Report of Independent Registered Chartered Accountants



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



We have audited the accompanying consolidated financial statements
of Brigus Gold Corp. and subsidiaries (the “Corporation”), which comprise the consolidated statements of financial
position as at December 31, 2011, December 31, 2010 and January 1, 2010, and the consolidated statements of operations and comprehensive
income (loss), consolidated statements of changes in shareholders’ equity, and consolidated statements of cash flows for
the years ended December 31, 2011 and December 31, 2010, 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 Brigus Gold Corp. as at December 31, 2011, December 31, 2010 and January
1, 2010 and their financial performance and its cash flows for the years ended December 31, 2011 and December 31, 2010 in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board.



Other matters



We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the Corporation’s internal control over financial reporting as
of December 31, 2011, 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 28, 2012 expressed an unqualified opinion on
the Corporation’s internal control over financial reporting.



/s/Deloitte & Touche LLP

Independent Registered Chartered Accountants



March 28, 2012

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 “Corporation”) as of December 31, 2011, based on the criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Corporation'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 Corporation'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 corporation's internal control over financial reporting is
a process designed by, or under the supervision of, the corporation's principal executive and principal financial officers, or
persons performing similar functions, and effected by the corporation'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 corporation'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 corporation; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the corporation are being made only in accordance with authorizations of management and directors
of the corporation; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the corporation'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 Corporation maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2011, 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 ended December 31, 2011 of the Corporation and our report dated March 28, 2012 expressed
an unqualified opinion on those financial statements.



/s/Deloitte & Touche LLP

Independent Registered Chartered Accountants



March 28, 2012

Halifax, Canada



















Consolidated Financial Statements
of



BRIGUS
GOLD CORP.



As
at and for the years ended December 31, 2011 and 2010











|BRIGUS GOLD CORP.
|-----------------
|Table of Contents
|December 31, 2011



|                                                                      | Page
|--------------------------------------------------------------------- | ----
|                                                                      |     
|Consolidated Statements of Operations and Comprehensive Income (Loss) | 1   
|                                                                      |     
|Consolidated Statements of Financial Position                         | 2   
|                                                                      |     
|Consolidated Statements of Shareholders’ Equity                       | 3   
|                                                                      |     
|Consolidated Statements of Cash Flows                                 | 4   
|                                                                      |     
|Notes to the Consolidated Financial Statements                        | 5-49









|BRIGUS GOLD CORP.                                                    
|---------------------------------------------------------------------
|Consolidated Statements of Operations and Comprehensive Income (Loss)



|                                                                                               |  | December 31 |             |   | December 31 |  
|---------------------------------------------------------------------------------------------- |  | ----------- | ----------- | - | ----------- | -
|Thousands of US dollars (except earnings per share and shares outstanding)                     |  | 2011        |             |   | 2010        |  
|                                                                                               |  |             |             |   |             |  
|Revenue from the sale of gold                                                                  |  | $           | 71,855      |   |             | $
|                                                                                               |  |             |             |   |             |  
|Operating expenses                                                                             |  |             |             |   |             |  
|Direct operating costs                                                                         |  |             | 45,922      |   |             |  
|Depreciation and amortization                                                                  |  |             | 17,514      |   |             |  
|Corporate administration                                                                       |  |             | 12,429      |   |             |  
|Impairment (Note 30)                                                                           |  |             | -           |   |             |  
|                                                                                               |  |             | 75,865      |   |             |  
|(Loss) income from operations                                                                  |  |             | (4,010      | ) |             |  
|Other income (expenses)                                                                        |  |             |             |   |             |  
|Finance income (Note 8)                                                                        |  |             | 1,521       |   |             |  
|Finance costs (Note 22)                                                                        |  |             | (5,362      | ) |             |  
|Fair value change on equity-linked financial instruments (Note 20)                             |  |             | 10,818      |   |             |  
|Unrealized gain (loss) on derivative instruments (Note 15)                                     |  |             | 10,511      |   |             |  
|Foreign exchange gain (loss) and other                                                         |  |             | 17          |   |             |  
|Renunciation of flow-through shares                                                            |  |             | 1,910       |   |             |  
|Loss on modification of debentures                                                             |  |             | -           |   |             |  
|Acquisition related costs (Note 7)                                                             |  |             | -           |   |             |  
|Income (loss) before income taxes and equity loss in joint venture and investment in associate |  |             | 15,405      |   |             |  
|Income tax recovery (Note 19)                                                                  |  |             | 404         |   |             |  
|Equity loss in investment in associate (Note 11)                                               |  |             | (40         | ) |             |  
|Equity loss in joint venture (Note 18)                                                         |  |             | -           |   |             |  
|Net income (loss) and comprehensive income (loss)                                              |  | $           | 15,769      |   |             | $
|                                                                                               |  |             |             |   |             |  
|Earnings (loss) per share (Note 23)                                                            |  |             |             |   |             |  
|Basic                                                                                          |  | $           | 0.08        |   |             | $
|Diluted                                                                                        |  | $           | 0.08        |   |             |  
|                                                                                               |  |             |             |   |             |  
|Weighted average shares outstanding (Note 23)                                                  |  |             |             |   |             |  
|Basic                                                                                          |  |             | 192,266,226 |   |             |  
|Diluted                                                                                        |  |             | 198,426,985 |   |             |  



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



Approved on behalf of the Board of Directors on March 28, 2012



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



Page 1





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



|Thousands of US dollars                     |  | December 31 2011 |          |   | December 31 2010 |   |          | January 1 2010 | 
|------------------------------------------- |  | ---------------- | -------- | - | ---------------- | - | -------- | -------------- | 
|Assets                                      |  |                  |          |   |                  |   |          |                | 
|Current assets                              |  |                  |          |   |                  |   |          |                | 
|Cash and cash equivalents                   |  | $                | 18,822   |   |                  | $ | 17,610   |                | 
|Restricted cash (Note 9)                    |  |                  | -        |   |                  |   | 5,194    |                | 
|Accounts receivable and other               |  |                  | 2,241    |   |                  |   | 3,379    |                | 
|Prepaids                                    |  |                  | 1,183    |   |                  |   | 828      |                | 
|Derivative instruments                      |  |                  | -        |   |                  |   | -        |                | 
|Inventories (Note 10)                       |  |                  | 6,088    |   |                  |   | 9,763    |                | 
|Notes receivable (Note 8)                   |  |                  | 3,440    |   |                  |   | 3,440    |                | 
|Assets held for sale (Note 13)              |  |                  | 4,936    |   |                  |   | -        |                | 
|Total current assets                        |  |                  | 36,710   |   |                  |   | 40,214   |                | 
|Derivative instruments                      |  |                  | -        |   |                  |   | -        |                | 
|Inventories (Note 10)                       |  |                  | 1,963    |   |                  |   | 3,338    |                | 
|Investments (Note 11)                       |  |                  | 13,183   |   |                  |   | 1,036    |                | 
|Property, plant and equipment (Note 12)     |  |                  | 301,413  |   |                  |   | 247,838  |                | 
|Equity accounted joint venture              |  |                  | -        |   |                  |   | -        |                | 
|Restricted certificates of deposit (Note 9) |  |                  | 19,942   |   |                  |   | 18,028   |                | 
|Total assets                                |  | $                | 373,211  |   |                  | $ | 310,454  |                | 
|                                            |  |                  |          |   |                  |   |          |                | 
|Liabilities and Shareholders’ Equity        |  |                  |          |   |                  |   |          |                | 
|Current liabilities                         |  |                  |          |   |                  |   |          |                | 
|Bank indebtedness                           |  | $                | -        |   |                  | $ | -        |                | 
|Accounts payable and accrued liabilities    |  |                  | 25,282   |   |                  |   | 22,996   |                | 
|Derivative liabilities                      |  |                  | -        |   |                  |   | -        |                | 
|Deferred revenue (Note 17)                  |  |                  | 6,285    |   |                  |   | 6,180    |                | 
|Current portion of long-term debt (Note 14) |  |                  | 8,837    |   |                  |   | 29,525   |                | 
|Total current liabilities                   |  |                  | 40,404   |   |                  |   | 58,701   |                | 
|Accrued long-term liabilities               |  |                  | 412      |   |                  |   | 1,991    |                | 
|Derivative liabilities (Note 15)            |  |                  | 20,565   |   |                  |   | -        |                | 
|Deferred revenue (Note 17)                  |  |                  | 46,520   |   |                  |   | 50,120   |                | 
|Long-term debt (Note 14)                    |  |                  | 46,615   |   |                  |   | 15,879   |                | 
|Equity-linked financial instruments         |  |                  | 6,684    |   |                  |   | 17,503   |                | 
|Accrued site closure costs (Note 16)        |  |                  | 19,570   |   |                  |   | 14,198   |                | 
|Deferred tax liability (Note 19)            |  |                  | 9,916    |   |                  |   | 10,320   |                | 
|Total liabilities                           |  |                  | 190,686  |   |                  |   | 168,712  |                | 
|Shareholders’ Equity                        |  |                  |          |   |                  |   |          |                | 
|Common shares (Note 20)                     |  |                  | 371,265  |   |                  |   | 349,725  |                | 
|Equity reserve                              |  |                  | 52,589   |   |                  |   | 49,115   |                | 
|Warrant reserve                             |  |                  | 13,733   |   |                  |   | 13,733   |                | 
|Accumulated deficit                         |  |                  | (255,062 | ) |                  |   | (270,831 | )              | 
|Total shareholders’ equity                  |  |                  | 182,525  |   |                  |   | 141,742  |                | 
|Total liabilities and shareholders’ equity  |  | $                | 373,211  |   |                  | $ | 310,454  |                | 



Commitments and contingencies (Note 29)



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



Page 2







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



|Thousands of shares and US dollars                           |  | Common Shares |         |   | Common Shares |   |         | Equity Reserve |  |   | Warrant Reserve |   |  | Accumulated Deficit |        |  | Total Shareholders’
    Equity |  
|------------------------------------------------------------ |  | ------------- | ------- | - | ------------- | - | ------- | -------------- |  | - | --------------- | - |  | ------------------- | ------ |  | ------------------------------ | -
|Balance, January 1, 2010                                     |  |               | 66,050  |   |               | $ | 202,769 |                |  | $ | 45,555          |   |  | $                   | 11,579 |  |                                | $
|Shares issued for services                                   |  |               | 2,465   |   |               |   | 3,378   |                |  |   | -               |   |  |                     | -      |  |                                |  
|Warrants issued for services                                 |  |               | -       |   |               |   | -       |                |  |   | (4,557          | ) |  |                     | 2,154  |  |                                |  
|Options exercised                                            |  |               | 569     |   |               |   | 554     |                |  |   | -               |   |  |                     | -      |  |                                |  
|Warrants exercised                                           |  |               | 2,209   |   |               |   | 2,221   |                |  |   | -               |   |  |                     | -      |  |                                |  
|Shares issued for cash                                       |  |               | 15,625  |   |               |   | 24,497  |                |  |   | -               |   |  |                     | -      |  |                                |  
|Shares cancelled                                             |  |               | (15,625 | ) |               |   | (24,497 | )              |  |   | 5,121           |   |  |                     | -      |  |                                |  
|Shares and options issued
    for business acquisition       |  |               | 60,523  |   |               |   | 75,049  |                |  |   | 1,844           |   |  |                     | -      |  |                                |  
|Shares issued for cash
    and related compensation warrants |  |               | 50,609  |   |               |   | 65,754  |                |  |   | -               |   |  |                     | -      |  |                                |  
|Share-based compensation                                     |  |               | -       |   |               |   | -       |                |  |   | 1,152           |   |  |                     | -      |  |                                |  
|Net loss and comprehensive loss                              |  |               | -       |   |               |   | -       |                |  |   | -               |   |  |                     | -      |  |                                |  
|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 and comprehensive income                          |  |               | -       |   |               |   | -       |                |  |   | -               |   |  |                     | -      |  |                                |  
|Balance, December 31, 2011                                   |  |               | 201,519 |   |               | $ | 371,265 |                |  | $ | 52,589          |   |  | $                   | 13,733 |  |                                | $



