Year Ended December 31, 2008 |    |
|-------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                          |   | BlackFox                     |    |   | Corporateand Other |   |   | Total |   |
| Revenue from sale of gold                                                     |   | $                            | – |   |   | $ | – |   |   | $ | – |   |
| Depreciation and amortization                                                 |   |                         | – |   |   |   | 100 |   |   |   | 100 |   |
| General and administrative expenses                                           |   |                         | – |   |   |   | 3,696 |   |   |   | 3,696 |   |
| Exploration and business development                                          |   |                         | 2,798   |   |   |   | 2,719 |   |   |   | 5,517 |   |
|                                                                          |   |                         | 2,798   |   |   |   | 6,515 |   |   |   | 9,313 |   |
| Operating loss                                                                |   |                         | (2,798  | ) |   |   | (6,515 | ) |   |   | (9,313 | ) |
| Interest income                                                               |   |                         | – |   |   |   | 238 |   |   |   | 238 |   |
| Interest expense                                                              |   |                         | – |   |   |   | (4,868 | ) |   |   | (4,868 | ) |
| Debt transaction costs                                                        |   |                         | – |   |   |   | (190 | ) |   |   | (190 | ) |
| Gain on derivative instruments                                                |   |                         | – |   |   |   | 3,958 |   |   |   | 3,958 |   |
| Foreign exchange loss and other                                               |   |                         | – |   |   |   | (1,329 | ) |   |   | (1,329 | ) |
| Loss before income taxes and equity earnings in Montana Tunnels joint venture |   | $                            | (2,798  | ) |   | $ | (8,706 | ) |   | $ | (11,504 | ) |
|                                                                          |   |                         |    |   |   |   |   |   |   |   |   |   |
| Investing activities                                                          |   |                         |    |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment expenditures                                    |   | $                            | 45,070  |   |   | $ | 42 |   |   | $ | 45,112 |   |

| 26. | DIFFERENCES BETWEEN U.S. AND CANADIAN GAAP |
|-----|--------------------------------------------|

|                                          |   | 2010   |    |   | 2009   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|
| Total assets in accordance with U.S GAAP      |   | $      | 261,417 |   |   | $      | 159,261 |   |
| Bank indebtedness (e)                         |   |   | – |   |   |   | (328 | ) |
| Montana Tunnels joint venture (b)             |   |   | – |   |   |   | 10,911 |   |
| Black Fox development costs(c)                |   |   | 23,328  |   |   |   | 27,674 |   |
| Development costs(c)                          |   |   | 1,272   |   |   |   | – |   |
| Convertible debentures (d)                    |   |   | – |   |   |   | (485 | ) |
| Deferred stripping costs (h)                  |   |   | 5,241   |   |   |   | – |   |
| Total assets in accordance with Canadian GAAP |   | $      | 291,258 |   |   | $      | 197,033 |   |

| Total liabilities in accordance with U.S. GAAP                    |   | $      | 185,586 |   |   | $      | 171,690 |   |
|-------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Bank indebtedness (e)                                             |   |   | – |   |   |   | (328    | )      |
| Montana Tunnels joint venture (b)                                 |   |   | – |   |   |   | 10,911  |   |
| Convertible debentures (d)                                        |   |   | – |   |   |   | (86     | )      |
| Income taxes related to flow-through share issuance (e) and other |   |   | (1,563  | )      |   |   | (869    | )      |
| Equity-linked financial instruments (g)                           |   |   | (42,742 | )      |   |   | (27,318 | )      |
| Total liabilities in accordance with Canadian GAAP                |   | $      | 141,281 |   |   | $      | 154,000 |   |

