CONSOLIDATED

----

| Vancouver, Canada    |  “Morgan & Company” |
|-------------------------------------|------------------------------------------|
|                                |                                     |
| July 26, 2011                       |  Chartered Accountants              |

----

|                                                                                 |   | March 31, |        |
|--------------------------------------------------------------------------------------|--------|-----------|-------------|
|                                                                                 |   | 2011      |        |   | 2010 |   |
|                                                                                 |   |      |        |   |   |   |
| Assets                                                                               |   |      |        |   |   |   |
|                                                                                 |   |      |        |   |   |   |
| Current assets                                                                       |   |      |        |   |   |   |
| Cash                                                                                 |   | $         | 448,109     |   |   | $ | 228,106 |   |
| Short-term investments                                                               |   |      | 4,336,906   |   |   |   | -- |   |
| Accounts receivable and prepaid expenses                                             |   |      | 86,544      |   |   |   | 119,085 |   |
|                                                                                 |   |      | 4,871,559   |   |   |   | 347,191 |   |
|                                                                                 |   |      |        |   |   |   |   |   |
| Accounts receivable, related parties (Note 9(a))                                     |   |      | 64,000      |   |   |   | -- |   |
| Mineral property interests (Note 3)                                                  |   |      | 483,605     |   |   |   | 454,853 |   |
| Foreign value-added taxes recoverable (Note 4)                                       |   |      | 134,255     |   |   |   | 139,556 |   |
| Equipment (Note 5)                                                                   |   |      | 53,015      |   |   |   | 3,934 |   |
| Investments (Note 6)                                                                 |   |      | 8,184       |   |   |   | 4,613 |   |
| Deferred finance costs                                                               |   |      | --          |   |   |   | 18,692 |   |
| Reclamation deposits (Note 7)                                                        |   |      | 18,000      |   |   |   | 18,000 |   |
|                                                                                 |   |      |        |   |   |   |   |   |
|                                                                                 |   | $         | 5,632,618   |   |   | $ | 986,839 |   |
|                                                                                 |   |      |        |   |   |   |   |   |
| Liabilities                                                                          |   |      |        |   |   |   |   |   |
|                                                                                 |   |      |        |   |   |   |   |   |
| Current liabilities                                                                  |   |      |        |   |   |   |   |   |
| Accounts payable and accrued liabilities                                             |   | $         | 252,234     |   |   | $ | 538,584 |   |
| Accounts payable, related parties (Note 9)                                           |   |      | 194,026     |   |   |   | 1,751,087 |   |
|                                                                                 |   |      | 446,260     |   |   |   | 2,289,671 |   |
| Shareholders’ equity (deficiency)                                              |   |      |        |   |   |   |   |   |
| Share capital (Note 8)                                                               |   |      |        |   |   |   |   |   |
| Authorized: Unlimited number of common shares without par value                      |   |      |        |   |   |   |   |   |
| Issued and fully paid: 149,464,345 (March 31, 2010 – 64,716,988) common shares |   |      | 32,053,685  |   |   |   | 24,596,256 |   |
| Share subscriptions                                                                  |   |      | --          |   |   |   | 873,475 |   |
| Warrants                                                                             |   |      | 2,922,556   |   |   |   | 170,613 |   |
| Contributed surplus                                                                  |   |      | 4,035,325   |   |   |   | 2,276,786 |   |
| Accumulated other comprehensive loss                                                 |   |      | (23,522     | ) |   |   | (27,093 | ) |
| Deficit                                                                              |   |      | (33,801,686 | ) |   |   | (29,192,869 | ) |
|                                                                                 |   |      | 5,186,358   |   |   |   | (1,302,832 | ) |
|                                                                                 |   | $         | 5,632,618   |   |   | $ | 986,839 |   |

|  /s/Michael O’Connor     |   /s/Robin Merrifield, C.A.(S.A.) |   |
|---------------------------------------------------------|---------------------------------------------|--------|
|  Director                      |   Director                        |   |

----

|                                                                                                                      |   | For the years ended March 31, |       |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                                                                      |   | 2011                          |       |   | 2010 |   |   | 2009 |   |
|                                                                                                                      |   |                          |       |   |   |   |   |   |   |
| Expenses                                                                                                                  |   |                          |       |   |   |   |   |   |   |
| Amortization                                                                                                              |   | $                             | 865        |   |   | $ | 865 |   |   | $ | 661 |   |
| Exploration costs (Note 17)                                                                                               |   |                          | 1,702,150  |   |   |   | 379,073 |   |   |   | 952,989 |   |
| Finance costs (Note 9)                                                                                                    |   |                          | 32,428     |   |   |   | 35,579 |   |   |   | 29,646 |   |
| Foreign exchange (gains) / losses                                                                                         |   |                          | 14,438     |   |   |   | (22,860 | ) |   |   | 20,525 |   |
| Legal, accounting and audit                                                                                               |   |                          | 109,125    |   |   |   | 99,981 |   |   |   | 82,593 |   |
| Unsolicited take-over bidexpenses (Note 3)                                                                                |   |                          | 524,212    |   |   |   | -- |   |   |   | -- |   |
| Management and consulting fees    (Note 9(b,d))                                                            |   |                          | 30,000     |   |   |   | 30,000 |   |   |   | 120,000 |   |
| Office and administration                                                                                                 |   |                          | 169,200    |   |   |   | 162,101 |   |   |   | 173,731 |   |
| Salaries and benefits                                                                                                     |   |                          | 381,433    |   |   |   | 230,693 |   |   |   | 193,118 |   |
| Shareholder communications                                                                                                |   |                          | 297,859    |   |   |   | 143,990 |   |   |   | 252,965 |   |
| Stock-based compensation                                                                                                  |   |                          | 1,339,990  |   |   |   | 2,081 |   |   |   | 212,986 |   |
| Travel and conferences                                                                                                    |   |                          | 7,886      |   |   |   | 1,998 |   |   |   | 5,372 |   |
| Write-down of mineral property        acquisition costs (Note 3(d))                    |   |                          | 12,806     |   |   |   | 227,196 |   |   |   | 418,312 |   |
| Interest income                                                                                                           |   |                          | (13,575    | ) |   |   | (4,658 | ) |   |   | (620 | ) |
|                                                                                                                      |   |                          | 4,608,817  |   |   |   | 1,286,039 |   |   |   | 2,462,278 |   |
| Loss before income taxes                                                                                                  |   |                          | (4,608,817 | ) |   |   | (1,286,039 | ) |   |   | (2,462,278 | ) |
| Future income tax recovery (Note 11)                                                                                      |   |                          | --         |   |   |   | 21,137 |   |   |   | 65,702 |   |
| Net loss for the year                                                                                                     |   |                          | (4,608,817 | ) |   |   | (1,264,902 | ) |   |   | (2,396,576 | ) |
|                                                                                                                      |   |                          |       |   |   |   |   |   |   |   |   |   |
| Net loss per common share, basic and diluted                                                                              |   | $                             | (0.06      | ) |   | $ | (0.02 | ) |   | $ | (0.05 | ) |
|                                                                                                                      |   |                          |       |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares         outstanding – basic and diluted |   |                          | 74,757,958 |   |   |   | 64,681,207 |   |   |   | 52,370,459 |   |

|                                                  |   | For the years ended March 31, |       |
|-------------------------------------------------------|--------|-------------------------------|------------|
|                                                  |   | 2011                          |       |   | 2010 |   |   | 2009 |   |
|                                                  |   |                          |       |   |   |   |   |   |   |
|                                                  |   |                          |       |   |   |   |   |   |   |
| Net loss for the year before other comprehensive loss |   | $                             | (4,608,817 | ) |   | $ | (1,264,902 | ) |   | $ | (2,396,576 | ) |
| Unrealized gain/(loss) on investments                 |   |                          | 3,571      |   |   |   | 1,761 |   |   |   | (21,917 | ) |
| Comprehensive loss for the year                       |   | $                             | (4,605,246 | ) |   | $ | (1,263,141 | ) |   | $ | (2,418,493 | ) |