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



Page 3







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



|                                                           |  | December 31 |         |   | December 31 |  
|---------------------------------------------------------- |  | ----------- | ------- | - | ----------- | -
|Thousands of US dollars                                    |  | 2011        |         |   | 2010        |  
|Operating activities                                       |  |             |         |   |             |  
|Net income (loss) for the year                             |  | $           | 15,769  |   |             | $
|Non-cash items:                                            |  |             |         |   |             |  
|Depreciation and amortization                              |  |             | 17,514  |   |             |  
|Share-based compensation                                   |  |             | 3,474   |   |             |  
|Shares and warrants issued for services                    |  |             | -       |   |             |  
|Finance costs                                              |  |             | 4,627   |   |             |  
|Capitalized borrowing costs                                |  |             | (3,832  | ) |             |  
|Impairment                                                 |  |             | 762     |   |             |  
|Net change in value of derivative instruments              |  |             | (10,511 | ) |             |  
|Net change in value of equity-linked financial instruments |  |             | (10,818 | ) |             |  
|Deferred income taxes                                      |  |             | (2,314  | ) |             |  
|Equity investment in associate                             |  |             | 40      |   |             |  
|Equity investment in joint venture                         |  |             | -       |   |             |  
|Other                                                      |  |             | 181     |   |             |  
|Net change in non-cash operating working capital (Note 24) |  |             | 4,198   |   |             |  
|Net cash provided by operating activities                  |  |             | 19,090  |   |             |  
|                                                           |  |             |         |   |             |  
|Investing activities                                       |  |             |         |   |             |  
|Property, plant and equipment                              |  |             | (44,747 | ) |             |  
|Exploration and evaluation expenditures                    |  |             | (14,006 | ) |             |  
|Net cash acquired in business acquisition (Note 7)         |  |             | -       |   |             |  
|Restricted cash, certificates of deposit and other assets  |  |             | 2,879   |   |             |  
|Net cash used in investing activities                      |  |             | (55,874 | ) |             |  
|                                                           |  |             |         |   |             |  
|Financing activities                                       |  |             |         |   |             |  
|Proceeds on issuance of convertible debentures             |  |             | 47,478  |   |             |  
|Proceeds on issuance of debt                               |  |             | -       |   |             |  
|Proceeds on issuance of other shares and warrants          |  |             | 7,616   |   |             |  
|Proceeds from exercise of warrants and options             |  |             | 13,511  |   |             |  
|Proceeds on sale of subsidiary                             |  |             | 983     |   |             |  
|Repayment of debt                                          |  |             | (30,725 | ) |             |  
|Net cash provided by financing activities                  |  |             | 38,863  |   |             |  
|                                                           |  |             |         |   |             |  
|Effect of exchange rate changes on cash                    |  |             | (867    | ) |             |  
|                                                           |  |             |         |   |             |  
|Increase in cash                                           |  |             | 1,212   |   |             |  
|Cash and cash equivalents, beginning of year               |  |             | 17,610  |   |             |  
|Cash and cash equivalents, end of year                     |  | $           | 18,822  |   |             | $
|                                                           |  |             |         |   |             |  
|Supplemental cash flow information:                        |  |             |         |   |             |  
|Interest paid                                              |  | $           | 4,548   |   |             | $
|Income taxes paid                                          |  | $           | -       |   |             | $



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



Page 4







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 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 Amex Equities Exchange (NYSE Amex: 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 OFPRESENTATION
| | -- | --------------------



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, equity-linked 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, including interests in joint ventures. 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 the 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 5







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | Business Combinations
| | -- | ---------------------



Acquisitions of businesses are accounted
for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated
as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to
the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Any excess
of the purchase price over fair value is recorded as goodwill. Acquisition-related costs are recognized in profit or loss as incurred.



| | c) | Jointly Controlled Entity
| | -- | -------------------------



A jointly controlled
entity is a corporation, partnership or other entity in which each joint venture participant holds an interest. A jointly controlled
entity controls the assets of the joint venture, earns its own income, and incurs its own liabilities and expenses. Joint control
exists when unanimous consent of the joint venture participants is required regarding strategic financial and operating policies
of the joint venture.



During 2010, the Company
conducted a portion of its business through a jointly controlled entity. The Company accounted for its interest in the jointly
controlled entity using the equity method, whereby the Company’s investment in the jointly controlled entity was initially
recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive
income of the jointly controlled entity.



| | d) | Investment in Associate
| | -- | -----------------------



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 and Comprehensive Income (Loss) reflects
the Company’s share of the associates 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 and Comprehensive Income (Loss). 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 and Comprehensive Income (Loss).



| | e) | 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.

Page 6







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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.



| | f) | 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.



| | g) | 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.



The operating results of the Company’s
subsidiaries 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 denominated in foreign currencies and measured at other than fair value are translated using the
rates of exchange at the transaction dates; and (iii) non-monetary assets 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.



| | h) | Borrowing Costs
| | -- | ---------------



Interest and other financing costs that
are directly attributable to the acquisition or construction of an 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 amounts so
capitalized. 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.



| | i) | 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.



Page 7







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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



| | j) | 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 fair value of the equity-settled share-based
payments is recognized in the Statement of Operations and Comprehensive Income (Loss) 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.



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.



Share-based payment transactions of
the acquiree in a business combination



When share-based payment awards held by
employees of an acquiree (“acquiree awards”) are replaced by the Company's share-based payment awards (“replacement
awards”), both the acquiree awards and the replacement awards are measured in accordance with IFRS 2 Share-based Payment
(“IFRS 2”) ("market-based measure") at the acquisition date. The portion of the replacement awards included
as consideration in the business combination equals the market-based measure of the acquiree awards multiplied by the ratio of
the portion of the vesting period completed to the greater of the total vesting period or the original vesting period of the acquiree
award. The excess of the market-based measure of the replacement awards over the market-based measure of the acquiree awards included
as consideration is recognized as remuneration cost for post-combination 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 and Comprehensive Income (Loss). 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.



Page 8







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Warrants issued with
Canadian dollar exercise prices



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. These warrants are classified on the Statement of Financial Position
as equity-linked financial instruments. The fair value of warrants traded on the open market is determined based on their quoted
market price. The fair value of warrants not traded on the open market is determined using the Black-Scholes option pricing model.
Upon exercise, the fair value of warrants included in derivative liabilities is reclassified to equity.



| | k) | 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 and Comprehensive Income (Loss).



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.



| | l) | 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.



Current income tax relating to items recognized
directly in equity is recognized in equity and not in the Statement of Operations and Comprehensive Income (Loss). 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
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Page 9







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | · | In respect of taxable temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, 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
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In respect of deductible temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, 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.



| | m) | Cash and cash equivalents
| | -- | -------------------------



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



Page 10







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | n) | 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 and Comprehensive Income (Loss) 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 parts (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
asset or part’s estimated useful life is determined considering its physical life limitations. The physical life of each
asset cannot exceed the life of the mine at which the asset 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.



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 costs are expected to be recovered
in full through the successful development and exploration of the identified property. 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.



Page 11







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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, or on a straight-line basis over the term of the lease if the project is subject to a mining lease that is less than the
planned mine life. 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.



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.



Page 12







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | o) | 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 and Comprehensive
Income (Loss).



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 assets (or cash generating units) original cost before impairment. A reversal of
an impairment loss is recognized immediately in the Statement of Operations and Comprehensive Income (Loss).



| | p) | 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.



| | q) | Inventories
| | -- | -----------



Materials and supplies inventory



Materials and supplies inventory consists
of mining supplies and consumables used in operations, and is 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.



Page 13







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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 will not 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.



| | r) | 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.



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.



| | s) | 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. Transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial assets and financial liabilities recorded at fair value through
profit or loss) 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
recorded at fair value through profit or loss are recognized immediately in the Statement of Operations and Comprehensive Income
(Loss).



Page 14







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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                               
|Restricted cash                          | Loans and receivables             | Amortized cost                               
|Derivative instruments                   | Fair value through profit or loss | Fair value through profit or loss            
|Accounts receivable and other            | Loans and receivables             | Amortized cost                               
|Investment receivable                    | Loans and receivables             | Amortized cost                               
|Notes receivable                         | Held to maturity                  | Amortized cost                               
|Investments                              | Available for sale                | Fair value through other comprehensive income
|Restricted certificates of deposit       | Loans and receivables             | Amortized cost                               
|Accounts payable and accrued liabilities | Other financial liabilities       | Amortized cost                               
|Equity-linked financial liabilities      | Fair value through profit or loss | Fair value through profit or loss            
|Long-term debt                           | Other financial liabilities       | Amortized cost                               



| | t) | Financial Assets
| | -- | ----------------



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. Upon initial recognition, the Company measures all financial assets at fair value.
In subsequent periods, 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 on the Statement of Operations and Comprehensive income
(Loss), and instruments classified as FVTPL are measured at fair value with unrealized gains and losses recognized on the Statement
of Operations and Comprehensive Income (Loss).



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 investment have been affected.



| | u) | 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 initially measured
at fair value with unrealized gains and losses recognized on the Statement of Operations and Comprehensive Income (Loss). 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 rate method.



Page 15







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Effective interest rate method



The effective interest method is a method
of calculating the amortized cost of a financial liability or asset and of allocating interest expense over the relevant period.
The effective interest rate 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 rate, 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 and Comprehensive
Income (Loss) 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 and Comprehensive Income (Loss)
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 in 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.



| | v) | 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.



Page 16







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 4. | CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES
| | -- | --------------------------------------------------



The critical judgments that the Company’s
management has made in the process of applying the Company’s accounting policies, apart from those involving estimates (note
5), that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are
as follows:



| | a) | Operating levels intended by management for commercial production
| | -- | -----------------------------------------------------------------



Prior to reaching operating levels intended
by management, all mining costs are capitalized within mining properties. The proceeds of gold recovered and sold during this period
are offset against these capitalized costs. Depletion of capitalized costs of mining properties begins when operating levels intended
by management have been reached. Management considers several factors in determining when a mining property has reached the operating
levels intended by management, such as, the recovery of minerals at or near expected production levels, the ability to sustain
production at levels intended by management, and the completion of major capital expenditures required to achieve operating levels
intended by management. The results of operations of the Company during the periods presented in these consolidated financial statements
have been impacted by management’s determination that its Black Fox underground mine reached the operating levels intended
by management on October 1, 2011.



| | b) | 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, existing permits of life of mine plan.



| | 5. | KEY SOURCES OF ESTIMATION UNCERTAINTY
| | -- | -------------------------------------



The preparation of the consolidated financial
statements requires that the Company’s management make estimates and assumptions 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 assumptions 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) | 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.



Page 17







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | 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 stockpile ore, in-circuit process volumes, gold contents of both, recoverable ounces once processed and the price per ounce
of gold when ounces of gold are recovered and sold.



| | c) | 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 judgments 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.



| | d) | 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.



| | e) | 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.



| | f) | 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 facts and circumstances available at the time. Changes to the estimated
future costs are recognized in the Statement of Financial Position by adjusting both the closure and rehabilitation asset and provision.



Page 18







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | g) | 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.



| | h) | Share-based payments
| | -- | --------------------



The Company makes certain estimates and
assumptions when calculating the fair values of stock options and warrants granted. The significant assumptions used include estimate
of 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.



| | i) | 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 statement on the date that such changes occur.



| | j) | 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 judgment is required in establishing fair values.
The judgments 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.



| | 6. | 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.



Page 19







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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 (2010), 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 Disclosureswhich
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.



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
is currently assessing the impact of these new standards on the Company’s 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 is currently assessing the impact of this new standard on the Company’s
financial assets and financial liabilities.



