UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





R           QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended June 30, 2010





OR





£           TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





Commission
File Number:  001-31593





BRIGUS
GOLD CORP.


(Formerly
APOLLO GOLD CORPORATION)


(Exact
name of registrant as specified in its charter)





Yukon
      Territory, Canada
              Not
      Applicable(State
      or other jurisdiction of
                incorporation
      or organization)
              (I.R.S.
      Employer Identification No.)





1969
      Upper Water Street, Suite 2001
              Halifax,
      Nova Scotia
              (Address
      of principal executive offices)
            B3J
      3R7
              Canada
              (Zip
      code)





Registrant’s
telephone number, including area code:  (902) 422-1421





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes R       No
£





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes £       No
£





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “large accelerated filer,” and
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      Accelerated Filer £
                Accelerated
      Filer RNon-Accelerated
      Filer £ (do not
      check if a smaller
                  reporting
      company)
                Smaller
      Reporting Company £





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes £       No
R





At August
13, 2010, there were 140,658,358 common shares of Brigus Gold Corp.
outstanding.




TABLE
OF CONTENTS





PagePART I
                                FINANCIAL INFORMATION
                                5ITEM 1.
                                FINANCIAL STATEMENTS (Unaudited)
                                5Condensed Consolidated Balance Sheets - As of June 30, 2010 and
      as of December 31, 2009
                                6Condensed Consolidated Statements of Operations and
      Comprehensive Loss for the Three and Six Months Ended June 30, 2010 and
      2009
                                7Condensed Consolidated Statements of Shareholders’ Equity
      (Deficiency) for the Year ended December 31, 2009 and the Six Months Ended
      June 30, 2010
                                8Condensed Consolidated Statements of Cash Flows for the Three
      and Six Months Ended June 30, 2010 and 2009
                                9Notes to the Condensed Consolidated Financial
      Statements
                                10ITEM 2.
                                MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS
                                36ITEM 3.
                                QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
                                45ITEM 4.
                                CONTROLS AND PROCEDURES
                                46PART II
                                OTHER INFORMATION
                                46ITEM 1.
                                LEGAL PROCEEDINGS
                                46ITEM 1A.
                                RISK FACTORS
                                47ITEM 2.
                                UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
                                49ITEM 6.
                                EXHIBITS
                                49INDEX TO EXHIBITS
                                51Certification
      of CEO Pursuant to Section 302
                                Exhibit 31.1Certification
      of CFO Pursuant to Section 302
                                Exhibit 31.2Certification
      of CEO and CFO Pursuant to Section 906
                                Exhibit 32.1





STATEMENTS
REGARDING FORWARD LOOKING INFORMATION




This
Quarterly Report on Form 10-Q contains forward looking statements as defined in
the Private Securities
Litigation Reform Act of 1995 with respect to our financial condition,
results of operations, business prospects, plans, objectives, goals, strategies,
future events, capital expenditures, and exploration and development
efforts.  Forward-looking statements can be identified by the use of
words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “intends,” “continue,” or the negative of such terms,
or other comparable terminology.  These statements include comments
regarding:




·
            the
      benefits and effects of the business combination with Linear Gold
      Corp.;


·
            plans
      for the development of and production at the Black Fox mine including,
      without limitation, the timing of the development of, and future
      production from, the underground mine at Black
  Fox;


·
            repayments
      of indebtedness and our ability to meet our repayment obligations under
      the Black Fox project finance
facility;


2


·
            our
      exploration and development plans, including such plans for our Grey Fox,
      Pike River, Goldfields, Ixhuatan, Huizopa and Dominican Republic
      projects;


·
            our
      ability to repay the convertible debentures issued to RAB Special
      Situations (Master) Fund Limited (“RAB”) due August 23,
    2010;


·
            the
      future effect on our share price of share issuances and registration for
      immediate resale arising from the exercise of a significant number of
      common share purchase warrants;


·
            liquidity
      to support operations and debt
repayment;


·
            future
      financing of projects, including our Grey Fox, Pike River, Goldfields,
      Ixhuatan, Huizopa and Dominican Republic
  projects;


·
            completion
      of a Canadian National Instrument 43-101 for our exploration
      properties;


·
            the
      establishment and estimates of mineral reserves and
    resources;


·
            daily
      production, mineral recovery rates and mill throughput
    rates;


·
            total
      production costs;


·
            cash
      operating costs;


·
            total
      cash costs;


·
            grade
      of ore mined and milled from Black Fox and cash flows derived
      therefrom;


·
            anticipated
      expenditures for development, exploration, and corporate
      overhead;


·
            timing
      and issue of permits, including permits necessary to conduct phase II of
      open pit mining at Black Fox;


·
            expansion
      plans for existing properties;


·
            estimates
      of closure costs and reclamation
liabilities;


·
            our
      ability to obtain financing to fund our estimated expenditure and capital
      requirements;


·
            factors
      impacting our results of operations;
and


·
            the
      impact of adoption of new accounting
standards.





These
forward looking statements are subject to numerous risks, uncertainties and
assumptions including: compliance with the terms of the Black Fox project
finance facility; integrating the business of Linear Gold Corp.; recent changes
in management; unexpected changes in business and economic conditions, including
the global financial and capital markets; significant increases or
decreases in gold prices; changes in interest and currency exchange rates
including the LIBOR rate; timing and amount of production; unanticipated changes
in grade of ore; unanticipated recovery or production problems; changes in
operating costs; operational problems at our mining properties; metallurgy,
processing, access, availability of materials, equipment, supplies and water;
determination of reserves; costs and timing of development of new reserves;
results of current and future exploration and development activities; results of
current and future exploration activities; results of future feasibility
studies; joint venture relationships; political or economic instability, either
globally or in the countries in which we operate; local and community impacts
and issues; timing of receipt of government approvals; accidents and labor
disputes; environmental costs and risks; competitive factors, including
competition for property acquisitions; availability of external financing at
reasonable rates or at all; and the factors discussed in our Annual Report on
Form 10-K for the year ended December 31, 2009 under the heading “Risk
Factors.”  Many of these factors are beyond our ability to control and
predict.  These factors are not intended to represent a complete list
of the general or specific factors that may affect us.  Except as
required by securities law, we disclaim any obligation to update forward looking
statements, whether as a result of new information, future events or
otherwise.




ACCOUNTING
PRINCIPLES, REPORTING CURRENCY AND OTHER INFORMATION




Brigus
Gold Corp. prepares its consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America (“U.S.
GAAP”) and publishes its financial statements in United States dollars. This
Quarterly Report on Form 10-Q should be read in conjunction with our condensed
consolidated financial statements and related notes included in this quarterly
report, as well as our annual financial statements for the fiscal year ended
December 31, 2009 included in our Annual Report on Form
10-K.


3


Unless
stated otherwise, all dollar amounts are expressed in United States
dollars.




References
to “we,” “our,” “us,” the “Company” or “Brigus” mean Brigus Gold Corp. (formerly
Apollo Gold Corporation) and its consolidated subsidiaries, or to any one or
more of them, as the context requires.




On June
24, 2010, the Company’s shareholders authorized the Company to effect a 1-for-4
reverse split of the number of shares of the Company's common stock (the
“Reverse Split”).  Immediately prior to the Reverse Split, 517,565,717
shares of common stock were outstanding.  Upon execution of the
Reverse Split, such shares were consolidated into 129,391,429 shares of common
stock.  This Quarterly Report on Form 10-Q and the accompanying
financial statements have been retroactively adjusted to reflect the Reverse
Split.




NON-GAAP
FINANCIAL INFORMATION




In this
Quarterly Report on Form 10-Q, Brigus uses the terms “cash operating costs,”
“total cash costs” and “total production costs,” each of which are considered
non-GAAP financial measures as defined in the United States Securities and
Exchange Commission (“SEC”) Regulation S-K Item 10 and should not be considered
in isolation or as a substitute for measures of performance prepared in
accordance with U.S. GAAP.  These terms are used by management to
assess performance of individual operations and to compare Brigus’s performance
to other gold producers.




The term
“cash operating costs” is used on a per ounce of gold basis.  Cash
operating costs per ounce is equivalent to direct operating cost, as found on
the Consolidated Statements of Operations, less production royalty expenses and
mining taxes but includes by-product credits for payable silver.




The term
“total cash costs” is equivalent to cash operating costs plus production
royalties and mining taxes.




The term
“total production costs” is equivalent to total cash costs plus non-cash costs
including depreciation and amortization and accretion on accrued site closure
costs.




This
information differs from measures of performance determined in accordance with
generally accepted accounting principles (“GAAP”) in Canada and the United
States and should not be considered in isolation or a substitute for measures of
performance prepared in accordance with GAAP.  These measures are not
necessarily indicative of operating profit or cash flow from operations as
determined under GAAP and may not be comparable to similarly titled measures of
other companies.  See Item 2, Management’s Discussion and Analysis of
Financial Condition and Results of Operations, for a reconciliation of these
non-GAAP measures to our Consolidated Statements of Operations.





REPORTING
REQUIREMENTS FOR DISCLOSURE OF MINERAL PROPERTIES





We report
our reserves on two separate standards to meet the requirements for reporting in
both Canada and the United States.  Accordingly, certain information
in this Quarterly Report on Form 10-Q concerning our properties and operations
has been prepared in accordance with Canadian standards under applicable
Canadian securities laws, which differ from the requirements of U.S. securities
laws. The terms “Mineral
Resource”,“Measured Mineral
Resource”,“Indicated Mineral
Resource”and “Inferred Mineral
Resource”used in this Quarterly
Report on Form 10-Q are Canadian mining terms as defined in accordance with NI
43-101 under guidelines set out in the Definition Standards for Mineral
Resources and Mineral Reserves adopted by the Canadian Institute of Mining,
Metallurgy and Petroleum Council on December 11, 2005 (“CIM
Standards”).


4





While the
terms “Mineral
Resource”,“Measured Mineral
Resource”,“Indicated Mineral
Resource”and “Inferred Mineral
Resource”are recognized and
required by Canadian securities regulations, they are not recognized by the SEC.
Pursuant to United States standards as promulgated by the SEC under Industry
Guide 7, mineralization may not be classified as a “reserve” unless the
determination has been made that the mineralization could be economically and
legally produced or extracted at the time the reserve determination is made.
“Inferred Mineral
Resource”has a great amount of
uncertainty as to its existence, as to whether it can be mined and as to its
economic and legal feasibility, except in rare cases. It cannot be assumed that
all or any part of an “Inferred Mineral
Resource”will ever be upgraded
to a higher category. Under Canadian securities regulations, estimates of
Inferred Mineral Resources may not form the basis of feasibility or other
economic studies, except in rare cases. Readers are cautioned not to assume
that all or any part of a “Measured Mineral
Resource” or
“Indicated Mineral
Resource” will ever be
converted into Mineral Reserves. Readers are also cautioned not to assume that
all or any part of an“Inferred Mineral
Resource”exists, or is economically or legally
mineable.Disclosure of contained ounces is permitted disclosure under
Canadian regulations; however, the SEC generally only permits issuers to report
resources as in place tonnage and grade without reference to unit measures. As
such, certain information contained in this Quarterly Report on Form 10-Q
concerning descriptions of mineralization and resources under Canadian standards
may not be comparable to similar information made public by United States
companies subject to reporting and disclosure requirements of the
SEC.





In
addition, the definitions of “Proven Mineral Reserves”and “Probable Mineral
Reserves”under CIM Standards
differ in certain respects from the U.S. standards.  Our Proven and
Probable Mineral Reserves are estimated in accordance with definitions set forth
in NI 43-101 and on a basis consistent with the definition of Proven and
Probable Mineral Reserves set forth in SEC Industry Guide 7.  Because
we report our Mineral Reserves to both NI 43-101 and SEC Industry Guide 7
standards, it is possible for our reserve estimates to vary between the two.
Where such a variance occurs it will arise from the differing requirements for
reporting Mineral Reserves set forth by the different reporting authorities to
which we are subject.





PART I — FINANCIAL INFORMATION




ITEM 1.
            FINANCIAL
      STATEMENTS




These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements, accompanying notes and other relevant
information included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2009 filed with the Securities and Exchange Commission
on March 17, 2010.


5


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


CONDENSED CONSOLIDATED BALANCE SHEETS


(In
thousands of U.S. dollars)


(Unaudited)





June 30,
                  2010
              
              
              December 31,
                  2009ASSETSCURRENTCash
              
              $
              4,728
              
              
              $
              –Restricted
      cash (Note 5)
              
              
              17,524
              
              
              
              6,731Accounts
      receivable and other
              
              
              1,453
              
              
              
              1,690Prepaids
              
              
              1,317
              
              
              
              394Derivative
      instruments (Note 6)
              
              
              –
              
              
              
              1,961Inventories
      (Note 7)
              
              
              5,283
              
              
              
              8,189Total
      current assets
              
              
              30,305
              
              
              
              18,965Derivative
      instruments (Note 6)
              
              
              –
              
              
              
              4,844Inventories,
      long-term (Note 7)
              
              
              4,538
              
              
              
              –Long-term
      investments (Note 8)
              
              
              4,476
              
              
              
              1,036Property,
      plant and equipment
              
              
              174,783
              
              
              
              116,171Investment
      in Montana Tunnels joint venture (Note 14)
              
              
              –
              
              
              
              3,440Restricted
      certificates of deposit
              
              
              14,650
              
              
              
              14,805TOTAL
      ASSETS
              
              $
              228,752
              
              
              $
              159,261LIABILITIESCURRENTBank
      indebtedness
              
              $
              –
              
              
              $
              328Accounts
      payable
              
              
              7,902
              
              
              
              6,789Accrued
      liabilities
              
              
              3,833
              
              
              
              2,129Derivative
      instruments (Note 6)
              
              
              19,370
              
              
              
              12,571Current
      portion of long-term debt (Note 9)
              
              
              27,152
              
              
              
              34,860Total
      current liabilities
              
              
              58,257
              
              
              
              56,677Accrued
      long-term liabilities
              
              
              1,877
              
              
              
              483Derivative
      instruments (Note 6)
              
              
              39,988
              
              
              
              31,654Long-term
      debt (Note 9)
              
              
              32,018
              
              
              
              48,909Equity-linked
      financial instruments (Note10)
              
              
              21,002
              
              
              
              27,318Accrued
      site closure costs
              
              
              5,620
              
              
              
              5,345Future
      income tax liabilities
              
              
              9,946
              
              
              
              1,304TOTAL
      LIABILITIES
              
              
              168,708
              
              
              
              171,690Commitments
      and Contingencies (Note 18)SHAREHOLDERS’
      EQUITY (DEFICIENCY)Common
      stock – Nil par value, unlimited shares authorized, 129,391,429 and
      66,050,232 shares issued and outstanding, respectively
              
              
              281,002
              
              
              
              202,769Additional
      paid-in capital
              
              
              53,035
              
              
              
              45,555Accumulated
      deficit
              
              
              (273,993
              )
              
              
              (260,753
              )TOTAL
      SHAREHOLDERS’ EQUITY (DEFICIENCY)
              
              
              60,044
              
              
              
              (12,429
              )TOTAL
      LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
              
              $
              228,752
              
              
              $
              159,261





Subsequent
Events (Note 21)





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


6


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS


(U.S.
dollars and shares in thousands, except per share amounts)


(Unaudited)





Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Revenue
      from sale of minerals
              
              $
              22,163
              
              
              $
              4,709
              
              
              $
              39,789
              
              
              $
              4,709Operating
      expensesDirect
      operating costs
              
              
              8,274
              
              
              
              2,034
              
              
              
              18,258
              
              
              
              2,034Depreciation
      and amortization
              
              
              4,029
              
              
              
              1,023
              
              
              
              7,490
              
              
              
              1,033Accretion
      expense – accrued site closure costs
              
              
              177
              
              
              
              69
              
              
              
              352
              
              
              
              69General
      and administrative expenses
              
              
              3,681
              
              
              
              1,096
              
              
              
              5,630
              
              
              
              2,028Exploration
      and business development
              
              
              1,426
              
              
              
              302
              
              
              
              1,697
              
              
              
              52917,587
              
              
              
              4,524
              
              
              
              33,427
              
              
              
              5,693Operating
      income (loss)
              
              
              4,576
              
              
              
              185
              
              
              
              6,362
              
              
              
              (984
              )Other
      income (expenses)Interest
      income
              
              
              59
              
              
              
              38
              
              
              
              113
              
              
              
              78Interest
      expense (Note 12)
              
              
              (2,679
              )
              
              
              (1,319
              )
              
              
              (6,021
              )
              
              
              (2,149
              )Debt
      transaction costs
              
              
              –
              
              
              
              (10
              )
              
              
              –
              
              
              
              (1,249
              )Loss
      on modification of debentures (Note 9(b))
              
              
              –
              
              
              
              –
              
              
              
              (513
              )
              
              
              (1,969
              )Linear
      acquisition costs
              
              
              (2,636
              )
              
              
              –
              
              
              
              (3,213
              )
              
              
              –Fair
      value change on equity-linked financialinstruments
      (Note 10)
              
              
              1,881
              
              
              
              (8,829
              )
              
              
              11,894
              
              
              
              (13,582
              )Realized
      gain (loss) on derivative instruments
              
              
              3,582
              
              
              
              (492
              )
              
              
              239
              
              
              
              (124
              )Unrealized
      (loss) gain on derivative instruments
              
              
              (23,919
              )
              
              
              3,376
              
              
              
              (21,938
              )
              
              
              (15,042
              )Foreign
      exchange (loss) gain and other
              
              
              (553
              )
              
              
              184
              
              
              
              (331
              )
              
              
              281(24,265
              )
              
              
              (7,052
              )
              
              
              (19,770
              )
              
              
              (33,756
              )Loss
      before income taxes and equity loss in Montana Tunnels joint
      venture
              
              
              (19,689
              )
              
              
              (6,867
              )
              
              
              (13,408
              )
              
              
              (34,740
              )Income
      taxes (Note 13)
              
              
              –
              
              
              
              –
              
              
              
              869
              
              
              
              73Equity
      loss in Montana Tunnels joint venture (Note 14)
              
              
              –
              
              
              
              (333
              )
              
              
              (701
              )
              
              
              (957
              )Net
      loss and comprehensive loss for the period
              
              $
              (19,689
              )
              
              $
              (7,200
              )
              
              $
              (13,240
              )
              
              $
              (35,624
              )Basic
      and diluted net loss per share (Note 15)
              
              $
              (0.23
              )
              
              $
              (0.12
              )
              
              $
              (0.17
              )
              
              $
              (0.62
              )Basic
      and diluted weighted-average number of shares outstanding (Note
      15)
              
              
              86,988
              
              
              
              58,540
              
              
              
              78,087
              
              
              
              57,613





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


7


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(DEFICIT)


(U.S.
dollars and shares in thousands)


(Unaudited)





Number of
                    Shares
                
                
                Share
                    Capital
                
                
                Debenture
                    Note
                    Warrants
                
                
                Additional
                    Paid-In
                    Capital
                
                
                Deficit
                
                
                TotalBalance,
      December 31, 2008
                
                
                55,715
                
                
                $
                189,451
                
                
                $
                2,234
                
                
                $
                48,241
                
                
                $
                (197,572
                )
                
