TWIN MINING CORPORATION

(a development stage company)

CONSOLIDATED BALANCE SHEETS

As at December 31, 2005 and 2004

|(in Canadian dollars)                                        | 2005         | 2004        
|------------------------------------------------------------ | ------------ | ------------
|                                                             | $            | $           
|ASSETS                                                       |              |             
|Current assets                                               |              |             
|Cash and cash equivalents                                    | 2,952,674    | 1,896,456   
|Receivables (note 3)                                         | 27,077       | 247,591     
|Prepaid expenses                                             | 153,944      | 148,429     
|Supply inventory (note 4(b))                                 | 151,657      | 198,631     
|                                                             | 3,285,352    | 2,491,107   
|Mineral properties(note 4)                                   | 38,372,889   | 34,591,552  
|Property, plant and equipment(note 5)                        | 127,598      | 51,496      
|                                                             | 41,785,839   | 37,134,155  
|LIABILITIES                                                  |              |             
|Current liabilities                                          |              |             
|Accounts payable and accrued liabilities
 (notes 6(d) and 8) | 3,544,711    | 2,462,766   
|Future income taxes(note 7)                                  | 6,429,295    | 6,427,491   
|                                                             | 9,974,006    | 8,890,257   
|Nature of operations and going concern (note 1)              |              |             
|Contingencies and commitments (notes 4 and 10)               |              |             
|SHAREHOLDERS' EQUITY                                         |              |             
|Capital stock(note 6)                                        | 59,056,603   | 53,355,502  
|Warrants(note 6(b))                                          | 3,071,847    | 3,182,866   
|                                                             | 62,128,450   | 56,538,368  
|Contributed surplus(notes 6(b) and (c))                      | 898,998      | 691,968     
|                                                             | 63,027,448   | 57,230,336  
|Accumulated deficit                                          | (31,215,615) | (28,986,438)
|                                                             | 31,811,833   | 28,243,898  
|                                                             | 41,785,839   | 37,134,155  

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

Approved by the Board

|/s/ Hermann Derbuch | /s/ Cedric E. Ritchie
|------------------- | ---------------------
|                    |                      
|Hermann Derbuch     | C. E. Ritchie        
|Director            | Director             

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TWIN MINING CORPORATION

(a development stage company)

CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT

For the years ended December 31, 2005, 2004 and 2003

|                                                       | Cumulative,        |             |             |           
|------------------------------------------------------ | ------------------ | ----------- | ----------- | ----------
|                                                       | since inception    |             |             |           
|                                                       | (March 6, 1985 to  |             |             |           
|(in Canadian dollars)                                  | December 31, 2005) | 2005        | 2004        | 2003      
|                                                       | $                  | $           | $           | $         
|Interest income                                        | 1,813,452          | 4,464       | 1,970       | 22,792    
|General and administrative expenses                    |                    |             |             |           
|Salaries and benefits                                  | 5,713,932          | 358,223     | 454,753     | 521,870   
|Professional fees                                      | 3,141,459          | 261,636     | 166,122     | 117,840   
|Investor relations                                     | 1,732,572          | 132,669     | 129,455     | 126,264   
|Travel                                                 | 710,650            | 26,882      | 72,504      | 19,211    
|Interest                                               | 188,083            | 105,068     | 40,000      | -         
|Administrative and office                              | 3,536,116          | 92,632      | 318,119     | 241,487   
|Depreciation                                           | 136,821            | 16,041      | 19,603      | 9,704     
|                                                       | 15,159,633         | 993,151     | 1,200,556   | 1,036,376 
|Mineral property costs written off(note 4(a) and 4(b)) | 13,700,710         | 1,500,000   | 1,450,626   | 31,219    
|Future income tax provision (recovery)(note 7)         | 3,414,879          | (237,186)   | 4,574,200   | (922,135) 
|(Gain) loss from foreign currency translation          | 107,700            | (22,324)    | (79,325)    | (18,012)  
|                                                       | 32,382,922         | 2,233,641   | 7,146,057   | 127,448   
|Loss for the year                                      | 30,569,470         | 2,229,177   | 7,144,087   | 104,656   
|Accumulated deficit, beginning of period               | -                  | 28,986,438  | 21,196,206  | 21,091,550
|Adoption of stock option standard(note 6(c))           | 646,145            | -           | 646,145     | -         
|Accumulated deficit, end of period                     | 31,215,615         | 31,215,615  | 28,986,438  | 21,196,206
|Weighted average number of shares outstanding          |                    | 137,760,661 | 100,425,167 | 83,664,662
|Loss per share - basic and diluted                     |                    | 0.016       | 0.071       | 0.001     