Page 20







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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. The Company does not anticipate the application of the amended IAS 19 to have a material impact on its
consolidated financial statements.



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 is currently assessing the impact of adopting IFRIC
20 on 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 effect of 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 is currently assessing the impact of adopting the IAS 32 and IFRS 7 amendments on the consolidated financial statements.



| | 7. | BUSINESS COMBINATION
| | -- | --------------------



In order to grow production and development
at its respective properties, the Company and Linear Gold Corp. (“Linear”) entered into a binding letter of intent
on March 9, 2010 (as amended on March 18, 2010, the “Letter of Intent”) pursuant to which (i) the businesses of Brigus
and Linear would be combined by way of a court-approved plan of arrangement (the “Arrangement”) pursuant to the provisions
of the Business Corporations Act (Alberta) (“ABCA”) and (ii) Linear purchased 15,625,000 common shares of Brigus
for gross proceeds of Cdn$25.0 million (the “Private Placement”) on March 19, 2010. As part of the Arrangement, the
Brigus common shares issued to Linear in this Private Placement were cancelled upon completion of the Arrangement.



On June 25, 2010, the Company completed
the business combination of Brigus and Linear. Brigus acquired all of the issued and outstanding Linear shares and Linear amalgamated
with 1526753 Alberta ULC (the “Brigus Sub”). Under the terms of the Arrangement, former shareholders of Linear received,
after giving effect to a 4 for 1 common share consolidation, 1.37 Brigus common shares for each common share of Linear, subject
to adjustment for fractional shares. Outstanding options and warrants to acquire Linear shares have been converted into options
and warrants to acquire Brigus common shares, adjusted in accordance with the same ratio. The Company issued 60,523,014 common
shares, 11,191,677 share purchase warrants and 3,448,746 stock options in connection with the completion of the Arrangement.



Page 21







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Arrangement was accounted for using
the acquisition method with Brigus as the acquirer of Linear. The Company completed a valuation of the fair value of the net assets
of Linear acquired with the assistance of an independent third party.



The purchase price allocation is summarized as follows:



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



The purchase price was allocated as follows:



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



The results of Linear’s operations
from the acquisition date, June 24, 2010, have been included in Brigus’ consolidated statements of operations for the year
ended December 31, 2010.



| | 8. | NOTES RECEIVABLE
| | -- | ----------------



On
February 1, 2010, the Company sold its 50% interest in an equity accounted joint venture for consideration which included notes
receivable with an aggregate outstanding balance of $9.5 million. The notes receivable bear interest at a rate of 8% per annum
and are recorded at amortized cost. Interest accrued on the notes since February 1, 2010 has not been recorded as collection was
not reasonably assured. In June 2011, the Company agreed to extend the due dates of the notes receivable to October 31, 2011 in
exchange for payment of accrued interest earned to date of $1.0 million. In October 2011, the Company agreed to further extend
the due date to November 30, 2011 in exchange for payment of $0.2 million. The notes were in default as of December 31, 2011. The
Company continues to work with the noteholder to recover the outstanding interest and principal balance.



| | 9. | RESTRICTED ASSETS
| | -- | -----------------





|                                   |  | December 31 |        |  | December 31 |   |        | January 1 | 
|---------------------------------- |  | ----------- | ------ |  | ----------- | - | ------ | --------- | 
|                                   |  | 2011        |        |  | 2010        |   |        | 2010      | 
|Project Facility                   |  | $           | -      |  |             | $ | 5,194  |           | 
|Restricted certificates of deposit |  | $           | 19,942 |  |             | $ | 18,028 |           | 



| | a) | Restricted Cash
| | -- | ---------------



Project Facility restricted cash represents
cash on deposit held in restricted accounts which required approval from the Project Facility lender prior to use. On March 23,
2011, the Project Facility was fully repaid.



Page 22







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | Restricted Certificates of Deposit
| | -- | ----------------------------------



Restricted certificates of deposit represent
funds pledged to the Ontario Ministry of Northern Development, Mines and Forestry to meet the bonding requirements for the site
closure obligations of the Black Fox Mine and Mill.



| | 10. | INVENTORIES
| | --- | -----------



Inventories consist of:



|                             |  | December 31 |       |  | December 31 |   |        | January 1 | 
|---------------------------- |  | ----------- | ----- |  | ----------- | - | ------ | --------- | 
|                             |  | 2011        |       |  | 2010        |   |        | 2010      | 
|Current portion of inventory |  |             |       |  |             |   |        |           | 
|Doré                         |  | $           | 1,278 |  |             | $ | 3,273  |           | 
|In-circuit gold              |  |             | 1,867 |  |             |   | 1,589  |           | 
|Stockpiled ore               |  |             | 1,237 |  |             |   | 3,427  |           | 
|Material and supplies        |  |             | 1,706 |  |             |   | 1,474  |           | 
|                             |  |             | 6,088 |  |             |   | 9,763  |           | 
|Long-term stockpiled ore     |  |             | 1,963 |  |             |   | 3,338  |           | 
|                             |  | $           | 8,051 |  |             | $ | 13,101 |           | 



A net realizable adjustment of $0.8 million
was recorded against for the low-grade long-term stockpiled during the year ended December 31, 2011 (2010 - $1.2 million ). There
were no reversals of write-downs during the year or in 2010.



| | 11. | investments
| | --- | -----------



|                        |  | December 31 |        |  | December 31 |   |       | January 1 | 
|----------------------- |  | ----------- | ------ |  | ----------- | - | ----- | --------- | 
|                        |  | 2011        |        |  | 2010        |   |       | 2010      | 
|Auction rate securities |  | $           | -      |  |             | $ | 1,036 |           | 
|Investment receivable   |  |             | 11,099 |  |             |   | -     |           | 
|Investment in associate |  |             | 2,084  |  |             |   | -     |           | 
|                        |  | $           | 13,183 |  |             | $ | 1,036 |           | 



| | a) | Auction Rate Securities
| | -- | -----------------------



On September 12, 2011, the Company sold
its auction rate securities for proceeds of $0.9 million.



Page 23







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | b) | Investment Receivable
| | -- | ---------------------



During the fourth quarter of 2011, the
Company received regulatory and TSX Venture Exchange approval for the sale of the Ixhuatán gold project to Cangold Limited
(“Cangold”). The transaction provides Cangold with the option to acquire a 75% interest in Brigus’ subsidiary,
Linear Gold Mexico , S.A. de C.V. Pursuant to the terms of the transaction, Cangold has paid Brigus Cdn$1.0 million and issued
6.0 million Cangold shares to acquire the initial option and will be required to pay Brigus Cdn$1.0 million and issue 6.0 million
Cangold shares after 12 months and an additional Cdn$3.0 million and 4.0 million Cangold shares after 24 months. To exercise its
option and acquire a 75% interest in the Ixhuatán Project, Cangold will then be required to pay Brigus Cdn$5.0 million and
issue 4.0 million Cangold shares as well as complete an independent third-party feasibility study on the Ixhuatán deposit
within 36 months. The remaining payments have been recorded as an investment receivable and the option has been recorded as a derivative
liability. The investment receivable and derivative liability were both recorded at fair value on initial recognition, based on
fair value of the consideration received for the transaction.



| | c) | Investment in Associate
| | -- | -----------------------



The Company has a 17% interest in Cangold,
which is a junior mineral exploration and development company incorporated in Canada. The Company exerts significant influence
by virtue of its contractual right to appoint one member of Cangold’s Board of Directors which provides the Company with
20% of the voting rights. The following tables illustrate summarized financial information of the Company’s investment in
Cangold:



|                                           |  | December 31 |       |  | December 31 |   |   | January 1 | 
|------------------------------------------ |  | ----------- | ----- |  | ----------- | - | - | --------- | 
|                                           |  | 2011        |       |  | 2010        |   |   | 2010      | 
|Total assets                               |  | $           | 6,073 |  |             | $ | - |           | 
|Total liabilities                          |  |             | 75    |  |             |   | - |           | 
|Net assets                                 |  | $           | 5,998 |  |             | $ | - |           | 
|Company’s share of net assets of associate |  | $           | 1,020 |  |             | $ | - |           | 



|                                              |  | December 31 |      |   | December 31 |  
|--------------------------------------------- |  | ----------- | ---- | - | ----------- | -
|                                              |  | 2011        |      |   | 2010        |  
|Total revenue                                 |  | $           | -    |   |             | $
|Total net loss                                |  |             | (236 | ) |             |  
|Equity loss pick-up of associate              |  | $           | (40  | ) |             | $
|                                              |  |             |      |   |             |  
|Company’s share of other comprehensive income |  | $           | -    |   |             | $



Page 24







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 12. | PROPERTY, PLANT AND EQUIPMENT
| | --- | -----------------------------



|                                           |  | Property, plant and equipment |         |   | Mining properties |   |         | Mineral rights |  |   | Evaluation and exploration assets |   |  | Total |       
|------------------------------------------ |  | ----------------------------- | ------- | - | ----------------- | - | ------- | -------------- |  | - | --------------------------------- | - |  | ----- | ------
|Cost                                       |  |                               |         |   |                   |   |         |                |  |   |                                   |   |  |       |       
|As at January 1, 2010                      |  | $                             | 79,309  |   |                   | $ | 76,104  |                |  | $ | 8,715                             |   |  | $     | 1,690 
|Additions                                  |  |                               | 16,966  |   |                   |   | 22,204  |                |  |   | 1,056                             |   |  |       | 6,735 
|Disposals                                  |  |                               | (262    | ) |                   |   | (3,977  | )              |  |   | -                                 |   |  |       | -     
|Acquisitions through business combinations |  |                               | 2,296   |   |                   |   | -       |                |  |   | 60,596                            |   |  |       | -     
|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



|                                         |  | Property, plant and equipment |        |   | Mining properties |   |        | Mineral rights |  |   | Evaluation and exploration assets |  |  | Total |  
|---------------------------------------- |  | ----------------------------- | ------ | - | ----------------- | - | ------ | -------------- |  | - | --------------------------------- |  |  | ----- | -
|Accumulated depreciation                 |  |                               |        |   |                   |   |        |                |  |   |                                   |  |  |       |  
|As at January 1, 2010                    |  | $                             | 5,137  |   |                   | $ | 2,151  |                |  | $ | 397                               |  |  | $     | -
|Depreciation expense                     |  |                               | 9,730  |   |                   |   | 5,817  |                |  |   | 667                               |  |  |       | -
|Disposals                                |  |                               | 814    |   |                   |   | (1,118 | )              |  |   | -                                 |  |  |       | -
|As at December 31, 2010                  |  | $                             | 15,681 |   |                   | $ | 6,850  |                |  | $ | 1,064                             |  |  | $     | -
|Depreciation expense                     |  |                               | 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                             |  |  | $     | -



|                        |  | Property, plant and equipment |        |  | Mining properties |   |         | 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, 2010 |  | $                             | 82,628 |  |                   | $ | 87,481  |                |  | $ | 69,304                            |  |  | $     | 8,425 
|As at January 1, 2010   |  | $                             | 74,172 |  |                   | $ | 73,953  |                |  | $ | 8,318                             |  |  | $     | 1,690 



As at December
31, 2011, the Company did not identify any indicators of impairment.



During the year ended December 31, 2011,
$3.8million (2010 - $0.2 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, 2011 was 11.5% (December
31, 2010 – 11.5%).



The carrying value of
property, plant, and equipment under finance leases at December 31, 2011 was $28.7 million (December 31, 2010 - $25.2 million,
January 1, 2010 - $15.5 million).



The
Company has made commitments to acquire property, plant and equipment totaling $14.1 million at December 31, 2011 (December 31,
2010 - $22.3 million).