----

|                                        |   | Common SharesWithout Par Value |        |   |   |   |       |                |   |   |     |   |   | Accumulated OtherComprehen-sive Loss |      |   |   |   |      |  Total Shareholders’Equity (Deficiency) |   |
|---------------------------------------------|--------|--------------------------------|-------------|--------|--------|--------|------------|---------------------|--------|--------|----------|--------|--------|--------------------------------------|-----------|--------|--------|--------|-----------|----------------------------------------------------|--------|
|                                        |   | Shares                         |        |   | Amount |   |       | Share subscriptions |   |   | Warrants |   |   | Contributed Surplus                  |      |   |   |   | Deficit   |                                               |   |   |
| Balance, March 31, 2008                     |   |                           | 47,921,073  |   |   |   | 23,776,948 |                |   |   | --       |   |   |                                 | 402,443   |   |   |   | 1,431,756 |                                               |   |   | (6,937 | ) |   |   | (25,531,391 | ) |   |   | 72,819 |   |
| Private placements, less share issue costs  |   |                           | 16,113,835  |   |   |   | 825,937    |                |   |   | --       |   |   |                                 | 379,956   |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 1,205,893 |   |
| Finders’ shares                       |   |                           | 172,080     |   |   |   | 40,290     |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 40,290 |   |
| Agents’ fees                          |   |                           | 340,000     |   |   |   | 17,000     |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   |   |   |   |   | 17,000 |   |
| Warrants expired, unexercised               |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | (210,599  | )      |   |   | 210,599   |                                               |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Mineral property interests                  |   |                           |        |   |   |   |       |                |   |   |     |   |   |                                 |      |   |   |   |      |                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Wine claims                                 |   |                           | 100,000     |   |   |   | 15,000     |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 15,000 |   |
| Future income tax on flow-through shares    |   |                           | --          |   |   |   | (65,702    | )                   |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | (65,702 | ) |
| Stock-based compensation                    |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | 232,883   |                                               |   |   | -- |   |   |   | -- |   |   |   | 232,883 |   |
| Unrealized loss on investments for the year |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | (21,917 | ) |   |   | -- |   |   |   | (21,917 | ) |
| Net loss for the year                       |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | (2,396,576 | ) |   |   | (2,396,576 | ) |
| Balance, March 31, 2009                     |   |                           | 64,646,988  |   |   |   | 24,609,473 |                |   |   | --       |   |   |                                 | 571,800   |   |   |   | 1,875,238 |                                               |   |   | (28,854 | ) |   |   | (27,927,967 | ) |   |   | (900,310 | ) |
| Warrants exercised                          |   |                           | 30,000      |   |   |   | 4,720      |                |   |   | --       |   |   |                                 | --        |   |   |   | (1,720    | )                                                  |   |   | -- |   |   |   | -- |   |   |   | 3,000 |   |
| Warrants expired, unexercised               |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | (401,187  | )      |   |   | 401,187   |                                               |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Share subscriptions                         |   |                           | --          |   |   |   | --         |                |   |   | 873,475  |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   |   |   |   |   | 873,475 |   |
| Mineral property interests                  |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   |   |   |   |   |   |   |
| Blueberry claims                            |   |                           | 40,000      |   |   |   | 3,200      |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 3,200 |   |
| Future income tax on flow-through shares    |   |                           | --          |   |   |   | (21,137    | )                   |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | (21,137 | ) |
| Stock-based compensation                    |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | 2,081     |                                               |   |   | -- |   |   |   | -- |   |   |   | 2,081 |   |
| Unrealized gain on investments for the year |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | 1,761 |   |   |   | -- |   |   |   | 1,761 |   |
| Net loss for the year                       |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | (1,264,902 | ) |   |   | (1,264,902 | ) |
| Balance, March 31, 2010                     |   |                           | 64,716,988  |   |   |   | 24,596,256 |                |   |   | 873,475  |   |   |                                 | 170,613   |   |   |   | 2,276,786 |                                               |   |   | (27,093 | ) |   |   | (29,192,869 | ) |   |   | (1,302,832 | ) |
| Private placement, net of share issue costs |   |                           | 60,463,214  |   |   |   | 3,923,200  |                |   |   | (873,475 | )      |   |                                 | 2,964,974 |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 6,014,699 |   |
| Finders’ shares issued                |   |                           | 144,000     |   |   |   | 12,960     |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 12,960 |   |
| Warrants exercised                          |   |                           | 23,680,143  |   |   |   | 3,464,469  |                |   |   | --       |   |   |                                 | (198,455  | )      |   |   |      |                                               |   |   | -- |   |   |   | -- |   |   |   | 3,266,014 |   |
| Warrants expired, unexercised               |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | (14,576   | )      |   |   | 14,576    |                                               |   |   |   |   |   |   |   |   |   |   | -- |   |
| Mineral property interests                  |   |                           |        |   |   |   |       |                |   |   |     |   |   |                                 |      |   |   |   |      |                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Blueberry claims                            |   |                           | 40,000      |   |   |   | 6,400      |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | -- |   |   |   | 6,400 |   |
| Options exercised                           |   |                           | 420,000     |   |   |   | 50,400     |                |   |   | --       |   |   |                                 | --        |   |   |   | (36,851   | )                                                  |   |   | -- |   |   |   | -- |   |   |   | 13,549 |   |
| Stock-based compensation                    |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | 1,780,814 |                                               |   |   | -- |   |   |   | -- |   |   |   | 1,780,814 |   |
| Unrealized gain on investments for the year |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | 3,571 |   |   |   | -- |   |   |   | 3,571 |   |
| Net loss for the year                       |   |                           | --          |   |   |   | --         |                |   |   | --       |   |   |                                 | --        |   |   |   | --        |                                               |   |   | -- |   |   |   | (4,608,817 | ) |   |   | (4,608,817 | ) |
| Balance, March 31, 2011                     |   |                           | 149,464,345 |   |   | $      | 32,053,685 |                |   | $      | --       |   |   | $                                    | 2,922,556 |   |   | $      | 4,035,325 |                                               |   | $ | (23,522 | ) |   | $ | (33,801,686 | ) |   | $ | 5,186,358 |   |

