----

| Vancouver, BC | “Morgan & Company” |
|---------------|------------------------------------|
|          |                               |
| July 27, 2012 | Chartered Accountants              |
|          |                               |

----

|                                                             |   | March 31, |        |   | March 31, |   |        | April 1,  |   |
|------------------------------------------------------------------|--------|-----------|-------------|--------|-----------|--------|-------------|-----------|--------|
|                                                             |   | 2012      |        |   | 2011      |   |        | 2010      |   |
|                                                             |   |      |        |   | (Note 17) |   |        | (Note 17) |   |
|                                                             |   |      |        |   |      |   |        |      |   |
| Assets                                                           |   |      |        |   |      |   |        |      |   |
|                                                             |   |      |        |   |      |   |        |      |   |
| Current Assets                                                   |   |      |        |   |      |   |        |      |   |
| Cash                                                             |   | $         | 292,501     |   |      | $      | 448,109     |      |   | $ | 228,106 |   |
| Short-term investments                                           |   |      | 175,429     |   |      |   | 4,336,906   |      |   |   | -- |   |
| Marketable securities at fair value                              |   |      | --          |   |      |   | 8,183       |      |   |   | 4,612 |   |
| Amounts receivable and prepaid expenses (Notes 4, 9(a))          |   |      | 87,679      |   |      |   | 86,544      |      |   |   | 119,085 |   |
|                                                             |   |      | 555,609     |   |      |   | 4,879,742   |      |   |   | 351,803 |   |
| Non-current Assets                                               |   |      |        |   |      |   |        |      |   |   |   |   |
|    Deposits, related party (Notes 4, 9(a))        |   |      | 189,963     |   |      |   | 64,000      |      |   |   | -- |   |
|    Exploration and evaluation assets (Note 5)     |   |      | 97,080      |   |      |   | 483,605     |      |   |   | 454,853 |   |
|    Foreign value-added taxes recoverable (Note 6) |   |      | 497,865     |   |      |   | 134,255     |      |   |   | 139,556 |   |
|    Equipment (Note 7)                             |   |      | 59,566      |   |      |   | 53,015      |      |   |   | 3,934 |   |
|    Deferred finance costs                         |   |      | --          |   |      |   | --          |      |   |   | 18,692 |   |
|    Investment in associate                             |   |      | 1           |   |      |   | 1           |      |   |   | 1 |   |
|    Reclamation deposits                           |   |      | 15,000      |   |      |   | 18,000      |      |   |   | 18,000 |   |
|                                                             |   |      |        |   |      |   |        |      |   |   |   |   |
| Total Assets                                                     |   | $         | 1,415,084   |   |      | $      | 5,632,618   |      |   | $ | 986,839 |   |
|                                                             |   |      |        |   |      |   |        |      |   |   |   |   |
| Liabilities                                                      |   |      |        |   |      |   |        |      |   |   |   |   |
|                                                             |   |      |        |   |      |   |        |      |   |   |   |   |
| Current Liabilities                                              |   |      |        |   |      |   |        |      |   |   |   |   |
| Accounts payable and accrued liabilities (Note 8)                |   | $         | 157,941     |   |      | $      | 252,234     |      |   | $ | 538,584 |   |
| Accounts payable, related parties (Note 9)                       |   |      | 88,890      |   |      |   | 194,026     |      |   |   | 1,751,087 |   |
| Total Liabilities                                                |   |      | 246,831     |   |      |   | 446,260     |      |   |   | 2,289,671 |   |
|                                                             |   |      |        |   |      |   |        |      |   |   |   |   |
| Equity (Deficiency)                                              |   |      |        |   |      |   |        |      |   |   |   |   |
| Share capital (Note 11)                                          |   |      | 32,589,847  |   |      |   | 32,110,200  |      |   |   | 24,652,771 |   |
| Share subscriptions                                              |   |      | --          |   |      |   | --          |      |   |   | 873,475 |   |
| Warrant reserve                                                  |   |      | 2,836,637   |   |      |   | 2,922,556   |      |   |   | 170,613 |   |
| Share-based payments reserve (Note 11)                           |   |      | 4,506,782   |   |      |   | 4,035,325   |      |   |   | 2,276,786 |   |
| Deficit                                                          |   |      | (38,765,013 | )      |      |   | (33,881,723 | )         |   |   | (29,276,477 | ) |
| Total Equity (Deficiency)                                        |   |      | 1,168,253   |   |      |   | 5,186,358   |      |   |   | (1,302,832 | ) |
|  Total Liabilities and Equity                               |   | $         | 1,415,084   |   |      | $      | 5,632,618   |      |   | $ | 986,839 |   |

| /s/ Michael O’Connor |   |   |   | /s/ Robin Merrifield |   |   |
|----------------------------|--------|--------|--------|----------------------|--------|--------|
| Director                   |   |   |   | Director             |   |   |

