Report of Independent Registered Chartered Accountants



To the Shareholders and Board of Directors of
Brigus Gold Corp



We have audited the accompanying consolidatedfinancial statements of Brigus Gold Corpand subsidiaries (the “Company”),
which comprise the consolidated statements of financial position as at December 31, 2012 and December 31, 2011, and the consolidated
statements of operations, statements of comprehensive income, statements of shareholders’ equity and statements of cash flows
for the years ended December 31, 2012 and December 31, 2011, and a summary of significant accounting policies and other explanatory
information.



Management’s Responsibility for the Consolidated Financial
Statements



Management is responsible for the preparation and fair presentation
of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.



Auditor’s Responsibility



Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards
and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements
are free from material misstatement.



An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements.



We believe that the audit evidence we have obtained in our audits
is sufficient and appropriate to provide a basis for our audit opinion.



Opinion



In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company and subsidiaries as at December 31, 2012andDecember 31, 2011 and their financial performance and their cash flows for the years
ended December 31, 2012 and December 31, 2011 in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board.



Other Matter



We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of
December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission and our report dated March 27, 2013expressed
an unqualified opinion on the Company’s internal control over financial reporting.





/s/ Deloitte LLP

Independent Registered Chartered Accountants

March 27, 2013
Halifax, Canada













Report of Independent Registered Chartered Accountants



To the Shareholders and Board of Directors of
Brigus Gold Corp.



We have audited the internal control over financial reporting
of Brigus Gold Corp.and subsidiaries (the “Company”)as of December 31, 2012, based on the criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.



We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.



A company’s internal control over financial reporting
is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers,
or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.



Because of the inherent limitations of internal control over
financial reporting, including the possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness
of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as ofDecember 31, 2012, based on
the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.



We have also audited, in accordance with Canadian generally
accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States), the consolidated
financial statements as of and for the year endedDecember 31, 2012 of the Company and
our report dated March 27, 2013 expressed an unqualified opinion on those financial statements.





/s/ Deloitte LLP

Independent Registered Chartered Accountants

March 27, 2013
Halifax, Canada













Consolidated Financial Statements
of



BRIGUS
GOLD CORP.



As
at and for the years ended December 31, 2012 and 2011











|BRIGUS GOLD CORP.
|-----------------
|Table of Contents
|December 31, 2012



|                                                | Page  
|----------------------------------------------- | ------
|                                                |       
|Consolidated Statements of Operations           | 1     
|                                                |       
|Consolidated Statements of Comprehensive Income | 2     
|                                                |       
|Consolidated Statements of Financial Position   | 3     
|                                                |       
|Consolidated Statements of Shareholders’ Equity | 4     
|                                                |       
|Consolidated Statements of Cash Flows           | 5     
|                                                |       
|Notes to the Consolidated Financial Statements  | 6 - 45











|BRIGUS GOLD CORP.                    
|-------------------------------------
|Consolidated Statements of Operations



|                                                                           |  | December 31 |             |   | December 31 |  
|-------------------------------------------------------------------------- |  | ----------- | ----------- | - | ----------- | -
|Thousands of US dollars (except earnings per share and shares outstanding) |  | 2012        |             |   | 2011        |  
|                                                                           |  |             |             |   |             |  
|Revenue from the sale of gold                                              |  | $           | 117,681     |   |             | $
|                                                                           |  |             |             |   |             |  
|Mining operating expenses                                                  |  |             |             |   |             |  
|Direct operating costs                                                     |  |             | 56,169      |   |             |  
|Depreciation and amortization                                              |  |             | 25,147      |   |             |  
|Corporate administration                                                   |  |             | 13,019      |   |             |  
|Total mining operating expenses                                            |  |             | 94,335      |   |             |  
|Income (loss) from mining operations                                       |  |             | 23,346      |   |             |  
|Impairment of mineral property (Notes 11 and 12)                           |  |             | (6,906      | ) |             |  
|Loss on repurchase of Goldstream Agreement (Note 17)                       |  |             | (5,630      | ) |             |  
|Income (loss) from operations                                              |  |             | 10,810      |   |             |  
|Other income (expenses)                                                    |  |             |             |   |             |  
|Unrealized gains on derivative liabilities (Note 15)                       |  |             | 8,890       |   |             |  
|Gain on sale of notes receivable (Note 7)                                  |  |             | 2,347       |   |             |  
|Renunciation of flow-through shares                                        |  |             | 2,237       |   |             |  
|Gain on termination of option agreement (Note 10)                          |  |             | 1,849       |   |             |  
|Finance income                                                             |  |             | 243         |   |             |  
|Finance costs (Note 21)                                                    |  |             | (5,834      | ) |             |  
|Unrealized loss on derivative asset (Note 14)                              |  |             | (389        | ) |             |  
|Equity loss in investment in associate (Note 10)                           |  |             | (163        | ) |             |  
|Foreign exchange (loss) gain and other                                     |  |             | (1,410      | ) |             |  
|Income before income taxes                                                 |  |             | 18,580      |   |             |  
|Income tax recovery (Note 18)                                              |  |             | 349         |   |             |  
|Net income attributable to shareholders                                    |  | $           | 18,929      |   |             | $
|                                                                           |  |             |             |   |             |  
|Earnings per share (Note 22)                                               |  |             |             |   |             |  
|Basic                                                                      |  | $           | 0.09        |   |             | $
|Diluted                                                                    |  | $           | 0.09        |   |             | $
|                                                                           |  |             |             |   |             |  
|Weighted average shares outstanding (Note 22)                              |  |             |             |   |             |  
|Basic                                                                      |  |             | 215,838,973 |   |             |  
|Diluted                                                                    |  |             | 216,102,169 |   |             |  



The accompanying notes are an integral part of these consolidated
financial statements.



Approved on behalf of the Board of Directors on March 27, 2013



|“David W. Peat” | “Wade. K. Dawe” | 
|--------------- | --------------- | 
|                |                 | 
|Director        | Director        | 



Page 1







|BRIGUS GOLD CORP.                              
|-----------------------------------------------
|Consolidated Statements of Comprehensive Income



|                                                             |  | December 31 |        |  | December 31 |  
|------------------------------------------------------------ |  | ----------- | ------ |  | ----------- | -
|Thousands of US dollars                                      |  | 2012        |        |  | 2011        |  
|                                                             |  |             |        |  |             |  
|Net income attributable to shareholders                      |  | $           | 18,929 |  |             | $
|                                                             |  |             |        |  |             |  
|Other comprehensive income                                   |  |             |        |  |             |  
|Unrealized gains on available-for-sale investments (Note 10) |  |             | 182    |  |             |  
|Total comprehensive income attributable to shareholders      |  | $           | 19,111 |  |             | $



The accompanying notes are an integral part of these consolidated
financial statements.



Page 2







|BRIGUS GOLD CORP.                            
|---------------------------------------------
|Consolidated Statements of Financial Position



|Thousands
    of US dollars                 |  | December 31 2012 |          |   | December 31 2011 |  
|------------------------------------------- |  | ---------------- | -------- | - | ---------------- | -
|Assets                                      |  |                  |          |   |                  |  
|Current assets                              |  |                  |          |   |                  |  
|Cash and cash equivalents (Note 23)         |  | $                | 29,807   |   |                  | $
|Accounts receivable                         |  |                  | 1,927    |   |                  |  
|Prepaids                                    |  |                  | 674      |   |                  |  
|Inventories (Note 9)                        |  |                  | 10,862   |   |                  |  
|Investments (Note 10)                       |  |                  | 543      |   |                  |  
|Notes receivable (Note 7)                   |  |                  | -        |   |                  |  
|Assets held for sale (Note 12)              |  |                  | 4,062    |   |                  |  
|Total current assets                        |  |                  | 47,875   |   |                  |  
|Inventories (Note 9)                        |  |                  | 8,367    |   |                  |  
|Investments (Note 10)                       |  |                  | -        |   |                  |  
|Derivative asset (Note 14)                  |  |                  | 3,767    |   |                  |  
|Property, plant and equipment (Note 11)     |  |                  | 340,875  |   |                  |  
|Restricted cash (Note 8)                    |  |                  | 20,395   |   |                  |  
|Total assets                                |  | $                | 421,279  |   |                  | $
|                                            |  |                  |          |   |                  |  
|Liabilities and Shareholders’ Equity        |  |                  |          |   |                  |  
|Current liabilities                         |  |                  |          |   |                  |  
|Accounts payable and accrued liabilities    |  | $                | 21,071   |   |                  | $
|Deferred revenue (Note 17)                  |  |                  | 3,550    |   |                  |  
|Current portion of long-term debt (Note 13) |  |                  | 17,097   |   |                  |  
|Total current liabilities                   |  |                  | 41,718   |   |                  |  
|Accrued long-term liabilities               |  |                  | 1,680    |   |                  |  
|Derivative liabilities (Note 15)            |  |                  | 9,725    |   |                  |  
|Deferred revenue (Note 17)                  |  |                  | 25,715   |   |                  |  
|Long-term debt (Note 13)                    |  |                  | 76,098   |   |                  |  
|Accrued site closure costs (Note 16)        |  |                  | 24,152   |   |                  |  
|Deferred tax liability (Note 18)            |  |                  | 9,567    |   |                  |  
|Total liabilities                           |  |                  | 188,655  |   |                  |  
|Shareholders’ Equity                        |  |                  |          |   |                  |  
|Common shares (Note 19)                     |  |                  | 397,616  |   |                  |  
|Equity reserve                              |  |                  | 57,226   |   |                  |  
|Warrant reserve                             |  |                  | 13,733   |   |                  |  
|Investment revaluation reserve              |  |                  | 182      |   |                  |  
|Accumulated deficit                         |  |                  | (236,133 | ) |                  |  
|Total shareholders’ equity                  |  |                  | 232,624  |   |                  |  
|Total liabilities and shareholders’ equity  |  | $                | 421,279  |   |                  | $



Commitments and contingencies (Note 28)



The accompanying notes are an integral part of these consolidated
financial statements.





Page 3







|BRIGUS GOLD CORP.                              
|-----------------------------------------------
|Consolidated Statements of Shareholders’ Equity



|Thousands of shares and US dollars             |  | Common
    Shares |         |  | Common
    Shares |   |         | Equity
    Reserve |  |   | Warrant 
    Reserve |  |  | Investment
    Revaluation Reserve |        |  | Accumulated
    Deficit |   |     | Total
    Shareholders’ Equity | 
|---------------------------------------------- |  | ----------------- | ------- |  | ----------------- | - | ------- | ------------------ |  | - | -------------------- |  |  | ---------------------------------- | ------ |  | ----------------------- | - | --- | ------------------------------ | 
|                                               |  |                   |         |  |                   |   |         |                    |  |   |                      |  |  |                                    |        |  |                         |   |     |                                | 
|Balance, December 31, 2010                     |  |                   | 182,425 |  |                   | $ | 349,725 |                    |  | $ | 49,115               |  |  | $                                  | 13,733 |  |                         | $ | -   |                                | 
|Options exercised                              |  |                   | 814     |  |                   |   | 973     |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Warrants exercised                             |  |                   | 11,889  |  |                   |   | 12,538  |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Shares
    issued for cash                     |  |                   | 4,995   |  |                   |   | 5,726   |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Shares
    issued for contract settlement      |  |                   | 1,396   |  |                   |   | 2,303   |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Share-based compensation                       |  |                   | -       |  |                   |   | -       |                    |  |   | 3,474                |  |  |                                    | -      |  |                         |   | -   |                                | 
|Net
    income attributable to shareholders    |  |                   | -       |  |                   |   | -       |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Balance, December 31, 2011                     |  |                   | 201,519 |  |                   | $ | 371,265 |                    |  | $ | 52,589               |  |  | $                                  | 13,733 |  |                         | $ | -   |                                | 
|                                               |  |                   |         |  |                   |   |         |                    |  |   |                      |  |  |                                    |        |  |                         |   |     |                                | 
|Options exercised                              |  |                   | 18      |  |                   |   | 12      |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Warrants exercised                             |  |                   | 5,327   |  |                   |   | 4,766   |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Shares
    issued for cash                     |  |                   | 24,094  |  |                   |   | 21,171  |                    |  |   |                      |  |  |                                    |        |  |                         |   | -   |                                | 
|Shares
    issued under employee purchase plan |  |                   | 117     |  |                   |   | 107     |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Shares issued under agreement                  |  |                   | 25      |  |                   |   | 23      |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Shares
    issued for deferred share units     |  |                   | 260     |  |                   |   | 272     |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Share-based compensation                       |  |                   | -       |  |                   |   | -       |                    |  |   | 4,637                |  |  |                                    | -      |  |                         |   | -   |                                | 
|Other comprehensive income                     |  |                   | -       |  |                   |   | -       |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | 182 |                                | 
|Net
    income attributable to shareholders    |  |                   | -       |  |                   |   | -       |                    |  |   | -                    |  |  |                                    | -      |  |                         |   | -   |                                | 
|Balance, December 31, 2012                     |  |                   | 231,360 |  |                   | $ | 397,616 |                    |  | $ | 57,226               |  |  | $                                  | 13,733 |  |                         | $ | 182 |                                | 



The accompanying notes are an integral part of these consolidated
financial statements.