                $
                42,354Cumulative
      effect of change in accounting principle
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                (6,939
                )
                
                
                (1,531
                )
                
                
                (8,470
                )Shares
      issued for services
                
                
                1,293
                
                
                
                1,553
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                1,553Shares
      issued in settlement of interest
                
                
                611
                
                
                
                772
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                772Warrants
      issued for services
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                961
                
                
                
                –
                
                
                
                961Warrants
      exercised
                
                
                1,903
                
                
                
                1,416
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                1,416Shares
      issued for cash and related compensation warrants
                
                
                6,527
                
                
                
                9,577
                
                
                
                –
                
                
                
                294
                
                
                
                –
                
                
                
                9,871Expiration
      of note warrants
                
                
                –
                
                
                
                –
                
                
                
                (2,234
                )
                
                
                2,234
                
                
                
                –
                
                
                
                –Stock-based
      compensation
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                764
                
                
                
                –
                
                
                
                764Net
      loss and comprehensive loss
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                (61,650
                )
                
                
                (61,650
                )Balance,
      December 31, 2009
                
                
                66,050
                
                
                
                202,769
                
                
                
                –
                
                
                
                45,555
                
                
                
                (260,753
                )
                
                
                (12,429
                )Shares
      issued for services (Note 11(a)(i and iii))
                
                
                673
                
                
                
                1,039
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                1,039Warrants
      issued for services (Notes 9(b) and 11(a)(iii))
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                149
                
                
                
                –
                
                
                
                149Warrants
      exercised (Note 11(a)(ii))
                
                
                2,145
                
                
                
                2,145
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                2,145Shares
      issued for cash (Notes 4 and 11(a)(iv))
                
                
                15,625
                
                
                
                24,497
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                24,497Shares
      cancelled (Notes 4 and 11(a)(iv))
                
                
                (15,625
                )
                
                
                (24,497
                )
                
                
                –
                
                
                
                5,121
                
                
                
                –
                
                
                
                (19,376
                )Shares
      and options issued for acquisition of Linear (Notes 4 and
      11(a)(v))
                
                
                60,523
                
                
                
                75,049
                
                
                
                –
                
                
                
                1,844
                
                
                
                –
                
                
                
                76,893Stock-based
      compensation
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                366
                
                
                
                –
                
                
                
                366Net
      loss and comprehensive loss
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                (13,240
                )
                
                
                (13,240
                )Balance,
      June 30, 2010
                
                
                129,391
                
                
                $
                281,002
                
                
                $
                –
                
                
                $
                53,035
                
                
                $
                (273,993
                )
                
                $
                60,044





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


8


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In
thousands of U.S. dollars)


(Unaudited)





Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Operating
      activitiesNet
      loss for the period
              
              $
              (19,689
              )
              
              $
              (7,200
              )
              
              $
              (13,240
              )
              
              $
              (35,624
              )Items
      not affecting cash:Depreciation
      and amortization
              
              
              4,029
              
              
              
              1,023
              
              
              
              7,490
              
              
              
              1,033Amortization
      of deferred financing costs
              
              
              41
              
              
              
              15
              
              
              
              79
              
              
              
              15Stock-based
      compensation
              
              
              128
              
              
              
              174
              
              
              
              366
              
              
              
              356Shares
      and warrants issued for services and payment of interest
              
              
              –
              
              
              
              –
              
              
              
              599
              
              
              
              4,020Accretion
      expense – accrued site closure costs
              
              
              177
              
              
              
              69
              
              
              
              352
              
              
              
              69Accretion
      expense – amortization of debt discount
              
              
              1,226
              
              
              
              469
              
              
              
              2,809
              
              
              
              469Accretion
      expense – convertible debentures
              
              
              193
              
              
              
              203
              
              
              
              408
              
              
              
              1,005Interest
      paid on convertible debentures
              
              
              –
              
              
              
              –
              
              
              
              (772
              )
              
              
              (567
              )Unrealized
      loss (gain) on derivative instruments
              
              
              23,919
              
              
              
              (3,376
              )
              
              
              21,938
              
              
              
              15,042Net
      change in value of equity-linked financial instruments
              
              
              (1,881
              )
              
              
              8,829
              
              
              
              (11,894
              )
              
              
              13,582Foreign
      exchange (gain) loss and other
              
              
              446
              
              
              
              (600
              )
              
              
              601
              
              
              
              (663
              )Income
      taxes
              
              
              –
              
              
              
              –
              
              
              
              (869
              )
              
              
              (73
              )Equity
      investment in Montana Tunnels joint venture
              
              
              –
              
              
              
              (1,581
              )
              
              
              589
              
              
              
              (957
              )Net
      change in non-cash operating working capital items (Note
      16(a))
              
              
              2,788
              
              
              
              (3,222
              )
              
              
              1,542
              
              
              
              (2,635
              )Earnings
      distribution from Montana Tunnels joint venture
              
              
              –
              
              
              
              2,716
              
              
              
              –
              
              
              
              3,196Net
      provided by (used in) operating activities
              
              
              11,377
              
              
              
              (2,481
              )
              
              
              9,998
              
              
              
              (1,732
              )Investing
      activitiesProperty,
      plant and equipment expenditures
              
              
              (4,033
              )
              
              
              (18,580
              )
              
              
              (5,095
              )
              
              
              (40,446
              )Net
      cash acquired in the Linear acquisition via the issuance of common shares,
      warrants and options
              
              
              15,426
              
              
              
              –
              
              
              
              15,426
              
              
              
              –Restricted
      cash and certificates of deposit, including bank
    indebtedness
              
              
              171
              
              
              
              (10,034
              )
              
              
              (11,121
              )
              
              
              (1,864
              )Net
      cash provided by (used in) investing activities
              
              
              11,564
              
              
              
              (28,614
              )
              
              
              (790
              )
              
              
              (42,310
              )Financing
      activitiesProceeds
      on issuance of shares to Linear
              
              
              –
              
              
              
              –
              
              
              
              24,497
              
              
              
              –Proceeds
      from exercise of warrants
              
              
              –
              
              
              
              352
              
              
              
              2,145
              
              
              
              851Proceeds
      from debt
              
              
              –
              
              
              
              28,500
              
              
              
              –
              
              
              
              66,534Repayments
      of debt
              
              
              (19,573
              )
              
              
              (1,561
              )
              
              
              (30,546
              )
              
              
              (22,498
              )Net
      cash (used in) provided by financing activities
              
              
              (19,573
              )
              
              
              27,291
              
              
              
              (3,904
              )
              
              
              44,887Effect
      of exchange rate changes on cash
              
              
              (571
              )
              
              
              95
              
              
              
              (576
              )
              
              
              91Net
      increase (decrease) in cash
              
              
              2,797
              
              
              
              (3,709
              )
              
              
              4,728
              
              
              
              936Cash,
      beginning of period
              
              
              1,931
              
              
              
              4,645
              
              
              
              –
              
              
              
              –Cash,
      end of period
              
              $
              4,728
              
              
              $
              936
              
              
              $
              4,728
              
              
              $
              936SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
              
              $
              823
              
              
              $
              1,550
              
              
              $
              3,497
              
              
              $
              2,475Income
      taxes paid
              
              $
              –
              
              
              $
              –
              
              
              $
              –
              
              
              $
              25





See Note
16 for additional supplemental cash flow information.





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


9





BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes to the Condensed Consolidated Financial
Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





1.
            BUSINESS
      COMBINATION WITH LINEAR GOLD CORP.




On March
9, 2010, Brigus Gold Corp. (formerly Apollo Gold Corporation) (“Brigus” or the
“Company”) and Linear Gold Corp. (“Linear”) entered into a binding letter of
intent (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 without
any payment upon completion of the Arrangement.





On June
25, 2010, the Company completed the business combination of Brigus Gold Corp.
and Linear .  The Arrangement was structured as a court-approved plan
of arrangement under the ABCA pursuant to which 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 described in Note 4(a), 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 warrants to purchase common shares and
3,448,746 options to purchase common shares in connection with the completion of
the Arrangement.





The
Arrangement has allowed the Company to reduce its debt related to the Black Fox
project, and to provide capital to fund underground development at Black Fox and
the exploration programs at the Grey Fox and Pike River properties.  The
Arrangement has also provided an increased number of properties to the Company,
including the Goldfields project in northern Saskatchewan, Canada, the Ixhuatan
property in southern Mexico, and the Ampliacion Pueblo Viejo, Loma El Mate, and
Loma Hueca properties in the Dominican Republic.





The
Arrangement is accounted for using the acquisition method with Brigus as the
acquirer of Linear.  The Company is in the process of completing a
full and detailed valuation of the fair value of the net assets of Linear
acquired with the assistance of an independent third party.





After
adjusting Linear’s Equity investment in Brigus to its market value as of June
24, 2010, Brigus has estimated the fair value of Linear’s non-mineral interest
net assets to be equal to their current carrying values.  The
remainder of the purchase price has been assigned as an increase to the
estimated fair value of the acquired mineral interests, including a deferred
income tax adjustment of $9.5 million.





The
allocation of the purchase price is based upon management’s preliminary
estimates and certain assumptions with respect to the fair value increment
associated with the assets acquired and the liabilities assumed.  The
actual fair values of the assets and liabilities are to be determined as of the
date of acquisition when further analysis is completed. Consequently, the actual
allocation of the purchase price may result in different adjustments than those
shown below.


10


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





The
preliminary purchase price allocation is subject to change and is summarized as
follows:





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





The
purchase price was allocated as follows:





Net
      working capital acquired (including cash of $15.4 million)
                  
                  $
                  14,162Equity
      investment in Brigus
                  
                  
                  19,375Property,
      plant and equipment (including mineral exploration properties of $56.1
      million)
                  
                  
                  58,416Other
      assets
                  
                  
                  35Future
      income tax liability
                  
                  
                  (9,517
                  )Net
      identifiable assets
                  
                  $
                  82,471





Linear’s
results of operations from the acquisition date, June 24, 2010, have been
included in Brigus’ consolidated statements of operations for the three and six
months ended June 30, 2010.





The
following table presents supplemental pro forma financial information as if the
Arrangement had occurred on January 1, 2010 for the three and six months ended
June 30, 2010 and January 1, 2009 for the three and six months ended June 30,
2009.  As such, all periods presented include charges related to the
Arrangement.  The pro forma consolidated results are not necessarily
indicative of the results that would have occurred in the periods presented
below had the Company completed the Arrangement on January 1, 2010 or January 1,
2009.   In addition, the pro forma financial results do not
purport to project the future results of the combined Company nor do they
reflect cost savings relating to the integration of Brigus and
Linear.





Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Revenue
      from the sale of gold
              
              $
              22,163
              
              
              $
              4,709
              
              
              $
              39,789
              
              
              $
              4,709Loss
      from continuing operations attributable to Brigus
              
              
              (15,922
              )
              
              
              (7,116
              )
              
              
              (10,929
              )
              
              
              (34,951
              )Net
      loss attributable to Brigus
              
              
              (15,922
              )
              
              
              (7,449
              )
              
              
              (11,630
              )
              
              
              (35,908
              )Basic
      and diluted net loss per share attributable to Brigus
              
              
              (0.18
              )
              
              
              (0.13
              )
              
              
              (0.15
              )
              
              
              (0.62
              )





These
amounts have been calculated after applying the Company’s accounting policies
and adjusting the results of Brigus to reflect the removal of acquisition costs
related to the Arrangement including employee severance charges had they been
applied on January 1, 2010 and 2009, as applicable.





2.
            CONTINUING
      OPERATIONS




These
interim condensed consolidated financial statements are prepared on the basis of
a going concern which assumes that Brigus Gold Corp. will realize its assets and
discharge its liabilities in the normal course of business for the foreseeable
future.  To date the Company has funded its operations through
issuance of debt and equity securities, and cash generated by the Black Fox
mine.  On June 24, 2010, the Company acquired Linear (as more fully
described in Note 1) which included a working capital surplus of $14.2
million.  The Company’s ability to continue as a going concern is
dependent on its ability to continue to generate cash flow from the Black Fox
mine and to issue debt and/or equity securities.


11


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





As of
June 30, 2010, the Company had a working capital deficiency of $28.0 million and
an accumulated deficit of $274.0 million.  As at June 30, 2010, the
Company held cash of $4.7 million, restricted cash of $17.5 million and had
current debt of $27.2 million consisting of (1) the current portion of the Black
Fox project financing facility (the “Project Facility”) (Note 9(a)) of $16.6
million, (2) the outstanding principal and accrued interest due on the Series
2007-A convertible debentures of $4.6 million (Note 9(b)), and (3) $6.0 million
for capital leases and other current debt.  As a result, based on the
Company’s financial position as of June 30, 2010, there was substantial doubt
that the Company would continue as a going concern.




On July
29, 2010, the Company completed a private placement of 10,000,000 flow-through
common shares at Cdn$1.40 per share for aggregate gross proceeds of Cdn$14.0
million (Note 21(a)).  In addition, on August 3, 2010, the Company and
the two banks (the “Banks”) associated with the Project Facility agreed to
amend, subject to a number of conditions, the Project Facility by, among other
things, replacing the Project Facility repayment schedule with a revised interim
repayment schedule as more fully described in Note 21(b), which includes a
deferral of the $10.0 million payment originally scheduled for September 30,
2010.




If the
Company is unable to generate sufficient cash flow from Black Fox, satisfy the
conditions to the Banks’ revised interim repayment schedule, and/or secure
additional financing, it may be unable to continue as a going concern and
material adjustments would be required to the carrying value of assets and
liabilities and balance sheet classifications.





3.
            NATURE
      OF OPERATIONS




Brigus is
engaged in gold mining including extraction, processing, refining and the
production of other by-product metals, as well as related activities including
the exploration and development of potential mining properties and acquisition
of mining claims.  Brigus owns Black Fox, an open pit and underground
mine development and mill located near Matheson in the Province of Ontario,
Canada (“Black Fox”).  Mining of ores at Black Fox began in March
2009, milling operations commenced in April 2009, and commercial production
commenced in late May 2009.  Exploration properties adjacent to the
Black Fox mine include the Grey Fox and Pike River properties.




Brigus is
also advancing the Goldfields Project located near Uranium City, Saskatchewan,
Canada, which hosts the Box and Athona gold deposits. In Mexico, Brigus holds a
100 percent interest in the Ixhuatan Property located in the state of Chiapas,
and the Huizopa Joint Venture, an 80 percent interest in an early stage,
gold-silver exploration joint venture located in the Sierra Madres in the State
of Chihuahua. In the Dominican Republic, Brigus and Everton Resources have a
joint venture covering the Ampliacion Pueblo Viejo, Loma El Mate and Loma Hueca
exploration projects.




4.
            SIGNIFICANT
      ACCOUNTING POLICIES




(a)           Basis
of Presentation




On June
24, 2010, the Company’s shareholders authorized the Company to effect a 1-for-4
reverse split of the number of shares of the Company's common stock (the
“Reverse Split”).  Immediately prior to the Reverse Split, 517,565,717
shares of common stock were outstanding.  Upon execution of the
Reverse Split, such shares were consolidated into 129,391,429 shares of common
stock.  The accompanying financial statements have been retroactively
adjusted to reflect the Reverse Split.


12




BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





These
unaudited condensed consolidated interim financial statements have been prepared
in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
and except as described in Note 20, conform in all material respects with
accounting principles generally accepted in Canada (“Canadian
GAAP”).  The accounting policies followed in preparing these financial
statements are those used by the Company as set out in the audited financial
statements for the year ended December 31, 2009, except as disclosed in
(b)
below.  Certain information and note disclosures normally included in
consolidated financial statements prepared in accordance with Canadian GAAP have
been omitted.  These interim financial statements should be read
together with the Company’s audited financial statements for the year ended
December 31, 2009.




In the
opinion of management, all adjustments considered necessary for fair
presentation have been included in these financial
statements.  Interim results are not necessarily indicative of the
results expected for the fiscal year.




(b)
            Recently
      adopted accounting pronouncements





In June
2009, the ASC guidance for consolidation accounting was updated to require an
entity to perform a qualitative analysis to determine whether the enterprise’s
variable interest gives it a controlling financial interest in a variable
interest entity (“VIE”).  This analysis identifies a primary
beneficiary of a VIE as the entity that has both of the following
characteristics: (i) the power to direct the activities of a VIE that most
significantly impact the entity’s economic performance and (ii) the obligation
to absorb losses or receive benefits from the entity that could potentially be
significant to the VIE.  The updated guidance also requires ongoing
reassessments of the primary beneficiary of a VIE.  The provisions of
the updated guidance are effective for the Company’s fiscal year beginning
January 1, 2010.  The provisions of the updated guidance were adopted
January 1, 2010.  The adoption had no impact on the Company’s
financial position, results of operations, or cash flows.





In
January 2010, the ASC guidance for fair value measurements and disclosure was
updated to require additional disclosures related to transfers in and out of
level 1 and 2 fair value measurements and enhanced detail in the level 3
reconciliation. The guidance was amended to clarify the level of disaggregation
required for assets and liabilities and the disclosures required for inputs and
valuation techniques used to measure the fair value of assets and liabilities
that fall in either level 2 or level 3.  The updated guidance was
effective for the Company’s fiscal year beginning January 1, 2010, with the
exception of the level 3 disaggregation which is effective for the Company’s
fiscal year beginning January 1, 2011.  The adoption had no impact on
the Company’s financial position, results of operations, or cash
flows.  Refer to Note 17 for further details regarding the Company’s
assets and liabilities measured at fair value.





In
December 2009, the ASC guidance for stock compensation was updated to address
the classification of employee share-based awards with exercise prices
denominated in the currency of a market in which the underlying security
trades.  The updated guidance provides that employee share-based awards
with an exercise price denominated in the currency of a market in which a
substantial portion of the entity’s equity securities trade should not be
considered to contain a condition that is not a market, performance, or service
condition.  Therefore, such awards would not be classified as liabilities
if they otherwise qualify as equity.  The provisions of the updated
guidance have been early adopted by the Company effective April 1, 2010. 
Although, the adoption had no impact on the Company’s financial position,
results of operations, or cash flows on April 1, 2010, the guidance dictated
that the 3,448,746 options issued to former Linear employees on June 24, 2010 be
classified as equity upon issuance (Note 1).


13


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





5.
            RESTRICTED
      CASH




Restricted
cash consists of:




June 30,
                  2010
              
              
              December 31,
                  2009Restricted
      cash, currentProject
      Facility (a)
              
              $
              14,698
              
              
              $
              2,108Unexpended
      flow-through funds (b)
              
              
              2,826
              
              
              
              4,623$
              17,524
              
              
              $
              6,731





(a)
            Project
      Facility




Project
Facility restricted cash represents cash on deposit held in restricted
accounts.  The cash may be used to settle operational expenses at both
Black Fox and the corporate offices, but requires approval from the Banks prior
to use.  The balance has been classified as a current asset as it will
be utilized within approximately 90 days of the period end to settle such
operational expenses.