----

|                                                                                                          |   | For the years ended March 31, |        |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|
|                                                                                                          |   | 2012                          |        |   | 2011(Note 17) |   |
| Revenue                                                                                                       |   |                          |        |   |   |   |
| Interest                                                                                                      |   | $                             | 40,918      |   |   | $ | 13,575 |   |
| Gain on marketable securities                                                                                 |   |                          | --          |   |   |   | 3,571 |   |
| Loss on marketable securities                                                                                 |   |                          | (2,596      | ) |   |   | -- |   |
| Total Revenue                                                                                                 |   | $                             | 38,322      |   |   | $ | 17,146 |   |
| Expenses                                                                                                      |   |                          |        |   |   |   |   |   |
| Consulting and director fees (Note 9)                                                                         |   |                          | 81,767      |   |   |   | 30,000 |   |
| Exploration Costs (Note 16)                                                                                   |   |                          | 2,763,119   |   |   |   | 1,702,150 |   |
| Finance costs (Note 9)                                                                                        |   |                          | --          |   |   |   | 32,428 |   |
| Foreign exchange                                                                                              |   |                          | 12,638      |   |   |   | 14,438 |   |
| General and administrative (Notes 9, 10)                                                                      |   |                          | (8,828      | ) |   |   | 177,951 |   |
| Professional fees                                                                                             |   |                          | 201,975     |   |   |   | 109,125 |   |
| Takeover defense                                                                                              |   |                          | --          |   |   |   | 524,212 |   |
| Salaries and benefits                                                                                         |   |                          | 453,463     |   |   |   | 381,433 |   |
| Shareholder communications                                                                                    |   |                          | 496,437     |   |   |   | 297,859 |   |
| Share-based payments                                                                                          |   |                          | 480,229     |   |   |   | 1,339,990 |   |
|     Write-down of exploration and    evaluation assets  (Note 5) |   |                          | 440,812     |   |   |   | 12,806 |   |
| Total expenses                                                                                                |   |                          | (4,921,612  | ) |   |   | (4,622,392 | ) |
| Net Loss and Comprehensive Loss for the Year                                                                  |   |                          | (4,883,290  | ) |   |   | (4,605,246 | ) |
|                                                                                                          |   |                          |        |   |   |   |   |   |
| Loss per Share, Basic and Diluted                                                                             |   | $                             | (0.03       | ) |   | $ | (0.06 | ) |
|                                                                                                          |   |                          |        |   |   |   |   |   |
| Weighted Average Number of Shares Outstanding – Basic and Diluted                                       |   |                          | 152,114,579 |   |   |   | 74,757,958 |   |

----

|                                                                            |   | Common SharesWithout Par Value |        |   |   |   |       |                       |   |   |            |   |   |                         |      |   |    |   |
|---------------------------------------------------------------------------------|--------|--------------------------------|-------------|--------|--------|--------|------------|----------------------------|--------|--------|-----------------|--------|--------|------------------------------|-----------|--------|---------|--------|
|                                                                            |   | Shares                         |        |   | Amount |   |       |   Share Subscriptions |   |   | Warrant Reserve |   |   | Share-based Payments Reserve |      |   | Deficit |   |   | Total Equity (Deficiency) |   |
| Balance, April 1, 2010                                                          |   |                           | 64,716,988  |   |   | $      | 24,652,771 |                       |   | $      | 873,475         |   |   | $                            | 170,613   |   |    | $      | 2,276,786 |   |   | $ | (29,276,477 | ) |   | $ | (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 |   |   |   | -- |   |   |   | -- |   |
| Exploration and evaluation assets     Blueberry claims |   |                           | 40,000      |   |   |   | 6,400      |                       |   |   | --              |   |   |                         | --        |   |    |   | -- |   |   |   | -- |   |   |   | 6,400 |   |
| Options exercised                                                               |   |                           | 420,000     |   |   |   | 50,400     |                       |   |   | --              |   |   |                         | --        |   |    |   | (36,851 | ) |   |   | -- |   |   |   | 13,549 |   |
| Share-based payments                                                            |   |                           | --          |   |   |   | --         |                       |   |   | --              |   |   |                         | --        |   |    |   | 1,780,814 |   |   |   | -- |   |   |   | 1,780,814 |   |
| Net loss for the year                                                           |   |                           | --          |   |   |   | --         |                       |   |   | --              |   |   |                         | --        |   |    |   | -- |   |   |   | (4,605,246 | ) |   |   | (4,605,246 | ) |
| Balance, March 31, 2011                                                         |   |                           | 149,464,345 |   |   |   | 32,110,200 |                       |   |   | --              |   |   |                         | 2,922,556 |   |    |   | 4,035,325 |   |   |   | (33,881,723 | ) |   |   | 5,186,358 |   |
| Warrants exercised                                                              |   |                           | 2,998,571   |   |   |   | 437,275    |                       |   |   | --              |   |   |                         | (85,919   | )      |    |   | -- |   |   |   | -- |   |   |   | 351,356 |   |
| Exploration and evaluation assets     Blueberry claims |   |                           | 80,000      |   |   |   | 21,600     |                       |   |   | --              |   |   |                         | --        |   |    |   | -- |   |   |   | -- |   |   |   | 21,600 |   |
| Options exercised                                                               |   |                           | 100,000     |   |   |   | 20,772     |                       |   |   | --              |   |   |                         | --        |   |    |   | (8,772 | ) |   |   | -- |   |   |   | 12,000 |   |
| Share-based payments                                                            |   |                           | --          |   |   |   | --         |                       |   |   | --              |   |   |                         | --        |   |    |   | 480,229 |   |   |   | -- |   |   |   | 480,229 |   |
| Net loss for the year                                                           |   |                           | --          |   |   |   | --         |                       |   |   | --              |   |   |                         | --        |   |    |   | -- |   |   |   | (4,883,290 | ) |   |   | (4,883,290 | ) |
|                                                                            |   |                           |        |   |   |   |       |                       |   |   |            |   |   |                         |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2012                                                         |   |                           | 152,642,916 |   |   | $      | 32,589,847 |                       |   | $      | --              |   |   | $                            | 2,836,637 |   |    | $      | 4,506,782 |   |   | $ | (38,765,013 | ) |   | $ | 1,168,253 |   |