Page 4







|BRIGUS GOLD CORP.                    
|-------------------------------------
|Consolidated Statements of Cash Flows



|                                                                        |  | December 31 |         |   | December 31 |  
|----------------------------------------------------------------------- |  | ----------- | ------- | - | ----------- | -
|Thousands of US dollars                                                 |  | 2012        |         |   | 2011        |  
|Operating activities                                                    |  |             |         |   |             |  
|Net income attributable to shareholders                                 |  | $           | 18,929  |   |             | $
|Repurchase of Goldstream Agreement (Note 17)                            |  |             | (24,396 | ) |             |  
|Non-cash items:                                                         |  |             |         |   |             |  
|Depreciation and amortization                                           |  |             | 25,147  |   |             |  
|Share-based compensation                                                |  |             | 4,637   |   |             |  
|Finance costs                                                           |  |             | 9,085   |   |             |  
|Capitalized borrowing costs                                             |  |             | (3,251  | ) |             |  
|Impairment of mineral property                                          |  |             | 6,906   |   |             |  
|Loss on repurchase of Goldstream Agreement                              |  |             | 5,630   |   |             |  
|Gain on termination of option agreement                                 |  |             | (1,849  | ) |             |  
|Gain on sale of notes receivable                                        |  |             | (2,347  | ) |             |  
|Unrealized gains on derivative liabilities                              |  |             | (8,890  | ) |             |  
|Unrealized loss on derivative asset                                     |  |             | 389     |   |             |  
|Renunciation of flow-through shares                                     |  |             | (2,237  | ) |             |  
|Deferred income taxes                                                   |  |             | (349    | ) |             |  
|Equity loss in investment in associate                                  |  |             | 163     |   |             |  
|Other                                                                   |  |             | 483     |   |             |  
|Net change in non-cash operating working capital (Note 23)              |  |             | (15,398 | ) |             |  
|Net cash provided by operating activities                               |  |             | 12,652  |   |             |  
|                                                                        |  |             |         |   |             |  
|Investing activities                                                    |  |             |         |   |             |  
|Additions to property, plant and equipment                              |  |             | (53,490 | ) |             |  
|Additions to exploration and evaluation assets                          |  |             | (10,628 | ) |             |  
|Disposals of property, plant and equipment                              |  |             | 366     |   |             |  
|Restricted cash                                                         |  |             | -       |   |             |  
|Net cash used in investing activities                                   |  |             | (63,752 | ) |             |  
|                                                                        |  |             |         |   |             |  
|Financing activities                                                    |  |             |         |   |             |  
|Proceeds from issuance of convertible debentures                        |  |             | -       |   |             |  
|Proceeds from issuance of shares                                        |  |             | 23,253  |   |             |  
|Proceeds from sale of notes receivable                                  |  |             | 5,787   |   |             |  
|Proceeds from lease financing                                           |  |             | 14,863  |   |             |  
|Proceeds from exercise of warrants, options, and employee purchase plan |  |             | 4,839   |   |             |  
|Proceeds from sale of subsidiary                                        |  |             | -       |   |             |  
|Proceeds from issuance of senior secured notes                          |  |             | 28,780  |   |             |  
|Interest paid on debt                                                   |  |             | (5,613  | ) |             |  
|Repayment of debt                                                       |  |             | (11,192 | ) |             |  
|Net cash provided by financing activities                               |  |             | 60,717  |   |             |  
|                                                                        |  |             |         |   |             |  
|Effect of exchange rate changes on cash                                 |  |             | 1,368   |   |             |  
|                                                                        |  |             |         |   |             |  
|Increase in cash and cash equivalents                                   |  |             | 10,985  |   |             |  
|Cash and cash equivalents, beginning of year                            |  |             | 18,822  |   |             |  
|Cash and cash equivalents, end of year                                  |  | $           | 29,807  |   |             | $



The accompanying notes are an integral part of these consolidated
financial statements.



Page 5









|BRIGUS GOLD CORP.                    
|-------------------------------------
|Consolidated Statements of Cash Flows



| | 1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS
| | -- | ------------------------------------------------



Brigus Gold Corp. (“Brigus”
or the “Company”) is incorporated and domiciled in Canada and is a publicly traded company with common shares listed
on the Toronto Stock Exchange (TSX:BRD.TO) and NYSE MKT Equities Exchange (NYSE MKT: BRD). The Company’s registered office
is at 1959 Upper Water Street, 1100 Purdy’s Wharf Tower I, Halifax, NS, B3J 3E5.



Brigus is principally engaged in gold mining
including extraction, processing and refining as well as exploration and development of mineral deposits principally in Canada.



| | 2. | BASIS OF PRESENTATION
| | -- | ---------------------



The consolidated financial statements of
the Company and all its subsidiaries have been prepared in accordance with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”).



The consolidated financial statements have
been prepared on a historical cost basis and net realizable value, except for derivative financial instruments and investments
that have been measured at fair value. The consolidated financial statements are presented in US dollars and all values are rounded
to the nearest thousand ($000) except when otherwise indicated.



| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | -- | ------------------------------------------



The principal accounting
policies followed by the Company are summarized as follows:



| | a) | Basis of Consolidation
| | -- | ----------------------



These consolidated financial
statements include the accounts of the Company and all of its subsidiaries. The financial statements of entities which are controlled
by the Company are included in the consolidated financial statements from the date that control commences until the date whereby
control ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies
of an entity so as to obtain benefits, from its activities. All subsidiaries have the same year end as the Company. All intercompany
balances, revenue and expense transactions are eliminated upon consolidation. Where necessary, adjustments are made to bring accounting
policies of the Company’s subsidiaries in line with those of the Company.



The accounts of the following
wholly-owned subsidiaries are included in these consolidated financial statements:





|Subsidiary                       |  | Principal Activity      |  | Country of Incorporation
|-------------------------------- |  | ----------------------- |  | ------------------------
|Brigus Gold ULC                  |  | Administrative services |  | Canada                  
|Brigus Gold Inc.                 |  | Administrative services |  | United States           
|Linear Gold Caribe, S.A.         |  | Exploration             |  | Panama                  
|7153945 Canada Inc.              |  | Exploration             |  | Canada                  
|Linear Gold Holdings Corp.       |  | Holding company         |  | Canada                  
|Linear Gold Mexico, S.A. de C.V. |  | Exploration             |  | Mexico                  
|Linear Gold Mineracao Ltda.      |  | Exploration             |  | Brazil                  
|Servicios Ixhuatán, S.A. de C.V. |  | Exploration             |  | Mexico                  





Page 6







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | Investments in Associates
| | -- | -------------------------



The Company accounts for investments in
associates using the equity method. An associate is an entity in which the Company has significant influence. Under the equity
method, the investment in the associate is recorded on the Statement of Financial Position at cost plus post acquisition changes
in the Company’s share of net assets of the associate. The Statement of Operations reflects the Company’s share of
the associate’s operations.



The financial statements of the associate
are prepared using the same accounting policies as the Company. When necessary, adjustments are made to bring the accounting policies
of the associate in line with those of the Company.



At each reporting date, the Company determines
whether there is any objective evidence that the investment in the associate is impaired. If an impairment is deemed to exist,
the amount of the impairment is recognized in the Statement of Operations. The amount of impairment is calculated as the difference
between the recoverable amount of the investment in the associate and its carrying value.



Upon loss of significant influence over
an associate, the Company measures and recognizes any remaining investment at fair value. Any difference between the carrying amount
of the investment in the associate and the fair value of the retained investment plus proceeds from disposal is recognized in the
Statement of Operations.



| | c) | Revenue Recognition
| | -- | -------------------



Revenue from the sale of gold is recognized
when persuasive evidence of an arrangement exists, the risks and rewards of ownership (including title risk) passes to the purchaser,
the selling price is fixed or determinable, and collectability is reasonably assured. Revenue is measured at the fair value of
the consideration received or receivable.



Interest income is recognized when it is
probable that the economic benefits will flow to the Company and the amount can be measured reliably. Interest income is recognized
on an accrual basis using the effective interest method.



| | d) | Leases
| | -- | ------



Leases are classified as finance leases
whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are
classified as operating leases.



Assets held under finance leases are initially
recognized as assets of the Company at the lower of the present value of the minimum lease payments or their fair value. The corresponding
liability to the lessor is recognized as a finance lease obligation within long-term debt.



Lease payments are apportioned between
finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of
the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to qualifying
assets, in which case they are capitalized in accordance with the Company's general policy on borrowing costs.



Operating lease payments are recognized
as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the
time pattern in which economic benefits from the leased asset are consumed.



Page 7







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | e) | Foreign Currency Translation
| | -- | ----------------------------



The U.S. dollar is the functional and presentation
currency of the Company and all subsidiaries, as this is the principal currency of the economic environment in which the Company
operates.



Foreign currency transactions are translated
as follows: (i) monetary assets and liabilities denominated in currencies other than the US dollar are translated into US dollars
at the exchange rate prevailing at the Statement of Financial Position date; (ii) non-monetary assets and liabilities denominated
in foreign currencies and measured in terms of historic costs are translated using rates of exchange at the transaction dates;
and (iii) non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated
using the rates of exchange at the dates those fair values are determined.



| | f) | Borrowing Costs
| | -- | ---------------



Interest and other financing costs that
are directly attributable to the acquisition or construction of a qualifying asset are capitalized. Capitalization of borrowing
costs ceases when all the activities necessary to prepare the asset for its intended use or sale are substantially complete. Interest
earned on the temporary investment of borrowed funds is deducted from interest paid on the borrowed funds in arriving at the capitalized
amounts. These costs are amortized on the same basis as the asset. All other borrowing costs are recognized in income in the period
in which they are incurred.



| | g) | Employee Benefits
| | -- | -----------------



The Company accrues liabilities for employee
benefits such as wages, salaries, bonuses, paid vacation, and other benefits at their nominal amounts as these are the amounts
expected to be paid when the liabilities are settled.



Payments to defined contribution retirement
benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.



| | h) | Share-based Payment Arrangements and Warrants
| | -- | ---------------------------------------------



Share-based payment transactions of
the Company



Equity-settled share-based payments to
employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The
fair value of the share-based payment is measured by reference to the fair value of the equity instrument granted, which in turn
is determined using the Black-Scholes option-pricing model on the date of the grant, using management’s assumptions for the
risk-free rate, dividend yield, volatility factors of the expected market price of the Company’s common shares, expected
forfeitures and the life of the options. The expected life of options granted is derived from historical data on employee exercise
and post-vesting employment termination behavior. Expected volatility is based on the historic volatility of the Company’s
share price. In addition, the Company is required to estimate the expected forfeiture rate as only the expenses related to options
that are expected to vest are to be recognized.



The fair value of the equity-settled share-based
payments is recognized in the Statement of Operations over the vesting period, based on the Company's estimate of equity instruments
that will eventually vest, with a corresponding increase in equity. Vesting assumptions are reviewed at each reporting date to
ensure they reflect current expectations.



Page 8







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Equity-settled share-based payment transactions
with parties other than employees are measured at the fair value of the goods or services received, except in circumstances where
that fair value cannot be estimated reliably. In these circumstances, the transactions are measured at the fair value of the equity
instruments granted, measured at the date the Company obtains the goods or the counterparty renders the service.



Warrants issued for services received



Warrants issued in exchange for services
rendered are accounted for in accordance with IFRS 2. The fair value of these warrants is determined at the time the services are
received by the Company and the expense is recognized in the Statement of Operations. The fair value of the warrants is the fair
value of the services received where this can be estimated reliably by comparable services by independent parties. In circumstances
where the fair value of the services received cannot be estimated reliably, the fair value is measured indirectly by reference
to the fair value of the equity instrument granted, measured at the date the entity receives the relevant services. In accordance
with IFRS 2, all such warrants are classified as equity.



Warrants issued in
a currency other than the Company’s functional currency



Warrants with exercise prices denominated
in a currency other than the Company’s functional currency are derivatives. The Company has classified warrants issued with
Canadian dollar exercise prices as derivative liabilities on the Statement of Financial Position. The fair value of warrants with
Canadian dollar exercise prices which are traded on the open market is determined based on their quoted market price. Upon exercise,
the fair value of warrants included in derivative liabilities is reclassified to equity.



| | i) | Flow-through Shares
| | -- | -------------------



The Company will, from time to time, issue
flow-through shares to finance a portion of its exploration program. Pursuant to the terms of the flow-through share agreements,
the Company agrees to incur qualifying expenditures and renounce the tax deductions associated with these qualifying expenditures
to the subscribers at an agreed upon date.



The excess of cash consideration received
over the market price of the Company’s shares at the date of the announcement of the flow-through share financing is recorded
as a liability. This liability is extinguished when the tax effect of the temporary differences, resulting from the renunciation
of the tax benefit by the Company, is recorded. The difference between the liability and the value of the tax assets renounced
is recorded through the Statement of Operations.



A deferred tax liability is recognized
for the taxable temporary difference that arises from the difference between the carrying amount of eligible expenditures that
are capitalized to exploration and evaluation assets and their tax basis. If the Company has sufficient tax assets to offset the
deferred tax liability, the liability will be offset by the recognition of a corresponding deferred tax asset.



| | j) | Income Taxes
| | -- | ------------



Current income taxes



Current income tax assets and liabilities
are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company
operates and generates taxable income.



Page 9







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Current income tax relating to items
recognized directly in equity is recognized in the Statement of Shareholders’ Equity and not in the Statement of
Operations. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate. The Company recognizes
interest and penalties, if any, related to uncertain tax positions in income tax expense.



Deferred income taxes



Deferred income taxes are calculated using
the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except:



| | · | When the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In respect of taxable temporary differences associated with investments in subsidiaries and associates,
when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred tax assets are recognized for
all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carryforward of unused tax credits and unused tax losses, can be utilized, except:



| | · | When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In respect of deductible temporary differences associated with investments in subsidiaries and
associates, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying amount of deferred tax assets
is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at
each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred
tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.



Deferred tax relating to items recognized
outside of profit or loss is recognized outside of profit or loss. Deferred tax items are recognized in correlation to the underlying
transaction either in other comprehensive income or directly in equity.



Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.



Page 10







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | k) | Cash, cash equivalents and restricted cash
| | -- | ------------------------------------------



Cash and cash equivalents are comprised
of cash and short-term money-market investments that are readily convertible to cash with original terms of three months or less.



Restricted cash are funds that are restricted
and not available for current operations.



| | l) | Long-Lived Assets
| | -- | -----------------



Property, plant and equipment



Property, plant and equipment, excluding
land, are recorded at cost less accumulated depreciation and accumulated impairment losses. Land is recorded at cost less accumulated
impairment losses and is not depreciated. The initial cost of an asset is comprised of its purchase price or construction cost,
any costs directly attributable to bringing the asset into operation, the initial estimate of the reclamation obligation and, for
qualifying assets, borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of
any other consideration given to acquire the asset. The capitalized value of a finance lease is also included within property,
plant and equipment, and is measured at the lower of the present value of the minimum lease payments and the fair value of the
leased asset.



Subsequent costs are included in the asset’s
carrying amount when it is probable that future economic benefits associated with the asset will flow to the Company and the costs
can be measured reliably. This would include costs related to the refurbishment or replacement of major parts (components) of an
asset. Costs relating to the refurbishment of a major part are capitalized since the refurbishment will typically result in a significant
extension in the physical life of that part. All other repairs and maintenance costs are charged to the Consolidated Statement
of Operations during the period in which they are incurred.



Depreciation of buildings and processing
equipment used for production is calculated on a unit-of-production basis over the remaining proven and probable reserves of the
mine. Equipment that is mobile is depreciated on a straight-line basis over the estimated useful life of the equipment of five
to ten years, not to exceed the related estimated life of the mine. Depreciation commences on an asset when it is capable of operating
in the manner intended by management.



When components of an item of property,
plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Each
component’s estimated useful life is determined considering its physical life limitations. The physical life of each component
cannot exceed the life of the mine at which the component is utilized. The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective
basis.



Assets held under finance leases are depreciated
over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.