----

|                                                        |   | For the years ended March 31, |       |
|-------------------------------------------------------------|--------|-------------------------------|------------|
|                                                        |   | 2011                          |       |   | 2010 |   |   | 2009 |   |
|  Cash provided by (used for)                           |   |                          |       |   |   |   |   |   |   |
| Operating activities                                        |   |                          |       |   |   |   |   |   |   |
| Net loss for the year                                       |   | $                             | (4,608,817 | ) |   | $ | (1,264,902 | ) |   | $ | (2,396,576 | ) |
| Items not affecting cash                                    |   |                          |       |   |   |   |   |   |   |   |   |   |
| Amortization                                                |   |                          | 2,530      |   |   |   | 7,624 |   |   |   | 7,814 |   |
| Write-off of exploration assets included in site activities |   |                          | --         |   |   |   | -- |   |   |   | 161,270 |   |
| Stock-based compensation                                    |   |                          | 1,780,814  |   |   |   | 2,081 |   |   |   | 232,883 |   |
| Sale of equipment in Sierra Leone                           |   |                          | --         |   |   |   | (6,393 | ) |   |   | -- |   |
| Foreign exchange                                            |   |                          | 1,139      |   |   |   | 16,082 |   |   |   | 15,016 |   |
| Non-cash finance and administration costs                   |   |                          | (44,455    | ) |   |   | 35,579 |   |   |   | 29,646 |   |
| Write-down of mineral property interests                    |   |                          | 12,806     |   |   |   | 227,196 |   |   |   | 418,312 |   |
| Future income tax recovery                                  |   |                          | --         |   |   |   | (21,137 | ) |   |   | (65,702 | ) |
| Changes in non-cash working capital                         |   |                          |       |   |   |   |   |   |   |   |   |   |
| Accounts receivable and prepaid expenses                    |   |                          | (31,459    | ) |   |   | (87,932 | ) |   |   | 44,020 |   |
| Interest on short term investments                          |   |                          | (11,906    | ) |   |   | -- |   |   |   | -- |   |
| Accounts payable and accrued liabilities                    |   |                          | (267,459   | ) |   |   | 56,704 |   |   |   | 185,345 |   |
| Accounts payable, related parties                           |   |                          | (384,476   | ) |   |   | -- |   |   |   | -- |   |
|                                                        |   |                          | (3,551,283 | ) |   |   | (1,035,098 | ) |   |   | (1,367,972 | ) |
| Investing activities                                        |   |                          |       |   |   |   |   |   |   |   |   |   |
| Mineral property interests                                  |   |                          |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                                           |   |                          | (46,821    | ) |   |   | (81,125 | ) |   |   | (135,006 | ) |
| Foreign value-added taxes recoverable                       |   |                          | 4,162      |   |   |   | 21,156 |   |   |   | (8,256 | ) |
| Short term investments                                      |   |                          | (4,325,000 | ) |   |   | -- |   |   |   | -- |   |
| Deferred finance costs                                      |   |                          | --         |   |   |   | (8,840 | ) |   |   | -- |   |
| Equipment acquisitions                                      |   |                          | (49,946    | ) |   |   | -- |   |   |   | (14,019 | ) |
| Proceeds from disposal of equipment                         |   |                          | --         |   |   |   | 6,393 |   |   |   | 68,083 |   |
|                                                        |   |                          | (4,417,605 | ) |   |   | (62,416 | ) |   |   | (89,198 | ) |
| Financing activities                                        |   |                          |       |   |   |   |   |   |   |   |   |   |
| Due to related parties                                      |   |                          | (1,128,131 | ) |   |   | 264,378 |   |   |   | 365,460 |   |
| Share subscriptions received                                |   |                          | --         |   |   |   | 873,475 |   |   |   | -- |   |
| Issuance of common shares                                   |   |                          | 9,317,022  |   |   |   | 3,000 |   |   |   | 1,263,183 |   |
|                                                        |   |                          | 8,188,891  |   |   |   | 1,140,853 |   |   |   | 1,628,643 |   |
|                                                        |   |                          |       |   |   |   |   |   |   |   |   |   |
| Cash                                                        |   |                          |       |   |   |   |   |   |   |   |   |   |
| Increase (decrease) during the year                         |   |                          | 220,003    |   |   |   | 43,339 |   |   |   | 171,473 |   |
| Balance, beginning of year                                  |   |                          | 228,106    |   |   |   | 184,767 |   |   |   | 13,294 |   |
| Balance, end of year                                        |   | $                             | 448,109    |   |   | $ | 228,106 |   |   | $ | 184,767 |   |
|                                                        |   |                          |       |   |   |   |   |   |   |   |   |   |

----

| 1. | Going concern and nature of operations |
|----|----------------------------------------|

| 2. | Significant accounting policies |
|----|---------------------------------|

|   | (a) | Basis of presentation |
|--------|-----|-----------------------|

|   | (b) | Use of estimates |
|--------|-----|------------------|

----

| 2. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (c) | Cash |
|--------|-----|------|

|   | (d) | Short-term investments |
|--------|-----|------------------------|

|   | (e) | Mineral property interests |
|--------|-----|----------------------------|

|   | (f) | Investments and comprehensive income |
|--------|-----|--------------------------------------|

----

| 2. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (g) | Financial Instruments and Risk Management |
|--------|-----|-------------------------------------------|

----

| 2. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (h) | Equipment |
|--------|-----|-----------|

|   | (i) | Impairment of long-lived assets |
|--------|-----|---------------------------------|

|   | (j) | Income taxes |
|--------|-----|--------------|

|   | (k) | Asset retirement obligations |
|--------|-----|------------------------------|

|   | (l) | Translation of foreign currencies |
|--------|-----|-----------------------------------|

----

| 2. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (m) | Stock-based compensation and warrants |
|--------|-----|---------------------------------------|

|   | (n) | Net loss per common share |
|--------|-----|---------------------------|

|   | (o) | Flow-through shares |
|--------|-----|---------------------|

----

| 2. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (p) | Recent accounting pronouncements |
|--------|-----|----------------------------------|

|   | (i) | Business combinations |
|--------|-----|-----------------------|

|   | (ii) | International Financial Reporting Standards(“IFRS”) |
|--------|------|-----------------------------------------------------------------|

| 3. | Mineral property interests |
|----|----------------------------|

|  Year ended March 31, 2011        |   | Opening Balance |    |   | Incurred |   |   | Write-downs |   |   | Closing Balance |   |
|----------------------------------------|--------|-----------------|---------|--------|----------|--------|--------|-------------|--------|--------|-----------------|--------|
| Nuevo Milenio, Mexico (a)              |   |            | --      |   |     |   | --     |        |   |   | --              |   |   |   | -- |   |
| Goldsmith and other properties, BC (b) |   |            | 188,903 |   |     |   | 24,334 |        |   |   | --              |   |   |   | 213,237 |   |
| Manitoba Properties, Manitoba (c)      |   |            | 253,967 |   |     |   | 16,400 |        |   |   | --              |   |   |   | 270,367 |   |
| Kaslo Silver Property, BC (d)          |   |            | 11,983  |   |     |   | 824    |        |   |   | (12,806         | )      |   |   | 1 |   |
| Las Habas, Mexico (e)                  |   |            | --      |   |     |   | --     |        |   |   | --              |   |   |   | -- |   |
| Total Acquisition Costs                |   | $               | 454,853 |   |     | $      | 41,558 |        |   | $      | (12,806         | )      |   | $ | 483,605 |   |

----

| 3. | Mineral property interests (continued) |
|----|----------------------------------------|

|  Year ended March 31, 2010                  |   | Opening Balance |    |   | Incurred |   |   | Write-downs |   |   | Closing Balance |   |
|--------------------------------------------------|--------|-----------------|---------|--------|----------|--------|--------|-------------|--------|--------|-----------------|--------|
| Casierra Property, Sierra Leone                  |   | $               | 1       |   |     | $      | 25,466 |        |   | $      | (25,467         | )      |   | $ | -- |   |
| Nuevo Milenio, Mexico                            |   |            | --      |   |     |   | --     |        |   |   | --              |   |   |   | -- |   |
| Goldsmith and other properties, British Columbia |   |            | 349,342 |   |     |   | 20,560 |        |   |   | (180,999        | )      |   |   | 188,903 |   |
| Manitoba Properties, Manitoba                    |   |            | 227,221 |   |     |   | 26,746 |        |   |   | --              |   |   |   | 253,967 |   |
| Kaslo Silver Property, British Columbia          |   |            | 11,160  |   |     |   | 823    |        |   |   | --              |   |   |   | 11,983 |   |
| Nacaral, Mexico                                  |   |            | --      |   |     |   | 20,730 |        |   |   | (20,730         | )      |   |   | -- |   |
| Total Acquisition Costs                          |   | $               | 587,724 |   |     | $      | 94,325 |        |   | $      | (227,196        | )      |   | $ | 454,853 |   |

|   | (a) | Nuevo Milenio Property, Nayarit, Mexico |
|--------|-----|-----------------------------------------|

----

| 3. | Mineral property interests (continued) |
|----|----------------------------------------|

|   | (b) | Goldsmith and other properties, British Columbia, Canada |
|--------|-----|----------------------------------------------------------|

|   | (c) | Manitoba Properties |
|--------|-----|---------------------|

|   | (i) | Stephens Lake Property |
|--------|-----|------------------------|

|   | (ii) | Wine Claims |
|--------|------|-------------|

|   | (iii) | Blueberry Property |
|--------|-------|--------------------|

----

| 3. | Mineral property interests (continued) |
|----|----------------------------------------|

|   | (d) | Kaslo Silver Property, Kaslo, British Columbia, Canada |
|--------|-----|--------------------------------------------------------|

|   | (i) | Bismark Claims |
|--------|-----|----------------|

|   | (ii) | Black Bear Group of Claims |
|--------|------|----------------------------|

|   | (iii) | Black Fox Claims |
|--------|-------|------------------|

|   | (e) | Las Habas Property, Mexico |
|--------|-----|----------------------------|