(b)
            Proceeds
      from flow-through share offering




Notwithstanding
whether there is a specific requirement to segregate the funds, for accounting
purposes the funds received through the flow-through share offering completed on
July 15, 2009 which are unexpended at the consolidated balance sheet dates are
considered to be restricted and are not considered to be cash or cash
equivalents.





6.
            DERIVATIVE
      INSTRUMENTS




Fair
value of derivative instruments consists of:




June 30, 2010
                
                
                December 31, 2009Cost
                    Basis
                
                
                Unrealized
                    Gain (Loss)
                
                
                Fair
                    Value
                
                
                Cost
                    Basis
                
                
                Unrealized
                    Gain (Loss)
                
                
                Fair
                    ValueAssetsCanadian
      dollar contracts
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                6,805
                
                
                $
                6,805Current
      portion
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                –
                
                
                
                (1,961
                )
                
                
                (1,961
                )Long-term
      portion
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                –
                
                
                $
                4,844
                
                
                $
                4,844LiabilitiesGold
      forward sales contracts
                
                $
                –
                
                
                $
                (59,358
                )
                
                $
                (59,358
                )
                
                $
                –
                
                
                $
                (44,225
                )
                
                $
                (44,225
                )Less:  Current
      portion
                
                
                –
                
                
                
                19,370
                
                
                
                19,370
                
                
                
                –
                
                
                
                12,571
                
                
                
                12,571Long-term
      portion
                
                $
                –
                
                
                $
                (39,988
                )
                
                $
                (39,988
                )
                
                $
                –
                
                
                $
                (31,654
                )
                
                $
                (31,654
                )





On
February 20, 2009, the Company entered into a $70.0 million Project Facility
with two banks relating to Black Fox (Note 9(a)).  As required by the
terms of the Project Facility, 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 forward gold sales program results in proceeds of
$876 per ounce of gold.  During the three and six months ended June
30, 2010, the Company realized a $4.6 million loss and an $8.4 million loss on
the settlement of gold forward sales contracts covering 14,557 ounces of gold
and 30,573 ounces of gold, respectively.


14


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





Settlements
of the remaining gold forward sales contracts as of June 30, 2010 are as follows
(table not in thousands):





Year of Settlement
                
                Gold Ounces
                
                
                Average Contract
                    Price Per Ounce2010
                
                
                27,293
                
                
                $
                8762011
                
                
                54,704
                
                
                $
                8762012
                
                
                73,458
                
                
                $
                8762013
                
                
                14,523
                
                
                $
                876169,978





The
weighted average exchange rate of the foreign exchange derivative program was
Cdn$1.21 per $1.  On April 23, 2010, the remaining amounts of the
Canadian dollar foreign exchange contracts were unwound early for proceeds of
$8.2 million.  During the three and six months ended June 30, 2010,
the Company realized gains of $8.2 million and $8.6 million, respectively, for
the settlement of the Canadian dollar foreign exchange
contracts.  During the three and six months ended June 30, 2010, the
Company recorded unrealized losses of $8.2 million and $6.8 million,
respectively, for the change in fair value of the Canadian dollar foreign
exchange contracts.





The
Company did not apply hedge accounting to its derivative
transactions.  As a result, the Company accounts for these derivative
instruments as investments and records the changes in unrealized gains and
losses in the consolidated statement of operations each period.  The
fair value of these derivatives is recorded as an asset or liability at each
balance sheet date as follows:





Asset Derivatives
                                
                                
                                Liability DerivativesJune 30, 2010
                                
                                
                                December 31, 2009
                                
                                
                                June 30, 2010
                                
                                
                                December 31, 2009Balance
                                    Sheet
                                    Location
                                
                                
                                Fair
                                    Value
                                
                                
                                Balance
                                    Sheet
                                    Location
                                
                                
                                Fair
                                    Value
                                
                                
                                Balance
                                    Sheet
                                    Location
                                
                                
                                Fair
                                    Value
                                
                                
                                Balance
                                    Sheet
                                    Location
                                
                                
                                Fair
                                    ValueDerivatives
      not designated as hedging instruments under ASC 815-20Gold
      forward contracts
                                
                                n/a
                                
                                
                                $
                                –
                                
                                
                                n/a
                                
                                
                                $
                                –
                                
                                
                                Derivative
                                  instruments
                                
                                
                                $
                                59,358
                                
                                
                                Derivative
                                  instruments
                                
                                
                                $
                                44,225Canadian
      currency forward contracts
                                
                                Derivative
                                  instruments
                                
                                
                                
                                –
                                
                                
                                n/a
                                
                                
                                
                                6,805
                                
                                
                                n/a
                                
                                
                                
                                –
                                
                                
                                n/a
                                
                                
                                
                                –Total
      derivatives
                                
                                
                                
                                
                                $
                                –
                                
                                
                                
                                
                                
                                
                                $
                                6,805
                                
                                
                                
                                
                                
                                
                                $
                                59,358
                                
                                
                                
                                
                                
                                
                                $
                                44,225





The fair
value of the gold forward contracts have been determined by examining third
party bid and ask gold forward prices for gold contracts that mature on dates
that match the Company’s gold forward contract dates.  For the gold
forward contract dates for which there was no corresponding third party bid and
ask gold forward prices available, the Company estimated the forward price using
linear interpolation.  The Company also obtained the risk free rate
for each of the gold forward contract maturity dates and used linear
interpolation to calculate the risk free rate for the gold forward contract
maturity dates that were not available.  As the gold forward contracts
are in a loss position, the Company did not include counterparty risk in its
valuation.  The Company then calculated the difference between the
forward mid price (calculated as the average of bid and ask price) and the
contract price determined in the Company’s outstanding forward contracts to
determine the net cash flow and thus the value of the
contracts.


15


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





The
Company’s valuation of its gold forward contracts are considered Level 2
valuations, whereby the valuations utilize quoted prices in markets that are not
active, or inputs that are observable, either directly or indirectly, for
substantially the full term of the asset or liability.





7.
            INVENTORIES




Inventories
consist of:




June 30,
                2010
              
              
              December 31,
                2009Current
      portion of inventoryDoré
      inventory
              
              $
              1,218
              
              
              $
              3,186In-circuit
      inventory
              
              
              1,304
              
              
              
              1,561Stockpiled
      ore inventory
              
              
              1,557
              
              
              
              2,633Materials
      and supplies
              
              
              1,204
              
              
              
              8095,283
              
              
              
              8,189Long-term
      – stockpiled ore inventory
              
              
              4,538
              
              
              
              –$
              9,821
              
              
              $
              8,189





8.
            LONG-TERM
      INVESTMENTS




Long-term
investments consist of:




June 30,
                2010
              
              
              December 31,
                2009Auction
      rate securities (a)
              
              $
              1,036
              
              
              $
              1,036Notes
      receivable (b)
              
              
              3,440
              
              
              
              –$
              4,476
              
              
              $
              1,036





(a)
            Auction
      Rate Securities




The
Company acquired auction rate securities (“ARS”) in 2007, which are recorded in
long-term investments, with a face value of $1.5 million.  The Company
has recorded an other than temporary impairment on its ARS, within foreign
exchange loss and other in the consolidated statement of operations, of nil and
$0.05 million for the three and six months ended June 30, 2010 and 2009,
respectively, and as such, no amounts have been recorded in other comprehensive
income.  The adjusted cost basis and fair value of the ARS at June 30,
2010 and December 31, 2009 was $1.0 million.  The ARS are pledged as
collateral for a $0.9 million margin loan.




The
Company’s ARS investments are valued using a probability-weighted discounted
cash flow valuation.  The Company’s valuation of the ARS investments
considers possible cash flows and probabilities forecasted under certain
potential scenarios.  Each scenario’s cash flow is multiplied by the
probability of that scenario occurring.  The major inputs included in
the valuation are: (i) maximum contractual ARS interest rate, (ii) probability
of passing auction/early redemption at each auction, (iii) probability of
failing auction at each auction, (iv) probability of default at each auction,
(v) severity of default, and (vi) discount rate.  Changes in these
assumptions to reasonably possible alternative assumptions would not
significantly affect the Company’s results.




There
were no changes in the carrying value of the Company’s ARS from December 31,
2009 to June 30, 2010.


16


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





(b)
            Notes
      Receivable




On
February 1, 2010, the Company sold its 100% interest in MTMI, which held the
Company’s remaining 50% interest in the Montana Tunnels joint venture to Elkhorn
(Note 14), for consideration consisting of certain promissory notes held by
Elkhorn and certain investors in Elkhorn or its affiliates with an aggregate
outstanding balance of approximately $9.5 million (the “Elkhorn
Notes”).  The Elkhorn Notes are secured by real property in Boulder
County, Colorado.  The Elkhorn Notes are due on February 1,
2011.  The Elkhorn Notes bear interest at a rate of 8.0% per
annum.  Also, on March 12, 2010, the Company entered into a purchase
agreement with a certain party (the “Noteholder”) pursuant to which the Company
agreed to issue 398,183 common shares for consideration of a promissory note
(the “Additional Notes”) held by the Noteholder with an aggregate balance of
$0.7 million.  Principal and interest on the promissory note are due March
12, 2011 and the promissory note bears interest of 8%.




Based on
a valuation performed on the property securing the Elkhorn Notes and the
Additional Notes using Level 3 inputs the notes were recorded at a value of $3.4
million and classified as a long-term investment, as the Company does not
anticipate collecting on the Elkhorn Notes within the next twelve
months.  Level 3 inputs are those inputs used in a valuation technique
that are both significant to the fair value measurement and unobservable, i.e.
supported by little or no market activity.  The valuation of the
property included $1.7 million for the associated land, and $1.7 million for the
replacement cost of the associated buildings.  The land value was
determined by examining sales of land in the near vicinity with similar
characteristics, and making adjustments as appropriate.  The
replacement cost of the buildings was determined by estimating the cost to
re-create the structures on the property, and then deducting for the physical
depreciation of the standing buildings.




9.
            LONG-TERM
      DEBT




Long-term
debt consists of the following:




June 30,
                  2010
              
              
              December 31,
                  2009Black
      Fox Project Facility (a)
              
              $
              37,122
              
              
              $
              62,514Convertible
      debentures (b)
              
              
              4,560
              
              
              
              4,926Capital
      leases
              
              
              15,932
              
              
              
              15,320Notes
      payable and other
              
              
              1,556
              
              
              
              1,009Total
      debt
              
              
              59,170
              
              
              
              83,769Less:
      current portion of long-term debt
              
              
              (27,152
              )
              
              
              (34,860
              )Total
      long-term debt
              
              $
              32,018
              
              
              $
              48,909


17


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





As of
June 30, 2010, long-term debt is repayable as follows:




Black Fox
                      Project
                      Facility
                  
                  
                  Convertible
                      Debentures
                  
                  
                  Capital
                      leases
                  
                  
                  Notes
                      Payable
                      and
                      other
                  
                  
                  Total2010
                  
                  $
                  15,000
                  
                  
                  $
                  4,676
                  
                  
                  $
                  2,663
                  
                  
                  $
                  1,556
                  
                  
                  $
                  23,8952011
                  
                  
                  10,200
                  
                  
                  
                  –
                  
                  
                  
                  5,377
                  
                  
                  
                  –
                  
                  
                  
                  15,5772012
                  
                  
                  16,598
                  
                  
                  
                  –
                  
                  
                  
                  4,371
                  
                  
                  
                  –
                  
                  
                  
                  20,9692013
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  3,679
                  
                  
                  
                  –
                  
                  
                  
                  3,6792014
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  1,883
                  
                  
                  
                  –
                  
                  
                  
                  1,883Total
      payments due under long-term debt
                  
                  
                  41,798
                  
                  
                  
                  4,676
                  
                  
                  
                  17,973
                  
                  
                  
                  1,556
                  
                  
                  
                  66,003Less:
      imputed interest
                  
                  
                  –
                  
                  
                  
                  (116
                  )
                  
                  
                  (2,041
                  )
                  
                  
                  –
                  
                  
                  
                  (2,157
                  )Less:
      unamortized debt discount
                  
                  
                  (4,676
                  )
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  (4,676
                  )Total
      debt
                  
                  
                  37,122
                  
                  
                  
                  4,560
                  
                  
                  
                  15,932
                  
                  
                  
                  1,556
                  
                  
                  
                  59,170Less:
      current portion of long-term debt
                  
                  
                  (16,635
                  )
                  
                  
                  (4,560
                  )
                  
                  
                  (4,401
                  )
                  
                  
                  (1,556
                  )
                  
                  
                  (27,152
                  )Total
      long-term debt
                  
                  $
                  20,487
                  
                  
                  $
                  –
                  
                  
                  $
                  11,531
                  
                  
                  $
                  –
                  
                  
                  $
                  32,018





(a)
            Financing
      Agreement




On
February 20, 2009, the Company entered into a $70 million Project Facility with
the Banks relating to Black Fox.  As of December 31, 2009, the Company
had borrowed the full $70 million available under the Project
Facility.





The terms
of the Project Facility include:  (i) interest on the outstanding
principal amount accruing at a rate equal to the London interbank offered rate
(“LIBOR”) plus 7% per annum and payable in monthly installments commencing March
31, 2009 (interest is currently payable monthly but may be monthly, quarterly or
such other period as may be agreed to by the Banks and the Company); (ii)
scheduled repayment of the principal amount in unequal quarterly amounts
commencing September 30, 2009 (see discussion below regarding rescheduling of
quarterly payments) with the final repayment no later than March 31, 2013; (iii)
an arrangement fee of $3.5 million, and 8,709,028 warrants (the “Banks’
Compensation Warrants”) to purchase the Company’s common shares at an exercise
price of Cdn$1.008 expiring February 20, 2013.  The average monthly
LIBOR rate charged to the Company during the three and six months ended June 30,
2010 was 0.3%.





Borrowings under the Project Facility
are secured by substantially all of the Company’s assets, including the Black
Fox Project, and the stock of its subsidiaries.  The Project Facility
contains various financial and operational covenants that impose limitations on
the Company which include, among other requirements, the
following:  maintenance of certain financial coverage ratios and
minimum project reserves, satisfaction of a minimum tangible net worth test, and
the operation of the Black Fox project in compliance with an agreed cash flow
budgeting and operational model.  As at June 30, 2010, the Company
was, after giving effect to all consents and waiver letters given by the Banks,
in compliance with the various financial and operational covenants of the
Project Facility.  See Note 21(b) for the subsequent rescheduling of
the remaining debt repayments.





The
Company recorded a $10.9 million discount on the Project Facility carrying
value, comprised of the $3.5 million arrangement fee and the $7.4 million fair
value assigned to the Banks’ Compensation Warrants, which discount is being
accreted over the life of the loan using the effective interest method and
charged to interest expense.  Additionally, at inception, the Company
recorded $0.6 million of debt transactions costs that are treated similarly to
the discount on the Project Facility.  The accreted interest expense
for the three and six months ended June 30, 2010 was $1.3 million and $2.9
million, respectively.


18


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





(b)
            Convertible
      Debentures




On
February 26, 2010, the Company reached an agreement with the holder (the
“Debenture Holder”) of its Series 2007-A convertible debentures (the “2007
Debentures”) to further extend the maturity date of the $4.3 million principal
amount of the 2007 Debentures held by the Debenture Holder from February 23,
2010 to August 23, 2010 (the “Extended Debentures”).  The Debenture
Holder owned $4.3 million principal amount of the 2007 Debentures as of December
31, 2009 and February 23, 2010 (on which $0.8 million of interest was paid on
March 3, 2010).





In consideration for the foregoing, the
Company agreed to (i) issue 200,000 common shares of the Company to the
Debenture Holder (“Debenture Holder Shares”) on February 26, 2010, and (ii)
issue 536,250 common share purchase warrants (“Debenture Holder Warrants”) with
an expiration date of February 23, 2011 and an exercise price of
$2.00.





The
Company recorded a loss on modification of convertible debentures of $0.5
million comprised of $0.3 million for the Debenture Holder Shares, $0.1 million
for the Debenture Holder Warrants and $0.1 million for administrative
costs.  The Debenture Holder Warrants were assigned a fair value of
$0.1 million, using an option pricing model with the following
assumptions:  no dividends are paid, a volatility of the Company’s
share price of 66%, an expected life of the warrants of one year, and an annual
risk-free rate of 1.3%.





The
Extended Debentures bear interest at a rate of 18% per annum and are
convertible, at the option of the holder, at any time prior to maturity into
common shares of the Company at $2.00.  The Company has the option to
force conversion of the Extended Debentures under certain
circumstances.





On the
date of extension of the Extended Debentures, the $4.3 million principal
represented the fair value of the Debentures.  The holder’s option to
convert the principal balance into common shares did not represent a beneficial
conversion feature at the date of extension as the trading price of the
Company’s common shares was lower than the strike price, and as such, no portion
of the principal was allocated to the holder’s option to convert the principal
balance.  The $4.3 million fair value of the Extended Debentures is
classified as a liability.





10.
            EQUITY-LINKED
      FINANCIAL INSTRUMENTS




In June
2008, the ASC guidance for derivatives and hedging when accounting for contracts
in an entity’s own equity was updated to clarify the determination of whether an
instrument (or embedded feature) is indexed to an entity’s own stock which would
qualify as a scope exception from hedge accounting.  The provisions of
the updated guidance were adopted January 1, 2009.




Under the
guidance, an equity-linked financial instrument (or embedded feature) would not
be considered indexed to the entity’s own stock if the strike price is
denominated in a currency other than the issuer’s functional
currency.  As of June 30, 2010 and December 31, 2009, the Company had
37.3 million and 26.4 million outstanding warrants to purchase common shares of
the Company, respectively, that were denominated in a currency (Canadian
dollars) other than its functional currency (US dollars).  As such,
these warrants are not considered to be indexed to the Company’s own stock,
which precludes the warrants from meeting the scope exception under the
guidance.  The warrants thereby are accounted for separately as
derivative instruments, rather than as equity instruments.




As of
June 30, 2010, the Company has assessed the fair value of the outstanding
warrants subject to this accounting guidance and recorded a gain of $11.9
million during the six months ended June 30, 2010 (2009 – loss of $13.6 million)
on the fair value change of the warrants.


19


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





These
warrants were fair valued at June 30, 2010 and December 31, 2009 using an option
pricing model with the following assumptions:  no dividends are paid,
weighted average volatilities of the Company’s share price of 74% and 78%,
weighted average expected lives of the warrants of 2.5 and 2.6 years, and
weighted average annual risk-free rates of 1.6% and 1.8%,
respectively.





11.
            SHARE
      CAPITAL




(a)
            Shares
      issued in 2010




(i)           During
the six months ended June 30, 2010, the Company issued (a) 75,000 common shares
of the Company to a firm as compensation for services and (b) 398,183 common
shares of the Company to a certain party as consideration for a promissory note
with an aggregate balance of $0.7 million (See Note 14).




(ii)           For
the six months ended June 30, 2010, there were 2,145,000 shares issued upon
exercise of warrants for proceeds of $2.1 million.  Each warrant
exercised had an exercise price of $1.00.