Change in unit-of-production basis of
property, plant, and equipment



The unit-of-production basis for amortizing
significant property, plant, and equipment is reviewed whenever events or circumstances indicate that a more reliable basis is
appropriate. At December 31, 2012, management revised the amortization basis under which the Black Fox Mill was depreciated from
tonnes to be milled per the Company’s proven and probable reserves to ounces produced per the Company’s proven and
probable reserves.



Page 11







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The revision to the unit-of-production
basis constitutes a change in accounting estimate and is accounted for prospectively by amortizing the remaining value of the Black
Fox Mill over the expected ounces to be produced. The impact of this change in accounting estimate is expected to increase depreciation
by $0.4 million per year from 2013 to 2016, by $0.2 million in 2017, by $0.1 million from 2018 to 2019, and decrease depreciation
by $2.0 million in 2020.



Exploration and evaluation assets



Exploration and evaluation expenditures
include costs such as exploratory drilling, sample testing and the costs of pre-feasibility studies. These costs are capitalized
on a project-by-project basis pending determination of the technical feasibility and commercial viability of the project. The technical
feasibility and commercial viability of a project is considered to be determinable when the proposed efficiency and viability of
project is assessed and

the costs are expected to be recovered
in full through the successful development and exploration of the identified property. Once this has been determined, exploration
and evaluation expenditures are then capitalized. All capitalized exploration and evaluation expenditures are monitored for indications
of impairment, to ensure that commercial quantities of reserves exist or that exploration activities related to the property are
continuing or planned for the future. If an exploration property does not prove viable, all unrecoverable costs associated with
the project are expensed.



Exploration and evaluation assets are not
depreciated. These amounts are reclassified from exploration and evaluation assets to mine development costs once the work completed
to date supports the future development of the property and such development receives the appropriate approval. All subsequent
expenditures to ready the property for production are capitalized within mine development costs, other than those costs related
to the construction of property, plant and equipment. Once production has commenced, all assets included in mine development costs
are reclassified to mining properties.



Exploration and evaluation expenditures
incurred prior to the Company obtaining the right to explore are recorded as expense in the period in which they are incurred.



Mining properties



When further mine development expenditures
are incurred in respect of a mining property after the commencement of production, such expenditures are carried forward as part
of the mining property when it is probable that additional future economic benefits associated with the expenditure will flow to
the entity. Otherwise such expenditures are classified as a cost of production.



Production stage mining properties are
depreciated over the life of the mine using the unit-of-production method based on estimated proven and probable reserves of the
mine. The expected useful lives used in depreciation calculations are determined based on the facts and circumstances associated
with the mining property. Any changes in estimates of useful lives are accounted for prospectively from the date of the change.



Mineral rights



Mineral rights include the cost of obtaining
unpatented and patented mining claims and the cost of acquisition of properties. Significant payments related to the acquisition
of land and mineral rights are capitalized. If a mineable ore body is discovered, such costs are amortized when saleable minerals
are produced from the ore body using the unit-of-production method based on proven and probable reserves. If no mineable ore body
is discovered or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined
the property has no future economic value.



Page 12











|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Stripping costs



In open pit mining operations, it is necessary
to incur costs to remove overburden and other mine waste materials in order to access the ore body. Pre-production stripping costs
are capitalized as incurred. Stripping costs incurred during the production stage of an open pit mine are accounted for as costs
of the inventory produced during the period that the stripping costs were incurred, unless these costs provide a future economic
benefit. Production phase stripping costs are considered to generate a future economic benefit when the related stripping activity:
(i) provides access to ore to be mined in the future; (ii) increases the fair value of the mine as access to future mineral reserves
becomes less costly; (iii) increases the productive capacity; or (iv) extends the productive life of the mine. Production phase
stripping costs that generate a future economic benefit are capitalized as mine development costs. Stripping costs incurred and
capitalized during the production phase are depleted using the unit-of-production method over the reserves that directly benefit
from the specific stripping activity.



| | m) | Impairment of Long Lived Assets
| | -- | -------------------------------



At the end of each reporting period, the
Company reviews the carrying amounts of its long lived assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent
of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis
of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.



The recoverable amount of an asset is the
higher of fair value less costs to sell and value in use. Value in use is determined by discounting the estimated future cash flows
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.



If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Operations.



Where an impairment loss subsequently reverses,
the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, however
the revised carrying amount cannot exceed the asset’s (or cash generating unit’s) original cost before impairment.
A reversal of an impairment loss is recognized immediately in the Statement of Operations.



| | n) | Non-current assets held for sale
| | -- | --------------------------------



Non-current assets classified as held for
sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are classified as
held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing
use and the following criteria have been met, the sale is highly probable, the asset is available for immediate sale in its present
condition, management is committed to the sale, and the transaction is expected to be completed within one year from the date of
classification.



Property, plant and equipment classified
as held for sale is not depreciated or amortized.



Page 13







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | o) | Inventories
| | -- | -----------



Materials and supplies inventory



Materials and supplies inventory consists
of mining supplies and consumables used in operations, and are valued at the lower of average cost and net realizable value. Net
realizable value is the estimated selling price in the ordinary course of business less selling expenses.



Current and long-term stockpiled ore
inventory



Stockpiled inventory represents ore that
has been mined and is available for further processing. Stockpiles are measured by estimating the number of tonnes added and removed
from the stockpile, the number of contained ounces of gold (based on assay data) and the estimated metallurgical recovery rates
(based on the expected processing method). Stockpiled ore tonnages are verified by periodic surveys.



Costs are allocated to stockpiles based
on the current mining cost per gram incurred up to the point of stockpiling the ore, including applicable overhead, depletion and
amortization relating to mining operations, and are removed at the average cost per gram. Stockpile inventory is measured at the
lower of cost and net realizable value. For all ore inventories, net realizable value is calculated as the difference between the
estimated future metal revenue based on prevailing metal prices and estimated costs to complete production into a saleable form.
Long-term stockpiled ore inventory represents ore which is not expected to be processed within one year.



In-circuit gold inventory



Gold is recovered from ore through milling.
Costs of milling include applicable overhead, depletion and amortization which are added to the ore inventory costs. Costs are
removed from in-circuit gold inventory as ounces are recovered, based on the average cost per ounce of gold in in-circuit gold
inventory. In-circuit gold inventory is measured at the lower of cost and net realizable value.



Finished goods inventory



Finished goods inventory consists of doré
bars, and is valued at the lower of cost and net realizable value.



| | p) | Accrued Site Closure Costs
| | -- | --------------------------



The Company’s mining and exploration
activities are subject to various governmental laws and regulations relating to the protection of the environment. The Company
has made, and intends to make in the future, expenditures to comply with such laws and regulations or constructive obligations.



Accrued site closure costs are recorded
at the time an environmental disturbance occurs, and are measured at the Company’s best estimate of the expected value of
future cash flows required to reclaim the disturbance upon mine closure, discounted to their net present value. The net present
value is determined using a pre-tax discount rate that is specific to the liability. The estimated net present value is re-measured
on an annual basis or when changes in circumstances occur and/or new material information becomes available. Increases or decreases
to the provision arise due to changes in legal or regulatory requirements, the extent of environmental remediation required and
cost estimates. The net present value of the estimated costs of these changes is recorded in the period in which the change is
identified and quantifiable. The provision is progressively increased over the life of the operation as the effect of discounting
unwinds, creating an expense included in finance costs.



Page 14







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Upon initial recognition of site closure
costs, there is a corresponding increase to the carrying amounts of related assets, representing part of the cost of acquiring
the future economic benefits of the operation. The capitalized cost of site closure activities is recognized in property, plant
and equipment and depreciated on a unit-of-production basis over the life of the related assets.



| | q) | Financial Instruments
| | -- | ---------------------



Financial assets and financial liabilities
are recognized when the Company becomes a party to the contractual provisions of a financial instrument. Financial assets and financial
liabilities are initially measured at fair value. Financial assets are classified into one of the following specified categories:
fair value through profit or loss (“FVTPL”), held-to-maturity, available-for-sale (“AFS”) and loans and
receivables. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities classified as FVTPL) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities classified as FVTPL are recognized immediately in the Statement of Operations.



The Company’s financial instruments
are classified and subsequently measured as follows:



|Asset / Liability                        |  | Classification                    |  | Subsequent Measurement                       
|---------------------------------------- |  | --------------------------------- |  | ---------------------------------------------
|Cash and cash equivalents                |  | Loans and receivables             |  | Amortized cost                               
|Derivative assets                        |  | Fair value through profit or loss |  | Fair value through profit or loss            
|Accounts receivable                      |  | Loans and receivables             |  | Amortized cost                               
|Notes receivable                         |  | Held to maturity                  |  | Amortized cost                               
|Investments                              |  | Available-for-sale                |  | Fair value through other comprehensive income
|Restricted cash                          |  | Loans and receivables             |  | Amortized cost                               
|Accounts payable and accrued liabilities |  | Other financial liabilities       |  | Amortized cost                               
|Derivative liabilities                   |  | Fair value through profit or loss |  | Fair value through profit or loss            
|Long-term debt                           |  | Other financial liabilities       |  | Amortized cost                               



Financial Assets



Subsequent to initial recognition, financial
assets held to maturity and loans and receivables are measured at amortized cost, AFS instruments are measured at fair value with
unrealized gains and losses recognized in the Statement of Comprehensive Income, and instruments classified as FVTPL are measured
at fair value with unrealized gains and losses recognized in the Statement of Operations.



The fair value of financial instruments
traded in active markets (such as FVTPL and AFS securities) is based on quoted market prices at the date of the Statement of Financial
Position. The quoted market price used for financial assets held by the Company is the current bid price.



Impairment of financial
assets



Financial assets, other than those at FVTPL,
are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when
there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial
asset, the estimated future cash flows of the financial asset have been affected.



Page 15







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Financial Liabilities and Equity Instruments



Financial liabilities



Financial liabilities are classified as
either financial liabilities at FVTPL or other financial liabilities. Financial liabilities classified as FVTPL are measured at
fair value with unrealized gains and losses recognized in the Statement of Operations. Other financial liabilities including borrowings
are initially measured at fair value net of transaction costs, and subsequently measured at amortized cost using the effective
interest method.



Effective interest method



The effective interest method is a method
of calculating the amortized cost of a financial liability or asset and of allocating interest expense or income over the relevant
period. The effective interest is the rate that exactly discounts estimated future cash payments (including all fees and points
paid or received that form an integral part of the effective interest, transaction costs and other premiums or discounts) through
the expected life of the financial liability or asset, or (where appropriate) a shorter period, to the net carrying amount on initial
recognition.



Equity instruments



An equity instrument is any contract that
evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the
Company are recognized at the proceeds received, net of direct issue costs.



Repurchase of the Company's own equity
instruments is recognized and deducted directly in equity. No gain or loss is recognized in the Statement of Operations on the
purchase, sale, issue or cancellation of the Company's own equity instruments.



Derivative financial instruments



Derivatives are initially recognized at
fair value at the date the derivative contracts are entered into and are subsequently re-measured to their fair value at the end
of each reporting period. The resulting gain or loss is recognized in the Statement of Operations immediately unless the derivative
is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on
the nature of the hedge relationship.



Offsetting financial instruments



Financial assets and financial liabilities
are offset and the net amount reported on the Statement of Financial Position if, and only if, there is a currently enforceable
legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realise the asset and settle
the liability simultaneously.



Embedded derivatives



Derivatives embedded in non-derivative
host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the
host contracts and the host contracts are not measured at FVTPL. However, the Company can elect to treat the host contract at FVTPL.



Page 16







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | r) | Earnings Per Share
| | -- | ------------------



Earnings per share calculations are based
on the weighted average number of common shares issued and outstanding during the period. Diluted earnings per share are calculated
using the treasury stock method, in which the assumed proceeds from the potential exercise of those stock options, warrants and
restricted share units whose average exercise price is below the average market price of the underlying shares are used to purchase
the Company’s common shares at their average market price for the period.



| | 4. | SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
| | -- | ---------------------------------------------------------------------------



The preparation of the consolidated financial
statements requires that the Company’s management make estimates and judgements about future events that affect the amounts
reported in the consolidated financial statements and related notes to the consolidated financial statements. Actual results may
differ from those estimates. Estimates and judgements are reviewed on an ongoing basis based on historical experience and other
factors that are considered to be relevant under the circumstances. Revisions to estimates are accounted for prospectively.



The significant assumptions about the future
and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting
in a material adjustment to the carrying amounts of the Company assets and liabilities are as follows:



| | a) | Economic recoverability and probability of future economic benefits
of exploration, evaluation and development costs
| | -- | --------------------------------------------------------------------------------------------------------------------



The
Company has determined that exploration drilling, evaluation, development and related costs incurred which have been capitalized
are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of
future economic benefits including geological and metallurgical information, history of conversion of mineral deposits to proven
and probable reserves, scoping and feasibility studies, accessible facilities, and existing permits for the life of mine plan.



| | b) | Estimated recoverable ounces
| | -- | ----------------------------



The carrying amounts of the Company’s
mining properties are depleted based on recoverable ounces. Changes to estimates of recoverable ounces and depletable costs including
changes resulting from revisions to the Company’s mine plans and changes in metal price forecast can result in a change to
future depletion rates.



| | c) | Inventories
| | -- | -----------



All inventory is valued at the lower of
average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of
stockpiled ore, in-circuit gold inventories and doré inventories. The estimates and assumptions include surveyed quantities
of stockpiled ore, in-circuit process volumes, gold contents of both, costs to recover saleable ounces, recoverable ounces once
processed and the price per ounce of gold when ounces of gold are expected to be recovered and sold. For current stockpiled ore,
in-circuit gold inventories and doré inventories, management uses the gold price on the date of the reporting period. For
long-term stockpiled ore, management uses a gold price of $1,400 per ounce of gold and recovery percentages of 95%.



Page 17







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | d) | Deferred stripping
| | -- | ------------------



The Company defers stripping costs incurred
during the production stage of its operations when these costs are considered to generate a future benefit. The determination of
these amounts requires the use of judgements and estimates such as estimates of tonnes of waste to be removed over the life of
the mining area and economically recoverable reserves extracted as a result. Changes in a mine’s life and design may result
in changes to the expected stripping ratio. Any changes in these estimates are accounted for prospectively.



| | e) | Impairment of assets
| | -- | --------------------



At the end of each reporting period, the
Company assesses each cash generating unit to determine whether any indication of impairment exists. Where an indicator of impairment
exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs
to sell and value in use. The impairment analysis requires the use of estimates and assumptions such as long-term commodity prices,
discount rates, future capital requirements, exploration potential, and operating performance. Fair value of mineral assets is
generally determined as the present value of estimated future cash flows arising from the continued use of the asset, which includes
estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant
may take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessment of the time value of money and the risks specific to the asset. Management has assessed its cash generating units as
being an individual mine site, which is the lowest level for which cash inflows are largely independent of those other assets.



| | f) | Deferred revenue
| | -- | ----------------



Deferred revenue consists of payments received
by the Company in consideration for future commitments to deliver payable gold at contracted prices. The Company records a portion
of the deferred revenue as sales, based on a proportionate share of deliveries made compared with the total estimated contractual
commitment. The estimates and assumptions used by management include the reserves and resources on the named properties, the future
price of gold and the total future recoverable ounces.



| | g) | Accrued site closure costs
| | -- | --------------------------



The Company’s accounting policy for
the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant
legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure and
rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the
amounts currently provided for.