----

| 5.  | Equipment |
|----------|-----------|

|               |   | March 31, 2011 |   |   | March 31, 2010           |   |
|--------------------|--------|----------------|--------|--------|--------------------------|--------|
|               |   | Cost           |   |   | Accumulated Amortization |   |   | Net BookValue |   |   | Cost |   |   | Accumulated Amortization |   |   | Net BookValue |   |
| Vehicles           |   | $              | 76,263 |   |                     | $      | 25,535 |   |   | $ | 50,728 |   |   | $ | 36,597 |   |   | $ | 34,936 |   |   | $ | 1,661 |   |
| Office equipment   |   |           | 1,150  |   |                     |   | 919 |   |   |   | 231 |   |   |   | 1,059 |   |   |   | 680 |   |   |   | 379 |   |
| Computer equipment |   |           | 11,706 |   |                     |   | 9,650 |   |   |   | 2,056 |   |   |   | 13,343 |   |   |   | 11,449 |   |   |   | 1,894 |   |
|               |   | $              | 89,119 |   |                     | $      | 36,104 |   |   | $ | 53,015 |   |   | $ | 50,999 |   |   | $ | 47,065 |   |   | $ | 3,934 |   |

| 6.  | Investments |
|----------|-------------|

|    March 31, 2011                                |   |  Number ofShares |     |   |   Cost |   |     | Accumulated unrealized holding gains (loss) |   |   |   Fair Value |   |
|-----------------------------------------------------------------|--------|-----------------------|----------|--------|------------------|--------|----------|---------------------------------------------|--------|--------|------------------------|--------|
| Publicly traded companies:                                      |   |                  |     |   |             |   |     |                                        |   |   |                   |   |
| ValGold Resources Ltd.                                          |   |                  | 20,000   |   |             | $      | 30,000   |                                        |   | $      | (23,800                | )      |   | $ | 6,200 |   |
| Abitibi Mining Corp.                                            |   |                  | 7,000    |   |             |   | 210      |                                        |   |   | (118                   | )      |   |   | 92 |   |
| Mercator Minerals Ltd.                                          |   |                  | 504      |   |             |   | 698      |                                        |   |   | 995                    |   |   |   | 1,693 |   |
| Emgold Mining Corporation                                       |   |                  | 200      |   |             |   | 480      |                                        |   |   | (453                   | )      |   |   | 27 |   |
| Sultan Minerals Inc.                                            |   |                  | 2,630    |   |             |   | 316      |                                        |   |   | (146                   | )      |   |   | 170 |   |
|                                                            |   |                  |     |   |             |   | 31,704   |                                        |   |   | (23,522                | )      |   |   | 8,182 |   |
| Non-public companies:                                           |   |                  |     |   |             |   |     |                                        |   |   |                   |   |   |   |   |   |
| Terra Gaia Inc.                                                 |   |                  | 100,000  |   |             |   | 1        |                                        |   |   | --                     |   |   |   | 1 |   |
| Quorum Management and Administrative Services Inc. (Note 9 (a)) |   |                  |   1 |   |             |   |   1 |                                        |   |   |   --              |   |   |   |   1 |   |
|                                                            |   |                  |     |   |             | $      | 31,706   |                                        |   | $      | (23,522                | )      |   | $ | 8,184 |   |

|    March 31, 2010                   |   |  Number ofShares |    |   |   Cost |   |   | Accumulated unrealized holding gains (loss) |   |   |   Fair Value |   |
|----------------------------------------------------|--------|-----------------------|---------|--------|------------------|--------|--------|---------------------------------------------|--------|--------|------------------------|--------|
| Publicly traded companies:                         |   |                  |    |   |             |   |   |                                        |   |   |                   |   |
| ValGold Resources Ltd.                             |   |                  | 20,000  |   |             | $      | 30,000 |                                        |   | $      | (27,100                | )      |   | $ | 2,900 |   |
| Abitibi Mining Corp.                               |   |                  | 7,000   |   |             |   | 210    |                                        |   |   | 35                     |   |   |   | 245 |   |
| Mercator Minerals Ltd.                             |   |                  | 504     |   |             |   | 698    |                                        |   |   | 587                    |   |   |   | 1,285 |   |
| Emgold Mining Corporation                          |   |                  | 200     |   |             |   | 480    |                                        |   |   | (430                   | )      |   |   | 50 |   |
| Sultan Minerals Inc.                               |   |                  | 2,630   |   |             |   | 316    |                                        |   |   | (185                   | )      |   |   | 131 |   |
|                                               |   |                  |    |   |             |   | 31,704 |                                        |   |   | (27,093                | )      |   |   | 4,611 |   |
| Non-public companies:                              |   |                  |    |   |             |   |   |                                        |   |   |                   |   |   |   |   |   |
| Terra Gaia Inc.                                    |   |                  | 100,000 |   |             |   | 1      |                                        |   |   | --                     |   |   |   | 1 |   |
| Quorum Management and Administrative Services Inc. |   |                  | 1       |   |             |   | 1      |                                        |   |   | --                     |   |   |   | 1 |   |
|                                               |   |                  |    |   |             | $      | 31,706 |                                        |   | $      | (27,093                | )      |   | $ | 4,613 |   |

----

| 6.  | Investments (continued) |
|----------|-------------------------|

| 7.  | Reclamation deposits |
|----------|----------------------|

| 8.  | Share capital |
|----------|---------------|

|   | (a) | a private placement of a total of 22,963,214 units at a price of $0.07 per unit for gross proceeds of $1,607,425.  Each unit is comprised of one common share and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase one additional common share of the Company for a period of 24 months at the exercise price of $0.10 for a period of 12 months from the date of issue of the warrant and at a price of $0.15 for the remaining 12-month period.  The relative fair value of the warrants issued were estimated at $659,782 using the following assumptions: weighted average risk free interest rates – 1.15% to 1.98%; volatility factors of 94% to 131%, adjusted for hold periods and expected exercises, with and an expected life of two years.  The value allocated to each of the warrants was $0.03. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | a private placement of 37,500,000 units at $0.16 per unit for aggregate gross proceeds to the Company of $6,000,000.  Each unit consisted of one common share of the Company and one non-transferable share purchase warrant.  Each warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of $0.24 until December 21, 2012.  Provided that if after four months and one day following the closing date, the common shares of the Company close on the TSX Venture Exchange at a price in excess of $0.60 per common share for 20 consecutive days, the Company will be able to accelerate the expiry of the warrants to the date that is 30 days after notice of the new expiry date is provided to the holders of the warrants.  The relative fair value of the warrants issued were estimated at $2,073,168 using the following assumptions: weighted average risk free interest rate – 1.64%; volatility |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 8.  | Share capital (continued) |
|----------|---------------------------|