(iii)           On
February 26, 2010, the Company issued 200,000 common shares of the Company and
536,250 common share purchase warrants that expire on February 23, 2011 and have
an exercise price of $2.00 to the Debenture Holder as compensation to extend the
2007 Debentures for six months.  See Note 9(b) for additional
information.




(iv)           On
March 19, 2010, the Company issued 15,625,000 common shares of the Company to
Linear for net proceeds of $24.5 million.  These shares were cancelled
on June 25, 2010, in conjunction with the Arrangement (See Note 1).




(v)           On
June 25, 2010, the Company issued 60,523,014 common shares of the Company to the
shareholders of Linear in conjunction with the Arrangement (See Note
1).




(b)
            Warrants




A summary
of information concerning outstanding warrants is as follows:




Number of
                    Warrants and
                    Shares Issuable
                    upon ExerciseBalance,
      December 31, 2009
                
                
                27,898,294Warrants
      issued in connection with the Arrangement (Note 1)
                
                
                11,191,677Other
      warrants issued
                
                
                536,250Warrants
      exercised
                
                
                (2,145,000
                )Warrants
      expired
                
                
                (255,000
                )Balance,
      June 30, 2010
                
                
                37,226,221


20


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





The
following table summarizes outstanding warrants as at June 30,
2010:




Date Issued
                            
                            
                            Number of Warrants
                                and Shares Issuable
                                upon Exercise
                            
                            
                            Exercise Price
                            
                            Expiry DateExercisable
      in US$February
      26, 2010
                            
                            
                            
                            536,250
                            
                            
                            
                            2.00
                            
                            February
      23, 2011Exercisable
      in Cdn$December
      31, 2008
                            
                            
                            
                            63,750
                            
                            
                            
                            1.20
                            
                            December
      31, 2010February
      20, 2009
                            
                            
                            
                            579,475
                            
                            
                            
                            1.024
                            
                            February
      20, 2011June
      25, 2010
                            
                            (1)
                            
                            3,178,769
                            
                            
                            
                            1.096
                            
                            March
      19, 2011July
      15, 2009
                            
                            
                            
                            391,665
                            
                            
                            
                            0.96
                            
                            July
      15, 2011July
      24, 2008
                            
                            
                            
                            5,100,813
                            
                            
                            
                            2.60
                            
                            July
      24, 2011June
      25, 2010
                            
                            (1)
                            
                            891,316
                            
                            
                            
                            1.571
                            
                            November
      19, 2011December
      10, 2008
                            
                            
                            
                            10,653,563
                            
                            
                            
                            0.884
                            
                            December
      10, 2012February
      20, 2009
                            
                            
                            
                            8,709,028
                            
                            
                            
                            1.008
                            
                            February
      20, 2013June
      25, 2010
                            
                            (1)
                            
                            7,121,592
                            
                            
                            
                            2.192
                            
                            November
      19, 201436,689,97137,226,221




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





In
addition, 612,098 units issued to placement agents on July 24, 2008 (the Agents’
Units) are outstanding.  Each Agents’ Unit is exercisable at Cdn$2.40
into one common share of the Company and one- half of one warrant (the Agents’
Warrant), with each whole Agents’ Warrant exercisable into one common share of
the Company at Cdn$3.12.  The Agent’s Units and Agents’ Warrants
expire on July 24, 2012.




(c)
            Options




A summary
of information concerning outstanding stock options is as follows:




Number of
                    Common
                    Shares
                
                
                Weighted
                    Average
                    Exercise
                    Price Per
                    ShareBalance,
      December 31, 2009
                
                
                2,898,592
                
                
                $
                2.55Options
      issued in connection with the Arrangement (Note 1)
                
                
                3,448,746
                
                
                
                1.25Other
      options issued
                
                
                129,312
                
                
                
                1.53Options
      forfeited
                
                
                (242,018
                )
                
                
                2.19Balance,
      June 30, 2010
                
                
                6,234,632
                
                
                $
                1.82


21


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





The
following table summarizes information concerning outstanding and exercisable
stock options at June 30, 2010:




Options Outstanding
              
              
              Options ExercisableRange of Exercise
                  Prices
              
              Number
                  Outstanding
              
              
              Weighted Average
                  Remaining
                  Contractual Life (in
                  years)
              
              
              Weighted Average
                  Exercise
                  Price
              
              
              Number
                  Exercisable
              
              
              Weighted Average
                  Exercise
                  Price$0.50
      to $1.00
              
              
              1,888,986
              
              
              3.3
              
              
              $
              0.79
              
              
              
              1,885,236
              
              
              $
              0.79$1.00
      to $1.50
              
              
              1,348,471
              
              
              5.3
              
              
              $
              1.23
              
              
              
              995,153
              
              
              $
              1.22$1.50
      to $2.00
              
              
              305,419
              
              
              5.0
              
              
              $
              1.79
              
              
              
              187,764
              
              
              $
              1.73$2.00
      to $2.50
              
              
              1,700,431
              
              
              3.5
              
              
              $
              2.14
              
              
              
              1,700,431
              
              
              $
              2.14$2.50+
              
              
              991,325
              
              
              4.1
              
              
              $
              4.08
              
              
              
              991,325
              
              
              $
              4.086,234,632
              
              
              4.0
              
              
              $
              1.82
              
              
              
              5,759,909
              
              
              $
              1.86





(d)
            Stock-based
      compensation




The fair
value of each option granted is estimated at the time of grant using the
Black-Scholes option-pricing model with weighted average assumptions for grants
as follows:




June 30,
                  2010
              
              
              June 30,
                  2009Risk-free
      interest rate
              
              
              1.8
              %
              
              
              1.9
              %Dividend
      yield
              
              
              0
              %
              
              
              0
              %Volatility
              
              
              77
              %
              
              
              78
              %Expected
      life in years
              
              
              2
              
              
              
              6Weighted
      average grant-date fair value of stock options
              
              $
              0.55
              
              
              $
              0.88





12.
            INTEREST
      EXPENSE




Interest
expense consists of:




Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Accretion
      on convertible debentures
              
              $
              193
              
              
              $
              203
              
              
              $
              408
              
              
              $
              1,005Amortization
      of debt discount
              
              
              1,226
              
              
              
              469
              
              
              
              2,809
              
              
              
              469Amortization
      of deferred financing costs
              
              
              41
              
              
              
              15
              
              
              
              79
              
              
              
              15Capital
      leases, Project Facility and other
              
              
              1,219
              
              
              
              632
              
              
              
              2,725
              
              
              
              660$
              2,679
              
              
              $
              1,319
              
              
              $
              6,021
              
              
              $
              2,149





For the
three and six months ended June 30, 2009, the Company recorded capitalized
interest of $1.0 million and $1.8 million, respectively.





13.
            INCOME
      TAXES




The
Company recorded income tax benefits of $0.9 million and $0.1 million for the
six months ended June 30, 2010 and 2009, respectively, related to the issuance
of flow-through shares but recorded no other recovery for income taxes as the
net loss carry forwards are fully offset by a valuation allowance.





14.
            MONTANA
      TUNNELS JOINT VENTURE




On
February 1, 2010, the Company completed the sale of its 100% interest in MTMI,
which held the Company’s remaining 50% interest in the Montana Tunnels joint
venture to Elkhorn, for consideration of certain promissory notes held by
Elkhorn and certain investors in Elkhorn or its affiliates with an aggregate
outstanding balance of approximately $9.5 million.  Based on a
valuation performed on the property securing the Elkhorn Notes using Level 3
inputs (see Note 8(b)), an impairment of $0.3 million was recorded for the
Montana Tunnels equity interest as of December 31, 2009.  For the
three months ended March 31, 2010, the Company has recorded a $0.7 million loss
on the sale of Montana Tunnels.


22


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





On March
12, 2010, the Company entered into a purchase agreement with a certain party who
was a secondary creditor to the property which secures the Elkhorn Notes (the
“Noteholder”) pursuant to which the Company issued 398,183  common
shares on March 18, 2010, as consideration for a promissory note held by the
Noteholder with an aggregate balance of $0.7 million.  The Company
recorded an additional loss on the sale of the Montana Tunnels joint venture of
$0.6 million which is included within Equity loss in Montana Tunnels joint
venture.  Principal and interest on the promissory note are due March 12,
2011 and the promissory note bears interest of 8% per annum.




15.
            EARNINGS
      (LOSS) PER SHARE




Basic
earnings (loss) per share (“EPS”) is calculated by dividing net income available
to common shareholders by the weighted average number of common shares
outstanding during the period.  Diluted EPS is calculated to reflect
the dilutive effect of exercising outstanding warrants and stock options and of
conversion of convertible debentures by applying the treasury stock
method.




Earnings
(loss) used in determining EPS are presented below for the three and six months
ended June 30.




Three months ended June 30,
              
              
              Six months ended June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Net
      loss
              
              $
              (19,689
              )
              
              $
              (7,200
              )
              
              $
              (13,240
              )
              
              $
              (35,624
              )Weighted
      average number of shares outstanding, basic
              
              
              86,987,749
              
              
              
              58,540,390
              
              
              
              78,087,144
              
              
              
              57,613,215Dilutive
      securities:Options
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              –Warrants
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              –Weighted
      average number of shares outstanding, diluted
              
              
              86,987,749
              
              
              
              58,540,390
              
              
              
              78,087,144
              
              
              
              57,613,215Basic
      and diluted earnings (loss) per share
              
              $
              (0.23
              )
              
              $
              (0.12
              )
              
              $
              (0.17
              )
              
              $
              (0.62
              )Options
      and warrants outstanding but not included in computation of diluted
      weighted average number of shares (“OWNI”) because the strike prices
      exceeded the average price of the common shares
              
              
              17,413,566
              
              
              
              8,275,821
              
              
              
              17,372,509
              
              
              
              8,281,133Average
      exercise price of OWNI
              
              $
              2.37
              
              
              $
              2.42
              
              
              $
              2.31
              
              
              $
              2.36Shares
      issuable for convertible debentures excluded from calculation of EPS
      because their effect would have been anti-dilutive
              
              
              2,145,000
              
              
              
              2,145,000
              
              
              
              2,145,000
              
              
              
              2,145,000Conversion
      price of anti-dilutive convertible securities
              
              $
              2.00
              
              
              $
              2.00
              
              
              $
              2.00
              
              
              $
              2.00





Due to a
net loss for the three and six months ended June 30, 2010, an additional 26.7
million warrants and stock options were excluded from the EPS computation
because their effect would have been anti-dilutive.  Due to a net loss
for the three and six months ended June 30, 2009, an additional 23.8 million
warrants and stock options were excluded from the EPS computation because their
effect would have been anti-dilutive.


23


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)




16.
            SUPPLEMENTAL
      CASH FLOW INFORMATION




(a)
            Net
      changes in non-cash operating working capital items
  are:




Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009(Increase)
      decrease in:Accounts
      receivable and other
              
              $
              (206
              )
              
              $
              (240
              )
              
              $
              377
              
              
              $
              (946
              )Prepaids
              
              
              320
              
              
              
              370
              
              
              
              217
              
              
              
              382Inventories
              
              
              (1,357
              )
              
              
              (6,579
              )
              
              
              (1,675
              )
              
              
              (6,579
              )Increase
      (decrease) in:Accounts
      payable
              
              
              1,961
              
              
              
              2,761
              
              
              
              567
              
              
              
              3,613Accrued
      liabilities
              
              
              2,070
              
              
              
              463
              
              
              
              2,056
              
              
              
              892$
              2,788
              
              
              $
              (3,225
              )
              
              $
              1,542
              
              
              $
              (2,638
              )





(b)
            Non-cash
      transactions are:




Three months ended
                  June 30,
              
              
              Six months ended
                  June 30,2010
              
              
              2009
              
              
              2010
              
              
              2009Increase
      in property, plant and equipment due to assets acquired via issuance of
      notes payable
              
              $
              2,605
              
              
              $
              3,406
              
              
              $
              2,605
              
              
              $
              4,039Increase
      in prepaid assets due to financing a portion of the Company’s insurance
      program via the issuance of notes payable
              
              
              –
              
              
              
              –
              
              
              
              1,080
              
              
              
              582Increase
      in contributed surplus for the issuance of warrants to the Banks in
      connection with the Project Facility (Note 9(a)) and a corresponding
      decrease in debt for the debt discount
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              7,395Increase
      in additional paid-in capital resulting from the cancellation of common
      shares issued to Linear in March 2010 Private Placement
              
              
              5,121
              
              
              
              –
              
              
              
              5,121
              
              
              
              –Non-cash
      transactions resulting from the Linear acquisition via the issuance of
      common shares, warrants and options were as follows:Increase
      in current assets excluding cash
              
              
              284
              
              
              
              –
              
              
              
              284
              
              
              
              –Increase
      in property, plant and equipment
              
              
              58,416
              
              
              
              –
              
              
              
              58,416
              
              
              
              –Increase
      in restricted certificates of deposit
              
              
              35
              
              
              
              –
              
              
              
              35
              
              
              
              –Increase
      in current liabilities
              
              
              (1,589
              )
              
              
              –
              
              
              
              (1,589
              )
              
              
              –Increase
      in future income tax liability
              
              
              (9,517
              )
              
              
              –
              
              
              
              (9,517
              )
              
              
              –





17.
            FAIR
      VALUE OF FINANCIAL INSTRUMENTS




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 risk.  Where material, these risks are reviewed and
monitored by the Board of Directors.


24


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





(a)
            Capital
      Risk Management




The Company manages its capital to
ensure that it will be able to continue as a going concern while maximizing the
return to shareholders through the optimization of its debt and equity
balance.





The capital structure of the Company
consists of current and long-term debt and equity attributable to common
shareholders, comprising issued common stock, additional paid-in capital, and
accumulated deficit.





(b)
            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, trade
receivables, restricted cash, restricted certificates of deposit, derivative
instruments, auction rate securities and notes receivable in the ordinary course
of business.  Cash, restricted cash, restricted certificates of
deposit, derivative instruments and auction rate securities are placed with
high-credit quality financial institutions.  The Company sells its
metal production exclusively to large international organizations with strong
credit ratings.  The balance of trade receivables owed to the Company
in the ordinary course of business is not significant.  The carrying
value of accounts receivable approximates fair value due to the relatively short
periods to maturity on these instruments.  Therefore, the Company is
not exposed to significant credit risk.  Overall, the Company’s credit
risk has not changed significantly from 2009 with the exception of the notes
receivable described in Note 8(b) and Note 14.





The Company assesses quarterly whether
there has been an impairment of the financial assets of the
Company.  The Company has not recorded an impairment on any of the
financial assets of the Company during the three and six months ended June 30,
2010.  Brigus continues to maintain a portion of its investments in
ARS, which are floating rate securities that are marketed by financial
institutions with auction reset dates at 28 day intervals to provide short-term
liquidity.  All ARS were rated AAA when purchased, pursuant to
Brigus’s investment policy at the time.  Auction rate securities are
no longer permitted to be purchased under the Company’s current investment
policy.  Beginning in August 2007, a number of auctions began to fail
and the Company is currently holding ARS with a par value of $1.5 million which
currently lack liquidity.  All of Brigus’s ARS have continued to make
regular interest payments.  Brigus’s ARS were downgraded to Aa during
2008.  If uncertainties in the credit and capital markets persist or
Brigus’s ARS experience further downgrades, the Company may incur additional
impairments, which may continue to be judged other than
temporary.  Brigus believes that the current illiquidity of its ARS
will not have a material impact on Brigus’s financial condition.




The Company’s maximum exposure to
credit risk is represented by the carrying amount on the balance sheet of cash,
trade receivables, restricted cash, restricted certificates of deposit,
derivative instruments, auction rate securities and notes
receivable.  There are no material financial assets that the Company
considers to be past due.




(c)
            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
conduct equity issues or obtain project debt financing.


25


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





Trade payables and accrued liabilities
are paid in the normal course of business typically according to their
terms.  At June 30, 2010, the Company was, after giving effect to all
consents and waiver letters given by the Banks, in compliance with its debt
covenants.  The Company’s overall liquidity risk has not changed
significantly from the prior year.





(d)
            Currency
      Risk




Financial instruments that impact the
Company’s net income or other comprehensive income due to currency fluctuations
include:  Canadian dollar denominated cash, restricted certificates of
deposit and accounts payable.  For the three and six months ended June
30, 2010, 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 $0.5 million and $0.9 million, respectively, for a
10% increase or decrease in the Canadian dollar.





(e)
            Interest
      Rate Risk




The Company is exposed to interest rate
risk on its outstanding borrowings and short-term investments.  As of
June 30, 2010, the Company’s significant outstanding borrowings consist of $37.1
million of indebtedness under the Project Facility (Note 9(a)) and the Extended
Debentures which have an aggregate $4.3 million face value (Note
9(b)).  Amounts outstanding under the Project Facility accrue interest
at a floating rate based on LIBOR plus 7.0% and the Extended Debentures have a
stated rate of 18%.  The average monthly LIBOR rate charged to the
Company on the Project Facility during the three and six months ended June 30,
2010 was 0.3% and 0.3%, respectively.  The Company monitors its
exposure to interest rates and has not entered into any derivative contracts to
manage this risk.  The weighted average interest rate paid by the
Company during the three and six months ended June 30, 2010, on its outstanding
borrowings was 7.2% and7.5%, respectively.





For the three and six months ended June
30, 2010, a 100 basis point increase or decrease in interest rates would have
had a $0.1 million and a $0.3 million increase or decrease to interest expense
recorded during the periods, respectively.





(f)
            Commodity
      Price Risk




The Company’s principal businesses
include 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 little or no control. The Company has the ability to address its
price-related exposures through the limited use of options, future and forward
contracts, but generally does not enter into such arrangements.




On February 20, 2009, in order to meet
certain loan criteria of the Project Facility, the Company entered into certain
gold forward sales contracts.  See Note 6 for details.





(g)
            Fair
      Value Estimation




The fair value of financial instruments
that are not traded in an active market (such as derivative instruments) is
determined using a Black-Scholes model based on assumptions that are supported
by observable current market conditions, with the exception of auction rate
securities and notes receivable.  The valuation method of the
Company’s ARS investments is described in Note 8(a).  The valuation
method of the Company’s notes receivable acquired during the six months ended
June 30, 2010 is described in Note 8(b).


26


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





The carrying value less impairment
provision, if necessary, of restricted cash, restricted certificates of deposit,
long-term investments, trade receivables, trade payables, and notes receivable
approximate their fair values.  In addition, as the interest rate on
the Company’s credit facility is floating and has no unusual rights or terms,
the carrying value approximates its fair value.





18.
            COMMITMENTS
      AND CONTINGENCIES




(a)
            Commitments




The
Company had entered into a number of contractual commitments related to the
development of Black Fox and the development of the Goldfields Project that are
expected to become due within the next 12 months.  As of June 30,
2010, commitments were of approximately $38 million.