The provision for accrued site closure
costs is periodically reviewed and updated based on the available facts and circumstances. Changes to the estimated future costs
are recognized in the Statement of Financial Position by adjusting both the closure and rehabilitation asset and provision.



| | h) | Income taxes
| | -- | ------------



The Company is periodically required to
estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying
interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income
tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have
a direct impact on earnings in the period of changes.



Each period, the Company evaluates the
likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic
and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that
give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other
things, the market price for gold, production costs, quantities of proven and probable reserves, interest rates and foreign currency
exchange rates.



Page 18







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | i) | Share-based payments
| | -- | --------------------



The Company makes certain estimates and
assumptions when calculating the fair values of stock options and warrants granted. The significant estimations and assumptions
include expected volatility, expected life, expected dividend rate and expected risk-free rate of return. Changes in these assumptions
may result in a material change to the expense recorded for the issuance of stock options and warrants.



| | j) | Contingencies
| | -- | -------------



Due to the size, complexity and nature
of the Company’s operations, various legal and tax matters are outstanding from time to time. In the event that management’s
estimate of the future resolution of these matters changes, the Company will recognize the effects of the changes in its consolidated
financial statements on the date that such changes occur.



| | k) | Fair values and fair value hierarchy
| | -- | ------------------------------------



When the fair value of financial assets
and financial liabilities recorded in the Statement of Financial Position cannot be derived from active markets, their fair value
is determined using valuation techniques including the discounted cash flow model. The inputs into these models are taken from
observable markets where possible but where this is not feasible, a degree of judgement is required in establishing fair values.
The judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of financial instruments.



| | 5. | RECENT ACCOUNTING PRONOUNCEMENTS
| | -- | --------------------------------



IFRS 9 Financial Instruments (“IFRS
9”) introduces new requirements for the classification, measurement and derecognition of financial assets and financial liabilities.
Specifically, IFRS 9 requires all recognized financial assets that are within the scope of IAS 39 Financial Instruments:
Recognition and Measurement to be subsequently measured at amortized cost or fair value. The IASB has issued an amendment
to IFRS 9 Financial Instruments (“IFRS 9”), which changes the effective date of IFRS 9 (2009) and IFRS 9 (2011),
so that IFRS 9 is required to be applied for annual periods beginning on or after January 1, 2015, with early application permitted.
This amendment was released in connection with IFRS 7 Financial Instruments: Disclosures – Transition Disclosures(“IFRS
7”) which outlines that, with the amendments to IFRS 9, entities applying IFRS 9 do not need to restate prior periods but
are required to apply modified disclosures. The Company is currently assessing the impact of applying the amendments of IFRS 9
and IFRS 7 on the consolidated financial statements.



IFRS
10 Consolidated Financial Statements (“IFRS 10”) replaces the consolidation guidance in IAS 27 Consolidated
and Separate Financial Statements (“IAS 27”) and SIC-12 Consolidation — Special Purpose Entities by
introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee (i.e., whether
an entity is controlled through voting rights of investors or through other contractual arrangements as is common in special purpose
entities). Under IFRS 10, control is based on whether an investor has power over the investee, exposure, or rights, to variable
returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the returns.



Page 19







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



IFRS
11 Joint Arrangements (“IFRS 11”) introduces new accounting requirements for joint arrangements, replacing IAS
31 Interests in Joint Ventures. IFRS 11 removes the option to apply the proportional consolidation method when accounting
for jointly controlled entities and eliminates the concept of jointly controlled assets. IFRS 11 now only differentiates between
joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control have
rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have
joint control have rights to the net assets.



IFRS
12 Disclosure of Interests in Other Entities(“IFRS 12”) requires enhanced disclosures about both consolidated
entities and unconsolidated entities in which an entity has involvement. The objective of IFRS 12 is to provide financial statement
users with information to evaluate the basis of control, any restrictions on consolidated assets and liabilities, risk exposures
arising from involvement with unconsolidated structured entities and non-controlling interest holders' involvement in the activities
of consolidated entities.



The
requirements relating to separate financial statements in IAS 27 are unchanged in the amended IAS 27. The other portions of IAS
27 are replaced by IFRS 10. IAS 28 Investments in Associates and Joint Ventures (“IAS 28”) is amended to conform
with changes in IFRS 10, IFRS 11 and IFRS 12.



Each of these five standards have an effective
date for annual periods beginning on or after January 1, 2013, with earlier application permitted so long as each of the other
standards noted above are also early applied. However, entities are permitted to incorporate any of the disclosure requirements
in IFRS 12 without technically early applying the provisions of IFRS 12 (and thereby each of the other four standards). The Company
has concluded that the adoption of these standards will not have a material impact on its consolidated financial statements.



IFRS
13 Fair Value Measurement (“IFRS 13”) replaces existing IFRS guidance on fair value with a single standard.
IFRS 13 defines fair value, provides guidance on how to determine fair value and outlines required disclosures about fair value
measurements. IFRS 13 does not change the requirements regarding which items should be measured or disclosed at fair value. IFRS
13 is effective for annual periods beginning on or after January 1, 2013, with early application permitted. The Company has concluded
that the adoption of this standard will not materially impact the consolidated financial statements with the exception of requiring
additional disclosures.



The IASB issued amendments to IAS 1 Presentation
of Financial Statements (“IAS 1”) that require an entity to group items presented in the Statement of Comprehensive
Income on the basis of whether they may be reclassified to earnings subsequent to initial recognition. For those items presented
before taxes, the amendments to IAS 1 also require that the taxes related to the two separate groups be presented separately. The
amendments are effective for annual periods beginning on or after July 1, 2012, with earlier adoption permitted. The Company does
not anticipate the application of the amendments to IAS 1 to have a material impact on its consolidated financial statements.



The IASB issued amendments to IAS 19 Employee
Benefits (“IAS 19”) that introduced changes to the accounting for defined benefit plans and other employee benefits.
The amendments to other employee benefits include modification of the accounting for termination benefits and classification of
other employee benefits. IAS 19 is effective for annual periods beginning on or after January 1, 2013, with early application permitted.
The Company does not anticipate the application of the amended IAS 19 to have a material impact on its consolidated financial statements.



Page 20







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The IASB issued IFRIC 20 Stripping Costs
in the Production Phase of a Surface Mine (“IFRIC 20”). IFRIC 20 provides guidance on the accounting for the costs
of stripping activity in the production phase of surface mining when this activity provides access to useable ore that can be used
to produce inventory or improves access to further quantities of material that will be mined in future periods. IFRIC 20 must be
applied starting January 1, 2013, with early adoption permitted. The Company has concluded that its current accounting policies
conform with IFRIC 20 and the adoption of this standard will not impact the consolidated financial statements.



Amendments were issued by the IASB to IAS
32 Financial Instruments: Recognitions and Measurement (“IAS 32”), which address inconsistencies in current
practice when applying the offsetting criteria. These amendments are part of the IASB’s offsetting project. These amendments
must be applied starting January 1, 2014, with early adoption permitted. The IASB also issued amendments to IFRS 7 Financial
Instruments Disclosures as part of the offsetting project. This includes specific disclosures related to offsetting financial
assets and liabilities that will enable users of an entities financial statements to evaluate the potential effect of netting arrangements,
including rights of set-off associated with the entity’s recognized financial assets and liabilities, on the entity’s
financial position. These amendments must be applied starting January 1, 2013, with early adoption permitted. The Company has concluded
that the adoption of these standards will not have a material impact on its consolidated financial statements.



| | 6. | COMPARATIVE INFORMATION
| | -- | -----------------------



The Company has reclassified the following
balances in the Statement of Operations for the comparative year ending December 31, 2011;



|                              |  | December 31            |        |  | December 31                   |  
|----------------------------- |  | ---------------------- | ------ |  | ----------------------------- | -
|                              |  | 2011 (as reclassified) |        |  | 2011 (as previously reported) |  
|Direct operating costs        |  | $                      | 45,160 |  |                               | $
|Depreciation and amortization |  |                        | 18,276 |  |                               |  



For the year ending December 31, 2012,
the Company has reclassified $0.8 million from direct operating costs to depreciation and amortization expense in the Statement
of Operations, to conform with current period presentation. The reclassification reallocates the depreciation and amortization
charge for production inventory to the correct operating cost category. The reclassification does not impact net income attributable
to shareholders or earnings per share.



| | 7. | NOTES RECEIVABLE
| | -- | ----------------



On August 30, 2012, the Company completed
the sale of the notes receivable to a third party for proceeds of $5.8 million, less costs to sell. For the year ended December
31, 2012, the Company recorded a gain of $2.3 million related to the sale in the Statement of Operations.



| | 8. | RESTRICTED CASH
| | -- | ---------------



|                |  | December 31 |        |  | December 31 |  
|--------------- |  | ----------- | ------ |  | ----------- | -
|                |  | 2012        |        |  | 2011        |  
|Restricted cash |  | $           | 20,395 |  |             | $



Restricted cash represents secured funds
for letters of credit issued by the Company in favour of the Ontario Ministry of Northern Development, Mines and Forestry as security
to meet the Company’s bonding requirements for the site closure obligations of the Black Fox Mine and Mill.



Page 21







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 9. | INVENTORIES
| | -- | -----------



Inventories consist of:



|                             |  | December 31 |        |  | December 31 |  
|---------------------------- |  | ----------- | ------ |  | ----------- | -
|                             |  | 2012        |        |  | 2011        |  
|Current portion of inventory |  |             |        |  |             |  
|Doré                         |  | $           | 893    |  |             | $
|In-circuit gold              |  |             | 4,232  |  |             |  
|Stockpiled ore               |  |             | 3,027  |  |             |  
|Material and supplies        |  |             | 2,710  |  |             |  
|                             |  |             | 10,862 |  |             |  
|Long-term stockpiled ore     |  |             | 8,367  |  |             |  
|                             |  | $           | 19,229 |  |             | $



The cost of inventories recognized as an
expense in the Statement of Operations during the year ended December 31, 2012 is $81.3 million (2011 - $63.4 million). For the
year ended December 31, 2012, the Company recorded gross net realizable value adjustments of $1.2 million (2011 – $0.8 million),
offset by net realizable value reversals of $1.1 million (2011 – $nil) resulting from a change in management’s estimate
for long-term gold price.



| | 10. | investments
| | --- | -----------



|                               |  | December 31 |     |  | December 31 |  
|------------------------------ |  | ----------- | --- |  | ----------- | -
|                               |  | 2012        |     |  | 2011        |  
|Investment receivable          |  | $           | -   |  |             | $
|Investment in associate        |  |             | -   |  |             |  
|Available-for-sale investments |  |             | 543 |  |             |  
|                               |  | $           | 543 |  |             | $



Investment Receivable



During the year ended December 31, 2011,
the Company entered into an agreement for the sale of the Ixhuatán gold project to Cangold Limited (“Cangold”).
The transaction provided Cangold with the option to acquire a 75% interest in the Company’s subsidiary, Linear Gold Mexico,
S.A. de C.V. (“Linear Gold Mexico”). Pursuant to the terms of the transaction, Cangold was to remit the following consideration
to the Company to acquire the option: Cdn$1.0 million and 6.0 million Cangold shares upon signing, Cdn$1.0 million and 6.0 million
Cangold shares 12 months after signing, and Cdn$3.0 million and 4.0 million Cangold shares 24 months after signing.



Once all the consideration relating to
the option has been paid, Cangold could exercise the option by remitting Cdn$5.0 million and issuing 4.0 million Cangold shares
to the Company and completing an independent third-party feasibility study on the Ixhuatán deposit within 36 months after
signing the option.



The option agreement was signed on October
18, 2011. Upon initial recognition, the Company recorded an investment in associate of $2.1 million, as the Company had acquired
significant influence over Cangold by virtue of its ownership of 18% of Cangold’s outstanding voting shares and representation
on Cangold’s Board of Directors. The Company recognized an investment receivable of $11.1 million relating to the future
share consideration to be received from Cangold. The Company also recognized a derivative liability of $14.2 million relating to
the obligation to deliver the shares of Linear Gold Mexico (note 15). The fair value of the derivative liability and the investment
receivable were determined based on the net present value of the consideration to be received, since a reliable measure of the
fair value of the consideration to be delivered could not be determined as the shares of Linear Gold Mexico are not publically
traded.



Page 22







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



During the year ended December 31, 2012,
the Company concluded that the investment in associate and the investment receivable were impaired due to a significant and prolonged
decline in the market value of Cangold’s shares. For the year ended December 31, 2012, the Company recorded impairment charges
of $1.4 million on the investment in associate and $3.5 million on the investment receivable in the Statement of Operations.



On September 10, 2012, Cangold terminated the option agreement
with the Company and therefore was no longer required to make the remaining payments to the Company. For the year ended December
31, 2012, the Company recorded a gain of $1.8 million relating to the termination of the Agreement in the Statement of Operations.



The following is a reconciliation of the
gain recorded in the Statement of Operations relating to the termination of the Cangold option:



|Impairment of investment receivable and investment in associate                      |  | $ | (4,887 | )
|------------------------------------------------------------------------------------ |  | - | ------ | -
|Loss recognized on reclassification of investment in associate to available-for-sale |  |   | (210   | )
|Gain on termination of option derivative liability and investment receivable         |  |   | 6,946  |  
|Gain on termination of option agreement                                              |  | $ | 1,849  |  



Investment in Associate



On September 11, 2012, the Company concluded
that it no longer had significant influence over Cangold, as it did not own more than 20% of Cangold’s outstanding voting
shares and no longer had representation on Cangold’s Board of Directors. The Company reclassified the fair value of its remaining
investment in Cangold to available-for-sale as at the date the Company ceased to exert significant influence. For the year ended
December 31, 2012, the Company recorded a loss of $0.2 million in the Statement of Operations.