----

| 8.  | Share capital (continued) |
|----------|---------------------------|

|                          | Years ended March 31, |
|-------------------------------|-----------------------|
|                          | 2011                  | 2010 | 2009 |
| Risk free interest rate       | 2.7%                  | -- | 1.9% to 2.7% |
| Expected life (years)         | 5.0                   | -- | 3.6 to 5.0 |
| Expected volatility           | 104%                  | -- | 91% to 108% |
| Fair value per option granted | $0.29                 | -- | $0.07 to $0.30 |

|  Exercise Price |  Number Outstanding | Average RemainingContractual Life |
|----------------------|--------------------------|-----------------------------------|
| $0.53                | 310,000                  |                              | 0.83 years |
| $0.50                | 1,211,500                |                              | 1.05 years |
| $0.50                | 150,000                  |                              | 1.68 years |
| $0.12                | 1,660,000                |                              | 2.87 years |
| $0.38                | 6,575,000                |                              | 4.93 years |
|                 | 9,906,500                |                              | 3.93 years |

|                                     |  Number of Shares | Weighted Average Exercise Price |
|------------------------------------------|------------------------|---------------------------------|
| Balance, March 31, 2008                  | 5,349,900              |                            | $0.50 |
| Granted                                  | 2,340,000              |                            | $0.13 |
| Expired, unexercised                     | (957,300)              |                            | $0.54 |
| Cancelled and forfeited                  | (1,305,000)            |                            | $0.69 |
| Balance, March 31, 2009                  | 5,427,600              |                            | $0.29 |
| Expired, unexercised                     | (416,100)              |                            | $0.30 |
| Cancelled and forfeited                  | (160,000)              |                            | $0.36 |
| Balance, March 31, 2010                  |  4,851,500        |                            | $0.29 |
| Granted                                  | 6,575,000              |                            | $0.38 |
| Exercised                                | (420,000)              |                            | $0.12 |
| Expired                                  | (715,000)              |                            | $0.17 |
| Forfeited                                | (385,000)              |                            | $0.45 |
| Balance, March 31, 2011                  | 9,906,500              |                            | $0.36 |
| Vested and exercisable at March 31, 2011 | 9,306,500              |                            | $0.36 |

----

| 8.  | Share capital (continued) |
|----------|---------------------------|

| Number of Warrants | Exercise Price | Expiry Date       |
|--------------------|----------------|-------------------|
| 8,407,071          | $0.10/$0.15    | April 13, 2011/12 |
| 41,250,000         | $0.24          | December 22, 2012 |
| 3,750,000          | $0.16          | December 22, 2012 |
| 53,407,071         |           |              |

|                    |  Number of Warrants | Weighted Average Exercise Price |
|-------------------------|--------------------------|---------------------------------|
| Balance, March 31, 2008 | 2,768,890                |                            | $0.53 |
| Expired, unexercised    | (1,250,000)              |                            | $0.50 |
| Forfeited               | (2,000,000)              |                            | $0.10 |
| Issued                  | 16,641,915               |                            | $0.13 |
| Balance, March 31, 2009 | 16,160,805               |                            | $0.17 |
| Exercised               | (30,000)                 |                            | $0.10 |
| Expired, unexercised    | (6,296,405)              |                            | $0.28 |
| Balance, March 31, 2010 | 9,834,400                |                            | $0.20 |
| Issued                  | 68,107,214               |                            | $0.19 |
| Exercised               | (23,680,143)             |                            | $0.19 |
| Expired                 | (854,400)                |                            | $0.20 |
| Balance, March 31, 2011 | 53,407,071               |                            | $0.22 |

| 9.  | Related party transactions and balances |
|----------|-----------------------------------------|

| Services rendered in the years ended March 31,         |   | 2011   |    |   | 2010   |   |    | 2009   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Quorum Management and Administrative Services Inc. (a) |   | $      | 529,434 |   |   | $      | 405,026 |   |   | $ | 387,673 |   |
| Consulting (d, f)                                      |   |   | 30,000  |   |   |   | 30,000  |   |   |   | 30,000 |   |
| Geological Consulting (e)                              |   |   | 141,838 |   |   |   | 52,299  |   |   | US$120,000 |   |
| Lang Mining Corporation (b)                            |   |   | --      |   |   |   | --      |   |   |   | 90,000 |   |
| Directors                                              |   |   | 32,500  |   |   |   | --      |   |   |   | -- |   |
| Finance costs (c)                                      |   |   | 19,545  |   |   |   | 21,282  |   |   |   | 29,646 |   |

----

| 9.  | Related party transactions and balances (continued) |
|----------|-----------------------------------------------------|

| Balances at:                                           |   | 2011   |    |   | 2010   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Balances payable/(receivable) to (g):                  |   |   |    |   |   |   |
| Quorum Management and Administrative Services Inc. (a) |   | $      | (23,925 | )      |   | $      | 276,333 |   |
| Directors (e, h,)                                      |   |   | 153,951 |   |   |   | 232,564 |   |
| Lang Mining Corporation (b)                            |   |   | --      |   |   |   | 94,500 |   |
| Ainsworth Jenkins - Casierra project (c)               |   |   | --      |   |   |   | 39,109 |   |
| Mr. Frank A. Lang, interest bearing (c)                |   |   | --      |   |   |   | 337,100 |   |
| Mr. Frank A. Lang, advances (c)                        |   |   | --      |   |   |   | 720,000 |   |
| Mr. Frank A. Lang, accrued interest (c)                |   |   | --      |   |   |   | 44,272 |   |
| Mr. Frank A. Lang, expenses payable                    |   |   | --      |   |   |   | 7,209 |   |
|                                                   |   | $      | 130,026 |   |   | $      | 1,751,087 |   |

|   | (a) | Management, administrative, geological and other services are provided by Quorum, a private company held jointly by the Company and other public companies to provide services on a full cost recovery basis to the various public entities sharing office space with the Company.  The Company has a one-third interest in Quorum. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Lang Mining Corporation (“Lang Mining”) is a private company controlled by Frank A. Lang.  Lang Mining provided management services to the Company at a rate of $10,000 per month from November 1, 2006, while Mr. Lang was president of the Company.  At December 31, 2008, the fees were terminated until the financial situation of the Company stabilized and the provision of any future management fees was determined. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Frank A. Lang holds approximately 33% of the issued and outstanding shares of Casierra Diamond Corporation, incorporated in British Columbia and its wholly-owned subsidiary company, Casierra Development Fund Inc., also incorporated in British Columbia, which held an interest in two prospecting licence areas for diamonds and other minerals and metals in Sierra Leone, West Africa, previously held by the Company. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Consulting fees were paid or have been accrued, indirectly to Kent Avenue Consulting Ltd., a private company controlled by a director, Sargent H. Berner.  These fees were paid through Quorum, and are also included in the balance for services provided by Quorum.  Any amount owing to Kent Avenue Consulting Ltd. is owed to Quorum, and is included in the net payable to Quorum. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 9.  | Related party transactions and balances (continued) |
|----------|-----------------------------------------------------|

|   | (e) | Fees were paid or accrued to Fred Holcapek, a director of the Company and an officer of the subsidiary in Mexico, Cream Minerals de Mexico, S.A. de C.V., for administrative and geological services rendered. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | The Company’s investments in public companies include shares of Emgold Mining Corporation, Sultan, and ValGold, companies with directors in common with the Company. The Company also holds interests in the Stephens Lake property jointly with Sultan and ValGold. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Balances payable to related parties, and balances receivable from related parties are non-interest bearing and due on demand, except where otherwise noted. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | Related parties participated in the April, 2010 private placement described in Note 8 – Share capital.  All related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.  | Segmented Information |
|-----------|-----------------------|

| Balance Sheet 2011            |   | Canada |      |   | Mexico |   |    | Total  |   |
|-------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Assets                        |   |   |      |   |   |   |    |   |   |
| Current assets                |   | $      | 4,646,428 |   |   | $      | 225,131 |   |   | $ | 4,871,559 |   |
| Long term assets              |   |   | 574,311   |   |   |   | 186,748 |   |   |   | 761,059 |   |
| Total Assets                  |   | $      | 5,220,739 |   |   | $      | 411,879 |   |   | $ | 5,632,618 |   |
| Liabilities                   |   |   |      |   |   |   |    |   |   |   |   |   |
| Current liabilities           |   | $      | 267,178   |   |   | $      | 179,082 |   |   | $ | 446,260 |   |
| Total liabilities             |   | $      | 267,178   |   |   | $      | 179,082 |   |   | $ | 446,260 |   |
| Other information 2011        |   |   |      |   |   |   |    |   |   |   |   |   |
| Capital additions             |   | $      | --        |   |   | $      | 49,946  |   |   | $ | 49,946 |   |
| Depreciation and amortization |   | $      | 865       |   |   | $      | 1,665   |   |   | $ | 2,530 |   |

| Balance Sheet 2010            |   | Canada |      |   | Mexico |   |    | Total  |   |
|-------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Assets                        |   |   |      |   |   |   |    |   |   |
| Current assets                |   | $      | 289,152   |   |   | $      | 58,039  |   |   | $ | 347,191 |   |
| Long term assets              |   |   | 497,545   |   |   |   | 142,103 |   |   |   | 639,648 |   |
| Total Assets                  |   | $      | 786,697   |   |   | $      | 200,142 |   |   | $ | 986,839 |   |
| Liabilities                   |   |   |      |   |   |   |    |   |   |   |   |   |
| Current liabilities           |   | $      | 2,181,835 |   |   | $      | 107,836 |   |   | $ | 2,289,671 |   |
| Total liabilities             |   | $      | 2,181,835 |   |   | $      | 107,836 |   |   | $ | 2,289,671 |   |
| Other information 2010        |   |   |      |   |   |   |    |   |   |   |   |   |
| Depreciation and amortization |   | $      | 1,102     |   |   | $      | 6,522   |   |   | $ | 7,624 |   |