(b)
            Contingencies




On
September 4, 2009, Joe Green and companies owned or controlled by him, including
a Mexican company named Minas de Coronado, S. de R.L. de C.V., with whom the
Company’s Mexican subsidiary, Minera Sol de Oro, S.A. de C.V., has a joint
venture relationship at the Huizopa exploration project in the State of Sonora,
Mexico, filed a complaint against the Company in the United States District
Court for the District of Nevada.  In that complaint, Mr. Green alleges,
among other things, that the Company and Minera Sol de Oro have breached various
agreements and alleged fiduciary duties and have failed to recognize Minas de
Coronado’s right to a joint venture interest in the Huizopa exploration project,
and asks the Court to undo the parties’ 80/20 joint venture arrangement and
compel the return of the Huizopa exploration project properties to Mr. Green’s
companies.  Management believes that the claims in the complaint are
without merit, and intends to vigorously defend the Company against those
claims.




On
October 5, 2009, the Company filed a motion to dismiss the complaint and to
compel arbitration or, in the alternative, to stay proceedings pending the
conclusion of the arbitration.  On March 2, 2010, the court held a hearing
on that motion and on March 9, 2010, the court granted the Company’s motion
and dismissed the action.   On April 8, 2010, Mr. Green appealed
the March 9, 2010 Nevada District Court decision to the Ninth Circuit Court of
Appeals.  On June 18, 2010, Mr. Green and Brigus filed a dismissal with
prejudice agreement with the Ninth Circuit, requesting an order dismissing the
lawsuit with prejudice.  The Company is still waiting on that order
from the Ninth Circuit, but has no reason to believe it would not be
entered.  The carrying value of the Huizopa property as of June 30,
2010 is $3.2 million.





19.
            SEGMENTED
      INFORMATION




Brigus owns and operates the Black Fox
mine and mill and its adjacent Grey Fox and Pike River exploration
properties.  Additionally, Brigus owns the Goldfields development
project in Canada and other exploration properties in Mexico (Ixhuatan and
Huizopa) and the Dominican Republic.  Prior to the quarter ended June
30, 2010, the Company only reported Black Fox as a segment and included Huizopa
within Corporate and Other as a segment.  As a result of the
Arrangement, the Company has expanded its reportable segments.  The
reportable segments have been determined at the level where decisions are made
on the allocation of resources and capital and where performance is
measured.  The financial information for Montana Tunnels assets and
liabilities as of December 31, 2009 and the results of operations for the three
and six months ended June 30, 2010 and 2009 are reported under the equity
investment method as a result of the joint venture agreement (see Note 14) and
is presented within Corporate.


27


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





Amounts
as at June 30, 2010 are as follows:





Black
                  Fox
                  Canada
              
              
              Goldfields
                  Project
                  Canada
              
              
              Other
                  Exploration
                  Properties
              
              
              Corporate
              
              
              TotalCurrent
      assets
              
              $
              8,663
              
              
              $
              196
              
              
              $
              315
              
              
              $
              21,131
              
              
              $
              30,305Property,
      plant, and equipment
              
              
              113,259
              
              
              
              36,321
              
              
              
              25,164
              
              
              
              39
              
              
              
              174,783Restricted
      certificates of deposit
              
              
              14,608
              
              
              
              –
              
              
              
              –
              
              
              
              42
              
              
              
              14,650Other
      long-term assets
              
              
              4,538
              
              
              
              –
              
              
              
              –
              
              
              
              4,476
              
              
              
              9,014Total
      assets
              
              $
              141,068
              
              
              $
              36,517
              
              
              $
              25,479
              
              
              $
              25,688
              
              
              $
              228,752Current
      liabilities
              
              $
              28,795
              
              
              $
              112
              
              
              $
              5
              
              
              $
              29,345
              
              
              $
              58,257Derivative
      instruments
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              39,988
              
              
              
              39,988Equity-linked
      financial instruments
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              21,002
              
              
              
              21,002Accrued
      site closure costs
              
              
              5,620
              
              
              
              –
              
              
              
              –
              
              
              
              –
              
              
              
              5,620Debt
      and other long-term liabilities
              
              
              32,447
              
              
              
              8,596
              
              
              
              921
              
              
              
              1,877
              
              
              
              43,841Total
      liabilities
              
              $
              66,862
              
              
              $
              8,708
              
              
              $
              926
              
              
              $
              92,212
              
              
              $
              168,708





Amounts
as at December 31, 2009 are as follows:




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


28




BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)




Amounts
for the three and six month periods ended June 30, 2010 and 2009, respectively,
are as follows:




Three Months Ended June 30, 2010Black
                  Fox
              
              
              Corporate
                  and Other
              
              
              TotalRevenue
      from the sale of gold
              
              $
              22,163
              
              
              
              –
              
              
              $
              22,163Operating
      expensesDirect
      operating costs
              
              
              8,274
              
              
              
              –
              
              
              
              8,274Depreciation
      and amortization
              
              
              4,023
              
              
              
              6
              
              
              
              4,029Accretion
      expense – accrued site closure costs
              
              
              177
              
              
              
              –
              
              
              
              177General
      and administrative expenses
              
              
              –
              
              
              
              3,681
              
              
              
              3,681Exploration,
      business development and other
              
              
              1,128
              
              
              
              298
              
              
              
              1,42613,602
              
              
              
              3,985
              
              
              
              17,587Operating
      income (loss)
              
              
              8,561
              
              
              
              (3,985
              )
              
              
              4,576Other
      income (expenses)Interest
      income
              
              
              –
              
              
              
              59
              
              
              
              59Interest
      expense
              
              
              (2,482
              )
              
              
              (197
              )
              
              
              (2,679
              )Linear
      acquisition costs
              
              
              –
              
              
              
              (2,636
              )
              
              
              (2,636
              )Fair
      value change on equity-linked financial instruments
              
              
              –
              
              
              
              1,881
              
              
              
              1,881Realized
      gain on derivative instruments
              
              
              –
              
              
              
              3,582
              
              
              
              3,582Unrealized
      gains on derivative instruments
              
              
              –
              
              
              
              (23,919
              )
              
              
              (23,919
              )Foreign
      exchange gain and other
              
              
              (6
              )
              
              
              (547
              )
              
              
              (553
              )(2,488
              )
              
              
              (21,777
              )
              
              
              (24,265
              )Income
      (loss) before income taxes and equity loss in Montana Tunnels
      JV
              
              $
              6,073
              
              
              $
              (25,762
              )
              
              $
              (19,689
              )Investing
      activitiesProperty,
      plant and equipment expenditures
              
              $
              3,968
              
              
              $
              65
              
              
              $
              4,033





Three
      Months Ended June 30, 2009Black
                          Fox
                      
                      
                      Corporate
                          and
      Other
                      
                      
                      TotalRevenue
      from sale of gold
                      
                      $
                      4,709
                      
                      
                      $
                      –
                      
                      
                      $
                      4,709Direct
      operating costs
                      
                      
                      2,034
                      
                      
                      
                      –
                      
                      
                      
                      2,034Depreciation
      and amortization
                      
                      
                      1,013
                      
                      
                      
                      10
                      
                      
                      
                      1,023Accrued
      site closure costs – accretion expense
                      
                      
                      69
                      
                      
                      
                      –
                      
                      
                      
                      69General
      and administrative expenses
                      
                      
                      –
                      
                      
                      
                      1,096
                      
                      
                      
                      1,096Exploration,
      business development and other
                      
                      
                      48
                      
                      
                      
                      254
                      
                      
                      
                      3023,164
                      
                      
                      
                      1,360
                      
                      
                      
                      4,524Operating
      income (loss)
                      
                      
                      1,545
                      
                      
                      
                      (1,360
                      )
                      
                      
                      185Interest
      income
                      
                      
                      –
                      
                      
                      
                      38
                      
                      
                      
                      38Interest
      expense
                      
                      
                      (1,069
                      )
                      
                      
                      (250
                      )
                      
                      
                      (1,319
                      )Debt
      transaction costs
                      
                      
                      –
                      
                      
                      
                      (10
                      )
                      
                      
                      (10
                      )Fair
      value change on equity-linked financial instruments
                      
                      
                      –
                      
                      
                      
                      (8,829
                      )
                      
                      
                      (8,829
                      )Realized
      loss on investments – derivative instruments
                      
                      
                      –
                      
                      
                      
                      (492
                      )
                      
                      
                      (492
                      )Unrealized
      gain on investments – derivative instruments
                      
                      
                      –
                      
                      
                      
                      3,376
                      
                      
                      
                      3,376Foreign
      exchange gain and other
                      
                      
                      –
                      
                      
                      
                      184
                      
                      
                      
                      184(1,069
                      )
                      
                      
                      (5,983
                      )
                      
                      
                      (7,052
                      )Income
      (loss) before income taxes and equity loss in Montana Tunnels
      JV
                      
                      $
                      476
                      
                      
                      $
                      (7,343
                      )
                      
                      $
                      (6,867
                      )Investing
      activitiesProperty,
      plant and equipment expenditures
                      
                      $
                      18,580
                      
                      
                      $
                      –
                      
                      
                      $
                      18,580




29




BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





Six
      months ended June 30, 2010Black
                  Fox
              
              
              Corporate
                  and
      Other
              
              
              TotalRevenue
      from sale of gold
              
              $
              39,789
              
              
              $
              –
              
              
              $
              39,789Direct
      operating costs
              
              
              18,258
              
              
              
              –
              
              
              
              18,258Depreciation
      and amortization
              
              
              7,478
              
              
              
              12
              
              
              
              7,490Accrued
      site closure costs – accretion expense
              
              
              352
              
              
              
              –
              
              
              
              352General
      and administrative expenses
              
              
              –
              
              
              
              5,630
              
              
              
              5,630Exploration,
      business development and other
              
              
              1,309
              
              
              
              388
              
              
              
              1,69727,397
              
              
              
              6,030
              
              
              
              33,427Operating
      income (loss)
              
              
              12,392
              
              
              
              (6,030
              )
              
              
              6,362Interest
      income
              
              
              –
              
              
              
              113
              
              
              
              113Interest
      expense
              
              
              (5,303
              )
              
              
              (718
              )
              
              
              (6,021
              )Loss
      on modification of debentures
              
              
              –
              
              
              
              (513
              )
              
              
              (513
              )Linear
      acquisition costs
              
              
              –
              
              
              
              (3,213
              )
              
              
              (3,213
              )Fair
      value change on equity-linked financial instruments
              
              
              –
              
              
              
              11,894
              
              
              
              11,894Realized
      gain on investments – derivative instruments
              
              
              –
              
              
              
              239
              
              
              
              239Unrealized
      loss on investments – derivative instruments
              
              
              –
              
              
              
              (21,938
              )
              
              
              (21,938
              )Foreign
      exchange gain and other
              
              
              90
              
              
              
              (421
              )
              
              
              (331
              )(5,213
              )
              
              
              (14,557
              )
              
              
              (19,770
              )Income
      (loss) before income taxes and equity loss in Montana Tunnels joint
      venture
              
              $
              7,179
              
              
              $
              (20,587
              )
              
              $
              (13,408
              )Investing
      activitiesProperty,
      plant and equipment expenditures
              
              $
              5,013
              
              
              $
              82
              
              
              $
              5,095





Six
      months ended June 30, 2009Black
                  Fox
              
              
              Corporate
                  and
      Other
              
              
              TotalRevenue
      from sale of gold
              
              $
              4,709
              
              
              $
              –
              
              
              $
              4,709Direct
      operating costs
              
              
              2,034
              
              
              
              –
              
              
              
              2,034Depreciation
      and amortization
              
              
              1,013
              
              
              
              20
              
              
              
              1,033Accrued
      site closure costs – accretion expense
              
              
              69
              
              
              
              –
              
              
              
              69General
      and administrative expenses
              
              
              –
              
              
              
              2,028
              
              
              
              2,028Exploration,
      business development and other
              
              
              112
              
              
              
              417
              
              
              
              5293,228
              
              
              
              2,465
              
              
              
              5,693Operating
      income (loss)
              
              
              1,481
              
              
              
              (2,465
              )
              
              
              (984
              )Interest
      income
              
              
              –
              
              
              
              78
              
              
              
              78Interest
      expense
              
              
              (1,098
              )
              
              
              (1,051
              )
              
              
              (2,149
              )Debt
      transaction costs
              
              
              –
              
              
              
              (1,249
              )
              
              
              (1,249
              )Loss
      on modification of debentures
              
              
              –
              
              
              
              (1,969
              )
              
              
              (1,969
              )Fair
      value change on equity-linked financial instruments
              
              
              –
              
              
              
              (13,582
              )
              
              
              (13,582
              )Realized
      loss on investments – derivative instruments
              
              
              –
              
              
              
              (124
              )
              
              
              (124
              )Unrealized
      loss on investments – derivative instruments
              
              
              –
              
              
              
              (15,042
              )
              
              
              (15,042
              )Foreign
      exchange gain and other
              
              
              –
              
              
              
              281
              
              
              
              281(1,098
              )
              
              
              (32,658
              )
              
              
              (33,756
              )Income
      (loss) before income taxes and equity loss in Montana Tunnels joint
      venture
              
              $
              383
              
              
              $
              (35,123
              )
              
              $
              (34,740
              )Investing
      activitiesProperty,
      plant and equipment expenditures
              
              $
              40,446
              
              
              $
              –
              
              
              $
              40,446


30


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





20.
            DIFFERENCES
      BETWEEN CANADIAN AND U.S. GAAP




The
Company prepares its consolidated financial statements in accordance with U.S.
GAAP.  The following adjustments and/or additional disclosures would be
required in order to present the financial statements in accordance with
Canadian GAAP at June 30, 2010 and December 31, 2009 and for the three and six
months ended June 30, 2010 and 2009.




Material
variances between financial statement items under U.S. GAAP and the amounts
determined under Canadian GAAP are as follows:





June
      30,
                  2010
              
              
              December
      31,
                2009Total
      assets in accordance with U.S GAAP
              
              $
              228,752
              
              
              $
              159,261Bank
      indebtedness (e)
              
              
              –
              
              
              
              (328
              )Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              10,911Black
      Fox development costs(c)
              
              
              26,540
              
              
              
              27,674Financing
      costs (a)
              
              
              (406
              )
              
              
              (485
              )Deferred
      stripping costs (h)
              
              
              618
              
              
              
              –Total
      assets in accordance with Canadian GAAP
              
              $
              255,504
              
              
              $
              197,033Total
      liabilities in accordance with U.S. GAAP
              
              $
              168,708
              
              
              $
              171,690Bank
      indebtedness (e)
              
              
              –
              
              
              
              (328
              )Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              10,911Convertible
      debentures (d)
              
              
              (95
              )
              
              
              (86
              )Income
      taxes related to flow-through share issuance (e)
              
              
              –
              
              
              
              (869
              )Equity-linked
      financial instruments (g)
              
              
              (21,002
              )
              
              
              (27,318
              )Total
      liabilities in accordance with Canadian GAAP
              
              $
              147,611
              
              
              $
              154,000Total
      shareholders’ equity (deficiency) in accordance with U.S.
    GAAP
              
              $
              60,044
              
              
              $
              (12,429
              )Financing
      costs (a)
              
              
              (406
              )
              
              
              (485
              )Black
      Fox development costs (c)
              
              
              26,540
              
              
              
              27,674Convertible
      debentures (d)
              
              
              95
              
              
              
              86Income
      taxes related to flow-through share issuance (e)
              
              
              –
              
              
              
              869Equity-linked
      financial instruments (g)
              
              
              21,002
              
              
              
              27,318Deferred
      stripping costs (h)
              
              
              618
              
              
              
              –Total
      shareholders’ equity in accordance with Canadian GAAP
              
              $
              107,893
              
              
              $
              43,033Total 
      shareholders’ equity and liabilities in accordance with Canadian
      GAAP
              
              $
              255,504
              
              
              $
              197,033





Under Canadian GAAP, the components of
shareholders’ equity would be as follows:





June
      30,
                  2010
              
              
              December
      31,
                2009Share
      capital
              
              $
              279,216
              
              
              $
              202,925Equity
      component of convertible debentures
              
              
              312
              
              
              
              584Contributed
      surplus
              
              
              49,693
              
              
              
              36,051Deficit
              
              
              (221,328
              )
              
              
              (196,527
              )Total
      shareholders’ equity in accordance with Canadian GAAP
              
              $
              107,893
              
              
              $
              43,033




31


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)
 Notes
to the Condensed Consolidated Financial Statements
 Six
month period ended June 30, 2010
 (Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)
 (Unaudited)


Under
Canadian GAAP, the net loss and net loss per share would be adjusted as
follows:





Three
      months ended
                  June
      30,
              
              
              Six
      months ended
                  June
      30,2010
              
              
              2009
              
              
              2010
              
              
              2009Loss
      before equity loss in Montana Tunnels joint venture for the period, based
      on U.S. GAAP
              
              $
              (19,689
              )
              
              $
              (6,867
              )
              
              $
              (12,539
              )
              
              $
              (34,667
              )Financing
      costs (a)
              
              
              41
              
              
              
              15
              
              
              
              79
              
              
              
              (557
              )Black
      Fox development costs (c)
              
              
              (93
              )
              
              
              (168
              )
              
              
              (1,134
              )
              
              
              (168
              )Convertible
      debentures (d)
              
              
              (122
              )
              
              
              (109
              )
              
              
              (303
              )
              
              
              (277
              )Equity-linked
      financial instruments (g)
              
              
              (1,881
              )
              
              
              8,829
              
              
              
              (11,894
              )
              
              
              13,582Income
      taxes (f)
              
              
              –
              
              
              
              –
              
              
              
              1,073
              
              
              
              116Deferred
      stripping costs (h)
              
              
              618
              
              
              
              –
              
              
              
              618
              
              
              
              –(Loss)
      income from continuing operations for the period, based on Canadian
      GAAP
              
              
              (21,126
              )
              
              
              1,700
              
              
              
              (24,100
              )
              
              
              (21,971
              )Equity
      loss in Montana Tunnels joint venture, under U.S. GAAP
              
              
              –
              
              
              
              (333
              )
              
              
              (701
              )
              
              
              (957
              )Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              (101
              )
              
              
              –
              
              
              
              (559
              )Loss
      from discontinued operations for the period, based on Canadian
      GAAP
              
              
              –
              
              
              
              (434
              )
              
              
              (701
              )
              
              
              (1,516
              )Net
      (loss) income for the period based on Canadian GAAP
              
              $
              (21,126
              )
              
              $
              1,266
              
              
              $
              (24,801
              )
              
              $
              (23,487
              )Comprehensive
      (loss) income based on Canadian GAAP
              
              $
              (21,126
              )
              
              $
              1,266
              
              
              $
              (24,801
              )
              
              $
              (23,487
              )Basic
      and diluted net loss (income) per share in accordance with Canadian
      GAAP
              
              $
              (0.24
              )
              
              $
              0.02
              
              
              $
              (0.32
              )
              
              $
              (0.41
              )





Under
Canadian GAAP, the consolidated statements of cash flows would be adjusted as
follows:





Three
      months ended
                  June
      30,
              
              
              Six
      months ended
                  June
      30,2010
              
              
              2009
              
              
              2010
              
              
              2009Cash
      provided by (used in) operating activities based on U.S.
    GAAP
              
              $
              11,377
              
              
              $
              (2,481
              )
              
              $
              9,998
              
              
              $
              (1,732
              )Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              (257
              )
              
              
              –
              
              
              
              550Cash
      provided by (used in) operating activities based on Canadian
      GAAP
              
              
              11,377
              
              
              
              (2,738
              )
              
              
              9,998
              
              
              
              (1,182
              )Cash
      provided by (used in) investing activities based on U.S.
    GAAP
              
              
              11,564
              
              
              
              (28,614
              )
              
              
              (790
              )
              
              
              (42,310
              )Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              (4
              )
              
              
              –
              
              
              
              (10
              )Black
      Fox Project (c)
              
              
              –
              
              
              
              (2,199
              )
              
              
              –
              
              
              
              –Restricted
      cash for Canadian flow-through expenditures (e)
              
              
              –
              
              
              
              3,084
              
              
              
              (4,295
              )
              
              
              (2,199
              )Cash
      provided by (used in) investing activities based on Canadian
      GAAP
              
              
              11,564
              
              
              
              (27,733
              )
              
              
              (5,085
              )
              
              
              (44,519
              )Cash
      (used in) provided by financing activities based on U.S.
    GAAP
              
              
              (19,573
              )
              
              
              27,291
              
              
              
              (3,904
              )
              
              
              44,887Montana
      Tunnels joint venture (b)
              
              
              –
              
              
              
              (273
              )
              
              
              –
              
              
              
              (540
              )Cash
      provided by (used in) financing activities based on Canadian
      GAAP
              
              
              (19,573
              )
              
              
              27,018
              
              
              
              (3,904
              )
              
              
              44,347Effect
      of exchange rate changes on cash
              
              
              (571
              )
              
              
              95
              
              
              
              (576
              )
              
              
              91Net
      cash outflow in accordance with Canadian GAAP
              
              
              2,797
              
              
              
              (3,358
              )
              
              
              433
              
              
              
              (1,263
              )Cash,
      beginning of period under Canadian GAAP
              
              
              1,931
              
              
              
              5,192
              
              
              
              4,295
              
              
              
              3,097Cash,
      end of period under Canadian GAAP
              
              $
              4,728
              
              
              $
              1,834
              
              
              $
              4,728
              
              
              $
              1,834




32


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)




(a)
            Financing
      costs




Under
U.S. GAAP, debt financing costs are capitalized and amortized over the term of
the related debt.