----

|                                                                        |   | For the years ended March 31, |       |
|-----------------------------------------------------------------------------|--------|-------------------------------|------------|
|                                                                        |   | 2012                          |       |   | 2011 |   |
| Cash provided by (used in):                                                 |   |                          |       |   |   |   |
|                                                                        |   |                          |       |   |   |   |
| Operations                                                                  |   |                          |       |   |   |   |
| Net loss for the year                                                       |   | $                             | (4,883,290 | ) |   | $ | (4,605,246 | ) |
| Items not involving cash                                                    |   |                          |       |   |   |   |   |   |
| Depreciation                                                                |   |                          | 15,518     |   |   |   | (10,961 | ) |
| Share-based payments                                                        |   |                          | 480,229    |   |   |   | 1,780,814 |   |
| Foreign exchange                                                            |   |                          | 19,749     |   |   |   | 1,139 |   |
| Finance costs                                                               |   |                          | --         |   |   |   | (44,455 | ) |
| Loss on marketable securities                                               |   |                          | 2,596      |   |   |   | -- |   |
| Gain on marketable securities                                               |   |                          | --         |   |   |   | (3,571 | ) |
| Write-off of exploration and evaluation     assets |   |                          | 440,812    |   |   |   | 12,806 |   |
| Changes in non-cash operating assets and liabilities                        |   |                          |       |   |   |   |   |   |
| Amounts receivable and prepaid expenses                                     |   |                          | (1,135     | ) |   |   | (31,459 | ) |
|     Foreign value-added taxes recoverable               |   |                          | (383,359   | ) |   |   | 4,162 |   |
| Accounts payable and accrued liabilities                                    |   |                          | (94,293    | ) |   |   | (267,459 | ) |
| Accounts payable, related parties                                           |   |                          | (231,099   | ) |   |   | (384,476 | ) |
| Cash used in operating activities                                           |   |                          | (4,634,272 | ) |   |   | (3,548,706 | ) |
| Investing activities                                                        |   |                          |       |   |   |   |   |   |
| Exploration and evaluation assets                                           |   |                          | (32,687    | ) |   |   | (46,821 | ) |
| Proceeds (purchase) of short-term     investments  |   |                          | 4,161,906  |   |   |   | (4,325,000 | ) |
| Proceeds on sale of marketable securities                                   |   |                          | 5,587      |   |   |   | -- |   |
| Reclamation bonds recovered                                                 |   |                          | 3,000      |   |   |   | -- |   |
| Interest on short-term investments                                          |   |                          | (429       | ) |   |   | (11,906 | ) |
| Equipment acquisitions                                                      |   |                          | (22,069    | ) |   |   | (36,455 | ) |
| Cash provided by (used in) investing activities                             |   |                          | 4,115,308  |   |   |   | (4,420,182 | ) |
| Financing activities                                                        |   |                          |       |   |   |   |   |   |
| Common shares                                                               |   |                          | 363,356    |   |   |   | 9,317,022 |   |
| Net settlements with related party                                          |   |                          | --         |   |   |   | (1,128,131 | ) |
| Cash provided by financing activities                                       |   |                          | 363,356    |   |   |   | 8,188,891 |   |
|                                                                        |   |                          |       |   |   |   |   |   |
| (Decrease) increase in cash during the year                                 |   |                          | (155,608   | ) |   |   | 220,003 |   |
|                                                                        |   |                          |       |   |   |   |   |   |
| Cash, beginning of year                                                     |   |                          | 448,109    |   |   |   | 228,106 |   |
|                                                                        |   |                          |       |   |   |   |   |   |
| Cash, end of year                                                           |   | $                             | 292,501    |   |   | $ | 448,109 |   |
|                                                                        |   |                          |       |   |   |   |   |   |
| Supplemental information                                                    |   |                          |       |   |   |   |   |   |
| Shares issued for exploration and evaluation assets                         |   | $                             | 21,600     |   |   | $ | 6,400 |   |
| Non-cash portion of warrants exercised                                      |   | $                             | 85,919     |   |   | $ | 198,455 |   |
| Non-cash portion of options exercised                                       |   | $                             | 8,772      |   |   | $ | 36,851 |   |
| Finders’ shares issued                                                |   | $                             | --         |   |   | $ | 12,960 |   |