----

| 10.  | Segmented Information (continued) |
|-----------|-----------------------------------|

| 2011              |   | Canada |      |   | Mexico |   |    | Sierra Leone |   |   | Total |   |
|-------------------|--------|--------|-----------|--------|--------|--------|---------|--------------|--------|--------|-------|--------|
| Exploration costs |   | $      | 714,237   |   |   | $      | 987,913 |         |   | $      | --    |   |   | $ | 1,702,150 |   |
| Other expenses    |   |   | 2,906,667 |   |   |   | --      |         |   |   | --    |   |   |   | 2,906,667 |   |
| Total expenses    |   | $      | 3,620,904 |   |   | $      | 987,913 |         |   | $      | --    |   |   | $ | 4,608,817 |   |

| 2010              |   | Canada |      |   | Mexico |   |   | Sierra Leone |   |   | Total |   |
|-------------------|--------|--------|-----------|--------|--------|--------|--------|--------------|--------|--------|-------|--------|
| Exploration costs |   | $      | 342,423   |   |   | $      | 36,650 |         |   | $      | --    |   |   | $ | 379,073 |   |
| Other expenses    |   |   | 885,829   |   |   |   | --     |         |   |   | --    |   |   |   | 885,829 |   |
| Total expenses    |   | $      | 1,228,252 |   |   | $      | 36,650 |         |   | $      | --    |   |   | $ | 1,264,902 |   |

| 2009              |   | Canada |      |   | Mexico |   |    | Sierra Leone |   |   | Total   |   |
|-------------------|--------|--------|-----------|--------|--------|--------|---------|--------------|--------|--------|---------|--------|
| Exploration costs |   | $      | 153,373   |   |   | $      | 334,845 |         |   | $      | 464,771 |   |   | $ | 952,989 |   |
| Other expenses    |   |   | 1,443,587 |   |   |   | --      |         |   |   | --      |   |   |   | 1,443,587 |   |
| Total expenses    |   | $      | 1,606,960 |   |   | $      | 334,845 |         |   | $      | 464,771 |   |   | $ | 2,396,576 |   |

| 11.  | Income Taxes |
|-----------|--------------|

|                                    |   | 2011   |      |   | 2010   |   |      | 2009   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Loss for the year                       |   | $      | 4,608,817 |   |   | $      | 1,286,039 |   |   | $ | 2,462,000 |   |
| Statutory tax rate                      |   |   | 28.01     | %      |   |   | 29.63     | %      |   |   | 30.75 | % |
| Expected income tax recovery            |   |   | 1,291,000 |   |   |   | 381,000   |   |   |   | 757,000 |   |
| Decrease to income tax recovery due to: |   |   |      |   |   |   |      |   |   |   |   |   |
| Non-deductible permanent differences    |   |   | (552,000  | )      |   |   | (131,000  | )      |   |   | (75,000 | ) |
| Losses not recognized                   |   |   | (823,000  | )      |   |   | (180,000  | )      |   |   | (607,000 | ) |
| Other                                   |   |   | 84,000    |   |   |   | (48,863   | )      |   |   | (9,298 | ) |
| Income tax recovery                     |   | $      | --        |   |   | $      | 21,137    |   |   | $ | 65,702 |   |

|                                          |   | 2011   |       |   | 2010   |   |       | 2009   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Mineral property interests and capital assets |   | $      | 2,419,000  |   |   | $      | 2,390,000  |   |   | $ | 2,434,000 |   |
| Share issue costs                             |   |   | 130,000    |   |   |   | 21,000     |   |   |   | 27,000 |   |
| Operating losses carried forward              |   |   | 2,553,000  |   |   |   | 1,840,000  |   |   |   | 1,795,000 |   |
| Total future tax assets                       |   |   | 5,102,000  |   |   |   | 4,251,000  |   |   |   | 4,256,000 |   |
| Valuation allowance for future tax assets     |   |   | (5,102,000 | )      |   |   | (4,251,000 | )      |   |   | (4,256,000 | ) |
|                                          |   | $      | --         |   |   | $      | --         |   |   | $ | -- |   |

----

| 11.  | Income Taxes (continued) |
|-----------|--------------------------|

| Expiry date | $                |
|-------------|------------------|
| 2014        | 405,000          |   |
| 2015        | 424,000          |   |
| 2026        | 564,000          |   |
| 2027        | 618,000          |   |
| 2028        | 928,000          |   |
| 2029        | 895,000          |   |
| 20302031    | 706,0001,860,000 |   |
| Total       | 6,400,000        |   |

| 12.  | Supplementary cash flow information |
|-----------|-------------------------------------|

| Non-cash investing and financing transactions        |   |   |
|------------------------------------------------------|--------|--------|
|                                                 |   | 2011   |   |   | 2010 |   |   | 2009 |
| Issuance of shares for mineral property interests    |   | $      | 6,400 |   |   | $ | 3,200 |   |   | $ | 15,000 |   |
| Issuance of shares for finance and agent’s fee |   | $      | 12,960 |   |   | $ | -- |   |   | $ | 57,290 |   |
| Cash paid for interest                               |   | $      | -- |   |   | $ | -- |   |   | $ | 20,665 |   |
| Cash paid for income taxes                           |   | $      | -- |   |   | $ | -- |   |   | $ | -- |   |

| 13.  | Financial instruments and risk management |
|-----------|-------------------------------------------|

|                                         |   |   | March 31, 2011 |      |   | March 31, 2010 |   |
|----------------------------------------------|--------|--------|--------------------------|-----------|--------|--------------------------|--------|
|                                         |   |   | Carrying                 |      |   | Fair                     |   |   | Carrying |   |   | Fair |   |
|                                         | Level  |   | value                    |      |   | Value                    |   |   | value |   |   | value |   |
| Cash (a)                                     | 1      |   | $                        | 448,109   |   |                     | $      | 448,109 |   |   | $ | 228,106 |   |   | $ | 228,106 |   |
| Short-term investments (a)                   | 2      |   | $                        | 4,336,906 |   |                     |   | 4,336,906 |   |   | $ | — |   |   | $ | — |   |
| Investments – public companies (b)     | 1      |   | $                        | 8,182     |   |                     |   | 8,182 |   |   | $ | 4,611 |   |   | $ | 4,611 |   |
| Investments – private companies        | 3      |   | $                        | 2         |   |                     |   | 2 |   |   | $ | 2 |   |   | $ | 2 |   |
| Accounts payable and accrued liabilities (a) | 2      |   | $                        | 252,234   |   |                     | $      | 252,234 |   |   | $ | 538,584 |   |   | $ | 538,584 |   |
| Due to related parties (a)                   | 2      |   | $                        | 130,026   |   |                     | $      | 130,026 |   |   | $ | 1,751,087 |   |   | $ | 1,751,087 |   |

|   | (a) | Fair value approximates the carrying amounts due to the short-term nature. |
|--------|-----|----------------------------------------------------------------------------|

|   | (b) | Recorded at fair value.  Quoted market prices are used to determine fair value. |
|--------|-----|-------------------------------------------------------------------------------------------|