Under
Canadian GAAP, the Company expenses debt financing costs when they are
incurred.





(b)
            Montana
      Tunnels joint venture




Under
U.S. GAAP, the Company has accounted for its 50% interest in the Montana Tunnels
joint venture (“Montana Tunnels”) using the equity method whereby the Company's
share of Montana Tunnels earnings and losses is included in operations and its
investment in Montana Tunnels adjusted by a similar amount.




Under
Canadian GAAP, the Company would account for its joint venture interest in
Montana Tunnels using the proportionate consolidation method whereby the
Company's proportionate share of each line item of Montana Tunnels assets,
liabilities, revenues and expenses is included in the corresponding line item of
the Company's financial statements.




(c)
            Development
      of Black Fox




On April
14, 2008, the Company filed a Canadian National Instrument 43-101 prepared to
U.S. standards and on April 24, 2008, the Company’s Board of Directors approved
a plan authorizing management to proceed with development of Black Fox. 
Therefore, effective April 24, 2008, under U.S. GAAP, mining development costs
at the Black Fox Project are capitalized.  Development costs incurred prior
to April 24, 2008 were expensed as incurred under U.S. GAAP.




Under
Canadian GAAP, mining development costs at Black Fox Project have been
capitalized from inception.  Accordingly, for Canadian GAAP purposes, a
cumulative increase in property, plant and equipment of $25.5 million has
been recorded as at June 30, 2010.




(d)
            Convertible
      debentures




Under
Canadian GAAP, the 2007 Debentures (Note 9(b)) would be recorded as compound
financial instruments including detachable note warrants.  On issuance,
under U.S. GAAP, the detachable note warrants are similarly treated as an equity
instrument with the remainder of the convertible debentures treated as a
liability.  Further, under U.S. GAAP, the beneficial conversion features
determined using the effective conversion prices based on the proceeds allocated
to the convertible debentures is allocated to additional paid-in capital. 
This discount on the debenture is recognized as additional interest expense
immediately as the debt is convertible at the date of issuance.  Canadian
GAAP does not require the recognition of any beneficial conversion
feature.




(e)
            Flow-through
      common shares




Under
Canadian income tax legislation, a company is permitted to issue flow-through
shares whereby the Company agrees to incur qualifying expenditures and renounce
the related income tax deductions to the investors.  Under U.S. GAAP, the
proceeds from issuance of these shares are allocated between the offering of
shares and the sale of tax benefits.  The allocation is made based on the
difference between the quoted price of the existing shares and the amount the
investor pays for the shares.  A liability is recognized for this
difference.  The liability is reversed when tax benefits are renounced and
a deferred tax liability is recognized at that time.  Income tax expense is
the difference between the amount of a deferred tax liability and the liability
recognized on issuance.




33


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





Under
Canadian GAAP, the Company has accounted for the issue of flow-through shares
using the deferral method in accordance with Canadian GAAP.  At the time of
issue, the funds received are recorded as share capital.




Also,
notwithstanding whether there is a specific requirement to segregate the funds,
the flow-through funds which are unexpended at the consolidated balance sheet
dates are considered to be restricted and are not considered to be cash or cash
equivalents under U.S. GAAP.  These funds are not considered restricted
under Canadian GAAP.  As at June 30, 2010 and December 31, 2009, there
were unexpended flow-through funds of $2.8 million and $4.6 million,
respectively.




(f)
            Income
      taxes




While tax
accounting rules are essentially the same under both U.S. and Canadian GAAP, tax
account differences can arise from differing treatment of various assets and
liabilities.  For example, certain mine developments cost are capitalized
under Canadian GAAP and expensed under U.S. GAAP, as explained in (c)
above.  An analysis of these differences indicates that there are larger
potential tax benefits under U.S. GAAP than under Canadian GAAP but a
valuation allowance has been applied to all amounts as of June 30,
2010.




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




Under
U.S. GAAP, effective January 1, 2009, an equity-linked financial instrument
would not be considered indexed to the entity’s own stock if the strike price is
denominated in a currency other than the issuer’s functional currency.  As
of June 30, 2010 and December 31, 2009, the Company had 37.3 million and 26.4
million outstanding warrants to purchase common shares of the Company,
respectively, that were denominated in a currency (Canadian dollars) other than
its functional currency (US dollars).  As such, these warrants are not
considered to be indexed to the Company’s own stock, and are thereby required to
be accounted for separately as derivative instruments, rather than as equity
instruments.




Under
Canadian GAAP, these warrants are accounted for as equity instruments, with
their fair value upon issuance recognized as additional paid-in
capital.




(h)
            Deferred
      stripping costs




Under
U.S. 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.  Under Canadian GAAP, stripping costs that
represent a betterment to the mineral property are capitalized and amortized
using the units-of-production method over the expected life of the mine based on
the estimated recoverable gold equivalent ounces.




21.
            SUBSEQUENT
      EVENTS




(a)
            Flow-through
      Private Placement




On July
29, 2010, the Company completed a private placement of 10,000,000 flow-through
common shares at Cdn$1.40 per share for aggregate gross proceeds of Cdn$14.0
million.  The Company intends to use the proceeds from the sale of the
flow-through shares to incur exploration and development expenses at the Black
Fox mine and adjoining Grey Fox and Pike River properties.




34


BRIGUS
GOLD CORP. (formerly Apollo Gold Corporation)


Notes
to the Condensed Consolidated Financial Statements


Six
month period ended June 30, 2010


(Stated
in U.S. dollars, unless indicated otherwise; tabular amounts in thousands except
share and per share data)


(Unaudited)





(b)
            Project
      Facility repayment schedule updated




On August
3, 2010, the Banks agreed to amend certain provisions of the Project Facility
for the outstanding principal of $41.8 million, including without limitation the
following revised interim repayment schedule:




Repayment
      Date
                    
                    Repayment
      AmountDecember
      31, 2010
                    
                    $
                    5,000March
      31, 2011 and each quarter end through December 31, 2012
                    
                    $
                    4,090March
      31, 2013
                    
                    $
                    4,078





(c)
            Amendments
      to the Options on the Dominican Republic
  concessions




On August
6, 2010, Brigus and Everton Resources, Inc. (“Everton”) (together, the
“Parties”) amended the option agreement between the Parties dated April 10, 2007
(the “Option Agreement”) relating to the following:




(i)     
     Ampliacion Pueblo Viejo (“APV”) – Everton has earned a 50%
interest in APV and will not exercise the Second Option as defined in the Option
Agreement.  The Parties agreed to modify the Second Option whereby Everton
can earn an additional 20% interest in APV by spending an additional $2.5
million on exploration until April 10, 2012.




(ii)     
     Loma Hueca – The Parties agreed to grant Everton a one year
extension to April 10, 2011 to spend the remaining $0.45 million on exploration
on the concession.




(iii)     
     Loma El Mate – The Parties agreed that Everton can earn an
additional 20% interest in Loma El Mate (currently a 50% interest) by spending
an additional $1.0 million on exploration over the next two years.




(d)
            Common
      share issuance




In July
2010, the Company issued 1,266,929 common shares of the Company.  The $1.5
million value of these common shares was accrued in Accrued long-term
liabilities at June 30, 2010.


35


ITEM 2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




All
Dollar amounts are expressed in United States Dollars.




The
following discussion and analysis should be read in conjunction with
‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’ contained in our Annual Report on Form 10-K for the year ended
December 31, 2009 as well as with the consolidated financial statements and
related notes and the other information appearing elsewhere in this
report.  As used in this report, unless the context otherwise indicates,
references to ‘‘we,’’ ‘‘our,’’ “us,” the “Company” or ‘‘Brigus’’ refer to Brigus
Gold Corp. and its subsidiaries collectively.  The financial statements in
this Form 10-Q have been prepared in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”).  For a
reconciliation to GAAP in Canada (“Canadian GAAP”), see Note 20 to the
consolidated financial statements set forth above.




In this
Form 10-Q, the terms “cash operating cost,” “total cash cost” and “total
production cost” are non-GAAP financial measures and are used on a per ounce of
gold sold basis.  Cash operating costs per ounce is equivalent to direct
operating cost as found on the Consolidated Statements of Operations, less
production royalty expenses and mining taxes but includes by-product credits for
payable silver, where applicable.  Total cash costs is equivalent to cash
operating costs plus production royalties and mining taxes.  The term
“total production costs” is equivalent to total cash costs plus non-cash costs
including depreciation and amortization.  See “Reconciliation of Cash
Operating and Total Production Costs Per Ounce” below.  References in this
Form 10-Q to “$” are to United States dollars.  Canadian dollars are
indicated by the symbol “Cdn$”.




BACKGROUND
AND RECENT DEVELOPMENTS




We are
principally engaged in gold mining including extraction, processing, and
refining, as well as related activities including exploration and development of
mineral deposits principally in North America.  We own Black Fox, an open
pit and underground mine and mill located in the Province of Ontario, Canada
(“Black Fox”).  The Black Fox mine site is situated seven miles east of
Matheson and the mill complex is twelve miles west of Matheson.  Ore mining
from the open pit began in March 2009 and milling operations commenced in April
2009.  Underground mining at Black Fox is expected to commence in August
2010.  We own two exploration properties adjacent to the Black Fox mine
site known as Grey Fox and Pike River.




We are
also advancing the Goldfields Project located near Uranium City, Saskatchewan,
Canada, which hosts the Box and Athona gold deposits. In Mexico, we hold a 100
percent interest in the Ixhuatan Property located in the state of Chiapas, and
the Huizopa Joint Venture, an 80 percent interest (20 percent Minas de Coronado,
S. de R.L. de CV) in an early stage, gold-silver exploration joint venture
located in the Sierra Madres in the State of Chihuahua.  In the Dominican
Republic, Brigus and Everton Resources have a joint venture covering the
Ampliacion Pueblo Viejo (“APV”) and Loma El Mate gold exploration
projects.





Corporate





Business
Combination with Linear




On March
9, 2010, Brigus Gold Corp. (formerly Apollo Gold Corporation) and Linear Gold
Corp. (“Linear”) entered into a binding letter of intent (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 at a price of Cdn$1.60 per common share 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 without any payment upon completion of the
Arrangement.





On June
25, 2010, the Company completed the business combination of Brigus and
Linear.  The Arrangement was structured as a court-approved plan of
arrangement under the ABCA pursuant to which 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 warrants to
purchase common shares and 3,448,746 options to purchase common shares in
connection with the completion of the Arrangement.




36


Board of Directors and other
Matters.Upon consummation of the Arrangement, the following
changes occurred:





·
            Wade
      Dawe (the former President and Chief Executive Officer of Linear) was
      appointed President and Chief Executive Officer of
  Brigus;


·
            R.
      David Russell (i) resigned as President and Chief Executive Officer of
      Brigus and, subject to customary releases, was paid all termination and
      other amounts owing pursuant to his employment agreement of approximately
      US$1.7 million in the aggregate and (ii) entered into a consulting
      agreement with Brigus;


·
            The
      Board of Directors of Brigus was initially comprised of six directors
      including (i) Wade Dawe (the former Chief Executive Officer of Linear),
      who was nominated as the Chairman of the Board of Directors, (ii) three
      previous Apollo board members and (iii) two Linear nominees.  A
      seventh director, who will be a mining industry technical person, will be
      appointed in the future.





The
Arrangement has allowed us to reduce our debt related to the Black Fox project,
and to provide capital to fund underground development at Black Fox and the
exploration programs at the Grey Fox and Pike River properties.  The
Arrangement has also provided us an increased number of properties, including
the Goldfields project in northern Saskatchewan, Canada, properties in the
Chiapas area of southern Mexico, and the APV property in the Dominican
Republic.





The
Arrangement is accounted for using the acquisition method with Brigus as the
acquirer of Linear.  The Company is in the process of completing a full and
detailed valuation of the fair value of the net assets of Linear acquired with
the assistance of an independent third party.





Brigus
has estimated the fair value of Linear’s non-mineral interest net assets to be
equal to their current carrying values.  The remainder of the purchase
price has been assigned as an increase to the estimated fair value of the
acquired mineral interests, including a deferred income tax adjustment of $9.5
million.





The
allocation of the purchase price is based upon management’s preliminary
estimates and certain assumptions with respect to the fair value increment
associated with the assets acquired and the liabilities assumed.  The
actual fair values of the assets and liabilities are to be determined as of the
date of acquisition when further analysis is completed. Consequently, the actual
allocation of the purchase price may result in different adjustments than those
shown below.





The
preliminary purchase price allocation is subject to change and is summarized as
follows:





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





The
purchase price was allocated as follows:





Net
      working capital acquired (including cash of $15.4 million)
                    
                    $
                    14,162Equity
      investment in Brigus
                    
                    
                    19,375Property,
      plant and equipment (including mineral exploration properties of $56.1
      million)
                    
                    
                    58,416Other
      assets
                    
                    
                    35Deferred
      income tax liability
                    
                    
                    (9,517
                    )Net
      identifiable assets
                    
                    $
                    82,471




37


Black
Fox Financing Agreement





On
February 20, 2009, we entered into a $70.0 million project financing agreement
(“Project Facility”) with Macquarie Bank Ltd. (“Macquarie Bank”) and RMB
Australia Holdings Limited (“RMB”) (Macquarie Bank together with RMB, the
“Banks”) as joint arrangers and underwriters.





On August
3, 2010, the Banks agreed to amend certain provisions of the Project Facility
for the outstanding principal of $41.8 million, including without limitation the
following revised interim repayment schedule (in thousands):





Repayment
      Date
                  
                  Repayment
      AmountDecember
      31, 2010
                  
                  $
                  5,000March
      31, 2011 and each quarter end through December 31, 2012
                  
                  $
                  4,090March
      31, 2013
                  
                  $
                  4,078





Black
Fox





During
the second quarter of 2010, we mined 2,028,000 tonnes of material of which
228,000 tonnes were gold ore resulting in a strip ratio of 7.9:1 and compared to
2,062,000 tonnes mined, 190,000 tonnes ore and a strip ratio of 8.9:1 in the
first quarter of 2010.  During the second quarter the Black Fox mill
processed 178,000 tonnes of ore (1,956 tonnes per day), at a grade of 3.42 grams
of gold per tonne and recovery rate of 92%, achieving total gold production of
18,028 ounces, this compared to 14,175 ounces produced during the first quarter
of 2010.  The 27% increase in gold production was a result of the
improvement in the grade of gold ore in the second quarter.





Gold
ounces sold during the second quarter were 18,430 ounces which included 3,872
ounces of gold (21%) that were sold into the spot market at an average price of
$1,237 per ounce with the balance of sales being delivered against the forward
sales contracts at a realized price of $875 per ounce.  The total cash cost
per ounce of gold sold for the second quarter was $448 per ounce compared to the
first quarter of $631 per ounce.  The quarter over quarter improvement in
cash costs was due to higher grade of ore.





Much of
the second quarter of 2010 was spent on the commencement of the development of
the Black Fox underground mine.  Currently there is an access ramp from
surface down to the 235 meter level where there is a 1,000 meter drift. 
The underground mine development plan consists of: (i) rehabilitation of the
existing ramp for production, (ii) development of a new ventilation raise, and
(iii) development of access drifts to the ore headings.





In May
2010, we awarded the underground development contract to Cementation Inc., which
mobilised during June 2010.  The rehabilitation of the existing ramp was
completed in July as was the raisebore pilot hole with the raisebore expected to
be completed during August 2010.   Work on development of the access
drifts is progressing.  The Company plans to mine underground ores using
its own equipment and employees.  Initial mining of ores will be done by
the contractor during development, with the first ores expected to be extracted
from the underground operations during August 2010.  The Company
anticipates production of ore rising steadily to a steady rate of production of
800 tonnes per day in March 2011.  The Phase 2 overburden removal began
recently in preparation for Phase 2 production from the open pit in late
2010.





Quarterly
gold production is forecast to increase through the remainder of 2010 as the
underground mine ramps up.  We expect to produce approximately 24,000
ounces of gold in the third quarter of 2010 and approximately 28,500 ounces in
the fourth quarter of 2010 for total forecast production of approximately 85,000
ounces for full year 2010.  Total cash costs forecast for the year is
unchanged at $500 to $550 per ounce.





Capital
expenditures for the second quarter of 2010 were $6.6 million and included
significant infrastructure expenditures at Black Fox including the new
administration and technical offices, miners change house, sample preparation
and core logging facilities as well as the commencement of a new mine
maintenance workshop and the commencement of the underground
development.




38





Grey Fox and Pike River
Exploration Properties





During
2009 we conducted a 53-hole exploration program, mainly on our Grey Fox
property, and all holes but one intersected gold mineralization.  All
assays on these holes are complete and work continues on production of an
initial National Instrument 43-101 compliant mineral resource estimate,
including some Measured and Indicated Resources, covering the first 500 meters
of strike and a maximum depth of 250 meters at the Contact Zone, expected to be
completed in the third quarter of 2010.  At the beginning of April 2010, we
commenced our 2010 exploration drilling program targeted on both Grey Fox and
Pike River.