Page 25







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



During
the year ended December 31, 2011, $15.3 million (2010 - $nil) of revenue was credited to mining properties and development costs
related to the sale of underground ore prior to entering commercial production.



| | 13. | Assets held for salE
| | --- | --------------------



During
2011, the Company commenced a program to divest of its exploration and evaluation assets located in the Dominican Republic and
signed an agreement relating to the sale of these assets. The assets held for sale are measured at the lower of carrying value
and fair value less costs to sell and are classified as current as the transaction is expected to close within the next twelve
months.



|                    |  | December 31 |       |  | December 31 |   |   | January 1 | 
|------------------- |  | ----------- | ----- |  | ----------- | - | - | --------- | 
|                    |  | 2011        |       |  | 2010        |   |   | 2010      | 
|Plant and equipment |  | $           | 10    |  |             | $ | - |           | 
|Mineral rights      |  |             | 4,926 |  |             |   | - |           | 
|                    |  | $           | 4,936 |  |             | $ | - |           | 



| | 14. | LONG-TERM DEBT
| | --- | --------------



|                                             |  | December 31 |        |  | December 31 |   |        | January 1 | 
|-------------------------------------------- |  | ----------- | ------ |  | ----------- | - | ------ | --------- | 
|                                             |  | 2011        |        |  | 2010        |   |        | 2010      | 
|6.5% Senior Unsecured Convertible Debentures |  | $           | 33,487 |  |             | $ | -      |           | 
|Project Facility                             |  |             | -      |  |             |   | 20,738 |           | 
|Finance lease liabilities                    |  |             | 21,965 |  |             |   | 23,659 |           | 
|Notes payable and other                      |  |             | -      |  |             |   | 1,007  |           | 
|Total debt                                   |  | $           | 55,452 |  |             | $ | 45,404 |           | 
|                                             |  |             |        |  |             |   |        |           | 
|Current                                      |  | $           | 8,837  |  |             | $ | 29,525 |           | 
|Non-current                                  |  |             | 46,615 |  |             |   | 15,879 |           | 
|                                             |  | $           | 55,452 |  |             | $ | 45,404 |           | 



| | a) | 6.5% 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 dated March 23, 2011 (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, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Debentures are classified as a hybrid
financial instrument for accounting purposes as a result of the holder conversion option. The debt component is measured at amortized
cost and is accreted over the expected term to maturity using the effective interest method. Refer to Note 15 for details related
to the conversion option.



| | b) | Project Facility
| | -- | ----------------



On March 23, 2011, the Project Facility
was repaid in full.



| | c) | Finance Lease Liabilities
| | -- | -------------------------



The Company is obligated under various
finance leases for equipment, all of which expire by the end of 2014. 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 total annual payments under finance leases are as follows:



|                                             |  | 2012 |       |  | 2013 |   |       | 2014 |  |   | 2015  |  |  | 2016 |    
|-------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- |  |  | ---- | ---
|Minimum annual payments under finance leases |  | $    | 8,837 |  |      | $ | 8,490 |      |  | $ | 3,725 |  |  | $    | 721



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



The
Debentures are classified as a hybrid financial instrument for accounting purposes as a result of the holder conversion option.
The conversion option is accounted for as a derivative liability and was
therefore measured at fair value of $16.9 million on initial recognition. The conversion option is re-measured at fair value through
the Statement of Operations and Comprehensive Income (Loss) at the end of each reporting period. At December 31, 2011, the fair
value of the derivative liability was $6.4 million. The change in fair value has resulted in a gain of $10.5 million which was
recorded in income as an unrealized gain for the year ended December 31.



The
option associated with the sale of the Ixhuatán property (Note 11) is classified as a derivative liability. The derivative
liability related to the option is linked to, and must be settled by, delivery of shares of Linear Gold Mexico. The fair value
of the derivative liability upon initial recognition was $14.2 million, based on the net present value of the consideration to
be received. The shares of Linear Gold Mexico are not traded on an active market, therefore the fair value of the shares could
not be reliably measured. There has been no change in the value of the derivative as of December 31, 2011.



In
2009, the Company entered into a derivative program covering a portion of the Company’s forecasted gold sales and forecasted
Canadian dollar operating costs, with the Banks acting as counterparties. The weighted average price of the sales program was $876
per ounce of gold. During the year ended December 31, 2010, the Company delivered 52,729 ounces of gold toward the forward sales
program. In October and November of 2010, the Company early settled gold futures contracts covering 147,602 ounces of gold, of
which gold futures contracts covering 40,316 ounces were settled by purchasing equal and offsetting contracts. During the year
ended December 31, 2010, the Company recorded a loss on gold derivatives of $53.6 million. The weighted average exchange rate of
the foreign exchange derivative program was Cdn$1.21 per $1.00. On April 23, 2010, the remaining Canadian dollar foreign exchange
contracts were unwound early for proceeds of $8.2 million. During the year ended December 31, 2010 the Company recorded a gain
of $1.8 million for foreign exchange contracts.



Page 27







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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



The accrued site closure
costs are as follows:



|                                         |  | December 31 |        |  | December 31 |  
|---------------------------------------- |  | ----------- | ------ |  | ----------- | -
|                                         |  | 2011        |        |  | 2010        |  
|Balance, beginning of year               |  | $           | 14,198 |  |             | $
|Accretion                                |  |             | 486    |  |             |  
|Change in accounting policy              |  |             | 4,319  |  |             |  
|Changes in estimate and foreign exchange |  |             | 567    |  |             |  
|Balance, end of year                     |  | $           | 19,570 |  |             | $



The Company’s operations
are subject to reclamation and closure requirements. The Company estimates the accrued site closure costs and reconciles balances
recorded to legal and regulatory requirements.



During the year Company reviewed its methodology
for calculating the liability specific discount rate in relation to the accrued site closure costs. Previously, the Company’s
discount rate was calculated as a credit-adjusted risk free rate. During 2011, the Company changed its accounting policy for calculating
the discount rate as a risk-free rate. This change in policy more accurately reflects the liability specific discount rate and
is in line with convergence in the industry to the use of a risk-free rate. This change in accounting policy has been applied retroactively
and all periods from January 1, 2010 onward have been restated. Periods prior to January 1, 2010 have not been restated as the
Company elected to use the IFRS 1 exemption related to changes in decommissioning liabilities. The change in accounting policy
resulted in a reduction of the discount rate from 13% to 3%, which increased the accrued site closure cost liability at December
31, 2010 by $8.9 million (January 1, 2010 - $10.4 million). The accrued site closure cost liability at December 31, 2010 was $14.2
million (January 1, 2010 - $15.7 million)



For the year ended December 31, 2011, the
discount rate was reduced from 3% to 2%, which increased the accrued site closure cost liability by $4.3 million, to $19.5 million.



As of December 31, 2011,
the undiscounted obligation, adjusted for inflation, associated with the site closure costs relating to the Black Fox mine and
mill is $24.3 million (December 31, 2010 - $19.2 million, January 1, 2010 - $24.5 million). The present value of the Company’s
accrued site closure liability was determined using a discount rate of 2% (December 31, 2010 - 3%, January 1, 2010 - 3%).



| | 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 28







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Company has 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.



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, 2011,
the Company recorded revenue of $6.5 million related to the Agreement. At December 31, 2011, the remaining deferred revenue balance
was $52.8 million, with $6.3million recorded as current (December 31, 2010 - $56.3 million with
$6.2 million recorded as current, January 1, 2010 - $nil).



| | 18. | JOINT VENTURE
| | --- | -------------



On
February 1, 2010, the Company completed the sale of its joint venture interest for consideration which included a note receivable
with an aggregate outstanding balance of approximately $9.5 million. Brigus accounted for its 50% interest in the joint venture
using the equity method, whereby the Company's share of the investees' earnings and losses was included in operations and its investment
in the joint venture was adjusted by a similar amount.



Summarized
results of the operations of the joint venture is as follows, including a reconciliation of the Company’s equity earnings
in the venture:



|                               |  | December 31 |     
|------------------------------ |  | ----------- | ----
|                               |  | 2010        |     
|Revenue from sale of minerals  |  | $           | -   
|Direct operating costs         |  |             | -   
|Depreciation and amortization  |  |             | -   
|Impairment                     |  |             | (701
|Operating loss                 |  |             | (701
|Net loss                       |  |             | (701
|Less: equity share of net loss |  |             | -   
|Equity loss                    |  | $           | (701



Page 29







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 19. | INCOME TAXES
| | --- | ------------



|                             |  | December 31 |      |   | December 31 |  
|---------------------------- |  | ----------- | ---- | - | ----------- | -
|                             |  | 2011        |      |   | 2010        |  
|Current income tax expense   |  | $           | -    |   |             | $
|Deferred income tax recovery |  | $           | (404 | ) |             | $



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 |  
|------------------------------------------------------------------------------------------------------------ |  | ----------- | ------ | - | ----------- | -
|                                                                                                             |  | 2011        |        |   | 2010        |  
|Net income (loss) before tax                                                                                 |  | $           | 15,405 |   |             | $
|Statutory rate                                                                                               |  |             | 29.03  | % |             |  
|Tax expense (recovery) at statutory rate                                                                     |  |             | 4,472  |   |             |  
|Non-taxable fair value change on equity-linked financial instruments                                         |  |             | (3,140 | ) |             |  
|Non-deductible share-based compensation expense                                                              |  |             | 1,009  |   |             |  
|Renouncement of flow-through share expenditures incurred                                                     |  |             | 3,091  |   |             |  
|(Recovery) expense for losses and deductible temporary differences not recognized in current and prior years |  |             | (5,414 | ) |             |  
|Permanent differences and other                                                                              |  |             | (422   | ) |             |  
|Income tax recovery                                                                                          |  | $           | (404   | ) |             | $



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 |   |        | January 1 | 
|------------------------------------------ |  | ----------- | ------ |  | ----------- | - | ------ | --------- | 
|                                           |  | 2011        |        |  | 2010        |   |        | 2010      | 
|Deferred tax assets                        |  |             |        |  |             |   |        |           | 
|Net operating losses carried forward       |  | $           | 25,488 |  |             | $ | 16,714 |           | 
|Deductible temporary differences and other |  |             | 2,250  |  |             |   | 954    |           | 
|Exploration and development                |  |             | 89     |  |             |   | -      |           | 
|Property, plant and equipment              |  |             | 981    |  |             |   | 730    |           | 
|Accrued site closure costs                 |  |             | 1,580  |  |             |   | 494    |           | 
|                                           |  |             | 30,388 |  |             |   | 18,892 |           | 
|Deferred tax liabilities                   |  |             |        |  |             |   |        |           | 
|Property, plant and equipment              |  |             | 2,603  |  |             |   | 4,290  |           | 
|Investment receivable                      |  |             | 1,554  |  |             |   | -      |           | 
|Convertible debentures                     |  |             | 2,795  |  |             |   | -      |           | 
|Finance lease obligations                  |  |             | 3,013  |  |             |   | 938    |           | 
|Exploration and development                |  |             | 30,339 |  |             |   | 23,969 |           | 
|Other                                      |  |             | -      |  |             |   | 15     |           | 
|                                           |  |             | 40,304 |  |             |   | 29,212 |           | 
|Net deferred tax liability                 |  | $           | 9,916  |  |             | $ | 10,320 |           | 



Page 30







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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



|                           |  | December 31 |        |   | December 31 |  
|-------------------------- |  | ----------- | ------ | - | ----------- | -
|                           |  | 2011        |        |   | 2010        |  
|Balance, beginning of year |  | $           | 10,320 |   |             | $
|Deferred tax recovery      |  |             | (404   | ) |             |  
|Business acquisition       |  |             | -      |   |             |  
|Balance, end of year       |  | $           | 9,916  |   |             | $



At
December 31, 2011, the Company and its subsidiaries have unused non-capital losses of $205.9 million (December 31, 2010 - $235.3
million, January 1, 2010 - $130.8 million) available for carryforward purposes which expire from 2012-2031. The Company’s
subsidiaries also have non-capital loss carryforwards of $1.2 million (December 31, 2010 - $1.2 million, January 1,2010 - $nil)
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 $40.9 million (December 31, 2010 - $40.4 million, January 1, 2010 - $4.1 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 $189.7 million (December 31, 2010 - $211.8 million, January 1, 2010 - $196.5 million) in respect of loss
carryforwards, deductible temporary differences and unused tax credits.