The following is a reconciliation of the
investment in associate for the year ending December 31, 2012:



|Investment in associate as of December 31, 2011                                |  | $ | 2,084  |  
|------------------------------------------------------------------------------ |  | - | ------ | -
|Equity loss in investment in associate                                         |  |   | (163   | )
|Impairment of investment in associate                                          |  |   | (1,422 | )
|Foreign exchange                                                               |  |   | 71     |  
|Carrying value of investment in associate before loss of significant influence |  |   | 570    |  
|Fair value available-for-sale investment                                       |  |   | 360    |  
|Loss recognized                                                                |  | $ | (210   | )



The following tables contain summarized
financial information of the Company’s investment in Cangold during the period in which the Company had significant influence:



|                                           |  | December 31 |   |  | December 31 |  
|------------------------------------------ |  | ----------- | - |  | ----------- | -
|                                           |  | 2012        |   |  | 2011        |  
|Total assets                               |  | $           | - |  |             | $
|Total liabilities                          |  |             | - |  |             |  
|Net assets                                 |  | $           | - |  |             | $
|Company’s share of net assets of associate |  | $           | - |  |             | $



Page 23







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



|                                              |  | December 31 |      |   | December 31 |  
|--------------------------------------------- |  | ----------- | ---- | - | ----------- | -
|                                              |  | 2012        |      |   | 2011        |  
|Total revenue                                 |  | $           | -    |   |             | $
|Total net loss                                |  |             | (938 | ) |             |  
|Equity loss pick-up of associate              |  | $           | (163 | ) |             | $
|                                              |  |             |      |   |             |  
|Company’s share of other comprehensive income |  | $           | -    |   |             | $



Available-for-sale investments



The available-for-sale investment represents
the Company’s investment in Cangold. On September 11, 2012, the Company no longer had significant influence over Cangold
and therefore ceased accounting for this investment on an equity basis and reclassified it to available-for-sale. The fair market
value of the available-for-sale investment on initial recognition was $0.4 million, based on the quoted market price for the underlying
security. For the year ending December 31, 2012, the Company has recognized unrealized gains of $0.2 million in the Statement of
Comprehensive Income.



| | 11. | PROPERTY, PLANT AND EQUIPMENT
| | --- | -----------------------------



|                                         |  | Property, plant and equipment |         |   | Mining properties and development costs |   |         | Mineral rights |  |   | Evaluation and exploration assets |   |  | Total |       
|---------------------------------------- |  | ----------------------------- | ------- | - | --------------------------------------- | - | ------- | -------------- |  | - | --------------------------------- | - |  | ----- | ------
|Cost                                     |  |                               |         |   |                                         |   |         |                |  |   |                                   |   |  |       |       
|As at December 31, 2010                  |  | $                             | 98,309  |   |                                         | $ | 94,331  |                |  | $ | 70,367                            |   |  | $     | 8,425 
|Additions                                |  |                               | 14,933  |   |                                         |   | 50,800  |                |  |   | 693                               |   |  |       | 14,006
|Disposals                                |  |                               | (1,151  | ) |                                         |   | -       |                |  |   | (52                               | ) |  |       | -     
|Reclassification to assets held for sale |  |                               | (98     | ) |                                         |   | (4,926  | )              |  |   | -                                 |   |  |       | -     
|As at December 31, 2011                  |  | $                             | 111,993 |   |                                         | $ | 140,205 |                |  | $ | 71,008                            |   |  | $     | 22,431
|Additions                                |  |                               | 29,142  |   |                                         |   | 52,502  |                |  |   | 1,026                             |   |  |       | 10,497
|Disposals                                |  |                               | (21,900 | ) |                                         |   | -       |                |  |   | -                                 |   |  |       | -     
|As at December 31, 2012                  |  | $                             | 119,235 |   |                                         | $ | 192,707 |                |  | $ | 72,034                            |   |  | $     | 32,928



|                                         |  | Property, plant and equipment |        |   | Mining properties and development costs |   |        | Mineral rights |  |   | Evaluation and exploration assets |  |  | Total |  
|---------------------------------------- |  | ----------------------------- | ------ | - | --------------------------------------- | - | ------ | -------------- |  | - | --------------------------------- |  |  | ----- | -
|Accumulated depreciation and impairment  |  |                               |        |   |                                         |   |        |                |  |   |                                   |  |  |       |  
|As at December 31, 2010                  |  | $                             | 15,681 |   |                                         | $ | 6,850  |                |  | $ | 1,064                             |  |  | $     | -
|Depreciation                             |  |                               | 11,912 |   |                                         |   | 9,316  |                |  |   | 574                               |  |  |       | -
|Disposals                                |  |                               | (1,085 | ) |                                         |   | -      |                |  |   | -                                 |  |  |       | -
|Reclassification to assets held for sale |  |                               | (88    | ) |                                         |   | -      |                |  |   | -                                 |  |  |       | -
|As at December 31, 2011                  |  | $                             | 26,420 |   |                                         | $ | 16,166 |                |  | $ | 1,638                             |  |  | $     | -
|Depreciation                             |  |                               | 13,937 |   |                                         |   | 17,715 |                |  |   | 661                               |  |  |       | -
|Disposals                                |  |                               | (6,537 | ) |                                         |   | -      |                |  |   | -                                 |  |  |       | -
|Impairments                              |  |                               | -      |   |                                         |   | -      |                |  |   | 6,029                             |  |  |       | -
|As at December 31, 2012                  |  | $                             | 33,820 |   |                                         | $ | 33,881 |                |  | $ | 8,328                             |  |  | $     | -



Page 24







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



|                        |  | Property, plant and equipment |        |  | Mining properties and development costs |   |         | Mineral rights |  |   | Evaluation and exploration assets |  |  | Total |       
|----------------------- |  | ----------------------------- | ------ |  | --------------------------------------- | - | ------- | -------------- |  | - | --------------------------------- |  |  | ----- | ------
|Carrying amount         |  |                               |        |  |                                         |   |         |                |  |   |                                   |  |  |       |       
|As at December 31, 2011 |  | $                             | 85,573 |  |                                         | $ | 124,039 |                |  | $ | 69,370                            |  |  | $     | 22,431
|As at December 31, 2012 |  | $                             | 85,415 |  |                                         | $ | 158,826 |                |  | $ | 63,706                            |  |  | $     | 32,928



During the year ended December 31, 2012,
due to the termination of the option agreement with Cangold, the Company reviewed the fair value less costs to sell of its Ixhuatán
exploration property, included within the evaluation and exploration category. The Company concluded that the carrying value was
impaired and recorded an impairment charge of $5.7 million for the year ended December 31, 2012, representing the difference between
the Company’s estimate of the fair value less costs to sell and its carrying value. Fair value less costs to sell was measured
by assessing the market value of similar properties held by comparable companies in similar jurisdictions. The impairment loss
has been included in the “Other Exploration Properties” segment in note 27.



During the year ended December 31, 2012,
due to a lapse in expected payment under the terms of the Huizopa agreement (note 29), the Company reviewed the fair value less
costs to sell of its Huizopa property, included within the evaluation and exploration category. The Company concluded that the
carrying value was impaired and recorded an impairment charge of $0.3 million for the year ended December 31, 2012, which represented
the difference between the Company’s estimate of the fair value less costs to sell and its carrying value. The discount rate
used in measuring fair value less costs to sell was 12.5% per annum. The impairment loss has been included in the “Other
Exploration Properties” segment in note 27.



During the year ended December 31, 2012,
$3.3million (2011 - $3.8 million) of borrowing costs associated with qualifying assets were capitalized
within property, plant and equipment. The applicable capitalization rate for the year ended December 31, 2012 was 11.5% (December
31, 2011 – 11.5%).



The carrying value of
property, plant, and equipment under finance leases at December 31, 2012 was $38.6 million (December 31, 2011 - $28.7 million).



The
Company has made commitments to acquire property, plant and equipment totalling $14.1 million at December 31, 2012 (December 31,
2011 - $14.1 million).



During
the year ended December 31, 2012, $nil (2011 - $15.3 million) of revenue was credited to mining properties and development costs
related to the sale of underground ore prior to entering commercial production.



Page 25







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 12. | Assets held for salE
| | --- | --------------------



|                    |  | December 31 |       |  | December 31 |  
|------------------- |  | ----------- | ----- |  | ----------- | -
|                    |  | 2012        |       |  | 2011        |  
|Plant and equipment |  | $           | 12    |  |             | $
|Mineral rights      |  |             | 4,050 |  |             |  
|                    |  | $           | 4,062 |  |             | $



The Company has signed an agreement relating
to the sale of its exploration and evaluation assets in the Dominican Republic. The assets held for sale are measured at the lower
of carrying value and fair value less costs to sell. As at December 31, 2012, the Company identified that the carrying value exceeded
the fair value less costs to sell and therefore recorded an impairment charge of $0.9 million in the Statement of Operations. The
discount rate used in measuring fair value less costs to sell was 9.5% per annum.



The Company anticipates that the transaction
will close in the next twelve months and has determined it appropriate to classify the assets held for sale as current.



| | 13. | LONG-TERM DEBT
| | --- | --------------



|                                        |  | December 31 |        |  | December 31 |  
|--------------------------------------- |  | ----------- | ------ |  | ----------- | -
|                                        |  | 2012        |        |  | 2011        |  
|Senior Unsecured Convertible Debentures |  | $           | 36,518 |  |             | $
|Senior Secured Notes                    |  |             | 27,527 |  |             |  
|Finance lease liabilities               |  |             | 29,150 |  |             |  
|Total debt                              |  | $           | 93,195 |  |             | $
|                                        |  |             |        |  |             |  
|Current                                 |  | $           | 17,097 |  |             | $
|Non-current                             |  |             | 76,098 |  |             |  
|                                        |  | $           | 93,195 |  |             | $



Senior Unsecured Convertible Debentures



On March 23, 2011, the Company issued 50,000
Senior Unsecured Convertible Debentures (“the Debentures”) in the aggregate principal amount of $50.0 million. The
Debentures, which were issued pursuant to a Debenture Indenture (the “Debenture Indenture”), each have a principal
amount of $1,000, bear interest at a rate of 6.5% per annum and are convertible by the holders into common shares of the Company
at any time at a conversion price of $2.45 per common share. The Debentures do not allow for forced conversion by the Company prior
to March 31, 2014 but after that date, the Company may redeem the Debentures if the market price of the Company’s shares
is at least 125% of the conversion price. The maturity date of the Debentures is March 31, 2016.



Interest is payable in arrears in equal
semi-annual installments on March 31 and September 30 in each year. The Debenture Indenture provides that in the event of a change
in control of the Company, as defined therein, where 10% or more of the aggregate purchase consideration is cash, the holders are
entitled to receive an additional number of common shares as defined in the Debenture Indenture. The Debentures are unsecured and
subordinate to any secured indebtedness incurred subsequent to the issue of the Debentures.

Page 26







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Debentures are a hybrid financial instrument
(note 15). The debt component is measured at amortized cost and is accreted over the expected term to maturity using the effective
interest method. The derivative component is measured at fair value at each reporting period.



Senior Secured Notes



On October 25, 2012, the Company issued
Cdn$30.0 million in Senior Secured Notes (the “Notes”). The Notes are secured by a first charge over all assets of
the Black Fox Mine, including the Grey Fox property, as well as the Goldfields property and a second charge over the Black Fox
Mill. The Notes have a three year term with quarterly principal payments of Cdn$2.0 million, commencing on June 30, 2013. The Notes
bear interest at rates ranging between 9% and 14%, which is paid monthly, at an annual rate as calculated based on the closing
Bloomberg Composite New York Gold Price from the prior month. The Notes also contain early redemption and change of control provisions.



The Notes are a hybrid financial instrument
and contain three embedded derivatives. The embedded derivatives relate to the commodity linked interest rate, the early redemption
provision and the change of control provision (notes 14 and 15). The embedded derivatives must be separately valued and disclosed
on the Statement of Financial position. The debt component is measured at amortized cost and is accreted over the expected term
to maturity using the effective interest method. The embedded derivatives are recorded at fair value upon initial recognition.
Changes to the fair value of the embedded derivatives are recorded in the Statement of Operations each reporting period. The change
of control provision is deemed to have a fair value of $nil and, therefore, is not separately disclosed on the Statement of Financial
Position.



Finance Lease Liabilities



The Company is obligated under various
finance leases for equipment. All finance lease agreements provide that the Company can purchase the leased equipment at the end
of the lease term for a nominal amount. Interest payable on the various leases range from a fixed rate of 1.96% to 8.60%. The lessors
hold first security rights over the assets which are being leased.



The total annual payments under finance
leases are as follows:



|                             |  | Minimum lease payments |        |   | Present value of minimum lease payments |  
|---------------------------- |  | ---------------------- | ------ | - | --------------------------------------- | -
|                             |  | December 31            |        |   | December 31                             |  
|                             |  | 2012                   |        |   | 2011                                    |  
|Less than 1 year             |  | $                      | 13,738 |   |                                         | $
|Between 1 and 5 years        |  |                        | 18,156 |   |                                         |  
|More than 5 years            |  |                        | -      |   |                                         |  
|                             |  |                        | 31,894 |   |                                         |  
|Less: future finance charges |  |                        | (2,744 | ) |                                         |  
|                             |  | $                      | 29,150 |   |                                         | $



Page 27











|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 14. | Derivative ASSET
| | --- | ----------------



The Notes contain an early redemption feature
which allows them to be redeemed by the Company at any time at a principal redemption factor of 105% prior to January 1, 2014 or
103% between January 1, 2014 and October 31, 2015, plus accrued and unpaid interest. The early redemption feature is considered
to be an embedded derivative as the prepayment option is not closely related to the host debt contract.



The fair value of the early redemption
option was determined using the one-factor Hull-White model for future interest rates. The related derivative asset was modeled
as a swaption, with the underlying swap having the same payment structure as the Notes. The model simulated the evolution of interest
rates onto a tree or lattice to value interest rate derivatives. The volatility for the interest rate was calibrated from market
data on traded swaptions with maturities and tenors commensurate with the maturity of the underlying swap. A basis spread equal
to the credit spread was applied to the swaption valuation. The credit spread for the risk adjusted discount rate was determined
by pricing the debt and the swaption simultaneously so the price of the debt minus the option agreed to the par value of the debt
at inception.