Production
& Metals Price Averages




The table
below summarizes our production of gold and silver, as well as average metal
prices and other key statistics, for the three and six months ended June 30,
2010:





Three months
                  ended
                  June 30,
                  2010
              
              
              Three months
                  ended
                  June 30,
                  2009 (1)
              
              
              Six months
                  ended
                  June 30,
                  2010
              
              
              Six months
                  ended
                  June 30,
                  2009(1)Metal
      Sales:Gold
      (ounces)
              
              
              18,430
              
              
              
              5,043
              
              
              
              34,226
              
              
              
              5,043Silver
      (ounces)
              
              
              953
              
              
              
              –
              
              
              
              1,883
              
              
              
              –Total
      revenue ($millions)
              
              $
              22.2
              
              
              $
              4.7
              
              
              $
              39.8
              
              
              $
              4.7Gold
      ounces produced
              
              
              18,028
              
              
              not
      available
              
              
              
              32,203
              
              
              not
      availableOre
      tonnes mined
              
              
              228,400
              
              
              not
      available
              
              
              
              418,400
              
              
              not
      availableTotal
      tonnes mined
              
              
              2,028,460
              
              
              not
      available
              
              
              
              4,090,060
              
              
              not
      availableTonnes
      milled
              
              
              178,357
              
              
              not
      available
              
              
              
              356,357
              
              
              not
      availableTonnes
      per day milled
              
              
              1,960
              
              
              not
      available
              
              
              
              3,938
              
              
              not
      availableHead
      grade of ore (gpt)
              
              
              3.43
              
              
              not
      available
              
              
              
              3.06
              
              
              not
      availableRecovery
      (%)
              
              
              92
              
              
              not
      available
              
              
              
              93
              
              
              not
      availableTotal
      cash and production costs on a by-product basis:Total
      cash costs per ounce of gold
              
              $
              448
              
              
              $
              403
              
              
              $
              532
              
              
              $
              403Total
      production costs per ounce of gold
              
              $
              676
              
              
              $
              618
              
              
              $
              761
              
              
              $
              618Average
      metal prices:Gold
      – London bullion market ($/ounce)
              
              $
              1,196
              
              
              $
              922
              
              
              $
              1,152
              
              
              $
              916Silver
      – London bullion market ($/ounce)
              
              $
              18.32
              
              
              $
              13.76
              
              
              $
              17.62
              
              
              $
              13.19





(1) The Black Fox mine began
commercial productions in late May 2009 so the three and six months ended June
30, 2009 represent approximately one month of gold sales.





RECONCILIATION
OF CASH OPERATING AND TOTAL PRODUCTION COSTS PER OUNCE





($ in thousands)
                
                Three months
                    ended
                    June 30,
                    2010
                
                
                Three months
                    ended
                    June 30,
                    2009 (1)
                
                
                Six months
                    ended
                    June 30,
                    2010
                
                
                Six months
                    ended
                    June 30,
                    2009(1)Gold
      ounces sold
                
                
                18,430
                
                
                
                5,043
                
                
                
                34,226
                
                
                
                5,043Direct
      operating costs
                
                $
                8,274
                
                
                $
                2,034
                
                
                $
                18,258
                
                
                $
                2,034Less: 
      By-product credits
                
                
                (18
                )
                
                
                –
                
                
                
                (34
                )
                
                
                –Cash
      operating costs and Total cash costs
                
                
                8,256
                
                
                
                2,034
                
                
                
                18,224
                
                
                
                2,034Add: 
      Depreciation & amortization (operations only)
                
                
                4,023
                
                
                
                1,013
                
                
                
                7,478
                
                
                
                1,013Add: 
      Accretion on accrued site closure costs
                
                
                177
                
                
                
                69
                
                
                
                352
                
                
                
                69Total
      production costs
                
                
                12,456
                
                
                
                3,116
                
                
                
                26,054
                
                
                
                3,116Cash
      operating cost per ounce of gold
                
                $
                448
                
                
                $
                403
                
                
                $
                532
                
                
                $
                403Total
      cash cost per ounce of gold
                
                $
                448
                
                
                $
                403
                
                
                $
                532
                
                
                $
                403Total
      production cost per ounce of gold
                
                $
                676
                
                
                $
                618
                
                
                $
                761
                
                
                $
                618





(1) The Black Fox mine began
commercial productions in late May 2009 so the three and six months ended June
30, 2009 represent approximately one month of gold sales.


39


MATERIAL
CHANGES IN RESULTS OF OPERATIONS




Three
Months Ended June 30, 2010 Compared to the Three Months Ended June 30,
2009




In late
May 2009, Black Fox, the Company’s only producing property, entered commercial
production.  Therefore, there was only about one month of activity to
report for the three months ended June 30, 2009 for revenue from the sale of
gold, direct operating costs, depreciation and amortization, and accretion
expense – accrued site closure costs.





Revenue
from the Sale of Gold




Revenue
for the three months ended June 30, 2010 was $22.2 million compared to $4.7
million for the same period in 2009. The average spot price recorded for
gold for the three months ended June 30, 2010 was $1,219 per ounce. Gold
sold for the three months ended June 30, 2010 was 18,430 ounces.  Of the
18,430 ounces gold sold during the quarter, 14,558 ounces were delivered against
our gold forward sales contracts and therefore cash received was at a realized
price of $875 per ounce, while the balance of 3,872 ounces of gold were sold at
spot at an average of $1,238 per ounce.  For gold sales delivered into the
gold forward sales contracts, the difference between the average spot price per
ounce of gold and the forward sales contract price is recorded as a realized
loss on derivative instruments which amounted to a realized loss in the quarter
of $4.6 million.




Operating
Expenses




Direct Operating Costs.Direct operating costs at Black Fox, which include mining costs and
processing costs, for the three months ended June 30, 2010 were $8.3 million,
compared to $2.0 million for the three months ended June 30, 2009.




Depreciation and
Amortization.  Depreciation and amortization expenses were $4.0
million and $1.0 million for the three months ended June 30, 2010 and 2009,
respectively.




Accretion Expense – Accrued Site
Closure Costs.Accrued accretion expense was $0.2 million for the
three months ended June 30, 2010 compared to $0.1 million for the same period in
2009.





General and Administrative
Expenses.General and administrative expenses were $3.7 million and
$1.1 million for the three months ended June 30, 2010 and 2009,
respectively.  The increase is primarily a result of (1) termination costs
for the former President and CEO, (2) increased consulting fees in connection
with the Project Facility, (3) increased accounting and legal fees, related to
increased SOX and disclosure requirements, and (4) personnel and recruitment
costs.




Exploration and Business
Development.Expenses for exploration and development, consisting
of drilling and maintaining our exploration properties, totaled $1.4 million and
$0.3 million for the three months ended June 30, 2010 and 2009,
respectively.  During the second quarter of 2010, we spent $1.1 million for
exploration activities at our Grey Fox and Pike River properties in Canada and
$0.3 million at our Huizopa property in Mexico.




Total Operating
Expenses.  As a result of these expense components, our total
operating expenses for the three months ended June 30, 2010 were $17.6 million,
compared to $4.5 million for the three months ended June 30, 2009.  The
increase is primarily due to the commencement of commercial production in late
May 2009 at Black Fox.




Other
Income (Expenses)




Interest Expense.We
recorded interest expense of $2.7 million during the three months ended June 30,
2010 compared to $1.3 million during the three months ended June 30, 2009. 
The increase is a result of increased borrowings in conjunction with the $70
million Project Facility and an increase in capital leases and interest
thereon.  Additionally, interest of $1.0 million was capitalized for the
development of the Black Fox project during the three months ended June 30,
2009.




40


Linear Acquisition
Costs.  During the three months ended June 30, 2010, we recorded
$2.6 million for costs related to the business combination with Linear. 
Costs included legal, accounting and investment banking fees to complete the
Arrangement.





Fair Value Change on Equity-Linked
Financial Instruments.  During the three months ended June 30, 2010
and 2009, we recorded a gain of $1.9 million and a loss of $8.8 million,
respectively, for the change in fair value of certain warrants to purchase our
common shares denominated in a foreign currency (the Canadian dollar) due to
these warrants being treated as derivative instruments rather than equity
instruments for accounting purposes.





Realized (Losses) Gains on
Derivative Instruments.For the three months ended June 30, 2010
and 2009, we recorded realized gains on derivative instruments of $3.6 million
and realized losses of $0.5 million, respectively.  The $3.6 million
realized gains for the three months ended June 30, 2010 are comprised of $8.2
million gains for Canadian dollar contracts settled, partially offset by $4.6
million losses for gold forward sales contracts settled.  The $8.2 million
gain on Canadian dollar contracts was the result of unwinding all of our
Canadian dollar exchange contracts associated with the Project
Facility.





Unrealized Gains (Losses) on
Derivative Instruments.For the three months ended June 30, 2010
and 2009, we recorded unrealized losses on derivative instruments of $23.9
million and unrealized gains of $3.4 million, respectively.  The $23.9
million unrealized gains for the three months ended June 30, 2010 are comprised
of (1) $15.7 million for the change in fair value of the outstanding gold
forward sales contracts and (2) $8.2 million for the change in value of Canadian
dollar contracts.  The $3.4 million unrealized gains for the three months
ended June 30, 2009 are comprised of (1) an unrealized loss $0.6 million for the
change in value recorded for gold forward sales contracts and (2) an unrealized
gain of $4.0 million for the change in value of the Canadian dollar
contracts.





Net
Loss




As a
result of the foregoing, the Company recorded a net loss of $19.7 million, or
($0.23) per share, for the three months ended June 30, 2010, as compared to a
net loss of $7.2 million, or ($0.12) per share, for the three months ended June
30, 2009.




Six
Months Ended June 30, 2010 Compared to the Six Months Ended June 30,
2009




In late May 2009, Black Fox, the
Company’s only producing property, entered commercial production. 
Therefore, there was only about one month of activity to report for the six
months ended June 30, 2009 for revenue from the sale of gold, direct operating
costs, depreciation and amortization, and accretion expense – accrued site
closure costs.





Revenue
from the Sale of Gold




Revenue
for the six months ended June 30, 2010 was $39.8 million compared to $4.7
million for the same period in 2009.  The average spot price recorded for
gold for the six months ended June 30, 2010 was $1,163 per ounce.  Gold
sold for the six months ended June 30, 2010 was 34,226 ounces.  Of the
34,226 ounces gold sold during the quarter, 30,373 ounces were delivered against
our gold forward sales contracts and therefore cash received was at a realized
price of $875 per ounce, while the balance of 3,872 ounces of gold were sold at
spot at an average of $1,238 per ounce.  For gold sales delivered into the
gold forward sales contracts, the difference between the average spot price per
ounce of gold and the forward sales contract price is recorded as a realized
loss on derivative instruments which amounted to a realized loss for the six
months ended June 30, 2010 of $8.3 million.




Operating
Expenses




Direct Operating Costs.Direct operating costs at Black Fox, which include mining costs and
processing costs, for the six months ended June 30, 2010 were $18.3 million,
compared to $2.0 million for the six months ended June 30, 2009.




Depreciation and
Amortization.  Depreciation and amortization expenses were $7.5
million and $1.0 million for the six months ended June 30, 2010 and 2009,
respectively.


41


Accretion Expense – Accrued Site
Closure Costs.Accrued accretion expense was $0.4 million for the
six months ended June 30, 2010 compared to $0.1 million for the same period in
2009.





General and Administrative
Expenses.General and administrative expenses were $5.6 million and
$2.0 million for the six months ended June 30, 2010 and 2009,
respectively.  The increase is a primarily a result of (1) termination
costs for the former President and CEO, (2) increased consulting fees in
connection with the Project Facility, (2) increased accounting and legal fees,
related to increased SOX and disclosure requirements, and (3) increased
personnel and recruiting costs.




Exploration and Business
Development.Expenses for exploration and development totaled $1.7
million and $0.5 million for the six months ended June 30, 2010 and 2009,
respectively.  The increase is due to increased exploration activities at
our Grey Fox and Pike River properties in Canada.




Total Operating
Expenses.  As a result of these expense components, our total
operating expenses for the six months ended June 30, 2010 were $33.4 million,
compared to $5.7 million for the six months ended June 30, 2009.  The
increase is primarily due to the commencement of commercial production in late
May 2009 at Black Fox.




Other
Income (Expenses)




Interest Expense.We
recorded interest expense of $6.0 million during the six months ended June 30,
2010 compared to $2.1 million during the six months ended June 30, 2009. 
The increase is a result of increased borrowings in conjunction with the $70
million Project Facility and an increase in interest on capital leases. 
Additionally, interest of $1.8 million was capitalized for the development of
the Black Fox project during the six months ended June 30, 2009.




Linear Acquisition
Costs.  During the six months ended June 30, 2010, we recorded $3.2
million for costs related to the business combination with Linear.  Costs
included legal, accounting and investment banking fees to complete the
Arrangement.





Fair Value Change on Equity-Linked
Financial Instruments.  During the six months ended June 30, 2010
and 2009, we recorded a gain of $11.9 million and a loss of $13.6 million,
respectively, for the change in fair value of certain warrants to purchase our
common shares denominated in a foreign currency (the Canadian dollar) due to
these warrants being treated as derivative instruments rather than equity
instruments for accounting purposes.





Realized (Losses) Gains on
Derivative Instruments.For the six months ended June 30, 2010 and
2009, we recorded realized gains on derivative instruments of $0.3 million and
realized losses of $0.1 million, respectively.  The $0.3 million realized
gains for the six months ended June 30, 2010 are comprised of $8.6 million gains
for Canadian dollar contracts settled, partially offset with $8.3 million losses
for gold forward sales contracts settled.  $8.2 million of the gain on
Canadian dollar contracts was the result of unwinding all of our Canadian dollar
contracts in April 2010.





Unrealized Gains (Losses) on
Derivative Instruments.For the six months ended June 30, 2010 and
2009, we recorded unrealized losses on derivative instruments of $21.9 million
and $15.0 million, respectively.  The $21.9 million unrealized losses for
the six months ended June 30, 2010 are comprised of (1) $15.1 million for the
change in fair value of the outstanding gold forward sales contracts and (2)
$6.8 million for the change in value of Canadian dollar foreign currency
contracts.  The $15.0 million unrealized losses for the six months ended
June 30, 2009 are comprised of (1) an unrealized loss $16.7 million for the
change in value recorded for gold forward sales contracts (2) an unrealized gain
of $2.2 million for the change in value of the Canadian dollar contracts and (3)
a $0.5 million loss for the change in value recorded for gold, silver and lead
contracts held at the beginning of 2009.





Net
Loss




As a
result of the foregoing, the Company recorded a net loss of $13.2 million, or
($0.17) per share, for the six months ended June 30, 2010, as compared to a net
loss of $35.6 million, or ($0.62) per share, for the six months ended June 30,
2009.




42


MATERIAL
CHANGES IN LIQUIDITY




To date,
we have funded our operations primarily through issuances of debt and equity
securities and cash generated by Black Fox.  At June 30, 2010, we had cash
of $4.7 million, compared to cash of nil at December 31, 2009.  The
increase in cash since December 31, 2009 included operating cash inflows of
$10.0 million, offset by investing cash outflows of $0.8 million and financing
cash outflows of $3.9 million.




During
the six months ended June 30, 2010, net cash used in investing activities
totaled $0.8 million, consisting of capital expenditures for plant and equipment
of $5.1 million at Black Fox and an $11.1 million increase in restricted cash,
mostly offset by cash acquired in the Linear acquisition of $15.4
million.




During
the six months ended June 30, 2010, cash used in financing activities was $3.9
million.  Cash outflows were for repayments of debt of $30.5 million, $28.2
million of which was for the Project Facility loan with the Banks, which reduced
the amount owing to the Banks from $70 million down to $41.8 million at June 30,
2010.  These outflows were partially offset by cash provided by financing
activities including $24.5 million from the issuance of shares to Linear plus
$2.2 million from the exercise of warrants both occurring during the first
quarter of 2010.




On July
29, 2010 we completed a Cdn$14.0 million flow-through offering.  On August
2, 2010, we reached an agreement with the banks to revise the debt repayment
schedule and defer the $10.0 million payment that was scheduled for September
30, 2010.  We estimate that with the Cdn$14.0 million flow-through offering
and the deferral of the $10.0 million Project Facility debt repayment, Brigus
will have adequate funds to (1) fund all of the 2010 work programs for the
continued development of Black Fox estimated at $25 million, (2) fund $4.0
million of exploration at our Grey Fox and Pike River properties, (3) make the
originally scheduled $15.0 million debt repayments to the banks and (4) fund
corporate overhead for the balance of the year.  The Company may be
required or choose to access debt or equity markets in the next year to meet
additional Project Facility obligations.




MATERIAL
CHANGES IN CONTRACTUAL OBLIGATIONS




Not
applicable.




MATERIAL
CHANGES IN OFF BALANCE SHEET ARRANGEMENTS




Not
applicable.




ACCRUED
RECLAMATION COSTS




As of
June 30, 2010, we have accrued $5.6 million related to reclamation obligations
at our Black Fox property.  These liabilities are covered by restricted
certificates of deposit of $14.6 million at June 30, 2010.  We have accrued
the present value of management’s estimate of these liabilities as of June 30,
2010.




DIFFERENCES
BETWEEN U.S. AND CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(GAAP)




The
Company reports under U.S. GAAP and reconciles to Canadian GAAP.  The
application of Canadian GAAP has a significant effect on the net loss and net
loss per share.  For a detailed explanation see Note 20 of our interim
financial statements.




CRITICAL
ACCOUNTING ESTIMATES AND POLICIES




The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make a variety of estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting periods covered by the financial statements.




For other
critical accounting policies, please refer to those disclosed in our 10-K filing
for the year ended December 31, 2009 and to the changes in accounting policies
described below.


43


CHANGES
IN ACCOUNTING POLICIES




In June
2009, the ASC guidance for consolidation accounting was updated to require an
entity to perform a qualitative analysis to determine whether the enterprise’s
variable interest gives it a controlling financial interest in a variable
interest entity (“VIE”).  This analysis identifies a primary beneficiary of
a VIE as the entity that has both of the following characteristics: (i) the
power to direct the activities of a VIE that most significantly impact the
entity’s economic performance and (ii) the obligation to absorb losses or
receive benefits from the entity that could potentially be significant to the
VIE.  The updated guidance also requires ongoing reassessments of the
primary beneficiary of a VIE.  The provisions of the updated guidance are
effective for our fiscal year beginning January 1, 2010.  The provisions of
the updated guidance were adopted January 1, 2010.  The adoption had no
impact on our financial position, results of operations, or cash
flows.





In
January 2010, the ASC guidance for fair value measurements and disclosure was
updated to require additional disclosures related to transfers in and out of
level 1 and 2 fair value measurements and enhanced detail in the level 3
reconciliation. The guidance was amended to clarify the level of disaggregation
required for assets and liabilities and the disclosures required for inputs and
valuation techniques used to measure the fair value of assets and liabilities
that fall in either level 2 or level 3.  The updated guidance was effective
for the Company’s fiscal year beginning January 1, 2010, with the exception of
the level 3 disaggregation which is effective for the Company’s fiscal year
beginning January 1, 2011.  The adoption had no impact on our financial
position, results of operations, or cash flows.  Refer to Note 17 for
further details regarding the Company’s assets and liabilities measured at fair
value.