At
December 31, 2011, the Company has no unrecognized deferred tax liability (December 31, 2010 - $nil, January 1, 2010 - $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 2011 or 2010 by the Company to its shareholders.



| | 20. | 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 at January 1, 2010                           |  |                  | 66,050,232  |   |        | $
|Exercise of options                                      |  |                  | 568,969     |   |        |  
|Exercise of warrants                                     |  |                  | 2,208,750   |   |        |  
|Shares issued for services                               |  |                  | 2,464,510   |   |        |  
|Shares issued for cash                                   |  |                  | 15,625,000  |   |        |  
|Shares cancelled in connection with business acquisition |  |                  | (15,625,000 | ) |        |  
|Shares and options issued for business acquisitions      |  |                  | 60,523,014  |   |        |  
|Shares issued for cash and related compensation warrants |  |                  | 50,609,353  |   |        |  
|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 |   |        | $



Page 31







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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



The following reconciles the warrants outstanding
to purchase common shares of the Company at the beginning and end of the respective periods:



|                                                        |  | Number of warrants and shares issuable upon exercise |            
|------------------------------------------------------- |  | ---------------------------------------------------- | -----------
|Balance, January 1, 2010                                |  |                                                      | 28,510,392 
|Warrants issued in connection with business acquisition |  |                                                      | 11,191,677 
|Other warrants issued                                   |  |                                                      | 12,273,916 
|Exercised                                               |  |                                                      | (2,208,750 
|Expired                                                 |  |                                                      | (255,000   
|Balance, December 31, 2010                              |  |                                                      | 49,512,235 
|Exercised                                               |  |                                                      | (11,888,924
|Expired                                                 |  |                                                      | (6,745,044 
|Balance, December 31, 2011                              |  |                                                      | 30,878,267 



There were no warrants issued during the
year ended December 31, 2011. The fair value of warrants issued during 2010 was determined using the Black-Scholes option pricing
model. The weighted average assumptions for those warrants include a risk free interest rate of 1.9%, expected life of 2 years,
expected volatility of 67% and expected dividend per share of $nil. The Company has used historical volatility to estimate the
volatility of the share price. The weighted average exercise price of the warrants outstanding at December 31, 2011 was $Cdn1.65
(December 31, 2010 - $Cdn1.47).



The following table summarizes information relating to warrants
outstanding as at December 31, 2011:



|                  |  | Number of warrants and shares |            |  | Exercise price |  |       |            
|----------------- |  | ----------------------------- | ---------- |  | -------------- |  | ----- | -----------
|Date issued       |  | issuable upon exercise        |            |  | (Cdn$)         |  |       | Expiry date
|July 24, 2008     |  |                               | 612,099    |  |                |  | 2.400 |            
|July 29, 2010     |  |                               | 630,000    |  |                |  | 1.400 |            
|October 19, 2010  |  |                               | 1,714,041  |  |                |  | 1.500 |            
|December 10, 2008 |  |                               | 5,326,782  |  |                |  | 0.884 |            
|February 20, 2009 |  |                               | 6,709,028  |  |                |  | 1.008 |            
|June 25, 2010     |  |                               | 7,121,592  |  |                |  | 2.192 |            
|October 19, 2010  |  |                               | 8,764,725  |  |                |  | 2.190 |            
|                  |  |                               | 30,878,267 |  |                |  |       |            



| | 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.



Page 32







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The fair value of each
option granted is estimated at the time of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing
model requires the input of subjective assumptions, such as the expected term of the option award and stock price volatility, which
involve inherent uncertainties and the application of management judgment. The expected term 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 stock. 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.



During the year ended
December 31, 2011 there were 6,051,831 options granted (2010 – 4,953,179). The weighted average assumptions for grants in
the year ended December 31, 2011 include a risk free interest rate of 1.7% (2010 – 1.8%), expected life of 4.3 years (2010
– 3.3 years), expected volatility of 72% (2010 – 74%) and expected dividend per share of $nil (2010 - $nil). The weighted
average fair value of the options granted was $0.85 (2010 - $0.64).



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



|                                                |  | December 31, 2011 |            |   | December 31, 2010               |  
|----------------------------------------------- |  | ----------------- | ---------- | - | ------------------------------- | -
|                                                |  | Number of options |            |   | Weighted average exercise price |  
|Balance, beginning of period                    |  |                   | 10,368,944 |   |                                 | $
|Granted                                         |  |                   | 6,051,831  |   |                                 |  
|Granted in connection with business acquisition |  |                   | -          |   |                                 |  
|Forfeited                                       |  |                   | (2,861,617 | ) |                                 |  
|Exercised                                       |  |                   | (813,748   | ) |                                 |  
|Balance, end of period                          |  |                   | 12,745,410 |   |                                 | $



The following table summarizes information relating to outstanding
and exercisable stock options at December 31, 2011:



|Exercise prices |  | Weighted average
 remaining contractual
life (in years) |     |  | Number of  options outstanding |  |            | Weighted average  exercise price |  |   | Number of options exercisable |  |  | Weighted average exercise price |          
|--------------- |  | ------------------------------------------------------- | --- |  | ------------------------------ |  | ---------- | -------------------------------- |  | - | ----------------------------- |  |  | ------------------------------- | ---------
|$0.50 - $1.00   |  |                                                         | 2.1 |  |                                |  | 1,014,701  |                                  |  | $ | 0.75                          |  |  |                                 | 1,014,701
|$1.00 - $1.50   |  |                                                         | 3.5 |  |                                |  | 5,883,334  |                                  |  |   | 1.23                          |  |  |                                 | 2,569,536
|$1.50 - $2.00   |  |                                                         | 4.2 |  |                                |  | 4,362,785  |                                  |  |   | 1.57                          |  |  |                                 | 714,795  
|$2.00 - $2.50   |  |                                                         | 1.4 |  |                                |  | 1,174,137  |                                  |  |   | 2.18                          |  |  |                                 | 1,174,137
|$2.50+          |  |                                                         | 1.6 |  |                                |  | 310,453    |                                  |  |   | 3.89                          |  |  |                                 | 310,453  
|                |  |                                                         | 3.4 |  |                                |  | 12,745,410 |                                  |  | $ | 1.46                          |  |  |                                 | 5,783,622



At December 31, 2011,
the intrinsic value of the stock options outstanding was $0.2 million (December 31, 2010 - $6.8 million) and the intrinsic value
of the stock options that were exercisable was $0.2 million (December 31, 2010 - $2.8 million).



| | d) | Share-based Compensation Expense
| | -- | --------------------------------



The total share-based payment expense recognized
in the Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2011 is $3.5 million (2010 - $1.2
million).



Page 33







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 21. | EMPLOYEE BENEFIT PLAN
| | --- | ---------------------



The Company maintains
a defined contribution plan for all employees. The amounts charged to earnings for the Company’s defined contribution plan
for the year ended December 31, 2011 is $0.6 million (2010 - $0.4 million).



| | 22. | FINANCE COSTS
| | --- | -------------



|                                                 |  | December 31 |        |   | December 31 |  
|------------------------------------------------ |  | ----------- | ------ | - | ----------- | -
|                                                 |  | 2011        |        |   | 2010        |  
|Interest and accretion on convertible debentures |  | $           | 5,352  |   |             | $
|Accretion on accrued site closure costs          |  |             | 486    |   |             |  
|Amortization of debt discount                    |  |             | 1,263  |   |             |  
|Interest on finance leases and other             |  |             | 2,093  |   |             |  
|                                                 |  |             | 9,194  |   |             |  
|Less: capitalized interest                       |  |             | (3,832 | ) |             |  
|                                                 |  | $           | 5,362  |   |             | $



| | 23. | EARNINGS (LOSS) PER SHARE
| | --- | -------------------------



The
basic earnings per share is calculated based on the weighted average number of common shares and common share equivalents outstanding
during the year. Diluted earnings per share is based on the assumption that stock options and warrants issued 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 |  
|------------------------------------------- |  | ----------- | ----------- |  | ----------- | -
|                                            |  | 2011        |             |  | 2010        |  
|Net income (loss)                           |  | $           | 15,769      |  |             | $
|Basic weighted average shares outstanding,  |  |             | 192,266,226 |  |             |  
|Dilutive securities:                        |  |             |             |  |             |  
|Options                                     |  |             | 1,558,557   |  |             |  
|Warrants                                    |  |             | 4,602,202   |  |             |  
|Diluted weighted average shares outstanding |  |             | 198,426,985 |  |             |  
|Basic earnings (loss) per share             |  | $           | 0.08        |  |             | $
|Diluted earnings (loss) per share           |  | $           | 0.08        |  |             | $



The
following items were excluded from the computation of diluted weighted average shares outstanding for the year ended December 31,
2011 because their effect would have been anti-dilutive:



|                       |  | December 31 |            |  | December 31 | 
|---------------------- |  | ----------- | ---------- |  | ----------- | 
|                       |  | 2011        |            |  | 2010        | 
|Options                |  |             | 5,823,000  |  |             | 
|Warrants               |  |             | 16,498,416 |  |             | 
|Convertible debentures |  |             | 20,408,163 |  |             | 



Page 34







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 24. | SUPPLEMENTAL CASH FLOW INFORMATION
| | --- | ----------------------------------



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



|                                         |  | December 31 |        |   | December 31 |  
|---------------------------------------- |  | ----------- | ------ | - | ----------- | -
|                                         |  | 2011        |        |   | 2010        |  
|Accounts receivable and other            |  | $           | 1,073  |   |             | $
|Prepaids                                 |  |             | (371   | ) |             |  
|Inventories                              |  |             | 4,275  |   |             |  
|Accounts payable and accrued liabilities |  |             | 2,715  |   |             |  
|Deferred revenue                         |  |             | (3,494 | ) |             |  
|                                         |  | $           | 4,198  |   |             | $



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



|                                                                         |  | December 31 |       |  | December 31 |  
|------------------------------------------------------------------------ |  | ----------- | ----- |  | ----------- | -
|                                                                         |  | 2011        |       |  | 2010        |  
|Increase in prepaid assets due to financing                              |  | $           | -     |  |             | $
|Increase in equity reserve from the cancellation of issued common shares |  |             | -     |  |             |  
|Depreciation capitalized                                                 |  |             | 4,183 |  |             |  
|Equipment purchases under finance lease                                  |  |             | 7,434 |  |             |  
|Shares issued for contract settlement and payment of departing officers  |  |             | 2,303 |  |             |  



Cash and cash equivalents are comprised
of:



|                                    |  | December 31 |        |  | December 31 |  
|----------------------------------- |  | ----------- | ------ |  | ----------- | -
|                                    |  | 2011        |        |  | 2010        |  
|Cash                                |  | $           | 16,121 |  |             | $
|Short-term money market investments |  |             | 2,701  |  |             |  



| | 25. | 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 shareholder’ equity and debt, net of cash and cash equivalents as follows:



|                                |  | December 31 |         |   | December 31 |  
|------------------------------- |  | ----------- | ------- | - | ----------- | -
|                                |  | 2011        |         |   | 2010        |  
|Shareholders’ equity            |  | $           | 182,525 |   |             | $
|Current and long-term debt      |  |             | 55,452  |   |             |  
|                                |  |             | 237,977 |   |             |  
|Less: cash and cash equivalents |  |             | (18,822 | ) |             |  
|                                |  | $           | 219,155 |   |             | $



Page 35







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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, 2011.