----

| 1.  | Nature of Operations and Going Concern |
|----------|----------------------------------------|

|   | The consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern.  This assumes the Company will operate for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.  The Company has incurred operating losses since inception, has no source of operating cash flow, minimal income from short-term investments, and there can be no assurances that sufficient funding, including adequate financing, will be available to explore its mineral properties and to cover general and administrative expenses necessary for the maintenance of a public company.  The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and mineral property exploration success.  These factors cast substantial doubt on the Company’s ability to continue as a going concern. Accordingly, the financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities, contingent obligations and commitments other than in the normal course of business and at amounts different from those in the financial statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.  | Significant Accounting Policies |
|----------|---------------------------------|

|   | (a) | Statement of Compliance |
|--------|-----|-------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (b) | Basis of Measurement and Presentation |
|--------|-----|---------------------------------------|

|   | (c) | Basis of Consolidation |
|--------|-----|------------------------|

|   | (d) | Short-term Investments |
|--------|-----|------------------------|

|   | (e) | Exploration and Evaluation Assets |
|--------|-----|-----------------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | The following new standards, amendments to standards and interpretations have been issued but are not effective during the period ended March 31, 2012: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  IFRS 9             | New financial instruments standard that replaces IAS 39 for classification and measurement of financial assets(iii)                                         |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  IFRS 10            | New standard to establish principles for the presentation and preparation of consolidated financial statements when an entity controls multiple entities(i) |
| ·  IFRS 11            | New standard to account for the rights and obligations in accordance with a joint agreement(i)                                                              |
| ·  IFRS 12            | New standard for the disclosure of interests in other entities not within the scope of IFRS 9/IAS 39(i)                                                     |
| ·  IFRS 13            | New standard on the measurement and disclosure of fair value(i)                                                                                             |
| ·  IAS 1 (Amendment)  | Presentation of other comprehensive income(ii)                                                                                                              |
| ·  IAS 28 (Amendment) | New standard issued that supersedes IAS 28 (2003) to prescribe the accounting for investments in associates and joint ventures(i)                           |

|   | (i) | Effective for annual periods beginning on or after January 1, 2013 |
|--------|-----|--------------------------------------------------------------------|

|   | (ii) | Effective for annual periods beginning on or after July 1, 2012 |
|--------|------|-----------------------------------------------------------------|

|   | (iii) | Effective for annual periods beginning on or after January 1, 2015 |
|--------|-------|--------------------------------------------------------------------|

----

| 3.  | Critical Accounting Judgments and Estimates |
|----------|---------------------------------------------|

|   | a) | Foreign Value-added Taxes Recoverable |
|--------|----|---------------------------------------|

|   | b) | Intangible Exploration and Evaluation Assets |
|--------|----|----------------------------------------------|

|   | · | the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Foreign Currency |
|--------|----|------------------|

|   | d) | Accrued Liabilities |
|--------|----|---------------------|

----

| 4.  | Amounts Receivable and Prepaid Expenses |
|----------|-----------------------------------------|

|                               |   | March 31, |   |   | March 31, |   |   | April 1, |   |
|------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|----------|--------|
|                               |   | 2012      |   |   | 2011      |   |   | 2010     |   |
| Harmonized Sales Tax receivable    |   | $         | 35,597 |   |      | $      | 50,497 |     |   | $ | 9,907 |   |
| Prepayments and amounts receivable |   |      | 52,082 |   |      |   | 36,047 |     |   |   | 109,178 |   |
| Total                              |   | $         | 87,679 |   |      | $      | 86,544 |     |   | $ | 119,085 |   |

| 5.  | Exploration and Evaluation Assets |
|----------|-----------------------------------|

|                    |   | Goldsmith  |     |   |         |   |     | Kaslo     |   |   |        |   |
|-------------------------|--------|------------|----------|--------|--------------|--------|----------|-----------|--------|--------|-------------|--------|
|                    |   | And Other  |     |   | Manitoba     |   |     | Silver    |   |   | Total       |   |
|                    |   | Properties |     |   | Properties,  |   |     | Property, |   |   | Acquisition |   |
|                    |   | BC (b)     |     |   | Manitoba (c) |   |     | BC (d)    |   |   | Costs       |   |
| Balance, April 1, 2010  |   | $          | 188,903  |   |         | $      | 253,967  |      |   | $      | 11,983      |   |   | $ | 454,853 |   |
| Additions               |   |       | 24,334   |   |         |   | 16,400   |      |   |   | 824         |   |   |   | 41,558 |   |
| Write-downs             |   |       | --       |   |         |   | --       |      |   |   | (12,806     | )      |   |   | (12,806 | ) |
| Balance, March 3l, 2011 |   |       | 213,237  |   |         |   | 270,367  |      |   |   | 1           |   |   |   | 483,605 |   |
| Additions               |   |       | 287      |   |         |   | 54,000   |      |   |   | --          |   |   |   | 54,287 |   |
| Write-downs             |   |       | (213,524 | )      |         |   | (227,287 | )         |   |   | (1          | )      |   |   | (440,812 | ) |
| Balance, March 31, 2012 |   | $          | --       |   |         | $      | 97,080   |      |   | $      | --          |   |   | $ | 97,080 |   |

|   | (a) | Goldsmith and Lucky Jack Properties, British Columbia, Canada |
|--------|-----|---------------------------------------------------------------|

|   | (b) | Manitoba Properties |
|--------|-----|---------------------|

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

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

----

| 5. | Exploration and Evaluation Assets (Continued) |
|----|-----------------------------------------------|

|   | (b) | Manitoba Properties (Continued) |
|--------|-----|---------------------------------|