In
December 2009, the ASC guidance for stock compensation was updated to address
the classification of employee share-based awards with exercise prices
denominated in the currency of a market in which the underlying security
trades.  The updated guidance provides that employee share-based awards
with an exercise price denominated in the currency of a market in which a
substantial portion of the entity’s equity securities trade should not be
considered to contain a condition that is not a market, performance, or service
condition.  Therefore, such awards would not be classified as liabilities
if they otherwise qualify as equity.  The provisions of the updated
guidance have been early adopted by the Company effective April 1, 2010. 
Although, the adoption had no impact on the Company’s financial position,
results of operations, or cash flows on April 1, 2010, the guidance dictated
that the 3,448,746 options issued to former Linear employees on June 24, 2010 be
classified as equity upon issuance.





Election
to Become a Foreign Private Issuer in the U.S.




Brigus
currently reports its financial statements as a domestic issuer both with the
United States and Canada regulatory agencies.  The Company has elected to
streamline its administrative functions and become a “foreign private issuer”
under the U.S. Securities Laws, beginning with its Q3 2010 financial reporting,
based on the fact that less than 50% of the holders of the Company’s common
shares are residents of the United States and all assets are located and
administered outside of the United States.  As a result, going forward in
the United States, the periodic reporting requirements will consist of filing an
annual report on Form 20-F and quarterly financial results on Form 6-K. 
There is no change to the filings for the Company in Canada with filings made on
www.SEDAR.com.





Transition
to International Financial Reporting Standards




We have
been monitoring the deliberations and progress being made by accounting standard
setting


bodies
and securities regulators both in the United States and Canada and with respect
to their plans regarding convergence to International Financial Reporting
Standards (IFRS).  We file our financial statements with both US securities
and Canadian and regulators in accordance with US GAAP, as permitted under
current regulations. In 2008, the Accounting Standards Board in Canada and the
Canadian Securities Administrators (CSA) confirmed that domestic issuers will be
required to transition to IFRS for fiscal years beginning on or after January 1,
2011.  In conjunction with Brigus election to become a “foreign private
issuer” under the U.S. Securities Laws, the Company initiated a plan to
transition from accounting principles generally accepted in the United States
(“US GAAP”) to IFRS effective January 1, 2011.  The transition is
anticipated to be retroactive and effective for the year beginning January 1,
2010, with initial  presentation of the consolidated financial statements
prepared in accordance with IFRS to be filed with our quarterly report on Form
6-K for the three month period ending March 31, 2011.


44





We are
currently developing our IFRS change-over plan.  Towards this end we have
retained qualified professional personnel to oversee and effect the conversion
process.  It is expected that the plan will take into consideration, among
other things:




•
            Changes
      in note disclosures;


•
            Information
      technology and data system
requirements;


•
            Disclosure
      controls and procedures, including investor relations and external
      communications plans related to the conversion to
  IFRS;


•
            Financial
      reporting expertise requirements, including training of personnel;
      and


•
            Impacts
      on other business activities that may be influenced by IFRS measures, such
      as performance measures and debt
covenants.





ITEM 3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Our
exposure to market risk includes, but is not limited to, the following risks:
changes in interest rates, changes in foreign currency exchange rates, commodity
price fluctuations and equity price risk.




Interest
Rate Risk




As of
June 30, 2010, the Company had $41.8 million principal outstanding on the
Project Facility.  The terms of the Project facility include interest on
the outstanding principal amount accruing at a rate equal to LIBOR plus 7% per
annum and interest being repayable in monthly installments (currently the LIBOR
rate is the one-month rate but the LIBOR rate used may be monthly, quarterly or
such other period as may be agreed to by the Banks and us).  We estimate
that given the expected outstanding debt during 2010, a one percent change in
LIBOR interest rates would affect our annual interest expense by $0.5
million.  See Note 17(e) to our financial statements above for more
information regarding our interest rate risk.




Foreign
Currency Exchange Rate Risk




While the
majority of our sales transactions are denominated in U.S. dollars, a major
portion of our purchases of labor, operating supplies and capital assets are
denominated in Canadian dollars.  The appreciation of non-US dollar
currencies against the US dollar increases the costs of goods and services
purchased in non-US dollar, which can adversely impact our net income and cash
flows.  Conversely, a depreciation of non-US dollar currencies against the
US dollar usually decreases the costs of goods and services purchased in US
dollar terms.




The value
of cash and cash equivalent investments denominated in foreign currencies also
fluctuates with changes in currency exchange rates.  Appreciation of non-US
dollar currencies results in a foreign currency gain on such investments and a
decrease in non-US dollar currencies results in a loss.





Commodity
Price Risk




The
profitability of the Company’s operations will be dependent upon the market
price of gold. Gold prices fluctuate widely and are affected by numerous factors
beyond the control of the Company. The level of interest rates, the rate of
inflation, the world supply of gold and the stability of exchange rates can all
cause significant fluctuations in prices. Such external economic factors are in
turn influenced by changes in international investment patterns, monetary
systems and political developments. The price of gold has fluctuated widely in
recent years, and future price declines could cause some projects to become
uneconomic, thereby having a material adverse effect on the Company’s business
and financial condition.  We have entered into derivative contracts to
protect the selling price for gold.  At June 30, 2010, the remaining
contracts cover 169,978 ounces at an average price of $876 per ounce over the
period through March 2013.  See Notes 6 and 17(f) to our financial
statements above for more information regarding our commodity price risk and how
we manage that risk.  We may in the future more actively manage our
exposure through additional commodity price risk management
programs.




Furthermore,
reserve calculations and life-of-mine plans using significantly lower gold
prices could result in material write-downs of the Company’s investment in
mining properties and increased amortization.


45




In
addition to adversely affecting the Company's reserve estimates and its
financial condition, declining gold prices could require a reassessment of the
feasibility of a particular project. Such a reassessment may be the result of a
management decision or may be required under financing arrangements related to a
particular project. Even if the project is ultimately determined to be
economically viable, the need to conduct such a reassessment may cause delays in
the implementation of the project.




Equity
Price Risk




We have
in the past and may in the future seek to acquire additional funding by sale of
common shares.  Movements in the price of our common shares have been
volatile in the past and may be volatile in the future.  As a result, there
is a risk that we may not be able to sell new common shares at an acceptable
price should the need for new equity funding arise.




ITEM 4.
            CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures




We
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, or Exchange Act) as of June 30,
2010.  This evaluation was conducted under the supervision and with the
participation of management, including our Chief Executive Officer and Chief
Financial Officer.  Based upon this evaluation, our Chief Executive Officer
and Chief Financial Officer have concluded that, as of June 30, 2010, our
disclosure controls and procedures were effective to provide reasonable
assurance that information required to be disclosed by us in reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the rules and forms of the SEC.  We
also concluded that our disclosure controls and procedures are effective to
provide reasonable assurance that information required to be disclosed in the
reports filed or submitted under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required
disclosure.




Changes
in Internal Control




There has
been no change in our internal control over financial reporting during the
quarter ended June 30, 2010, that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.




PART II — OTHER INFORMATION




ITEM 1.
            LEGAL
      PROCEEDINGS




On
September 4, 2009, Joe Green and companies owned or controlled by him, including
a Mexican company named Minas de Coronado, S. de R.L. de C.V., with whom the
Company’s Mexican subsidiary, Minera Sol de Oro, S.A. de C.V., has a joint
venture relationship at the Huizopa exploration project in the State of Sonora,
Mexico, filed a complaint against us in the United States District Court for the
District of Nevada.  In that complaint, Mr. Green alleges, among other
things, that we and Minera Sol de Oro have breached various agreements and
alleged fiduciary duties and have failed to recognize Minas de Coronado’s right
to a joint venture interest in the Huizopa exploration project, and asks the
Court to undo the parties’ 80/20 joint venture arrangement and compel the return
of the Huizopa exploration project properties to Mr. Green’s companies.  We
believe that the claims in the complaint are without merit, and intend to
vigorously defend ourselves against those claims.




On
October 5, 2009, we filed a motion to dismiss the complaint and to compel
arbitration or, in the alternative, to stay proceedings pending the conclusion
of the arbitration.  On March 2, 2010, the court held a hearing on that
motion and on March 9, 2010, the court granted our motion and dismissed the
action.   On April 8, 2010, Mr. Green appealed the March 9, 2010
Nevada District Court decision to the Ninth Circuit Court of Appeals.  On
June 18, 2010, Mr. Green and Brigus filed a dismissal with prejudice agreement
with the Ninth Circuit, requesting an order dismissing the lawsuit with
prejudice.  We are still waiting on that order from the Ninth Circuit, but
have no reason to believe it would not be entered.




46


ITEM 1A.
            RISK
      FACTORS




In
addition to the other information set forth in this report, you should carefully
consider the risk factors below and those discussed in ‘‘Risk Factors’’ in our
Annual Report on Form 10-K for the year ended December 31, 2009, which could
materially affect our business, financial condition and/or future results. 
These risks are not the only risks facing us.  Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial
condition and/or operating results.





We
may be unable to successfully integrate our operations following the
Arrangement.





Achieving
the anticipated benefits of the Arrangement will depend in part upon Brigus’s
ability to integrate its business with Linear’s business in an efficient
and effective manner.  Brigus’s attempt to integrate two companies that
have previously operated independently may result in significant
challenges, and Brigus may be unable to accomplish the integration
smoothly or successfully.  In particular, the necessity of
coordinating geographically dispersed organizations and addressing
possible differences in corporate cultures and management philosophies may
increase the difficulties of integration.  The integration
will require the dedication of significant management resources, which may
temporarily distract management’s attention from the day-to-day operations
of the businesses of the combined company.  The process of integrating
operations after the transaction could cause an interruption of, or loss of
momentum in, the activities of one or more of the combined company’s businesses
and the loss of key personnel.  Employee uncertainty, lack of focus or
turnover during the integration process may also disrupt the businesses of
the combined company.  Any inability of management to integrate the
operations of Brigus and Linear successfully could have a material adverse
effect on the business and financial condition of the combined
company.





Recent
changes in management and on our board of directors may be disruptive to our
business.





In June
2010, in connection with the Arrangement, four out of seven of our board members
resigned and were replaced by three Linear nominees.  In addition, R. David
Russell, our then-President and Chief Executive Officer resigned and Wade
Dawe was appointed as our Chief Executive Officer and Chairman of the
Board.  In addition, on July 31, 2010, we entered into an agreement with
Timothy G. Smith, our Vice President – U.S. and Canadian Operations, pursuant to
which the parties agreed that Mr. Smith’s employment would be terminated as
of July 31, 2010 and that Mr. Smith would provide consulting services from that
time until October 31, 2010.





These
changes and any future additions of new personnel and departures of existing
personnel, particularly in key management positions or on our board of
directors, can be disruptive, might lead to additional departures of existing
personnel and could have a material adverse effect on our business, operating
results, financial condition and internal controls over financial
reporting.  In addition, departures of corporate officers could place
additional cash demands on the Company if related severance payments under
employment contracts are experienced.





Our
exploration and development properties are highly speculative in nature and may
not be successful.





Certain
of our activities are directed toward the development of mineral deposits and
the exploration for and the future development of mineral deposits.
 The exploration for, and development of, precious metal deposits involves
significant risks which even a combination of careful evaluation,
experience and knowledge cannot eliminate.  While the discovery of a
precious metal deposit may result in substantial rewards, few properties
which are explored are ultimately developed into producing mines. 
Major expenses may be required to locate and establish mineral reserves, to
develop metallurgical processes and to construct mining and processing
facilities at a particular site.  Whether a precious metal deposit will be
commercially viable depends on a number of factors, some of which are: the
particular attributes of the deposit, such as size, grade and proximity
to infrastructure; metal prices which are highly cyclical and
unpredictable; and government regulations, including regulations relating
to prices, taxes, royalties, land tenure, land use, importing and exporting of
precious metals and environmental protection.  The exact effect of
these factors cannot be accurately predicted, but the combination of these
factors may result in Linear not receiving an adequate return on invested
capital or abandoning or delaying the development of a mineral
project.





There is
no certainty that the expenditures made by us towards the search and evaluation
of precious metal deposits will result in discoveries of commercial
quantities of such metals.


47


We
will require significant additional capital to continue our exploration and
development activities, and, if warranted, to develop mining
operations.




Substantial
expenditures will be required to develop the Goldfields Project located in
Saskatchewan, Canada and to continue with our exploration at the Grey Fox and
Pike River properties and our Huizopa exploration project, as well as the
recently acquired Ixhuatan project in Chiapas, Mexico and the
exploration properties located in the Dominican Republic.  In order to
develop and explore these projects and properties, we will be required to expend
significant amounts for, among other things, geological and geochemical
analysis, assaying, and, if warranted, feasibility studies with regard to
the results of exploration.  We may not benefit from these investments if
we are unable to identify commercially exploitable mineralized material.
 If we are successful in identifying reserves, we will
require significant additional capital to construct facilities necessary to
extract those reserves.  Our ability to obtain necessary funding
depends upon a number of factors, including the state of the national and
worldwide economy and the price of gold.




We may
not be successful in obtaining the required financing for these or other
purposes on terms that are favorable to us or at all, in which case our
ability to continue operating would be adversely affected.  Failure to
obtain such additional financing could result in delay or indefinite
postponement of further exploration or potential development.




Even
if we are able to acquire capital to continue our exploration and
development activities, there can be no certainty that our exploration and
development activities will be commercially successful.




The
Goldfields Project, Ixhuatan project in Chiapas, Mexico and the
exploration properties located in the Dominican Republic do not produce
gold in commercial quantities.  Similarly, our Grey Fox and Pike
River properties, as well as our Huizopa project, are in the exploration
phase.  Substantial efforts and regulatory hurdles are required
to establish ore reserves through drilling and analysis, to develop
metallurgical processes to extract metal from the ore and, in the case of
new properties, to develop the mining and processing facilities and
infrastructure at any site chosen for mining.  We cannot assure you that
any gold reserves or mineralized material acquired or discovered will be in
sufficient quantities to justify commercial operations or that the funds
required for development can be obtained on a timely basis or at
all.




The
development of the Goldfields Project is subject to a number of risks and its
development into a commercially viable mine cannot be assured.





The
Goldfields Project is currently at the pre-development stage.  Construction
and development of the project is subject to numerous risks, including, but
not limited to, delays in obtaining equipment, material and services essential
to completing construction of the project in a timely manner; changes in
environmental or other government regulations; currency exchange rates;
financing risks; labor shortages; and fluctuation in metal prices, as well as
the continued support of the local community.  There can be
no assurance that the construction will commence or continue in accordance
with current expectations or at all.





In
addition, the Goldfields Project has no recent operating history upon which to
base estimates of future commercial viability.  Estimates of mineral
resources and mineral reserves are, to a large extent, based on the
interpretation of geological data obtained from drillholes and other
sampling techniques and feasibility studies.  This information is used
to calculate estimates of the capital cost and operating costs based upon
anticipated tonnage and grades of gold to be mined and processed, the
configuration of the mineral resource, expected recovery rates, comparable
facility and equipment operating costs, anticipated climatic conditions and
other factors.  As a result, it is possible that difference in such
estimates could have a material adverse effect on our business, financial
condition, results of operations and prospects.  There can be no assurance
that we will be able to complete development of our mineral projects, or any of
them, at all or on schedule or within budget due to, among other things,
and in addition to those factors described above, changes in the economics of
the mineral projects, the delivery and installation of plant and equipment
and cost overruns, or that the current personnel, systems, procedures
and controls will be adequate to support our operations.  Should any
of these events occur, it would have a material adverse effect on our
business, financial condition, results of operations and
prospects.


48


Our
exploration project in the Dominican Republic is subject to a joint
venture.





Our
exploration projects in the Dominican Republic are subject to a joint venture
with Everton Resources Inc. The termination of this joint venture could
potentially have an impact on us and/or our share price.  We are
currently relying on Everton to advance these projects and there is no
assurance that Everton’s funding of these exploration projects
will continue.





We
disclose certain technical information in Canada related to our properties under
Canadian standards, which differs significantly from standards in the
United States




We file
reports in Canada that are prepared in accordance with the requirements of
securities laws in effect in Canada, which differ from the requirements of
United States securities laws. Technical disclosure regarding our
properties included or incorporated by reference in our Canadian filings
on SEDAR (the “Technical Disclosure”) has been prepared in accordance with
the requirements of securities laws in effect in Canada, which differ from
the requirements of the United States securities laws.  The
Technical Disclosure uses terms that comply with reporting standards in
Canada and certain estimates are made in accordance with National
Instrument 43-101 of the Canadian Securities administrators (“NI 43-101”).
 NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure an issuer
makes of scientific and technical information concerning mineral projects.
 Unless otherwise indicated, all mineral reserve and mineral resource
estimates contained in the Technical Disclosure have been prepared in
accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy
and Petroleum Classification System.  These standards differ significantly
from the requirements of the United States Securities and Exchange
Commission, and resource information contained in the Technical Disclosure may
not be comparable to similar information disclosed by U.S. companies.
 For example, use of the terms “probable mineral reserves,” “measured
mineral resources,” “indicated mineral resources” and “inferred mineral
resources” comply with the reporting standards in Canada but are not
recognized by the United States Securities and Exchange Commission.




Under
United States standards, mineralization may not be classified as a “reserve”
unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve
determination is made.




You
should not assume that all or any part of measured or indicated mineral
resources will ever be converted into mineral reserves.  These terms
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility.  In accordance with
Canadian rules, estimates of inferred mineral resources cannot form the basis of
feasibility or other economic studies.  It cannot be assumed that all
or any part of measured mineral resources, indicated mineral resources, or
inferred mineral resources will ever be upgraded to a higher category or that
such resources are economically or legally mineable.  The United
States Securities and Exchange Commission normally only permits issuers to
report mineralization that does not constitute “reserves” as in place
tonnage and grade without reference to unit measures.  In addition, the
definitions of proven and probable mineral reserves used in NI 43-101
differ from the definitions in the United States Securities and
Exchange Commission Industry Guide 7.  Accordingly, information
contained in the Technical Disclosure may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.





ITEM 2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS




In
accordance with Item 2(a) of Form 10-Q, information in respect of unregistered
sales of equity securities is not provided herein because it has been previously
included in a Current Report on Form 8-K.




ITEM 6.
            EXHIBITS




Exhibit No.
            
            Title of Exhibit31.1
            
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act31.2
            
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act32.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act




49


SIGNATURES




In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.




BRIGUS
      GOLD CORP.Date:
              August
      13, 2010
              /s/Wade K.
      DaweWade
      K. Dawe, President andChief
      Executive OfficerDate:
              August
      13, 2010
              /s/Melvyn
      WilliamsMelvyn
      Williams,Chief
      Financial Officer and Senior Vice President Finance and Corporate
      Development




50


Index to
Exhibits





Exhibit No.
            
            Title of Exhibit31.1
            
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act31.2
            
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act32.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act




51