----

| 13.  | Financial instruments and risk management (continued) |
|-----------|-------------------------------------------------------|

|                                                                         |   | March 31, 2011 |      |
|------------------------------------------------------------------------------|--------|----------------|-----------|
| Accounts and other receivables -                                             |   |           |      |
|      Currently due                                  |   | $              | 50,497    |   |
|      Past due by 90 days or less, not impaired      |   |           | --        |   |
|      Past due by greater than 90 days, not impaired |   |           | --        |   |
| Accounts receivable, related parties                                         |   |           | 64,000    |   |
|                                                                         |   |           | 114,497   |   |
| Cash                                                                         |   |           | 448,109   |   |
| Short-term investments                                                       |   |           | 4,336,906 |   |
|                                                                         |   | $              | 4,899,512 |   |

|                                                                         |   | March 31, 2011 |    |
|------------------------------------------------------------------------------|--------|----------------|---------|
| Accounts payable and accrued liabilities with contractual maturities – |   |           |    |
| Within 90 days or less                                                       |   | $              | 252,234 |   |
| In later than 90 days, not later than one year                               |   |           | --      |   |
| Due to related parties with contractual maturities                           |   |           |    |   |
| Within 90 days or less                                                       |   |           | 194,026 |   |
| In later than 90 days, not later than one year                               |   |           | --      |   |

----

| 13.  | Financial instruments and risk management (continued) |
|-----------|-------------------------------------------------------|

|                                     |   | March 31, 2011 |     |   | March 31, 2010 |   |
|------------------------------------------|--------|----------------|----------|--------|----------------|--------|
| U.S. Dollars                             |   |           |     |   |           |   |
| Cash                                     |   |           | 241,461  |   |           |   | 37,494 |   |
| Accounts payable and accrued liabilities |   |           | (182,425 | )      |           |   | (357,361 | ) |
| Mexican Pesos                            |   |           |     |   |           |   |   |   |
| Cash                                     |   |           | 36,742   |   |           |   | 21,288 |   |
| Value added taxes recoverable            |   |           | 134,228  |   |           |   | 139,557 |   |
| Accounts payable and accrued liabilities |   |           | (5,038   | )      |           |   | (228 | ) |

| 14.  | Management of capital |
|-----------|-----------------------|

----

| 14.  | Management of capital (continued) |
|-----------|-----------------------------------|

|                                                          |   | March 31, 2011 |        |   | March 31, 2010 |   |
|---------------------------------------------------------------|--------|----------------|-------------|--------|---------------------|--------|
| Shareholders’ equity comprised of:                      |   |           |        |   |                |   |
|      Share capital                        |   | $              | 32,053,685  |   |                | $      | 24,596,256 |   |
|      Share subscriptions             |   |           | --          |   |                |   | 873,475 |   |
|      Warrants                             |   |           | 2,922,556   |   |                |   | 170,613 |   |
|      Contributed surplus                  |   |           | 4,035,325   |   |                |   | 2,276,786 |   |
|      Accumulated other comprehensive loss |   |           | (23,522     | )      |                |   | (27,093 | ) |
|      Deficit                              |   |           | (33,801,686 | )      |                |   | (29,192,869 | ) |

| 15.  | Differences between Canadian and United States generally accepted accounting principles |
|-----------|-----------------------------------------------------------------------------------------|

|   | (a) | Consolidated Statements of Loss and Deficit and Balance Sheets |
|--------|-----|----------------------------------------------------------------|

|                                                                                        |   | Years ended March 31, |       |
|---------------------------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                                        |   | 2011                  |       |   | 2010 |   |   | 2009 |   |
| Loss in accordance with Canadian GAAP                                                       |   | $                     | (4,608,817 | ) |   | $ | (1,264,902 | ) |   | $ | (2,396,576 | ) |
| Future tax recovery and net premium to market on issuance of common shares (Note 15 (b)(i)) |   |                  | --         |   |   |   | -- |   |   |   | (10,108 | ) |
| Loss in accordance with US GAAP                                                             |   |                  | (4,608,817 | ) |   |   | (1,264,902 | ) |   |   | (2,406,684 | ) |
| Comprehensive income (loss) (Note 6)                                                        |   |                  | 3,571      |   |   |   | 1,761 |   |   |   | (21,917 | ) |
| Comprehensive loss under US GAAP                                                            |   | $                     | (4,605,246 | ) |   | $ | (1,263,141 | ) |   | $ | (2,428,601 | ) |
| Loss per share US GAAP                                                                      |   | $                     | (0.06      | ) |   | $ | (0.02 | ) |   | $ | (0.05 | ) |
| Comprehensive loss per share under US GAAP                                                  |   | $                     | (0.06      | ) |   | $ | (0.02 | ) |   | $ | (0.05 | ) |
| Weighted average shares outstanding US GAAP                                                 |   |                  | 74,757,958 |   |   |   | 64,681,207 |   |   |   | 52,370,459 |   |

|                                                                       |   | Years ended March 31, |      |
|----------------------------------------------------------------------------|--------|-----------------------|-----------|
|                                                                       |   | 2011                  |      |   | 2010 |   |   | 2009 |   |
| Shareholders’ equity (deficiency) per Canadian GAAP             |   | $                     | 5,186,358 |   |   | $ | (1,302,832 | ) |   | $ | (900,310 | ) |
| Future tax recovery and net premium to market on issuance of common shares |   |                  | --        |   |   |   | -- |   |   |   | (10,108 | ) |
| Shareholders’ equity (deficiency) - US GAAP                          |   | $                     | 5,186,358 |   |   | $ | (1,302,832 | ) |   | $ | (910,418 | ) |

----

| 15.  | Differences between Canadian and United States generally accepted accounting principles (continued) |
|-----------|-----------------------------------------------------------------------------------------------------|

|   | i) | Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 320, (formerly Statement of Financial Accounting Standard (“SFAS”) No. 115) requires investments to be classified with respect to holding period, as determined by management, as either held-to-maturity debt securities, trading securities or available-for-sale investments.  The Company has no held-to maturity debt securities or trading securities. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii) | United States accounting standards for reporting comprehensive income provide that comprehensive income represents the change in equity during a reporting period from transactions and other events and circumstances from non-owner sources.  Components of comprehensive income include available for sale investments that are not actively traded on short-term differences in price.  For US GAAP purposes, these holding gains and losses are reported as a separate component of shareholders’ equity until realized. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Statements of Cash Flows |
|--------|-----|--------------------------|

|                                   |   | Years ended March 31, |       |
|----------------------------------------|--------|-----------------------|------------|
|                                   |   | 2011                  |       |   | 2010 |   |   | 2009 |   |
| Cash provided by (used for) operations |   |                  |       |   |   |   |   |   |   |
| Canadian GAAP                          |   | $                     | (3,551,283 | ) |   | $ | (1,035,098 | ) |   | $ | (1,367,971 | ) |
| US GAAP                                |   |                  | (3,551,283 | ) |   |   | (1,035,098 | ) |   |   | (1,367,971 | ) |
| Investing Activities                   |   |                  |       |   |   |   |   |   |   |   |   |   |
| Canadian GAAP                          |   |                  | (4,417,605 | ) |   |   | (62,416 | ) |   |   | (89,198 | ) |
| Restricted cash                        |   |                  | --         |   |   |   | -- |   |   |   | 215,611 |   |
| US GAAP                                |   |                  | (4,417,605 | ) |   |   | (62,416 | ) |   |   | 126,413 |   |
| Financing Activities                   |   |                  |       |   |   |   |   |   |   |   |   |   |
| Canadian GAAP and US GAAP              |   | $                     | 8,188,901  |   |   | $ | 1,140,853 |   |   | $ | 1,628,643 |   |