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

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

| 6.  | Foreign Value-added Taxes Recoverable |
|----------|---------------------------------------|

| 7.  | Equipment |
|----------|-----------|

|                                                |   |  Vehicles |   |   | Office Equipment |   |   | ComputerEquipment |   |   |  Total |   |
|-----------------------------------------------------|--------|----------------|--------|--------|------------------|--------|--------|-------------------|--------|--------|-------------|--------|
| Cost                                                |   |           |   |   |             |   |   |              |   |   |        |   |
| Balance, April 1, 2010                              |   | $              | 36,597 |   |             | $      | 1,059  |              |   | $      | 13,343      |   |   | $ | 50,999 |   |
|      Additions (disposals) |   |           | 39,666 |   |             |   | 91     |              |   |   | (1,637      | )      |   |   | 38,120 |   |
| Balance, March 31, 2011                             |   |           | 76,263 |   |             |   | 1,150  |              |   |   | 11,706      |   |   |   | 89,119 |   |
| Additions                                           |   |           | 12,758 |   |             |   | 1,079  |              |   |   | 8,232       |   |   |   | 22,069 |   |
| Balance, March 31, 2012                             |   |           | 89,021 |   |             |   | 2,229  |              |   |   | 19,938      |   |   |   | 111,188 |   |
|  Accumulated amortization                      |   |           |   |   |             |   |   |              |   |   |        |   |   |   |   |   |
| Balance, April 1, 2010                              |   |           | 34,936 |   |             |   | 680    |              |   |   | 11,449      |   |   |   | 47,065 |   |
|    Amortization                      |   |           | (9,401 | )      |             |   | 239    |              |   |   | (1,799      | )      |   |   | (10,961 | ) |
| Balance, March 31, 2011                             |   |           | 25,535 |   |             |   | 919    |              |   |   | 9,650       |   |   |   | 36,104 |   |
|    Amortization                      |   |           | 12,079 |   |             |   | 258    |              |   |   | 3,181       |   |   |   | 15,518 |   |
| Balance, March 31, 2012                             |   |           | 37,614 |   |             |   | 1,177  |              |   |   | 12,831      |   |   |   | 51,622 |   |
|                                                |   |           |   |   |             |   |   |              |   |   |        |   |   |   |   |   |
| Carrying amounts                                    |   |           |   |   |             |   |   |              |   |   |        |   |   |   |   |   |
| As at April 1, 2010                                 |   |           | 1,661  |   |             |   | 379    |              |   |   | 1,894       |   |   |   | 3,934 |   |
| As at March 31, 2011                                |   |           | 50,728 |   |             |   | 231    |              |   |   | 2,056       |   |   |   | 53,015 |   |
| As at March 31, 2012                                |   | $              | 51,407 |   |             | $      | 1,052  |              |   | $      | 7,107       |   |   | $ | 59,566 |   |

----

| 8.  | Accounts Payable and Accrued Liabilities |
|----------|------------------------------------------|

|                |   | March 31,2012 |    |   |  March 31,2011 |   |    |  April 1,2010 |   |
|---------------------|--------|---------------|---------|--------|---------------------|--------|---------|--------------------|--------|
|                |   |          |    |   |                |   |    |               |   |
| Trade payables      |   | $             | 42,760  |   |                | $      | 225,964 |               |   | $ | 307,617 |   |
| Accrued liabilities |   |          | 115,181 |   |                |   | 26,270  |               |   |   | 230,967 |   |
| Totals              |   | $             | 157,941 |   |                | $      | 252,234 |               |   | $ | 538,584 |   |

| 9.  | Related Party Transactions and Balances |
|----------|-----------------------------------------|

|                                        |   | For the years ended March 31, |    |
|---------------------------------------------|--------|-------------------------------|---------|
|                                        |   | 2012                          |    |   | 2011 |   |
| Cream Minerals LimitedSalaries and benefits |   | $                             | 295,412 |   |   | $ | 311,942 |   |
| Directors fees (1)                          |   |                          | 58,500  |   |   |   | 32,500 |   |
| Share-based payments (1)                    |   |                          | 254,949 |   |   |   | 528,988 |   |
| Cream Minerals de Mexico, S.A. de C.V.      |   |                          |    |   |   |   |   |   |
| Salaries and benefits (2)                   |   |                          | 120,000 |   |   |   | 141,838 |   |
| Share-based payments (2)                    |   |                          | --      |   |   |   | 235,106 |   |

|   | (1) | Directors are entitled to director fees and stock options for their services. |
|--------|-----|-------------------------------------------------------------------------------|

|   | (2) | Salaries and benefits and share-based payments have been recorded as exploration costs related to the Nuevo Milenio project. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------|

|                                                                          |   | For the years ended March 31, |    |
|-------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                          |   | 2012                          |    |   | 2011 |   |
| Quorum Management and Administrative Services Inc. (“Quorum”) (a) |   | $                             | 565,319 |   |   | $ | 529,434 |   |
| Consulting and directors fees (b)                                             |   |                          | 22,500  |   |   |   | 30,000 |   |
| Finance costs (c)                                                             |   |                          | --      |   |   |   | 19,545 |   |