----

| Total shareholders’ equity (deficiency) in accordance with U.S. GAAP                   |   | $      | 75,831  |   |   | $      | (12,429 | )      |
|----------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Financing costs (a)                                                                          |   |   | (98     | )      |   |   | (485    | )      |
| Montana Tunnels joint venture (b)                                                            |   |   | – |   |   |   | – |   |
| Black Fox development costs (c)                                                              |   |   | 23,426  |   |   |   | 27,674  |   |
| Development costs (c)                                                                        |   |   | 1,272   |   |   |   | – |   |
| Convertible debentures (d)                                                                   |   |   | – |   |   |   | 86      |   |
| Income taxes related to flow-through share issuance (e) and other                            |   |   | 1,563   |   |   |   | 869     |   |
| Equity-linked financial instruments (g)                                                      |   |   | 42,742  |   |   |   | 27,318  |   |
| Deferred stripping costs (h)                                                                 |   |   | 5,241   |   |   |   | – |   |
| Total shareholders’ equity in accordance with Canadian GAAP                            |   | $      | 149,977 |   |   | $      | 43,033  |   |
|                                                                                         |   |   |    |   |   |   |    |   |
| Total  shareholders’ equity and liabilities in accordance with Canadian GAAP |   | $      | 291,258 |   |   | $      | 197,033 |   |

|                                                              |   | 2010   |     |   | 2009   |   |
|-------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Share capital                                                     |   | $      | 349,849  |   |   | $      | 202,925 |   |
| Equity component of convertible debentures                        |   |   | –  |   |   |   | 584 |   |
| Contributed surplus                                               |   |   | 52,680   |   |   |   | 36,051 |   |
| Deficit                                                           |   |   | (252,552 | )      |   |   | (196,527 | ) |
| Total shareholders’ equity in accordance with Canadian GAAP |   | $      | 149,977  |   |   | $      | 43,033 |   |

|                                                                                      |   | Year ended December 31, |    |
|-------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                      |   | 2010                    |    |   | 2009 |   |   | 2008 |   |
| Loss before equity loss in Montana Tunnels joint venture for the year, based on U.S. GAAP |   | $                       | (66,261 | ) |   | $ | (58,414 | ) |   | $ | (9,124 | ) |
| Financing costs (a)                                                                       |   |                    | 351     |   |   |   | (485 | ) |   |   | 160 |   |
| Black Fox development costs (c)                                                           |   |                    | (4,213  | ) |   |   | (1,485 | ) |   |   | 2,332 |   |
| Development costs (c)                                                                     |   |                    | 1,272   |   |   |   | – |   |   |   | – |   |
| Convertible debentures (d)                                                                |   |                    | (398    | ) |   |   | (550 | ) |   |   | 396 |   |
| Deferred stripping costs (h)                                                              |   |                    | 5,241   |   |   |   | – |   |   |   | – |   |
| Income taxes (e)                                                                          |   |                    | 726     |   |   |   | 116 |   |   |   | (523 | ) |
| Equity-linked financial instruments (g)                                                   |   |                    | 7,958   |   |   |   | 10,720 |   |   |   | – |   |
| (Loss) income from continuing operations for the year based on Canadian GAAP              |   |                    | (55,324 | ) |   |   | (50,098 | ) |   |   | (6,759 | ) |
| Equity loss in Montana Tunnels joint venture, under U.S. GAAP                             |   |                    | (701    | ) |   |   | (3,236 | ) |   |   | 10,326 |   |
| Montana Tunnels joint venture (b)                                                         |   |                    | – |   |   |   | (2,117 | ) |   |   | (1,971 | ) |
| (Loss) income from discontinued operations for the year based on Canadian GAAP (b)        |   |                    | (701    | ) |   |   | (5,353 | ) |   |   | 8,355 |   |
| Net (loss) income for the year based on Canadian GAAP                                     |   | $                       | (56,025 | ) |   | $ | (55,451 | ) |   | $ | 1,596 |   |
| Comprehensive (loss) income                                                               |   | $                       | (56,025 | ) |   | $ | (55,451 | ) |   | $ | 1,596 |   |
| Basic and diluted (loss) earnings per share in accordance with Canadian GAAP:             |   |                    |    |   |   |   |   |   |   |   |   |   |
| Continuing operations                                                                     |   | $                       | (0.47   | ) |   | $ | (0.81 | ) |   | $ | (0.14 | ) |
| Discontinued operations                                                                   |   |                    | (0.01   | ) |   |   | (0.09 | ) |   |   | 0.17 |   |
| Net (loss) earnings per share, basic and diluted – Canadian GAAP                    |   | $                       | (0.48   | ) |   | $ | (0.90 | ) |   | $ | 0.03 |   |