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

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TWIN MINING CORPORATION

(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOW

For the years ended December 31, 2005, 2004 and 2003

|                                             | Cumulative,        |             |             |            
|-------------------------------------------- | ------------------ | ----------- | ----------- | -----------
|                                             | since inception    |             |             |            
|                                             | (March 6, 1985 to  |             |             |            
|(in Canadian dollars)                        | December 31, 2005) | 2005        | 2004        | 2003       
|                                             | $                  | $           | $           | $          
|Operating activities                         |                    |             |             |            
|Loss for the year                            | (30,569,470)       | (2,229,177) | (7,144,087) | (104,656)  
|Add (deduct) items not involving cash:       |                    |             |             |            
|Mineral property costs written off           | 13,700,710         | 1,500,000   | 1,450,626   | 31,219     
|Depreciation                                 | 136,821            | 16,041      | 19,603      | 9,704      
|Future income tax expense (recovery)         | 3,414,879          | (237,186)   | 4,574,200   | (922,135)  
|Stock-based compensation expense             | 716,022            | 50,447      | 19,430      | -          
|Net change in non-cash working capital       | 3,212,033          | 1,343,918   | (713,003)   | 2,038,886  
|                                             | (9,389,005)        | 444,043     | (1,793,231) | 1,053,018  
|Financing activities                         |                    |             |             |            
|Issuance of common shares:                   |                    |             |             |            
|net of issue costs (note 6(d))               | 51,718,575         | 5,106,168   | 8,531,172   | 1,373,858  
|Issuance of flow-through shares:             |                    |             |             |            
|net of issue costs (note 6(d))               | 12,827,922         | 879,487     | -           | 1,435,604  
|                                             | 64,546,497         | 5,985,655   | 8,531,172   | 2,809,462  
|Investing activities                         |                    |             |             |            
|Mineral property expenditures                | (51,899,501)       | (5,240,439) | (5,549,765) | (4,766,748)
|Capital assets                               | (305,317)          | (133,041)   | (11,326)    | (26,915)   
|                                             | (52,204,818)       | (5,373,480) | (5,561,091) | (4,793,663)
|(Decrease) increase in cash                  | 2,952,674          | 1,056,218   | 1,176,850   | (931,183)  
|Cash and cash equivalents, beginning of year | -                  | 1,896,456   | 719,606     | 1,650,789  
|Cash and cash equivalents, end of year       | 2,952,674          | 2,952,674   | 1,896,456   | 719,606    
|Net change in non-cash working capital items |                    |             |             |            
|Receivables                                  |                    | 220,514     | (16,214)    | (199,607)  
|Prepaid expenses                             |                    | (5,515)     | (35,515)    | (29,825)   
|Supply inventory                             |                    | 46,974      | (6,047)     | (80,612)   
|Accounts payable and accrued liabilities     |                    | 1,081,945   | (655,227)   | 2,348,930  
|                                             |                    | 1,343,918   | (713,003)   | 2,038,886  

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

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TWIN MINING CORPORATION

(a development stage company)