----

| 9. | Related Party Transactions and Balances (Continued) |
|----|-----------------------------------------------------|

| Balances at:                                                                      |   | March 31, 2012 |    |   | March 31, 2011 |   |    | April 1, 2010 |   |
|-----------------------------------------------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|---------|--------------------|--------|
| Quorum (a)   Deposits                                              |   | $                   | 189,963 |   |                | $      | 64,000  |               |   | $ | -- |   |
| Payables:                                                                         |   |                |    |   |                |   |    |               |   |   |   |   |
|    Quorum (a)                                                      |   |                | 59,008  |   |                |   | 40,075  |               |   |   | 276,333 |   |
|    Directors (d)                                                   |   |                | 29,882  |   |                |   | 153,951 |               |   |   | 232,564 |   |
|    Lang Mining Corporation (d)                                     |   |                | --      |   |                |   | --      |               |   |   | 94,500 |   |
|    Ainsworth Jenkins – Casierra project (b)                  |   |                | --      |   |                |   | --      |               |   |   | 39,109 |   |
|    Mr. Frank A. Lang, interest bearing (b)                         |   |                | --      |   |                |   | --      |               |   |   | 337,100 |   |
|    Mr. Frank A. Lang, advances (b)                                 |   |                | --      |   |                |   | --      |               |   |   | 720,000 |   |
|    Mr. Frank A. Lang, accrued interest (b)                         |   |                | --      |   |                |   | --      |               |   |   | 44,272 |   |
|        Mr. Frank A. Lang, expenses payable (b) |   |                | --      |   |                |   | --      |               |   |   | 7,209 |   |

|   | (a) | Management, administrative, and other services are provided by Quorum, a private company held jointly, with a one-third interest each, by the Company and two other public companies, ValGold and Emgold Mining Corporation (“Emgold”).  Quorum provides services on a full cost recovery basis to the various entities sharing office space with the Company. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Included in consulting and directors fees are legal fees 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. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The directors balance includes fees and expenses owing to directors, as well as any salaries 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. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Lang Mining Corporation (“Lang Mining”) is a private company controlled by Mr. Lang.  Lang Mining provided management services to the Company while Mr. Lang was president of the Company.  At December 31, 2008, the fees were terminated.  The balance owing to Lang Mining relates to accruals made for these past services.  These fees were paid during the year ended March 31, 2011. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.  | Expenses by Nature |
|-----------|--------------------|

|                             |   | For the years ended March 31, |     |
|----------------------------------|--------|-------------------------------|----------|
|                             |   | 2012                          |     |   | 2011 |   |
| Amortization                     |   | $                             | 2,382    |   |   | $ | 865 |   |
| Office and administration        |   |                          | 139,690  |   |   |   | 169,200 |   |
| Credit for Quorum fees (Note 9a) |   |                          | (218,144 | ) |   |   | -- |   |
| Travel and conferences           |   |                          | 67,244   |   |   |   | 7,886 |   |
| Totals                           |   | $                             | (8,828   | ) |   | $ | 177,951 |   |

| 11.  | Share Capital |
|-----------|---------------|

----

| 11. | Share Capital (Continued) |
|-----|---------------------------|

----

| 11. | Share Capital (Continued) |
|-----|---------------------------|

|  Number Granted      |   |  Grant Date |   |  Expiry Date |   |  Exercise Price |   | Risk-free Interest Rate |   | Expected Life in Years |   |  Expected Volatility |    |  Fair Value per Option |
|---------------------------|--------|------------------|--------|-------------------|--------|----------------------|--------|-------------------------|--------|------------------------|--------|---------------------------|---------|-----------------------------|
|    600,000 |   | June 1, 2011     |   | June 1, 2016      |   | $                    | 0.22   |                    | 2.23%  |                   | 5      |                      | 104.44% |                        | $ | 0.17 |
|    500,000 |   | June 2, 2011     |   | June 2, 2016      |   | $                    | 0.23   |                    | 2.30%  |                   | 5      |                      | 113.50% |                        | $ | 0.16 |
| 1,200,000                 |   | June 23, 2011    |   | June 23, 2016     |   | $                    | 0.16   |                    | 2.09%  |                   | 5      |                      | 107.89% |                        | $ | 0.13 |