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



Set out below is a comparison by class
of the carrying amounts and fair value of the Company’s financial instruments:



|                                      |  | December 31, 2011 |        |  | December 31, 2010 |   |        | January 1, 2010 | 
|------------------------------------- |  | ----------------- | ------ |  | ----------------- | - | ------ | --------------- | 
|                                      |  | Carrying amount   |        |  | Fair value        |   |        | Carrying amount | 
|Financial Assets                      |  |                   |        |  |                   |   |        |                 | 
|Cash and cash equivalents             |  | $                 | 18,822 |  |                   | $ | 18,822 |                 | 
|Restricted cash                       |  |                   | -      |  |                   |   | -      |                 | 
|Accounts receivable                   |  |                   |        |  |                   |   |        |                 | 
|Notes receivable                      |  |                   | 3,440  |  |                   |   | 3,440  |                 | 
|Investment receivable                 |  |                   | 11,099 |  |                   |   | 11,099 |                 | 
|Auction rate securities               |  |                   | -      |  |                   |   | -      |                 | 
|Restricted certificates of deposit    |  |                   | 19,942 |  |                   |   | 19,942 |                 | 
|Derivative assets                     |  |                   | -      |  |                   |   | -      |                 | 
|                                      |  |                   |        |  |                   |   |        |                 | 
|Financial Liabilities                 |  |                   |        |  |                   |   |        |                 | 
|Derivative liabilities                |  |                   |        |  |                   |   |        |                 | 
|Gold forward contracts                |  |                   | -      |  |                   |   | -      |                 | 
|Conversion option on convertible debt |  |                   | 6,359  |  |                   |   | 6,359  |                 | 
|Option liability                      |  |                   | 14,206 |  |                   |   | 14,206 |                 | 
|Long-term debt                        |  |                   | 55,452 |  |                   |   | 58,356 |                 | 
|Equity-linked financial instruments   |  |                   | 6,684  |  |                   |   | 6,684  |                 | 



| | 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.



Page 36







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 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, restricted certificates of deposit, accounts receivable and notes receivable in
the ordinary course of business. The Company’s maximum exposure to credit risk is represented by the carrying amount of the
Company’s cash and cash equivalents, restricted cash, restricted certificates of deposit, accounts receivable and notes receivable.
Cash and cash equivalents, restricted cash and restricted certificates of deposit 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 except for the notes receivable as discussed in Note 8. The notes receivable were due
in full as of November 30, 2011 and as of December 31, 2011 no payments had been received. The notes are classified as held to
maturity and recorded at the value of the underlying property which secures the notes. The underlying property value mitigates
any credit risk associated with the recovery of the notes receivable and therefore the Company is not exposed to significant credit
risk. The Company’s credit risk has not changed significantly from December 31, 2010.



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, 2011.



| | 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, available bank lines, 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. The Company’s overall liquidity risk has decreased
from the prior year as a result of the repayment of the Black Fox Project Facility and issue of $50 million in Convertible Debentures.



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, 2011 |        |  | 2010         |  
|                                                   |  | Within 1 year                                  |        |  | 1-3 years    |  
|Accounts payable and accrued liabilities           |  | $                                              | 25,282 |  |              | $
|Long-term debt (principal and interest repayments) |  |                                                | 13,437 |  |              |  
|Operating lease obligations                        |  |                                                | 486    |  |              |  
|Contractual commitments                            |  |                                                | 13,622 |  |              |  
|                                                   |  | $                                              | 52,827 |  |              | $





Page 37







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



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



The Company is exposed to currency risk
on its Canadian dollar cash and cash equivalents, accounts receivable, restricted certificates of deposit, accounts payable and
accrued liabilities in addition to its direct operating costs. For the year ended December 31, 2011, 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 $6.2 million for a 10% increase or decrease in the Canadian dollar.



| | 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, 2011, the Company’s significant outstanding
borrowings consist of $50 million of convertible debentures which accrue interest at a fixed annual rate of 6.5% as well as equipment
finance leases. The weighted average interest rates paid by the Company on its outstanding borrowings during the year ended December
31, 2011 was 7.0% (2010 – 7.3%).



For the year ended December 31, 2011, a
100 basis point increase or decrease in interest rates would have impacted net earnings by $0.4 million, which relates to interest
expense on the former project facility which was the Company’s only variable rate debt which was fully repaid in 2011.



| | 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.



| | 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).



At December 31, 2011
the levels in the fair value hierarchy into which the Company’s financial assets and liabilities are measured and recognized
in the Statement of Financial Position at fair value are categorized are as follows:



|                                                |  | December 31, 2011 |      
|----------------------------------------------- |  | ----------------- | -----
|                                                |  | Level 1           |      
|                                                |  | Input             |      
|Financial Liabilities                           |  |                   |      
|Equity-linked financial instruments (Note 20)   |  |                   | 6,684
|Derivative liability (Note 15)                  |  |                   | -    
|Conversion option on convertible debt (Note 15) |  |                   | -    
|Total                                           |  | $                 | 6,684



Page 38







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



There were no transfers
between levels during the period. There have been no purchases, sales or gain and losses recognized in other comprehensive income
related to the level 1, 2 or 3 financial instrument.



|                                              |  | December 31, 2010 |       
|--------------------------------------------- |  | ----------------- | ------
|                                              |  | Level 1           |       
|                                              |  | Input             |       
|Financial Assets                              |  |                   |       
|Auction rate securities                       |  |                   | -     
|Financial Liabilities                         |  |                   |       
|Equity-linked financial instruments (Note 20) |  |                   | 17,503



There were no financial
assets classified as available for sale or as fair value through profit and loss at December 31, 2011 or 2010. There were no transfers
between levels during the period. There have been no purchases, sales or gain and losses recognized in other comprehensive income
related to the level 1,2 or 3 financial instrument.



| | 26. | OPERATING LEASE ARRANGEMENTS
| | --- | ----------------------------



The
Company has entered into commercial leases on certain motor vehicles, 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.



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



|                      |  | December 31 |     |  | December 31 |  
|--------------------- |  | ----------- | --- |  | ----------- | -
|                      |  | 2011        |     |  | 2010        |  
|Less than 1 year      |  | $           | 486 |  |             | $
|Between 1 and 5 years |  |             | 367 |  |             |  
|More than 5 years     |  |             | -   |  |             |  
|                      |  | $           | 853 |  |             | $



| | 27. | RELATED PARTY TRANSACTIONS
| | --- | --------------------------



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



|                         |  | December 31 |       |  | December 31 |  
|------------------------ |  | ----------- | ----- |  | ----------- | -
|                         |  | 2011        |       |  | 2010        |  
|Short-term benefits      |  | $           | 4,705 |  |             | $
|Post-employment benefits |  |             | 33    |  |             |  
|Share-based payments     |  |             | 2,821 |  |             |  
|Termination benefits     |  |             | 1,255 |  |             |  
|                         |  | $           | 8,814 |  |             | $



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.



Page 39







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 28. | 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 and are subject to purchase and sale agreements



The Company sells all
gold produced to two customers. The Company is not economically dependent on these 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, 2011 |        
|------------------------------------- |  | ----------------- | -------
|                                      |  | Black Fox Canada  |        
|Revenue from the sale of gold         |  | $                 | 71,855 
|Direct operating costs                |  |                   | 45,922 
|Depreciation and amortization         |  |                   | 17,442 
|Corporate administration              |  |                   | -      
|Segment income (loss) from operations |  |                   | 8,491  
|                                      |  |                   |        
|Assets                                |  |                   | 273,255
|Liabilities                           |  |                   | 158,059
|                                      |  |                   |        
|Other disclosures                     |  |                   |        
|Capital expenditures                  |  |                   | 66,785 
|Investment in associate (Note 11)     |  |                   | -      
|Assets held for sale (Note 13)        |  |                   | -      



|                                      |  | December 31, 2010 |        
|------------------------------------- |  | ----------------- | -------
|                                      |  | Black Fox Canada  |        
|Revenue from the sale of gold         |  | $                 | 85,935 
|Direct operating costs                |  |                   | 37,422 
|Depreciation and amortization         |  |                   | 15,246 
|Corporate administration              |  |                   | -      
|Impairment                            |  |                   | -      
|Segment income (loss) from operations |  |                   | 33,267 
|                                      |  |                   |        
|Assets                                |  |                   | 219,107
|Liabilities                           |  |                   | 130,090
|                                      |  |                   |        
|Other disclosures                     |  |                   |        
|Capital expenditures                  |  |                   | 22,763 



Page 40







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



|            |  | January 1, 2010  |        
|----------- |  | ---------------- | -------
|            |  | Black Fox Canada |        
|Assets      |  | $                | 184,560
|Liabilities |  |                  | 102,099



Geographical Information



|                   |  | December 31 |         |  | December 31 |   |         | January 1 | 
|------------------ |  | ----------- | ------- |  | ----------- | - | ------- | --------- | 
|Non-current assets |  | 2011        |         |  | 2010        |   |         | 2010      | 
|Canada             |  | $           | 287,320 |  |             | $ | 228,809 |           | 
|Mexico             |  |             | 14,093  |  |             |   | 14,096  |           | 
|Dominican Republic |  |             | -       |  |             |   | 4,933   |           | 



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



| | 29. | COMMITMENTS AND CONTINGENCIES
| | --- | -----------------------------



The
Company entered into flow-through share subscription agreements during the year ended December 31, 2011, whereby it agreed to renounce
to investors a total of $8.2 million of qualifying Canadian Exploration Expenses as described in the Income Tax Act of Canada,
with an effective date of December 31, 2011. The Company will be required to pay an interest penalty of approximately 1% per annum
on the unspent amount between February 29, 2012 and December 31, 2012.



As
at December 31, 2011, the Company had approximately $14.1 million of contractual commitments for the development of the Goldfields
Project.



Certain
of the Company’s mineral properties are subject to royalty obligations based on minerals produced from the properties. The
Black Fox current 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.



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.



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 of 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.



Page 41







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | 30. | Huizopa Sales transaction
| | --- | -------------------------



On December 23, 2010,
the Company entered into an agreement to sell 100% of Minera Sol de Oro and Minas de Argonautas, including the joint venture in
the Huizopa Project (collectively, “Huizopa”) to Cormack Capital Group, LLC (“Cormack”). Under the terms
of the agreement, the property could be returned to the Company at the sole discretion of the purchaser until December 31, 2011.
As a result of this provision, this transaction was not recorded as a sale during the period ending December 31, 2010. An impairment
of $2.4 million was recorded related to the Huizopa assets in the year ending December 31, 2010.



In December 2011, the
terms of the agreement were revised. Based on the revised terms, to complete the sale Cormack will be required to pay $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 retains
a 2% Net Smelter Royalty over future production from the Huizopa Project which  Cormack can reduce to 1% by making a US$1.0
million payment to the Company. Cormack 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.  In addition, Brigus is entitled
to receive a production bonus payment of $4.0 million within one year of the commencement of commercial production at Huizopa.



Voting control of the
Company will not pass until June 15, 2013 and therefore the Company did not record a sale of Huizopa as of December 31, 2011.



| | 31. | EVENTS AFTER THE REPORTING PERIOD
| | --- | ---------------------------------



On February 23, 2012 the Company announced
a $15 million bought deal equity financing, which closed on March 15, 2012. The net proceeds of the offering will be used to fund
development activities at the Company’s Black Fox Mine and for general corporate purposes and working capital.



| | 32. | transition to ifrs
| | --- | ------------------



The
Company’s consolidated financial statements for the year ending December 31, 2011 are the Company’s first set of annual
financial statements that comply with IFRS, as issued by the IASB, including the application of IFRS 1. IFRS 1 requires that comparative
financial information be provided, therefore the Company has applied IFRS as of January 1, 2010. IFRS requires first-time adopters
to retrospectively apply all IFRS’s that will be in effect at its December 31, 2011 reporting date. However, IFRS 1 provides
for certain optional and certain mandatory exceptions for first-time adopters. The Company has applied certain of these exemptions
to its opening Statement of Financial Position dated January 1, 2010, as described below:



| | a) | Elected Exemptions from Full Retrospective Application
| | -- | ------------------------------------------------------



Business
combinations



IFRS
1 indicates that a first-time adopter may elect not to apply IFRS 3 Business Combinations (“IFRS 3”) retrospectively
to business combinations that occurred before the date of transition to IFRS. The Company has elected to use this exemption and
has only applied IFRS 3 to business combinations that occurred on or after January 1, 2010.