CONSOLIDATED STATEMENTS OF MINERAL PROPERTIES

For the years ended December 31, 2005, 2004 and 2003

|                                        | Cumulative,        |            |             |           
|--------------------------------------- | ------------------ | ---------- | ----------- | ----------
|                                        | since inception    |            |             |           
|                                        | (March 6, 1985 to  |            |             |           
|(in Canadian dollars)                   | December 31, 2005) | 2005       | 2004        | 2003      
|                                        | $                  | $          | $           | $         
|TORNGAT Diamond Property(note 4(a))     |                    |            |             |           
|Balance, beginning of year              | -                  | 3,374,464  | 3,343,247   | 3,303,216 
|Drilling, assays and related field work | 3,511,669          | -          | -           | 5,275     
|Project administration and general      | 55,445             | 549        | 78          | 421       
|Property acquisition and holding costs  | 237,647            | 8,492      | 34,335      | 34,335    
|Costs recovered during the year         | (203,196)          | -          | (3,196)     | -         
|Property costs written off              | (918,060)          | (700,000)  | -           | -         
|Total expenditures during the year      | 2,683,505          | (690,959)  | 31,217      | 40,031    
|Balance, end of year                    | 2,683,505          | 2,683,505  | 3,374,464   | 3,343,247 
|Brodeur Diamond Property(note 4(b))     |                    |            |             |           
|Balance, beginning of year              | -                  | 9,733,227  | 8,113,587   | 6,702,778 
|Drilling, assays and related field work | 10,618,006         | 2,114,153  | 1,033,195   | 1,273,296 
|Project administration and general      | 176,510            | 3,480      | 54,186      | 10,058    
|Property acquisition and holding costs  | 1,117,257          | 29,694     | 532,259     | 158,674   
|Property costs written off              | (831,219)          | (800,000)  | -           | (31,219)  
|Total expenditures during the year      | 11,080,554         | 1,347,327  | 1,619,640   | 1,410,809 
|Balance, end of year                    | 11,080,554         | 11,080,554 | 9,733,227   | 8,113,587 
|Atlanta Gold Property(note 4(c))        |                    |            |             |           
|Balance, beginning of year              | -                  | 20,510,751 | 15,938,888  | 14,237,752
|Drilling, assays and related field work | 18,186,431         | 2,818,637  | 4,385,293   | 1,535,142 
|Project administration and general      | 2,983,322          | 118,918    | 78,673      | 52,800    
|Property acquisition and holding costs  | 3,093,749          | 101,682    | 107,897     | 113,194   
|Costs recovered during the year         | (713,514)          | -          | -           | -         
|Total expenditures during the year      | 23,549,988         | 3,039,237  | 4,571,863   | 1,701,136 
|Balance, end of year                    | 23,549,988         | 23,549,988 | 20,510,751  | 15,938,888
|Indonesia Properties(note 4(d))         |                    |            |             |           
|Balance, beginning of year              | -                  | -          | 1,450,626   | 1,444,738 
|Drilling, assays and related field work | 1,613,072          | -          | -           | -         
|Project administration and general      | 518,614            | -          | -           | 5,888     
|Property acquisition and holding costs  | 5,592,602          | -          | -           | -         
|Property costs written off              | (7,724,288)        | -          | (1,450,626) | -         
|Total expenditures during the year      | -                  | -          | (1,450,626) | 5,888     
|Balance, end of year                    | -                  | -          | -           | 1,450,626 
|Abitibi Gold Property(note 4(e))        |                    |            |             |           
|Balance, beginning of year              | -                  | 973,110    | 1,619,665   | -         
|Drilling, assays and related field work | 1,692,122          | 1,231      | 75,932      | 1,614,959 
|Project administration and general      | 8,708              | 3,872      | 3,337       | 1,499     
|Property acquisition and holding costs  | 29,777             | -          | 26,570      | 3,207     
|Costs recovered during the year(note 3) | (671,765)          | 80,629     | (752,394)   | -         
|Total expenditures during the year      | 1,058,842          | 85,732     | (646,555)   | 1,619,665 
|Balance, end of year                    | 1,058,842          | 1,058,842  | 973,110     | 1,619,665 
|                                        | 38,372,889         | 38,372,889 | 34,591,552  | 30,466,013