----

| 15.  | Differences between Canadian and United States generally accepted accounting principles (continued) |
|-----------|-----------------------------------------------------------------------------------------------------|

| 16.  | Subsequent events |
|-----------|-------------------|

|   | (a) | received $12,000 from the exercise of 100,000 stock options at a price of $0.12 per share. |
|--------|-----|--------------------------------------------------------------------------------------------|

|   | (b) | received $259,857 from the exercise of 2,598,571 warrants at a price of $0.10 per share. |
|--------|-----|------------------------------------------------------------------------------------------|

|   | (c) | granted 2,300,000 stock options to directors, officers and an Investor Relations company to acquire a like amount of shares at $0.16-$0.23 per share for a period of 5 years. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 16.  | Subsequent events (continued) |
|-----------|-------------------------------|

|   | (d) | adopted a Shareholder Rights Plan (the “Plan”)  that was approved by the board of directors.  The Plan, effective as at May 24, 2011, will have an initial term which expires at the annual general meeting of shareholders of the Company to be held in 2014, unless terminated earlier. The Plan may be extended beyond 2014 by further resolution of shareholders at such meeting.  The Plan was subsequently approved by shareholders at the Company's annual general and special meeting of shareholders on June 23, 2011. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 17.  | Exploration costs |
|-----------|-------------------|

| Year ended March 31, 2011     |   |  Kaslo Silver Property, British Columbia |   |   |  Goldsmith and Other Properties, British Columbia |   |   |  Manitoba Properties, Manitoba |   |   |  Nuevo Milenio Property, Mexico |   |   |  TotalMarch 31,2011 |      |
|-------------------------------|--------|-----------------------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------------|--------|--------|--------------------------|-----------|
| Incurred during the period    |   |                                          |   |   |                                                   |   |   |                                |   |   |                                 |   |   |                     |      |
| Assays and analysis           |   | $                                             | --     |   |                                                   | $      | --     |                                |   | $      | --                                   |   |   | $                        | 8,827     |   |   | $ | 8,827 |   |
| Drilling                      |   |                                          | --     |   |                                                   |   | --     |                                |   |   | --                                   |   |   |                     | 714,320   |   |   |   | 714,320 |   |
| Geological and geophysical    |   |                                          | 408    |   |                                                   |   | 68,451 |                                |   |   | 7,078                                |   |   |                     | 241,170   |   |   |   | 317,107 |   |
| Site activities               |   |                                          | 172    |   |                                                   |   | 2,210  |                                |   |   | 178                                  |   |   |                     | 167,941   |   |   |   | 170,501 |   |
| Stock-based compensation      |   |                                          | --     |   |                                                   |   | --     |                                |   |   | --                                   |   |   |                     | 440,824   |   |   |   | 440,824 |   |
| Travel and accommodation      |   |                                          | --     |   |                                                   |   | 9,358  |                                |   |   | --                                   |   |   |                     | 41,213    |   |   |   | 50,571 |   |
| Total Expenses March 31, 2011 |   | $                                             | 580    |   |                                                   | $      | 80,019 |                                |   | $      | 7,256                                |   |   | $                        | 1,614,295 |   |   | $ | 1,702,150 |   |

| Year ended March 31, 2010                   |   | Casierra Property, Sierra Leone |   |   | Kaslo Silver Property, British Columbia |   |    | Goldsmith and Other Properties, British Columbia |   |   | Manitoba Properties, Manitoba |   |   | Nuevo Milenio Property, Mexico |    |   | TotalMarch 31, 2010 |   |
|---------------------------------------------|--------|---------------------------------|--------|--------|-----------------------------------------|--------|---------|--------------------------------------------------|--------|--------|-------------------------------|--------|--------|-------------------------------------|---------|--------|---------------------|--------|
| Incurred during the year                    |   |                            |   |   |                                    |   |    |                                             |   |   |                          |   |   |                                |    |   |                |   |
| Assays and analysis                         |   | $                               | --     |   |                                    | $      | --      |                                             |   | $      | --                            |   |   | $                                   | --      |   |                | $      | 18,842 |   |   | $ | 18,842 |   |
| Geological and geophysical                  |   |                            | 2,877  |   |                                    |   | 708     |                                             |   |   | 2,500                         |   |   |                                | 111,818 |   |                |   | 75,920 |   |   |   | 193,823 |   |
| Site activities                             |   |                            | 21,173 |   |                                    |   | 233     |                                             |   |   | 315                           |   |   |                                | 544     |   |                |   | 137,714 |   |   |   | 159,979 |   |
| Travel and accommodation                    |   |                            | 460    |   |                                    |   | --      |                                             |   |   | --                            |   |   |                                | 30,676  |   |                |   | 13,277 |   |   |   | 44,413 |   |
| Expenditures in year                        |   |                            | 24,510 |   |                                    |   | 941     |                                             |   |   | 2,815                         |   |   |                                | 143,038 |   |                |   | 245,753 |   |   |   | 417,057 |   |
| Government assistance                       |   |                            | --     |   |                                    |   | (20,049 | )                                                |   |   | (17,935                       | )      |   |                                | --      |   |                |   | -- |   |   |   | (37,984 | ) |
| Total Expenses (recoveries), March 31, 2010 |   | $                               | 24,510 |   |                                    | $      | (19,108 | )                                                |   | $      | (15,120                       | )      |   | $                                   | 143,038 |   |                | $      | 245,753 |   |   | $ | 379,073 |   |

| Year ended March 31, 2009                                  |   |   Casierra Property, Sierra Leone |    |   |  Kaslo Silver Property, British Columbia |   |   | Goldsmith and Other Properties, British Columbia |   |   |   Manitoba Properties, Manitoba |   |   |  Nuevo Milenio Property, Mexico |   |   |   TotalMarch 31, 2009 |   |
|------------------------------------------------------------|--------|---------------------------------------------|---------|--------|-----------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------------------------------------|--------|--------|---------------------------------|--------|
| Incurred during the year                                   |   |                                        |    |   |                                          |   |   |                                             |   |   |                                      |   |   |                                 |   |   |                            |   |
| Assays and analysis                                        |   | $                                           | --      |   |                                          | $      | --     |                                             |   | $      | 8,824                                     |   |   | $                                    | --     |   |                            | $      | 2,842 |   |   | $ | 11,666 |   |
| Community relations                                        |   |                                        | 32,040  |   |                                          |   | --     |                                             |   |   | --                                        |   |   |                                 | --     |   |                            |   | -- |   |   |   | 32,040 |   |
| Dredging and bulk sampling                                 |   |                                        | 112,276 |   |                                          |   | --     |                                             |   |   | --                                        |   |   |                                 | --     |   |                            |   | -- |   |   |   | 112,276 |   |
| Geological and geophysical                                 |   |                                        | 8,623   |   |                                          |   | 313    |                                             |   |   | 16,308                                    |   |   |                                 | 75,739 |   |                            |   | 174,583 |   |   |   | 275,566 |   |
| Site activities                                            |   |                                        | 191,578 |   |                                          |   | 46     |                                             |   |   | 1,003                                     |   |   |                                 | 1,742  |   |                            |   | 147,280 |   |   |   | 341,649 |   |
| Stock-based compensation                                   |   |                                        | (3,888  | )      |                                          |   | --     |                                             |   |   | --                                        |   |   |                                 | --     |   |                            |   | 23,785 |   |   |   | 19,897 |   |
| Travel and accommodation                                   |   |                                        | 30,955  |   |                                          |   | --     |                                             |   |   | 5,456                                     |   |   |                                 | --     |   |                            |   | 17,239 |   |   |   | 53,650 |   |
| Trenching                                                  |   |                                        | --      |   |                                          |   | --     |                                             |   |   | 13,058                                    |   |   |                                 | --     |   |                            |   | -- |   |   |   | 13,058 |   |
| Write-off of equipment,   net of recoveries |   |                                        | 93,187  |   |                                          |   | --     |                                             |   |   | --                                        |   |   |                                 | --     |   |                            |   | -- |   |   |   | 93,187 |   |
| Total Expenses, March 31, 2009                             |   | $                                           | 464,771 |   |                                          | $      | 359    |                                             |   | $      | 44,649                                    |   |   | $                                    | 77,481 |   |                            | $      | 365,729 |   |   | $ | 952,989 |   |

----