The fair value of the derivative asset
upon initial recognition was $4.1 million. During the year ended December 31, 2012, unrealized losses relating to the early redemption
feature of $0.4 million have been recorded in the Statement of Operations.



| | 15. | Derivative liabilities
| | --- | ----------------------



The derivative liabilities recorded on
the Statement of Financial Position are as follows:



|                                        |  | December 31 |       |  | December 31 |  
|--------------------------------------- |  | ----------- | ----- |  | ----------- | -
|                                        |  | 2012        |       |  | 2011        |  
|Convertible debenture conversion option |  | $           | 2,554 |  |             | $
|Warrant liabilities                     |  |             | 1,592 |  |             |  
|Commodity linked interest liability     |  |             | 5,579 |  |             |  
|Cangold option (note 10)                |  |             | -     |  |             |  
|                                        |  | $           | 9,725 |  |             | $



The unrealized gains and losses associated
with the derivative liabilities recorded in the Statement of Operations are as follows:



|                                        |  | December 31 |       |   | December 31 |  
|--------------------------------------- |  | ----------- | ----- | - | ----------- | -
|                                        |  | 2012        |       |   | 2011        |  
|Convertible debenture conversion option |  | $           | 3,805 |   |             | $
|Warrant liabilities                     |  |             | 5,092 |   |             |  
|Commodity linked interest liability     |  |             | (7    | ) |             |  
|                                        |  | $           | 8,890 |   |             | $



Convertible debenture conversion option



The conversion option provided to the holders
of the Debentures is a derivative liability. The fair value of the conversion option upon initial recognition was $16.9 million.
The conversion option is re-measured at fair value through the Statement of Operations at the end of each reporting period. For
the year ended December 31, 2012, the Company recorded an unrealized gain of $3.8 million related to the change in the fair value
of the conversion option in the Statement of Operations (December 31, 2011 - $10.5 million).



Page 28







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The following are the assumptions used
in calculating the fair value of the conversion option:



|                    |  | December 31, 2012 |      |   | December 31, 2011 |  
|------------------- |  | ----------------- | ---- | - | ----------------- | -
|Discount rate       |  |                   | 0.72 | % |                   |  
|Expected life       |  |                   | 3.25 |   |                   |  
|Expected volatility |  |                   | 55   | % |                   |  
|Exercise price      |  | $                 | 2.45 |   |                   | $
|Stock price         |  | $                 | 0.93 |   |                   | $



Expected volatility is based on the historical share price volatility
over a period of time equivalent to the expected life of the conversion option.



Warrant liabilities



The Company has issued publically traded
warrants with exercise prices denominated in a currency other than the Company’s functional currency. These are considered
to be equity linked financial instruments and therefore are classified as derivative liabilities. The fair value of the warrant
liabilities is determined using the quoted market value of these securities. Gains or losses resulting from the change in the quoted
market value are recognized in the Statement of Operations each reporting period. For the year ended December 31, 2012, the Company
recorded an unrealized gain of $5.1 million (December 31, 2011 - $10.8 million) related to the change in the fair value of the
warrants in the Statement of Operations.



The following are the assumptions used
in calculating the fair value of the warrant liabilities:



|                         |  | December 31, 2012 |              |  | December 31, 2011 |  
|------------------------ |  | ----------------- | ------------ |  | ----------------- | -
|BRD.WT                   |  | $                 | 0.15         |  |                   | $
|BRD.WT.A                 |  | $                 | 0.095        |  |                   | $
|BRD.WT conversion factor |  |                   | 1 to 1.36855 |  |                   |  



Commodity linked interest liability



The interest rate payable under the terms
of the Notes is a derivative liability as it is linked to a commodity price. The fair value commodity linked interest liability
upon initial recognition was $6.0 million. The interest liability is re-measured at fair value through the Statement of Operations
at the end of each reporting period. For the year ended December 31, 2012, the Company made interest payments totalling $0.5 million
(December 31, 2011 - $nil).



The following are the assumptions used
in calculating the fair value of the interest liability:



|                                      |  | December 31, 2012 |        |   | December 31, 2011 | 
|------------------------------------- |  | ----------------- | ------ | - | ----------------- | 
|Discount rate                         |  |                   | 1.32   | % |                   | 
|Foreign exchange rate ($USD / $CDN)   |  |                   | 1  = 1 |   |                   | 
|Average gold price – 2013 (per ounce) |  | $                 | 1,802  |   |                   | 
|Average gold price – 2014 (per ounce) |  | $                 | 1,749  |   |                   | 
|Average gold price – 2015 (per ounce) |  | $                 | 1,600  |   |                   | 



Page 29







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Cangold
option



The following are the assumptions used
in calculating the fair value of the option liability:



|              |  | December 31, 2012 |   |  | December 31, 2011 | 
|------------- |  | ----------------- | - |  | ----------------- | 
|Discount rate |  |                   | - |  |                   | 





| | 16. | ACCRUED SITE CLOSURE COSTS
| | --- | --------------------------



The accrued site closure
costs are as follows:



|                            |  | December 31 |        |  | December 31 |  
|--------------------------- |  | ----------- | ------ |  | ----------- | -
|                            |  | 2012        |        |  | 2011        |  
|Balance, beginning of year  |  | $           | 19,570 |  |             | $
|Accretion                   |  |             | 398    |  |             |  
|Change in accounting policy |  |             | -      |  |             |  
|Change in estimates         |  |             | 3,767  |  |             |  
|Foreign exchange            |  |             | 417    |  |             |  
|Balance, end of year        |  | $           | 24,152 |  |             | $



As of December 31, 2012,
the undiscounted obligation, adjusted for inflation, associated with the site closure costs relating to the Black Fox Mine and
Mill is $28.8 million (December 31, 2011 - $24.3 million). The present value of the Company’s accrued site closure liability
was determined using a discount rate of 2% (December 31, 2011 - 2%).



In preparing the provision
for site closure costs, management has made certain assumptions for the timing of cash outflows and long-term costs associated
with the obligation which could change based on future events. During the year ended December 31, 2012, the estimate of the area
to be covered by the reclamation plan was revised. The change in estimate has increased the estimate for site closure costs by
$3.8 million.



During 2011, the Company reviewed the liability
specific discount rate used in the calculation of the accrued site closure costs. The discount rate used in the calculation of
the accrued site closure costs was changed from a credit-adjusted risk free rate, to a risk-free rate, as this was deemed to more
accurately reflect the liability specific discount rate. The Company accounted for this change as an accounting policy change and
applied it retrospectively.



| | 17. | DEFERRED REVENUE
| | --- | ----------------



On November 9, 2010, the Company entered
into an agreement (the “Agreement”) with Sandstorm Gold Ltd. (“Sandstorm”) to sell a portion of future
gold production from the Black Fox Mine and a portion of the adjoining Pike River property (the “Black Fox Extension”)
for an upfront payment of $56.3 million and ongoing per ounce payments of the lesser of $500 per ounce of gold (subject to an inflationary
adjustment beginning in 2013, not to exceed 2% per year) and the London fix price quoted by the London Bullion Market Association
(the “Fixed Price”) for each ounce delivered. The Company commenced sales under this Agreement on January 1, 2011.



Under the terms of the Agreement, the upfront
payment is reduced by the difference between the market price of gold on the business day prior to the date of gold delivery and
the Fixed Price of the gold multiplied by the total ounces of gold delivered (the “Uncredited Balance”). If, after
the term of the Agreement (November 9, 2090), the Uncredited Balance has not been reduced to $nil, then the Company will be required
to repay the amount of the Uncredited Balance. The Company recorded the upfront payment as deferred revenue.



Page 30







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Company had the option, until January
1, 2013, to reduce the gold payable of future gold production from the Black Fox Mine by increments of 1% by making a payment
of $6.1 million to a maximum 6% reduction from the Black Fox Mine and 4.5% reduction from the Black Fox Extension for $36.6 million.
On November 5, 2012, the Company elected to repurchase 4% and 3.7% of the future gold production at the Black Fox Mine and Black
Fox Extension, respectively, for $24.4 million. Sandstorm is now entitled to 8% of the future production at the Black Fox Mine
and 6.3% at the Black Fox Extension. The Company recognized a $5.6 million loss representing the premium on the repurchase, with
the remaining $18.8 million applied against the deferred revenue balance recorded on the Statement of Financial Position. The
Company’s option to repurchase any remaining portion of the Goldstream expired unexercised on January 1, 2013.



Under the Agreement, there is a fixed and
floating charge debenture between the Company and Sandstorm which provides Sandstorm with security for payment and performance
under all obligations of the Agreement. Under the provisions of the debenture, Sandstorm may agree to the subordination of their
interests to a senior lender providing that the senior lenders will, in the event of default, allow the delivery of the Sandstorm
payable gold at all times.



During the year ended December 31, 2012,
the Company recorded revenue of $9.0 million related to the Agreement (December 31, 2011 - $6.5 million). At December 31, 2012,
the deferred revenue balance was $29.3 million, with $3.6million recorded as current (December
31, 2011 - $52.8 million with $6.3 million recorded as current).



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



|                             |  | December 31 |     |  | December 31 |  
|---------------------------- |  | ----------- | --- |  | ----------- | -
|                             |  | 2012        |     |  | 2011        |  
|Current income tax expense   |  | $           | -   |  |             | $
|Deferred income tax recovery |  |             | 349 |  |             |  



The
provision for income taxes reported differs from the amounts computed by applying the cumulative Canadian federal and provincial
income tax rates to the net income before tax provision due to the following:



|                                                                                                   |  | December 31 |        |   | December 31 |  
|-------------------------------------------------------------------------------------------------- |  | ----------- | ------ | - | ----------- | -
|                                                                                                   |  | 2012        |        |   | 2011        |  
|Income before income taxes                                                                         |  | $           | 18,580 |   |             | $
|Statutory rate                                                                                     |  |             | 25.25  | % |             |  
|Tax expense at statutory rate                                                                      |  |             | 4,691  |   |             |  
|Non-taxable fair value change on warrant liabilities                                               |  |             | (1,286 | ) |             |  
|Non-deductible share-based compensation expense                                                    |  |             | 1,171  |   |             |  
|Renouncement of flow-through share expenditures incurred                                           |  |             | 2,321  |   |             |  
|Recovery for losses and deductible temporary differences not recognized in current and prior years |  |             | (8,967 | ) |             |  
|Permanent differences and other                                                                    |  |             | 1,721  |   |             |  
|Income tax recovery                                                                                |  | $           | (349   | ) |             | $



Page 31







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The
tax effects of temporary differences that would give rise to significant portion of the deferred tax assets and liabilities at
December 31 were as follows:



|                                           |  | December 31 |        |  | December 31 |  
|------------------------------------------ |  | ----------- | ------ |  | ----------- | -
|                                           |  | 2012        |        |  | 2011        |  
|Deferred tax assets                        |  |             |        |  |             |  
|Net operating losses carried forward       |  | $           | 28,335 |  |             | $
|Deductible temporary differences and other |  |             | 148    |  |             |  
|Exploration and development                |  |             | 89     |  |             |  
|Property, plant and equipment              |  |             | 957    |  |             |  
|Accrued site closure costs                 |  |             | 611    |  |             |  
|                                           |  |             | 30,140 |  |             |  
|Deferred tax liabilities                   |  |             |        |  |             |  
|Property, plant and equipment              |  |             | 6,833  |  |             |  
|Investment receivable                      |  |             | -      |  |             |  
|Convertible debentures                     |  |             | 2,759  |  |             |  
|Finance lease obligations                  |  |             | 2,584  |  |             |  
|Exploration and development                |  |             | 25,734 |  |             |  
|Other                                      |  |             | 1,797  |  |             |  
|                                           |  |             | 39,707 |  |             |  
|Net deferred tax liability                 |  | $           | 9,567  |  |             | $



The change in the net deferred tax liability can be explained
as follows:



|                           |  | December 31 |       |   | December 31 |  
|-------------------------- |  | ----------- | ----- | - | ----------- | -
|                           |  | 2012        |       |   | 2011        |  
|Balance, beginning of year |  | $           | 9,916 |   |             | $
|Deferred tax recovery      |  |             | (349  | ) |             |  
|Balance, end of year       |  | $           | 9,567 |   |             | $



At
December 31, 2012, the Company and its subsidiaries have unused non-capital losses of $188.6 million (December 31, 2011 - $205.9
million) available for carryforward purposes which expire from 2014-2032. The Company’s subsidiaries also have non-capital
loss carryforwards of $1.2 million (December 31, 2011 - $1.2 million) that have no expiration date, however, the use of these carryforwards
is restricted to 30% of annual taxable income. The Company also has capital loss carryforwards of $38.6 million (December 31, 2011
- $40.9 million) that expire in 2015. Deferred tax assets have been recognized in respect of non-capital losses and deductible
temporary differences to the extent of taxable temporary differences that reverse within the carryforward period of these attributes.
The Company has unrecognized deferred tax assets of $158.2 million (December 31, 2011 - $189.7 million) in respect of loss carryforwards,
deductible temporary differences and unused tax credits.



At
December 31, 2012, the Company has no unrecognized deferred tax liability (December 31, 2011 - $nil) for taxes that would be payable
on the unremitted earnings of certain of the Company’s subsidiaries.



There
are no income tax consequences attached to the payment of dividends in either 2012 or 2011 by the Company to its shareholders.



Page 32







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)





| | 19. | SHARE CAPITAL
| | --- | -------------



| | a) | Common Shares
| | -- | -------------



Authorized share capital of the Company
consists of an unlimited number of fully paid common shares without par value.



|                                           |  | Number of shares |             |  | Amount |  
|------------------------------------------ |  | ---------------- | ----------- |  | ------ | -
|Outstanding, December 31, 2010             |  |                  | 182,424,828 |  |        | $
|Exercise of options                        |  |                  | 813,749     |  |        |  
|Exercise of warrants                       |  |                  | 11,888,924  |  |        |  
|Shares issued for contract settlement      |  |                  | 1,396,134   |  |        |  
|Shares issued for cash                     |  |                  | 4,995,543   |  |        |  
|Outstanding, December 31, 2011             |  |                  | 201,519,178 |  |        | $
|Shares issued for cash                     |  |                  | 24,094,500  |  |        |  
|Exercise of warrants                       |  |                  | 5,326,782   |  |        |  
|Shares issued for deferred share units     |  |                  | 260,000     |  |        |  
|Shares issued under employee purchase plan |  |                  | 116,982     |  |        |  
|Shares issued under agreement              |  |                  | 25,000      |  |        |  
|Exercise of options                        |  |                  | 17,500      |  |        |  
|Outstanding, December 31, 2012             |  |                  | 231,359,942 |  |        | $



| | b) | Warrants
| | -- | --------



The following reconciles the warrants outstanding
at the beginning and end of the respective periods:



|                             |  | December 31, 2012   |            |   | December 31, 2011                       |  
|---------------------------- |  | ------------------- | ---------- | - | --------------------------------------- | -
|                             |  | Number 
of warrants |            |   | Weighted average exercise 
price (Cdn$) |  
|Balance, beginning of period |  |                     | 30,878,267 |   |                                         | $
|Exercised                    |  |                     | (5,326,782 | ) |                                         |  
|Expired                      |  |                     | (2,956,140 | ) |                                         |  
|Balance, end of period       |  |                     | 22,595,345 |   |                                         | $



There were no warrants issued during the
year ended December 31, 2012 (December 31, 2011 – nil). The weighted average exercise price of the warrants outstanding at
December 31, 2012 was $Cdn1.84 (December 31, 2011 - $Cdn1.66).