----

|                                                                   |   | Year ended December 31, |    |
|------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                   |   | 2010                    |    |   | 2009 |   |   | 2008 |   |
| Cash (used in) provided by operating activities based on U.S. GAAP     |   | $                       | (11,425 | ) |   | $ | 3,391 |   |   | $ | 2,710 |   |
| Montana Tunnels joint venture (b)                                      |   |                    | – |   |   |   | 1,214 |   |   |   | 2,101 |   |
| Deferred stripping costs (h)                                           |   |                    | 5,241   |   |   |   | – |   |   |   | – |   |
| Development costs (c)                                                  |   |                    | 1,272   |   |   |   | – |   |   |   | 2,332 |   |
| Cash (used in) provided by operating activities based on Canadian GAAP |   |                    | (4,912  | ) |   |   | 4,605 |   |   |   | 7,143 |   |
| Cash (used in) provided by investing activities based on U.S. GAAP     |   |                    | (19,809 | ) |   |   | (57,986 | ) |   |   | (41,880 | ) |
| Montana Tunnels joint venture (b)                                      |   |                    | – |   |   |   | (13 | ) |   |   | (2,504 | ) |
| Exploration and costs (c)                                              |   |                    | (1,272  | ) |   |   | – |   |   |   | (2,332 | ) |
| Deferred stripping costs (h)                                           |   |                    | (5,241  | ) |   |   | – |   |   |   | – |   |
| Restricted cash for Canadian flow-through expenditures (e)             |   |                    | (4,295  | ) |   |   | 1,210 |   |   |   | (127 | ) |
| Cash used in investing activities based on Canadian GAAP               |   |                    | (30,617 | ) |   |   | (56,789 | ) |   |   | (46,843 | ) |
| Cash provided by financing activities based on U.S. GAAP               |   |                    | 37,956  |   |   |   | 55,046 |   |   |   | 39,078 |   |
| Montana Tunnels joint venture (b)                                      |   |                    | – |   |   |   | (1,201 | ) |   |   | 403 |   |
| Cash provided by financing activities based on Canadian GAAP           |   |                    | 37,956  |   |   |   | 53,845 |   |   |   | 39,481 |   |
| Effect of exchange rate changes on cash                                |   |                    | (297    | ) |   |   | (451 | ) |   |   | (1,242 | ) |
| Net cash (outflow) inflow in accordance with Canadian GAAP             |   |                    | 2,130   |   |   |   | 1,210 |   |   |   | (1,461 | ) |
| Cash, beginning of year in accordance with Canadian GAAP               |   |                    | 4,295   |   |   |   | 3,085 |   |   |   | 4,546 |   |
| Cash, end of year in accordance with Canadian GAAP                     |   | $                       | 6,425   |   |   | $ | 4,295 |   |   | $ | 3,085 |   |

| (a) | Financing costs |
|-----|-----------------|

| (b) | Montana Tunnels joint venture |
|-----|-------------------------------|

| (c) | Capitalization of Development Costs |
|-----|-------------------------------------|

----

| (d) | Convertible debentures |
|-----|------------------------|

| (e) | Flow-through common shares |
|-----|----------------------------|

| (f) | Income taxes |
|-----|--------------|

----

| (g) | Equity-linked financial instruments not indexed to the Company’s own stock |
|-----|----------------------------------------------------------------------------------|

| (h) | Deferred stripping costs |
|-----|--------------------------|

| (i) | International Financial Reporting Standards |
|-----|---------------------------------------------|

| 27. | SUBSEQUENT EVENTS |
|-----|-------------------|

| (a) | GLR Settlement |
|-----|----------------|

| (b) | $50 Million Convertible Debentures |
|-----|------------------------------------|

----