Page 42







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Borrowing
costs



The
Company has elected the transition date, January 1, 2010, as the date to apply the transitional provisions set out in IAS 23 Borrowing
Costs (“IAS 23”). The Company will capitalize borrowing costs in accordance with IAS 23 for qualifying assets which
commenced construction after January 1, 2010.



Arrangements containing a lease



The Company has elected to apply transitional
provisions under IFRIC 4 Determining whether an Arrangement contains a Lease (“IFRIC 4”). The Company made an
assessment of the leases for US GAAP purposes under ASC 840 (EITF 01-8) as at the date of applicability, May 28, 2003. Accordingly
the Company has not reassessed arrangements containing leases as of January 1, 2010.



Decommissioning liabilities



IFRS 1 provides an exemption for decommissioning
liabilities whereby, if elected, the Company would not be required to comply with the requirements in IFRIC 1 Changes in Existing
Decommissioning, Restoration and Similar Liabilities for changes in liabilities that occurred before the date of transition
to IFRS. The Company has elected to use this exemption, and will account for changes in decommissioning liabilities prospectively
from January 1, 2010.



Share-based payment transactions



IFRS
1 permits first-time adopters to not apply IFRS 2to
equity instruments that were granted on or before November 7, 2002 or equity instruments that were granted subsequent to November
7, 2002 and vested before the date of transition to IFRS.  The Company has elected to take this exemption and not apply IFRS
2 to awards that vested prior to January 1, 2010.



| | b) | Mandatory Exceptions to Retrospective Application
| | -- | -------------------------------------------------



Estimates



IFRS 1 requires that an entity’s
estimates at the date of transition to IFRS must be consistent with estimates made for the same date under previous GAAP, unless
there is objective evidence that those estimates were made in error. The Company has not applied hindsight to create or revise
estimates originally made under the Company’s previous GAAP and accordingly the estimates initially made by the Company are
consistent with their application under IFRS.



| | c) | Reconciliation from US GAAP to IFRS
| | -- | -----------------------------------



A reconciliation of the impact of the transition
from US GAAP to IFRS on the Company’s financial position, financial performance and cash flows is set out in the following
tables and notes that accompany the tables:



Page 43







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Reconciliation of assets, liabilities and shareholders’
equity as at December 31, 2010:



|                                           |  | Notes         |  | US GAAP |          |   | Effect of IFRS Transition |   |         | Restatement and Reclassifications |  |   | IFRS    |  
|------------------------------------------ |  | ------------- |  | ------- | -------- | - | ------------------------- | - | ------- | --------------------------------- |  | - | ------- | -
|                                           |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Assets                                     |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Current assets                             |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Cash and cash equivalents                  |  | h             |  | $       | 6,425    |   |                           | $ | -       |                                   |  | $ | 11,185  |  
|Restricted cash                            |  | h             |  |         | 16,379   |   |                           |   | -       |                                   |  |   | (11,185 | )
|Accounts receivable and other              |  |               |  |         | 3,379    |   |                           |   | -       |                                   |  |   | -       |  
|Prepaids                                   |  |               |  |         | 828      |   |                           |   | -       |                                   |  |   | -       |  
|Inventories                                |  | a             |  |         | 9,927    |   |                           |   | (164    | )                                 |  |   | -       |  
|Notes receivable                           |  |               |  |         | 3,440    |   |                           |   | -       |                                   |  |   | -       |  
|Total current assets                       |  |               |  |         | 40,378   |   |                           |   | (164    | )                                 |  |   | -       |  
|Inventories                                |  | a             |  |         | 3,552    |   |                           |   | (214    | )                                 |  |   | -       |  
|Investments                                |  |               |  |         | 1,036    |   |                           |   | -       |                                   |  |   | -       |  
|Property, plant and equipment              |  | a,b,c,d,f,h   |  |         | 198,423  |   |                           |   | 42,989  |                                   |  |   | 6,426   |  
|Restricted certificates of deposit         |  |               |  |         | 18,028   |   |                           |   | -       |                                   |  |   | -       |  
|                                           |  |               |  | $       | 261,417  |   |                           | $ | 42,611  |                                   |  |   | 6,426   |  
|Liabilities and Shareholders’ Equity       |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Current liabilities                        |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Accounts payable and accrued liabilities   |  | f             |  | $       | 21,086   |   |                           | $ | 1,910   |                                   |  |   | -       |  
|Deferred revenue                           |  |               |  |         | 6,180    |   |                           |   | -       |                                   |  |   | -       |  
|Current portion of long-term debt          |  |               |  |         | 29,525   |   |                           |   | -       |                                   |  |   | -       |  
|Total current liabilities                  |  |               |  |         | 56,791   |   |                           |   | 1,910   |                                   |  |   | -       |  
|Accrued long-term liabilities              |  |               |  |         | 1,991    |   |                           |   | -       |                                   |  |   | -       |  
|Deferred revenue                           |  |               |  |         | 50,120   |   |                           |   | -       |                                   |  |   | -       |  
|Long-term debt                             |  |               |  |         | 15,879   |   |                           |   | -       |                                   |  |   | -       |  
|Equity-linked financial instruments        |  | h             |  |         | 42,742   |   |                           |   | (30,482 | )                                 |  |   | 5,243   |  
|Accrued site closure costs                 |  | h             |  |         | 5,307    |   |                           |   | -       |                                   |  |   | 8,891   |  
|Deferred tax liability                     |  | f             |  |         | 12,756   |   |                           |   | (2,436  | )                                 |  |   | -       |  
|Total liabilities                          |  |               |  |         | 185,586  |   |                           |   | (31,008 | )                                 |  |   | 14,134  |  
|Shareholders’ Equity                       |  |               |  |         |          |   |                           |   |         |                                   |  |   |         |  
|Common shares                              |  |               |  |         | 349,725  |   |                           |   | -       |                                   |  |   | -       |  
|Equity reserve                             |  | h             |  |         | 53,821   |   |                           |   | -       |                                   |  |   | (4,706  | )
|Warrants                                   |  | e             |  |         | -        |   |                           |   | 13,733  |                                   |  |   | -       |  
|Accumulated deficit                        |  | a,b,d,e,f,h,g |  |         | (327,715 | ) |                           |   | 59,886  |                                   |  |   | (3,002  | )
|Total shareholders’ equity                 |  |               |  |         | 75,831   |   |                           |   | 73,619  |                                   |  |   | (7,708  | )
|Total liabilities and shareholders’ equity |  |               |  | $       | 261,417  |   |                           | $ | 42,611  |                                   |  | $ | 6,426   |  



Page 44







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Reconciliation of assets, liabilities and shareholders’
equity as at January 1, 2010:



|                                           |  | Notes       |  | US GAAP |          |   | Effect of IFRS Transition |   |         | Reclassifications |  |   | IFRS   |  
|------------------------------------------ |  | ----------- |  | ------- | -------- | - | ------------------------- | - | ------- | ----------------- |  | - | ------ | -
|                                           |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Assets                                     |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Current assets                             |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Cash and cash equivalents                  |  | h           |  | $       | -        |   |                           |   | -       |                   |  | $ | 4,623  |  
|Restricted cash                            |  | h           |  |         | 6,731    |   |                           |   | -       |                   |  |   | (4,623 | )
|Accounts receivable and other              |  |             |  |         | 1,690    |   |                           |   | -       |                   |  |   | -      |  
|Prepaids                                   |  |             |  |         | 394      |   |                           |   | -       |                   |  |   | -      |  
|Derivative instruments                     |  |             |  |         | 1,961    |   |                           |   | -       |                   |  |   | -      |  
|Inventories                                |  | a           |  |         | 8,189    |   |                           |   | 613     |                   |  |   | -      |  
|Total current assets                       |  |             |  |         | 18,965   |   |                           |   | 613     |                   |  |   | -      |  
|Derivative instruments                     |  |             |  |         | 4,844    |   |                           |   | -       |                   |  |   | -      |  
|Inventories                                |  | a           |  |         | 1,036    |   |                           |   | -       |                   |  |   | -      |  
|Property, plant and equipment              |  | a,b,f,h     |  |         | 116,171  |   |                           |   | 31,792  |                   |  |   | 10,170 |  
|Equity accounted joint venture             |  |             |  |         | 3,440    |   |                           |   | -       |                   |  |   | -      |  
|Restricted certificates of deposit         |  |             |  |         | 14,805   |   |                           |   | -       |                   |  |   | -      |  
|                                           |  |             |  | $       | 159,261  |   |                           | $ | 32,405  |                   |  |   | 10,170 |  
|Liabilities and Shareholders’ Equity       |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Current liabilities                        |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Bank indebtedness                          |  |             |  | $       | 328      |   |                           | $ | -       |                   |  | $ | -      |  
|Accounts payable                           |  |             |  |         | 6,789    |   |                           |   | -       |                   |  |   | -      |  
|Accrued liabilities                        |  |             |  |         | 2,129    |   |                           |   | -       |                   |  |   | -      |  
|Derivative instruments                     |  |             |  |         | 12,571   |   |                           |   | -       |                   |  |   | -      |  
|Current portion of long-term debt          |  |             |  |         | 34,860   |   |                           |   | -       |                   |  |   | -      |  
|Total current liabilities                  |  |             |  |         | 56,677   |   |                           |   | -       |                   |  |   | -      |  
|Accrued long-term liabilities              |  | f           |  |         | 483      |   |                           |   | 869     |                   |  |   | -      |  
|Derivative instruments                     |  |             |  |         | 31,654   |   |                           |   | -       |                   |  |   | -      |  
|Long-term debt                             |  |             |  |         | 48,909   |   |                           |   | -       |                   |  |   | -      |  
|Equity-linked financial instruments        |  | e           |  |         | 27,318   |   |                           |   | (24,409 | )                 |  |   | -      |  
|Accrued site closure costs                 |  | h           |  |         | 5,345    |   |                           |   | -       |                   |  |   | 10,388 |  
|Deferred tax liability                     |  | f           |  |         | 1,304    |   |                           |   | (1,304  | )                 |  |   | -      |  
|Total liabilities                          |  |             |  |         | 171,690  |   |                           |   | (24,844 | )                 |  |   | 10,388 |  
|Shareholders’ (Deficiency) Equity          |  |             |  |         |          |   |                           |   |         |                   |  |   |        |  
|Common shares                              |  |             |  |         | 202,769  |   |                           |   | -       |                   |  |   | -      |  
|Equity reserve                             |  |             |  |         | 45,555   |   |                           |   | -       |                   |  |   | -      |  
|Warrants                                   |  | e           |  |         | -        |   |                           |   | 11,579  |                   |  |   | -      |  
|Accumulated deficit                        |  | a,b,d,e,f,h |  |         | (260,753 | ) |                           |   | 45,670  |                   |  |   | (218   | )
|Total shareholders’ (deficiency) equity    |  |             |  |         | (12,429  | ) |                           |   | 57,249  |                   |  |   | (218   | )
|Total liabilities and shareholders’ equity |  |             |  | $       | 159,261  |   |                           | $ | 32,405  |                   |  | $ | 10,170 |  