| Exercise Price |   |   | Number Outstanding |   |       | NumberExercisable |   | Average RemainingContractual Life |
|----------------|--------|--------|--------------------|--------|------------|-------------------|--------|-----------------------------------|
| $              | 0.50   |   |               |   | 1,001,500  |              |   |                              | 1,001,500 |   | * 0.05 years |
| $              | 0.50   |   |               |   | 150,000    |              |   |                              | 150,000 |   | 0.68 years |
| $              | 0.12   |   |               |   | 1,560,000  |              |   |                              | 1,560,000 |   | 1.87 years |
| $              | 0.38   |   |               |   | 6,375,000  |              |   |                              | 6,375,000 |   | **3.93 years |
| $              | 0.22   |   |               |   | 600,000    |              |   |                              | 600,000 |   | 4.17 years |
| $              | 0.23   |   |               |   | 500,000    |              |   |                              | 375,000 |   | 4.18 years |
| $              | 0.16   |   |               |   | 1,200,000  |              |   |                              | 1,200,000 |   | 4.23 years |
|           |   |   |               |   | 11,386,500 |              |   |                              | 11,261,500 |   | 3.32 years |

|                                     |   | Number of Shares |       |   | Weighted Average Exercise Price |   |
|------------------------------------------|--------|------------------|------------|--------|---------------------------------|--------|
| 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 |   |
| Granted                                  |   |             | 2,300,000  |   |                            |   | 0.19 |   |
| Exercised                                |   |             | (100,000   | )      |                            |   | 0.12 |   |
| Cancelled/forfeited                      |   |             | (720,000   | )      |                            |   | 0.48 |   |
| Balance, March 31, 2012                  |   |             | 11,386,500 |   |                            |   | 0.32 |   |
| Vested and exercisable at March 31, 2012 |   |             | 11,261,500 |   |                            | $      | 0.32 |   |

----

| 11. | Share Capital (Continued) |
|-----|---------------------------|

| Number of Warrants    | Exercise Price            | Expiry Dates      |
|-----------------------|---------------------------|-------------------|
|   5,758,500 |    $0.15 * | April 13, 2012    |
| 40,900,000            | $0.24                     | December 21, 2012 |
|   3,750,000 | $0.16                     | December 21, 2012 |
| 50,408,500            |                      |              |

|                    |   | Number of Warrants |        |   | Weighted Average Exercise Price |   |
|-------------------------|--------|--------------------|-------------|--------|---------------------------------|--------|
| 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 |   |
| Exercised               |   |               | (2,998,571  | )      |                            |   | 0.16 |   |
| Balance, March 31, 2012 |   |               | 50,408,500  |   |                            | $      | 0.22 |   |

| 12.  | Segmented Information |
|-----------|-----------------------|

| Statement of Financial Position March 31, 2012 |   | Canada |    |   | Mexico |   |    | Total  |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Total Assets                                   |   | $      | 729,798 |   |   | $      | 685,286 |   |   | $ | 1,415,084 |   |
| Current Assets                                 |   | $      | 476,747 |   |   | $      | 78,862  |   |   | $ | 555,609 |   |
| Long-term Assets                               |   | $      | 245,508 |   |   | $      | 613,967 |   |   | $ | 859,475 |   |

----

| 12. | Segmented Information (Continued) |
|-----|-----------------------------------|

| Statement of Financial Position March 31, 2011 |   | Canada |      |   | Mexico |   |    | Total  |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Total Assets                                   |   | $      | 5,220,739 |   |   | $      | 411,879 |   |   | $ | 5,632,618 |   |
| Current Assets                                 |   | $      | 4,654,611 |   |   | $      | 225,131 |   |   | $ | 4,879,742 |   |
| Long-term Assets                               |   | $      | 566,128   |   |   | $      | 186,748 |   |   | $ | 752,876 |   |

| Statement of Financial Position April 1, 2010 |   | Canada |    |   | Mexico |   |    | Total  |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Total Assets                                  |   | $      | 786,697 |   |   | $      | 200,142 |   |   | $ | 986,839 |   |
| Current Assets                                |   | $      | 293,764 |   |   | $      | 58,039  |   |   | $ | 351,803 |   |
| Long-term Assets                              |   | $      | 492,933 |   |   | $      | 142,103 |   |   | $ | 635,036 |   |

| March 31, 2012                   |   | Canada |      |   | Mexico |   |      | Total  |   |
|----------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Exploration and evaluation costs |   | $      | 236,221   |   |   | $      | 2,526,898 |   |   | $ | 2,763,119 |   |
| Other expenses                   |   |   | 2,161,089 |   |   |   | --        |   |   |   | 2,161,089 |   |
| Total expenses                   |   | $      | 2,397,310 |   |   | $      | 2,526,898 |   |   | $ | 4,924,208 |   |

| March 31, 2011                   |   | Canada |      |   | Mexico |   |    | Total  |   |
|----------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Exploration and evaluation costs |   | $      | 714,237   |   |   | $      | 987,913 |   |   | $ | 1,702,150 |   |
| Other expenses                   |   |   | 2,920,242 |   |   |   | --      |   |   |   | 2,920,242 |   |
| Total expenses                   |   | $      | 3,634,479 |   |   | $      | 987,913 |   |   | $ | 4,622,392 |   |