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

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TWIN MINING CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

|(in Canadian dollars)                     | Shares issued and subscribed |   |             |   |            |                   |            
|----------------------------------------- | ---------------------------- | - | ----------- | - | ---------- | ----------------- | -----------
|                                          | Number of                    |   | Ascribed    |   | Warrants   | Contributed       | Accumulated
|                                          | shares                       |   | value       |   | value      |                   | Surplus    
|                                          |                              |   |             |   | (note 6(b) | (note 6(b) & (c)) |            
|Balance, December 31, 2002                | 80,079,344                   | $ | 47,931,153  | $ | -          | $                 | -          
|Issue of shares for cash                  |                              |   |             |   |            |                   |            
|- at $0.28 per flow through share,        |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 5,357,143                    |   | 1,435,604   |   | -          |                   |            
|- at $0.30 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 616,667                      |   | 151,938     |   | 26,393     |                   |            
|- at $0.345 per common share,             |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 762,500                      |   | 250,994     |   | -          |                   |            
|- at $0.33 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 3,000,000                    |   | 787,950     |   | 156,583    |                   |            
|Issue of shares to Helix Resources Inc.   | 105,000                      |   | 42,000      |   |            |                   |            
|Share issue costs in respect of           |                              |   |             |   |            |                   |            
|CEE renounced in prior years(note 7)      | -                            |   | (3,039,138) |   |            |                   |            
|Loss for the year                         |                              |   |             |   |            |                   |            
|Balance, December 31, 2003                | 89,920,654                   | $ | 47,560,501  | $ | 182,976    | $                 | -          
|Adoption of stock based compensation      |                              |   |             |   |            |                   |            
|(note 4)                                  | -                            |   |             |   |            |                   | 646,145    
|Issue of shares for cash                  |                              |   |             |   |            |                   |            
|- at $0.35 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 142,857                      |   | 43,669      |   | 5,331      |                   |            
|- at $0.315 per common share,             |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 1,905,000                    |   | 516,533     |   | 80,142     |                   |            
|- at $0.30 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 2,383,667                    |   | 586,306     |   | 94,494     |                   |            
|- at $0.22 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 15,891,364                   |   | 1,735,876   |   | 1,238,030  |                   |            
|- at $0.20 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 22,000,000                   |   | 2,622,505   |   | 1,608,286  |                   |            
|Issue of shares to Helix Resources Inc.   | 120,000                      |   | 26,400      |   |            |                   |            
|Share issue costs recovered in respect of |                              |   |             |   |            |                   |            
|CEE renounced in prior years(note 7)      | -                            |   | 263,712     |   |            |                   |            
|Stock-based compensation(note 6(c))       |                              |   |             |   |            |                   | 19,430     
|Warrants expiring unexercised(note 6(b))  |                              |   |             |   | (26,393)   |                   | 26,393     
|Loss for the year                         |                              |   |             |   |            |                   |            
|Balance, December 31, 2004                | 132,363,542                  | $ | 53,355,502  | $ | 3,182,866  | $                 | 691,968    
|Issue of shares for cash                  |                              |   |             |   |            |                   |            
|- at $0.22 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 318,181                      |   | 60,435      |   | 8,140      |                   |            
|- at $0.18 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 4,836,665                    |   | 776,699     |   | 23,901     |                   |            
|- at $0.18 per flow through share,        |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 2,001,664                    |   | 325,685     |   | -          |                   |            
|- at $0.14 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 110,000                      |   | 15,037      |   | 303        |                   |            
|- at $0.12 per common share,              |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 36,400,000                   |   | 4,208,433   |   | 13,220     |                   |            
|- at $0.12 per flow through share,        |                              |   |             |   |            |                   |            
|net of share issue costs(note 6(d))       | 4,954,168                    |   | 553,802     |   | -          |                   |            
|Share issue costs in respect of           |                              |   |             |   |            |                   |            
|CEE renounced in prior years(note 7)      | -                            |   | (238,990)   |   |            |                   |            
|Stock-based compensation(note 6(c))       |                              |   |             |   |            |                   | 50,447     
|Warrants expiring unexercised(note 6(b))  |                              |   |             |   | (156,583)  |                   | 156,583    
|Loss for the year                         |                              |   |             |   |            |                   |            
|Balance, December 31, 2005                | 180,984,220                  | $ | 59,056,603  | $ | 3,071,847  | $                 | 898,998    

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

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