The following table summarizes information relating to warrants
outstanding as at December 31, 2012:



|                  |  | Number of warrants and shares |            |  | Exercise price |  |      |            
|----------------- |  | ----------------------------- | ---------- |  | -------------- |  | ---- | -----------
|Date issued       |  | issuable upon exercise        |            |  | (Cdn$)         |  |      | Expiry date
|February 20, 2009 |  |                               | 6,709,028  |  |                |  | 1.01 |            
|June 25, 2010     |  |                               | 7,121,592  |  |                |  | 2.19 |            
|October 19, 2010  |  |                               | 8,764,725  |  |                |  | 2.19 |            
|                  |  |                               | 22,595,345 |  |                |  |      |            



Page 33







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)





| | c) | Stock Option Plan
| | -- | -----------------



The Company has a stock
option plan that provides for the granting of options to directors, officers, employees and service providers of the Company at
a price based on the mean between the reported high and low sales price of a common share of the Company on the date that the option
is granted. Options vest over two or three years and have a 5-year to 10-year contractual term, unless otherwise determined by
the Company’s Board of Directors. The number of common shares reserved for issuance and made available to the Board for granting
of options shall not exceed 10% of the issued and outstanding common shares, provided that in any fiscal year the Company shall
limit the number of options granted to a maximum of 3.33% of its issued and outstanding common shares at the beginning of the fiscal
year, such that the maximum is based on the number of common shares outstanding at the previous fiscal year end.



During the year ended
December 31, 2012, 6,455,000 options were granted (2011 – 6,051,831). The following are the weighted average assumptions
used in calculating the value of the stock options granted:



|                            |  | December 31, 2012 |      |   | December 31, 2011 |  
|--------------------------- |  | ----------------- | ---- | - | ----------------- | -
|Risk free interest rate     |  |                   | 1.3  | % |                   |  
|Expected life               |  |                   | 4.6  |   |                   |  
|Expected volatility         |  |                   | 69   | % |                   |  
|Expected dividend per share |  | $                 | 0.00 |   |                   | $
|Weighted average fair value |  | $                 | 0.61 |   |                   | $



Expected volatility is based on the historical share price volatility
over a period of time equivalent to the expected life of the grant.



The following reconciles the stock options outstanding at the
beginning and end of the respective periods:



|                             |  | December 31, 2012  |            |   | December 31, 2011                        |  
|---------------------------- |  | ------------------ | ---------- | - | ---------------------------------------- | -
|                             |  | Number 
of options |            |   | Weighted 
average exercise 
price (Cdn$) |  
|Balance, beginning of period |  |                    | 12,745,410 |   |                                          | $
|Granted                      |  |                    | 6,455,000  |   |                                          |  
|Forfeited                    |  |                    | (2,237,635 | ) |                                          |  
|Exercised                    |  |                    | (17,500    | ) |                                          |  
|Balance, end of period       |  |                    | 16,945,275 |   |                                          | $



The following table summarizes information
relating to outstanding and exercisable stock options at December 31, 2012:



|Exercise prices |  | Weighted average 
remaining contractual 
life (in years) |     |  | Number of  
options 
outstanding |  |            | Weighted average  
exercise price 
(Cdn$) |  |   | Number of 
options 
exercisable |  |  | Weighted 
average exercise 
price (Cdn$) |          
|--------------- |  | -------------------------------------------------------- | --- |  | -------------------------------- |  | ---------- | ----------------------------------------- |  | - | ------------------------------- |  |  | ---------------------------------------- | ---------
|$0.50 - $1.00   |  |                                                          | 3.2 |  |                                  |  | 2,412,201  |                                           |  | $ | 0.82                            |  |  |                                          | 992,201  
|$1.00 - $1.50   |  |                                                          | 2.8 |  |                                  |  | 9,575,199  |                                           |  |   | 1.22                            |  |  |                                          | 5,224,065
|$1.50 - $2.00   |  |                                                          | 2.8 |  |                                  |  | 3,822,891  |                                           |  |   | 1.59                            |  |  |                                          | 2,416,955
|$2.00 - $2.50   |  |                                                          | 0.4 |  |                                  |  | 1,033,246  |                                           |  |   | 2.21                            |  |  |                                          | 1,033,246
|$2.50+          |  |                                                          | 2.4 |  |                                  |  | 101,738    |                                           |  |   | 3.72                            |  |  |                                          | 101,738  
|                |  |                                                          | 2.7 |  |                                  |  | 16,945,275 |                                           |  | $ | 1.32                            |  |  |                                          | 9,768,205



Page 34







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



At December 31, 2012,
the intrinsic value of the stock options outstanding was $0.3 million (December 31, 2011 - $0.2 million), and the intrinsic value
of the stock options that were exercisable was $0.2 million (December 31, 2011 - $0.2 million).



| | d) | Employee Common Share Purchase Plan
| | -- | -----------------------------------



During the year ended December 31, 2012,
the Company implemented an Employee Common Share Purchase Plan. Under this plan, employees are eligible to make cash contributions
towards the purchase of common shares of the Company, a portion of which is matched by the Company. Shares issued under the Company
matching plan vest after a one year period.



During the year ended December 31, 2012,
116,982 shares were issued under the Employee Common Share Purchase Plan (December 31, 2011 – nil). The total expense recognized
in the Statement of Operations for the year ended December 31, 2012 is $0.03 million (December 31, 2011 - $nil).



| | e) | Deferred Share Unit Plan
| | -- | ------------------------



During the year ended December 31, 2012,
the Company implemented a Deferred Share Unit Plan for senior executives and directors. Each deferred share unit is equivalent
to one common share of the Company. The Compensation Committee determines the number of deferred share units to grant as well as
the vesting period. During the year ended December 31, 2012, the Company granted 1,320,000 deferred share units.



At December 31, 2012, the carrying amount
of deferred share units included in liabilities was $0.3 million (December 31, 2011 – $nil). The total expense recognized
in the Statement of Operations for the year ended December 31, 2012 is $0.6 million (December 31, 2011 - $nil). The compensation
expense was measured based on the quoted market value of the Company’s common shares as of December 31, 2012.



| | f) | Share-based Compensation Expense
| | -- | --------------------------------



The total share-based compensation expense
recognized in the Statement of Operations for the year ended December 31, 2012 is $4.6 million (December 31, 2011 - $3.5 million).



| | 20. | EMPLOYEE BENEFIT PLAN
| | --- | ---------------------



The Company maintains
a defined contribution plan for all employees. For the year ended December 31, 2012 the Company has recorded expenses totaling
$0.8 million relating to the defined contribution plan in the Statement of Operations (December 31, 2011 - $0.6 million).



| | 21. | FINANCE COSTS
| | --- | -------------



|                                                 |  | December 31 |        |   | December 31 |  
|------------------------------------------------ |  | ----------- | ------ | - | ----------- | -
|                                                 |  | 2012        |        |   | 2011        |  
|Interest and accretion on convertible debentures |  | $           | 5,952  |   |             | $
|Interest on finance leases and other             |  |             | 1,904  |   |             |  
|Amortization of debt financing fees              |  |             | 640    |   |             |  
|Accretion on accrued site closure costs          |  |             | 398    |   |             |  
|Accretion on senior secured notes                |  |             | 191    |   |             |  
|                                                 |  |             | 9,085  |   |             |  
|Less: capitalized interest                       |  |             | (3,251 | ) |             |  
|                                                 |  | $           | 5,834  |   |             | $



Page 35







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 22. | EARNINGS PER SHARE
| | --- | ------------------



The
basic earnings per share is calculated based on the weighted average number of common shares outstanding during the year. Diluted
earnings per share is based on the assumption that stock options, warrants and common share equivalents which have an exercise
price less than the average market price of the Company’s common shares during the period have been exercised on the later
of the beginning of the year and the date granted.



Basic
weighted average shares outstanding is reconciled to diluted weighted average shares outstanding as follows:



|                                            |  | December 31 |             |  | December 31 |  
|------------------------------------------- |  | ----------- | ----------- |  | ----------- | -
|                                            |  | 2012        |             |  | 2011        |  
|Net income attributable to shareholders     |  | $           | 18,929      |  |             | $
|Basic weighted average shares outstanding   |  |             | 215,838,973 |  |             |  
|Dilutive securities:                        |  |             |             |  |             |  
|Options                                     |  |             | 263,196     |  |             |  
|Warrants                                    |  |             | -           |  |             |  
|Diluted weighted average shares outstanding |  |             | 216,102,169 |  |             |  
|Basic earnings per share                    |  | $           | 0.09        |  |             | $
|Diluted earnings per share                  |  | $           | 0.09        |  |             | $



The
following items were excluded from the computation of diluted weighted average shares outstanding for the year ended December 31,
2012 because their effect would have been anti-dilutive:



|                       |  | December 31 |            |  | December 31 | 
|---------------------- |  | ----------- | ---------- |  | ----------- | 
|                       |  | 2012        |            |  | 2011        | 
|Options                |  |             | 14,708,074 |  |             | 
|Warrants               |  |             | 22,595,345 |  |             | 
|Convertible debentures |  |             | 20,408,163 |  |             | 



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



Net changes in non-cash operating working
capital items are as follows:



|                                         |  | December 31 |         |   | December 31 |  
|---------------------------------------- |  | ----------- | ------- | - | ----------- | -
|                                         |  | 2012        |         |   | 2011        |  
|Accounts receivable                      |  | $           | 266     |   |             | $
|Prepaids                                 |  |             | 515     |   |             |  
|Inventories                              |  |             | (6,684  | ) |             |  
|Accounts payable and accrued liabilities |  |             | (4,721  | ) |             |  
|Deferred revenue                         |  |             | (4,774  | ) |             |  
|                                         |  | $           | (15,398 | ) |             | $



Non-cash transactions not reflected in the Consolidated Statements
of Cash Flows are as follows:



|                                        |  | December 31 |       |  | December 31 |  
|--------------------------------------- |  | ----------- | ----- |  | ----------- | -
|                                        |  | 2012        |       |  | 2011        |  
|Capitalized depreciation                |  | $           | 3,434 |  |             | $
|Equipment purchases under finance lease |  |             | 4,388 |  |             |  
|Shares issued under agreement (Note 19) |  |             | 23    |  |             |  





Page 36







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Cash and cash equivalents are comprised
of:



|                                    |  | December 31 |        |  | December 31 |  
|----------------------------------- |  | ----------- | ------ |  | ----------- | -
|                                    |  | 2012        |        |  | 2011        |  
|Cash                                |  | $           | 29,807 |  |             | $
|Short-term money market investments |  |             | -      |  |             |  



| | 24. | FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
| | --- | -------------------------------------------------------



| | a) | Capital Management
| | -- | ------------------



The primary objective of managing the Company’s
capital is to ensure that there is sufficient available capital to support the long-term growth strategy of the Company in a way
that optimizes the cost of capital and shareholder returns, and ensures the Company remains in sound financial position.



The capital of the Company consists of
items included in shareholders’ equity and debt, net of cash and cash equivalents as follows:



|                                |  | December 31 |         |   | December 31 |  
|------------------------------- |  | ----------- | ------- | - | ----------- | -
|                                |  | 2012        |         |   | 2011        |  
|Shareholders’ equity            |  | $           | 232,624 |   |             | $
|Current and long-term debt      |  |             | 93,195  |   |             |  
|                                |  |             | 325,819 |   |             |  
|Less: cash and cash equivalents |  |             | (29,807 | ) |             |  
|                                |  | $           | 296,012 |   |             | $



The Company manages its capital structure
and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may
return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes for managing
capital during the year ended December 31, 2012.



Page 37







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | Fair Values of Financial Instruments
| | -- | ------------------------------------



Fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The following
is a comparison of the carrying amounts and fair value of the Company’s financial instruments:



|                                         |  | December 31, 2012 |        |  | December 31, 2011 |  
|---------------------------------------- |  | ----------------- | ------ |  | ----------------- | -
|                                         |  | Carrying 
amount  |        |  | Fair 
value       |  
|Financial Assets                         |  |                   |        |  |                   |  
|Cash and cash equivalents                |  | $                 | 29,807 |  |                   | $
|Accounts receivable                      |  |                   | 1,927  |  |                   |  
|Notes receivable                         |  |                   | -      |  |                   |  
|Available-for-sale investment            |  |                   | 543    |  |                   |  
|Derivative asset (Note 14)               |  |                   | 3,767  |  |                   |  
|Investment receivable                    |  |                   | -      |  |                   |  
|Restricted cash                          |  |                   | 20,395 |  |                   |  
|                                         |  |                   |        |  |                   |  
|Financial Liabilities                    |  |                   |        |  |                   |  
|Accounts payable and accrued liabilities |  |                   | 22,751 |  |                   |  
|Derivative liabilities                   |  |                   |        |  |                   |  
|Convertible debenture conversion option  |  |                   | 2,554  |  |                   |  
|Warrant liabilities                      |  |                   | 1,592  |  |                   |  
|Cangold option                           |  |                   | -      |  |                   |  
|Commodity linked interest liability      |  |                   | 5,579  |  |                   |  
|Long-term debt                           |  |                   | 93,195 |  |                   |  



| | c) | Financial Risk Management Objectives
| | -- | ------------------------------------



The Company examines the various financial
instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include market risk,
credit risk, liquidity risk, currency risk, interest rate risk, and commodity price risk. Where material, these risks are reviewed
and monitored by the Board of Directors.



| | d) | Market Risk
| | -- | -----------



Gold prices are affected
by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and worldwide political
and economic conditions. The profitability of the Company is directly related to the market price of gold.



There has been no change
to the Company’s exposure to market risks or the manner in which these risks are managed and measured.



| | e) | Credit Risk
| | -- | -----------



Credit risk on financial instruments arises
from the potential for counterparties to default on their obligations to the Company. The Company’s credit risk is limited
to cash and cash equivalents, restricted cash, and accounts receivable in the ordinary course of business.



Page 38







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Company’s maximum exposure to
credit risk is represented by the carrying amount of the Company’s cash and cash equivalents, restricted cash, and accounts
receivable. Cash and cash equivalents and restricted cash are placed with high-credit quality financial institutions. The Company
sells its gold production exclusively to large international organizations with strong credit ratings. The balance of accounts
receivable owed to the Company in the ordinary course of business is not significant. The fair value of accounts receivable approximates
carrying value due to their relatively short periods to maturity.



There are no material financial assets
that the Company considers to be past due.