Page 45







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



Reconciliation of loss and comprehensive loss for the year ended
December 31, 2010:



|                                                          |  | Notes |  | US GAAP |         |   | Effect of IFRS Transition |   |         | Restatement and Reclassifications |  |   | IFRS   |  
|--------------------------------------------------------- |  | ----- |  | ------- | ------- | - | ------------------------- | - | ------- | --------------------------------- |  | - | ------ | -
|                                                          |  |       |  |         |         |   |                           |   |         |                                   |  |   |        |  
|Revenue from the sale of gold                             |  |       |  | $       | 85,935  |   |                           | $ | -       |                                   |  | $ | -      |  
|                                                          |  |       |  |         |         |   |                           |   |         |                                   |  |   |        |  
|Operating expenses                                        |  |       |  |         |         |   |                           |   |         |                                   |  |   |        |  
|Direct operating costs                                    |  | a,d   |  |         | 41,265  |   |                           |   | (3,843  | )                                 |  |   | -      |  
|Depreciation and amortization                             |  | a,b,h |  |         | 13,672  |   |                           |   | 138     |                                   |  |   | 1,480  |  
|Accretion expense                                         |  | g     |  |         | 646     |   |                           |   | -       |                                   |  |   | (646   | )
|Corporate administration                                  |  | h     |  |         | 12,647  |   |                           |   | -       |                                   |  |   | 768    |  
|Exploration and business development                      |  | a,h   |  |         | 7,503   |   |                           |   | (6,735  | )                                 |  |   | (768   | )
|Impairment on exploration property                        |  |       |  |         | 2,414   |   |                           |   | -       |                                   |  |   | -      |  
|                                                          |  |       |  |         | 78,147  |   |                           |   | (10,440 | )                                 |  |   | 834    |  
|Income from operations                                    |  |       |  |         | 7,788   |   |                           |   | 10,440  |                                   |  |   | (834   | )
|Other income (expenses)                                   |  |       |  |         |         |   |                           |   |         |                                   |  |   |        |  
|Finance income                                            |  |       |  |         | 283     |   |                           |   | -       |                                   |  |   |        |  
|Finance costs                                             |  | c,g   |  |         | (11,470 | ) |                           |   | (145    | )                                 |  |   | (646   | )
|Loss on modification of debentures                        |  |       |  |         | (513    | ) |                           |   | -       |                                   |  |   |        |  
|Acquisition related costs                                 |  |       |  |         | (3,338  | ) |                           |   | -       |                                   |  |   |        |  
|Fair value change on equity-linked financial instruments  |  | h     |  |         | (7,958  | ) |                           |   | 3,919   |                                   |  |   | (537   | )
|Loss on derivative instruments                            |  |       |  |         | (51,811 | ) |                           |   | -       |                                   |  |   | -      |  
|Renunciation of flow-through shares                       |  | f     |  |         | -       |   |                           |   | 1,363   |                                   |  |   | -      |  
|Foreign exchange loss and other                           |  | h     |  |         | (774    | ) |                           |   | -       |                                   |  |   | (856   | )
|Loss before income taxes and equity loss in joint venture |  |       |  |         | (67,793 | ) |                           |   | 15,577  |                                   |  |   | (2,873 | )
|Income taxes                                              |  | f     |  |         | 1,532   |   |                           |   | (1,272  | )                                 |  |   | -      |  
|Equity loss in joint venture                              |  |       |  |         | (701    | ) |                           |   | -       |                                   |  |   | -      |  
|Net loss and comprehensive loss                           |  |       |  | $       | (66,962 | ) |                           | $ | 14,305  |                                   |  | $ | (2,873 | )
|                                                          |  |       |  |         |         |   |                           |   |         |                                   |  |   |        |  
|Loss per common share – basic and diluted                 |  |       |  | $       | (0.57   | ) |                           |   |         |                                   |  |   |        |  



Reconciliation of consolidated statement
of cash flows



The transition to IFRS did not have a significant
impact on the Company’s Consolidated Statement of Cash Flows for the year ended December 31, 2010. The transition adjustments
recognized in the Statement of Financial Position and Statement of Operations and Comprehensive Income (Loss) have resulted in
reclassifications of various amounts on the Statement of Cash Flows. However, there were no significant changes to the total operating,
financing or investing cash flows, therefore a reconciliation has not been prepared.



The IFRS transition adjustments that impacted
the Company’s financial statements at December 31, 2010 are as follows:



Page 46







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | a) | Capitalization of Exploration and Evaluation Expenditures
| | -- | ---------------------------------------------------------



Under US GAAP,
exploration expenditures incurred to locate areas of potential mineralization are expensed as incurred. Capitalization of these
costs is only permitted once the commercial feasibility of the mineral deposits has been established.IFRS permits entities
to capitalize or expense exploration costs, subject to certain limits. Under IFRS, the Company will
capitalize exploration costs, once the legal right to explore has been established. This accounting policy choice has been applied
retrospectively.



The opening balance sheet adjustments at
January 1, 2010, included an increase to retained earnings of $33.0 million, an increase to property, plant and equipment of $32.4
million and an increase to inventory of $0.6 million. During the year ended December 31, 2010 the capitalization
of exploration and evaluation costs resulted in an increase to retained earnings of $5.7 million, an increase to property, plant
and equipment of $6.7 million and a decrease to inventory of $1.0 million. Depreciation expense increased by $0.4 million
and direct operating costs increased by $1.4 million for the year ended December 31, 2010 while exploration and evaluation expenditures
were reduced by $6.7 million.



| | b) | Componentization of Property, Plant and Equipment
| | -- | -------------------------------------------------



IFRS requires that each component of an
item of property, plant and equipment with a significant cost in relation to the total cost of the item should be depreciated separately,
according to its useful life. Under US GAAP, a components approach for depreciation is permitted but not required.



The adjustment to property, plant and equipment
and depreciation expense for the year ended December 31, 2010 was $0.6 million and the adjustment to property, plant and equipment
at January 1, 2010 was $0.2 million.



| | c) | Borrowing Costs
| | -- | ---------------



Both US GAAP and IFRS contain provisions
for capitalizing certain borrowing costs associated with qualifying assets. However, there are differences as to which costs qualify
for capitalization, the definition of a qualifying asset, and the amounts eligible for capitalization in relation to specific borrowings.



Under US GAAP, capitalized interest was
determined by applying the capitalization rate to the average of the accumulated expenditures relating to qualifying expenditures

The Company has elected to take the IFRS
1 exemption relating to borrowing costs and apply IAS 23 effective January 1, 2010. Accordingly, there are no adjustments to opening
retained earnings. There was a decrease in capitalized interest for the period ended December 31, 2010 under IFRS resulting in
a decrease in property, plant and financing costs of $0.2 million.



| | d) | Stripping Costs
| | -- | ---------------



Under US GAAP, stripping costs incurred
during the production stage of a mine are included in the cost of inventory produced during the period in which the stripping costs
were incurred. The Company’s policy under IFRS is to capitalize stripping costs during the production phase incurred to access
ore that will be mined in future periods as it will provide a future economic benefit. 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 related
stripping activity.



Page 47







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



The Company has determined that certain
stripping costs incurred during the production phase at Black Fox should be capitalized as they were incurred to provide access
to ore that will be mined in future periods. The adjustment to increase property, plant and equipment and reduce direct operating
costs for the year ended December 31, 2010 was $5.2 million.



| | e) | Warrants Issued for Services Received
| | -- | -------------------------------------



Under US GAAP, an equity-linked financial
instrument is not considered to be indexed to the entity’s own stock if the strike price is denominated in a currency other
than the issuer’s functional currency. The Company has outstanding warrants that are denominated in Canadian dollars, which
differs from the Company’s US dollar functional currency. As a result, these warrants were not considered to be indexed to
the Company’s own stock, and were accounted for separately as derivative liability instruments with fair value assessed at
each reporting date, rather than as equity instruments.



Under IFRS, warrants to purchase common
shares of the Company issued for services received (“Compensation Warrants”) fall within the scope of IFRS 2.
IFRS 2 requires that Compensation Warrants are initially recorded at fair value based on the fair value
of the goods or services received and are classified on the Statement of Financial Position within equity.



The fair value of the Compensation Warrants
as at the date issued was determined, reversing the previously recorded unrealized fair value adjustment. The opening balance sheet
adjustments at January 1, 2010 include a decrease in the equity linked financial instrument liability of $24.4 million which included
a fair value adjustment of $12.8 million and a reclassification between the equity-linked financial instruments liability and equity
of $11.6 million. The adjustments required for Compensation Warrants for the period ended December 31, 2010 include a decrease
in the liability of $6.1 million which includes a reclassification from equity-linked financial instruments to equity of $2.2 million
and a fair value adjustment of $3.9 million. The impact on the Statement of Operations and Comprehensive Income (Loss) for the
year ended December 31, 2010 was a reduction of a loss on the equity linked-financial instruments of $3.9 million.



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



IFRS disallows deferred
taxes to be recognized on the initial recognition of an asset or liability that results from a transaction that is not a business
combination. The opening balance sheet adjustments at January 1, 2010 included a reduction of property, plant and equipment of
$0.4 million, an increase in the accrued long-term liabilities of $0.9 million, and a reduction in the deferred tax liability of
$1.3 million. At December 31, 2010 there was a reduction in the deferred tax liability of $2.4 million, an increase in accrued
liabilities of $1.9 million, a decrease in the property, plant and equipment balance of $0.4 million and an increase of the income
tax recovery of $0.1 million, and a reclassification between income tax recovery and renunciation of flow through shares of $1.4
million at December 31, 2010. These adjustments related to the reversal of the deferred tax liability associated with the acquisition
of the Black Fox Mill as well as the treatment of flow-through share financing under IFRS.



Page 48







|BRIGUS GOLD CORP.                                                                   
|------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements                                      
|December 31, 2011                                                                   
|(stated in US dollars; tabular amounts in thousands except share and per share data)



| | g) | Accrued Site Closure Costs
| | -- | --------------------------



On transition to IFRS the Company reclassified
accretion expense to finance costs in accordance with IAS 23. Under US GAAP accretion expense was recorded as a standalone item.
This resulted in a reclassification from accretion expense to finance costs of $0.6 million for the year ended December 31, 2010.



| | h) | Restatement and Reclassifications
| | -- | ---------------------------------



(i) Accrued Site Closure
Costs



As of December 31, 2011
the Company made a change in its accounting policy related to the assessment of the liability specific discount rate related to
accrued site closure costs so that the discount rate was calculated using a risk-free rate as opposed to a credit-adjusted risk
free rate. This change in accounting policy resulted in a reduction of the discount rate from 13% to 3% for January 1, 2010 and
December 31, 2010 and a reduction to 2% at December 31, 2011.



This change resulted
in an increase in the closure asset of $10.2 million and an increase in the accrued site closure cost liability of $10.4 million
at January 1, 2010. An adjustment of $0.2 million related to foreign exchange was recorded in retained earnings. For the year ended
December 31, 2010 the change in the discount rate resulted in an increase in the closure asset of $6.4 million and an increase
in the accrued site closure cost liability of $8.9 million. The change also impacted depreciation expense which increase by $1.5
million, accretion expense which decreased by $0.1 million and foreign exchange loss which increase by $0.8 million.



(ii) Reclassifications



The Company reclassified $0.8 million of
exploration and business development expenses to corporate administration for the year ended December 31, 2010. In addition, the
Company reclassified $4.6 million and $11.2 million from restricted cash to cash and cash equivalents at January 1, 2010 and December
31, 2010, respectively. Previously, the Company classified internally restricted cash related to flow-through shares as restricted
cash.



(iii) Equity Linked Financial Instruments



The adjustments to equity-linked financial
instruments include an adjustment for an error related to warrants issued as part of an equity offering that were not included
in the assessment of the fair value at December 31, 2010. This adjustment resulted in an increase of $5.2 million related to the
equity linked financial instruments, a $4.7 million decrease in additional equity reserve and a $0.6 million increase in the fair
value change on equity-linked financial instruments.





Page 49