On a quarterly basis, the Company assesses
whether there has been an impairment of financial assets. The Company has not recorded an impairment on any of the Company’s
financial assets during the year ended December 31, 2012.



| | f) | Liquidity Risk
| | -- | --------------



Liquidity risk is the risk that the Company
will not meet its financial obligations as they become due. The Company has a planning and budgeting process to monitor operating
cash requirements including amounts projected for the existing capital expenditure program and plans for expansion, which are adjusted
as input variables change. These variables include, but are not limited to, mineral production from existing operations, commodity
prices, taxes and the availability of capital markets. As these variables change, liquidity risks may necessitate the need for
the Company to issue equity or obtain debt financing.



Accounts payables and accrued liabilities
are paid in the normal course of business generally according to their terms.



In the normal course of business, the Company
enters into contracts that give rise to commitments for future minimum payments. The following table summarizes the remaining contractual
maturities of the Company’s financial liabilities:



|                                                   |  |                                                |        |  | December 31, |  
|-------------------------------------------------- |  | ---------------------------------------------- | ------ |  | ------------ | -
|                                                   |  | Payments due by period as of December 31, 2012 |        |  | 2011         |  
|                                                   |  | Within 1 
year                                 |        |  | 2-3 years    |  
|Accounts payable and accrued liabilities           |  | $                                              | 21,071 |  |              | $
|Long-term debt (principal and interest repayments) |  |                                                | 25,597 |  |              |  
|Derivative liabilities                             |  |                                                | 2,788  |  |              |  
|Operating lease obligations                        |  |                                                | 372    |  |              |  
|Contractual commitments                            |  |                                                | 14,118 |  |              |  
|                                                   |  | $                                              | 63,946 |  |              | $



| | g) | Currency Risk
| | -- | -------------



The Company is exposed to currency risk
on its Canadian dollar cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities,
current and long-term debt, in addition to its direct operating costs. For the year ended December 31, 2012, the sensitivity of
the Company’s net income due to changes in the exchange rate between the Canadian dollar and the United States dollar would
have impacted net income by $1.3 million (2011 - $0.5 million) for a 10% increase or decrease in the Canadian dollar.



Page 39







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | h) | Interest Rate Risk
| | -- | ------------------



The Company is exposed to interest rate
risk on its outstanding borrowings and short-term investments. The Company monitors its exposure to interest rates and has not
entered into any derivative contracts to manage this risk. As of December 31, 2012, the Company’s significant outstanding
borrowings consist of $50 million of convertible debentures which accrue interest at a fixed annual rate of 6.5%, equipment finance
leases, as well as the Notes bearing interest between at 9% and 14% depending on the gold price. The weighted average interest
rates paid by the Company on its outstanding borrowings during the year ended December 31, 2012 was 6.7% (2011 – 7.0%).



For the year ended December 31, 2012, a
100 basis point increase or decrease in interest rates would have impacted net earnings by $nil (2011 - $0.4 million).



| | i) | Commodity Price Risk
| | -- | --------------------



The Company’s principal business
includes the sale of gold. Revenues, earnings and cash flows from the sale of gold are sensitive to changes in market prices, over
which the Company has no control. The Company has the ability to address its price-related exposures through the limited use of
options and future and forward contracts. The Company is currently an unhedged gold producer and does not have any option, future
or forward contracts. A 10% increase or decrease in the price of gold would result in a $10.9 million increase or decrease in the
Company’s 2012 pre-tax earnings for the period (2011 - $8.1 million).



The Company also has the Notes which bear
interest between 9% and 14% depending on the price of gold. For the year ended December 31, 2012, the sensitivity of the Company’s
interest expense related to the Notes due to changes in the gold price from under $1,800 per ounce to over $2,500 per ounce would
have impacted net income by $0.3 million (2011 - $nil) as the Notes were issued on October 25, 2012.



| | j) | Fair Value Measurements Recognized in the Consolidated Statement of Financial Position
| | -- | --------------------------------------------------------------------------------------



The Company has certain
financial assets and liabilities that are held at fair value. The fair value hierarchy establishes three levels to classify the
inputs to valuation techniques used to measure fair value. Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices). Level 3 fair value measurements are those derived from valuation techniques that
include inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).



Page 40







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



At December 31, 2012,
the levels in the fair value hierarchy into which the Company’s financial assets and liabilities are measured and recognized
on the Statement of Financial Position at fair value are categorized as follows:



|                                                  |  | December 31, 2012 |      
|------------------------------------------------- |  | ----------------- | -----
|                                                  |  | Level 1           |      
|                                                  |  | Input             |      
|Financial Assets                                  |  |                   |      
|Available-for-sale investment (Note 10)           |  | $                 | 543  
|Derivative asset  (Note 14)                       |  |                   | -    
|Total                                             |  | $                 | 543  
|Financial Liabilities                             |  |                   |      
|Warrant liabilities (Note 15)                     |  |                   | 1,592
|Commodity linked interest liability (Note 15)     |  |                   | -    
|Convertible debenture conversion option (Note 15) |  |                   | -    
|Total                                             |  | $                 | 1,592



|                                                   |  | December 31, 2011 |      
|-------------------------------------------------- |  | ----------------- | -----
|                                                   |  | Level 1           |      
|                                                   |  | Input             |      
|Financial Liabilities                              |  |                   |      
|Warrant liabilities (Note 15)                      |  | $                 | 6,684
|Cangold option (Note 15)                           |  |                   | -    
|Convertible debenture conversion option  (Note 15) |  |                   | -    
|Total                                              |  | $                 | 6,684



There were no transfers
between levels during the period. During the year ended December 31, 2012, gains of $0.2 million have been recognized in other
comprehensive income related to the Level 1, 2 or 3 financial instruments (December 31, 2011 - $nil).



The following table is a reconciliation of the level 3 fair
value measurements of financial assets:



|                                  |  | December 31, 2012 |      
|--------------------------------- |  | ----------------- | -----
|                                  |  | Derivative asset  |      
|Fair value on initial recognition |  | $                 | 4,156
|Losses included in net income     |  |                   | (389 
|Total                             |  | $                 | 3,767



Page 41







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 25. | OPERATING LEASE ARRANGEMENTS
| | --- | ----------------------------



The
Company has entered into commercial leases on certain equipment and office space. These leases have an average life of between
three and five years. There are no restrictions placed on the Company by entering into these leases. The total operating lease
expense recognized in the Statement of Operations for the year ended December 31, 2012 is $0.4 million (December 31, 2011 - $0.4
million).



Future
minimum lease payments under non-cancellable operating leases are as follows:



|                      |  | December 31 |       |  | December 31 |  
|--------------------- |  | ----------- | ----- |  | ----------- | -
|                      |  | 2012        |       |  | 2011        |  
|Less than 1 year      |  | $           | 372   |  |             | $
|Between 1 and 5 years |  |             | 877   |  |             |  
|More than 5 years     |  |             | 110   |  |             |  
|                      |  | $           | 1,359 |  |             | $



| | 26. | RELATED PARTY TRANSACTIONS
| | --- | --------------------------



The
remuneration of directors and other members of key management personnel during the year was as follows:



|                         |  | December 31 |       |  | December 31 |  
|------------------------ |  | ----------- | ----- |  | ----------- | -
|                         |  | 2012        |       |  | 2011        |  
|Short-term benefits      |  | $           | 3,147 |  |             | $
|Post-employment benefits |  |             | 47    |  |             |  
|Share-based payments     |  |             | 4,081 |  |             |  
|Termination benefits     |  |             | 634   |  |             |  
|                         |  | $           | 7,909 |  |             | $



The remuneration of directors and key executives
is determined by the Nominations and Compensation Committee, having regard to the performance of individuals and market trends.



During
the year ended December 31, 2012, the Company had related party transactions with Stockport Exploration Inc., formerly Linear Metals
Corporation, (“Stockport”) for the provision of general and administrative services of $0.05 million (December 31,
2011 - $0.17 million). The Company shares office space with Stockport and the CEO of the Company is on the Board of Directors of
Stockport.



The
Company has an accounts receivable balance from Stockport of $0.1 million, which is included in accounts receivable and other and
is measured at the cost of services provided for the year ended December 31, 2012 (December 31, 2011 - $0.1 million). Repayment
terms and conditions of the accounts receivable are 90 days and the amount will be settled in cash.



Page 42







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 27. | SEGMENT INFORMATION
| | --- | -------------------



The Company owns and
operates the Black Fox Mine and Mill and its adjacent Grey Fox and Pike River exploration properties. Additionally, the Company
owns the Goldfields development project in Canada and other exploration properties in Mexico (Ixhuatán and Huizopa) and
the Dominican Republic. The segments are determined on a property by property basis and therefore the Company’s operating
segments are represented by individual properties and the corporate operations. The only property which is currently in production
is located and operating in Canada. All revenues are generated from the sale of gold. The Mexican and Dominican Republic exploration
properties have been aggregated to form the Other Exploration Properties segment.



The Company is not economically
dependent on any customers for the sale of its product because gold can be sold through numerous commodity market traders worldwide.



The following are the operating results by segment:



|                                             |  | December 31, 2012 |        
|-------------------------------------------- |  | ----------------- | -------
|                                             |  | Black Fox 
Canada |        
|Revenue from the sale of gold                |  | $                 | 117,681
|Direct operating costs                       |  |                   | 56,169 
|Depreciation and amortization                |  |                   | 25,088 
|Corporate administration                     |  |                   | -      
|Segment income (loss) from mining operations |  |                   | 36,424 
|Impairment of mineral property               |  |                   | -      
|Loss on repurchase of Goldstream Agreement   |  |                   | (5,630 
|Segment income (loss) from operations        |  |                   | 30,794 
|Unrealized gains on derivative liabilities   |  |                   | -      
|Gain on sale of notes receivable             |  |                   | -      
|Renunciation of flow-through shares          |  |                   | 2,237  
|Gain on termination of option agreement      |  |                   | -      
|Finance income                               |  |                   | -      
|Finance costs                                |  |                   | (2,261 
|Unrealized loss on derivative asset          |  |                   | -      
|Equity loss in investment in associate       |  |                   | -      
|Foreign exchange loss and other              |  |                   | (789   
|Income (loss) before income taxes            |  |                   | 29,981 
|                                             |  |                   |        
|Assets                                       |  |                   | 351,134
|Liabilities                                  |  |                   | 169,904
|                                             |  |                   |        
|Other disclosures                            |  |                   |        
|Capital expenditures                         |  |                   | 63,852 
|Assets held for sale (Note 12)               |  |                   | -      



Page 43







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



|                                           |  | December 31, 2011 |        
|------------------------------------------ |  | ----------------- | -------
|                                           |  | Black Fox 
Canada |        
|Revenue from the sale of gold              |  | $                 | 71,855 
|Direct operating costs                     |  |                   | 45,160 
|Depreciation and amortization              |  |                   | 18,204 
|Corporate administration                   |  |                   | -      
|Segment income (loss) from operations      |  |                   | 8,491  
|Unrealized gains on derivative liabilities |  |                   | -      
|Renunciation of flow-through shares        |  |                   | 1,910  
|Finance income                             |  |                   | -      
|Finance costs                              |  |                   | (3,764 
|Equity loss in investment in associate     |  |                   | -      
|Foreign exchange gain and other            |  |                   | 1,067  
|Income (loss) before income taxes          |  |                   | 7,704  
|                                           |  |                   |        
|Assets                                     |  |                   | 273,255
|Liabilities                                |  |                   | 158,059
|                                           |  |                   |        
|Other disclosures                          |  |                   |        
|Capital expenditures                       |  |                   | 66,785 
|Assets held for sale (Note 12)             |  |                   | -      



Geographical Information



|                             |  | December 31 |         |  | December 31 |  
|---------------------------- |  | ----------- | ------- |  | ----------- | -
|Non-current assets           |  | 2012        |         |  | 2011        |  
|Canada                       |  | $           | 332,620 |  |             | $
|Mexico                       |  |             | 8,255   |  |             |  
|Dominican Republic (Note 12) |  |             | -       |  |             |  



Non-current assets for this purpose consist
of property, plant and equipment, mining properties, mineral rights and evaluation and exploration assets.



| | 28. | COMMITMENTS AND CONTINGENCIES
| | --- | -----------------------------



The
Company entered into flow-through share subscription agreements during the year ended December 31, 2012, whereby it agreed to renounce
to investors a total of $10.0 million of qualifying Canadian Exploration Expenses as described in the Income Tax Act of Canada,
with an effective date of December 31, 2012. The Company will be required to pay an interest penalty of approximately 1% per annum
on the unspent amount between February 29, 2013 and December 31, 2013.



The
Company’s mining and exploration activities are subject to various federal, provincial and state laws and regulations governing
the protection of the environment. The Company conducts its operations so as to protect public health and environment and it believes
its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make
in the future, expenditures to comply with such laws and regulations.



Page 44







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2012                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The
Company is from time to time involved in various claims, legal proceedings and complaints arising in the ordinary course of business.
The Company does not believe that adverse decisions in any pending or threatened proceedings related to any matter, or any amount
which it may be required to pay by reason thereof, will have a material effect on the financial conditions or future results of
operations of the Company.



Certain
of the Company’s mineral properties are subject to royalty obligations based on minerals produced from the properties. The
current Black Fox reserves are not subject to royalty obligations. Royalty obligations for the Grey Fox, Pike River, and Goldfields
properties may arise upon mine production relating to these properties.



As
at December 31, 2012, the Company had approximately $14.1 million of contractual commitments for the development of the Goldfields
Project.



| | 29. | Huizopa Sales transaction
| | --- | -------------------------



In 2011, the Company
signed an agreement to sell two of its subsidiaries, Minera Sol de Oro and Minas de Argonautas, including the interest in the Huizopa
Project (collectively, “Huizopa”) to Cormack Capital Group, LLC (“Cormack”). The Company is to receive
consideration totalling $3.0 million, payable in eight escalating annual installments of $0.05 million, $0.08 million, $0.1 million,
$0.3 million, $0.4 million, $0.6 million, $0.7 million and $0.8 million commencing in June 2012, with the final installment due
in June 2019. The Company also receives a 2% Net Smelter Royalty over future production from the Huizopa Project and a production
bonus of $4.0 million over two years from the date commercial production commences. Cormack may reduce the Net Smelter Royalty
to 1% by making a $1.0 million payment to the Company and may also elect to pay up to 50% of the purchase price through the issuance
of common shares in a publicly traded company listed on a recognized U.S. or Canadian national stock exchange.



As of December 31, 2012,
the first installment due June 30, 2012 had not been received by the Company. The Company has received interest payments on the
overdue amount. The second installment is due June 15, 2013. The Huizopa assets are included in exploration and evaluation assets
pending completion of the transaction. As of December 31, 2012, an impairment of $0.3 million was recorded against the carrying
value of the property (December 31, 2011 - $nil).





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