| 13.  | Income Taxes |
|-----------|--------------|

|                                    |   | 2012   |       |   | 2011   |   |
|-----------------------------------------|--------|--------|------------|--------|--------|--------|
| Loss for the year                       |   | $      | 4,883,290  |   |   | $      | 4,605,246 |   |
| Statutory tax rate                      |   |   | 26.13      | %      |   |   | 28.01 | % |
| Expected income tax recovery            |   |   | 1,276,000  |   |   |   | 1,290,000 |   |
| Decrease to income tax recovery due to: |   |   |       |   |   |   |   |   |
| Non-deductible permanent differences    |   |   | (183,000   | )      |   |   | (552,000 | ) |
| Losses not recognized                   |   |   | (1,061,000 | )      |   |   | (823,000 | ) |
| Other                                   |   |   | (32,000    | )      |   |   | 85,000 |   |
| Income tax recovery                     |   | $      | --         |   |   | $      | -- |   |

----

| 13. | Income Taxes (Continued) |
|-----|--------------------------|

|                                        |   | March 31,2012 |       |   | March 31,2011 |   |       | April 1,2010 |   |
|---------------------------------------------|--------|---------------|------------|--------|---------------|--------|------------|--------------|--------|
| Mineral property interests and equipment    |   | $             | 2,536,000  |   |          | $      | 2,419,000  |         |   | $ | 2,390,000 |   |
| Share issue costs                           |   |          | 93,000     |   |          |   | 130,000    |         |   |   | 21,000 |   |
| Operating losses carried forward            |   |          | 3,510,000  |   |          |   | 2,530,000  |         |   |   | 1,840,000 |   |
| Total deferred tax assets                   |   |          | 6,139,000  |   |          |   | 5,079,000  |         |   |   | 4,251,000 |   |
| Valuation allowance for deferred tax assets |   |          | (6,139,000 | )      |          |   | (5,079,000 | )            |   |   | (4,251,000 | ) |
|                                        |   | $             | --         |   |          | $      | --         |         |   | $ | -- |   |

| Expiry date |   |   | $         |   |   |
|-------------|--------|--------|-----------|--------|--------|
| 2014        |   |   | 405,000   |   |   |
| 2015        |   |   | 424,000   |   |   |
| 2026        |   |   | 564,000   |   |   |
| 2027        |   |   | 618,000   |   |   |
| 2028        |   |   | 928,000   |   |   |
| 2029        |   |   | 895,000   |   |   |
| 2030        |   |   | 706,000   |   |   |
| 2031        |   |   | 1,704,000 |   |   |
| 2032        |   |   | 1,342,000 |   |   |
| Total       |   |   | 7,586,000 |   |   |

----

| 14.  | Financial Instruments and Risk Management |
|-----------|-------------------------------------------|

|                                                |   |   |   |   | March 31, 2012 |   |    | March 31, 2011 |   |
|-----------------------------------------------------|--------|--------|--------|--------|----------------|--------|---------|----------------|--------|
|                                                |   |   |   |   | Carrying       |   |    | Fair           |   |   | Carrying |   |   | Fair |   |
|                                                |   | Level  |   |   | Value          |   |    | Value          |   |   | Value |   |   | Value |   |
| Cash (a)                                            |   |   | 1      |   |           | $      | 292,501 |           |   | $ | 292,501 |   |   | $ | 448,109 |   |   | $ | 448,109 |   |
| Short-term investments (a)                          |   |   | 1      |   |           |   | 175,429 |           |   |   | 175,429 |   |   |   | 4,336,906 |   |   |   | 4,336,906 |   |
| Amounts receivable and prepaid expenses (a)         |   |   | 1      |   |           |   | 87,679  |           |   |   | 87,679 |   |   |   | 86,544 |   |   |   | 86,544 |   |
| Marketable securities – public companies (b)  |   |   | 1      |   |           |   | --      |           |   |   | -- |   |   |   | 8,182 |   |   |   | 8,182 |   |
| Marketable securities – private companies (c) |   |   | 3      |   |           |   | --      |           |   |   | -- |   |   |   | 1 |   |   |   | 1 |   |
| Investment in associate (d)                         |   |   | 3      |   |           |   | 1       |           |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Accounts payable and accrued liabilities            |   |   | 2      |   |           |   | 157,941 |           |   |   | 157,941 |   |   |   | 252,234 |   |   |   | 252,234 |   |
| Accounts payable, related parties (a)               |   |   | 2      |   |           |   | 88,890  |           |   |   | 88,890 |   |   |   | 194,026 |   |   |   | 194,026 |   |

|                                                |   |   |   |   | April 1, 2010 |   |
|-----------------------------------------------------|--------|--------|--------|--------|---------------|--------|
|                                                |   |   |   |   | Carrying      |   |   | Fair |   |
|                                                |   | Level  |   |   | Value         |   |   | Value |   |
| Cash (a)                                            |   |   | 1      |   |          | $      | 228,106 |   |   | $ | 228,106 |   |
| Amounts receivable and prepaid expenses (a)         |   |   | 1      |   |          |   | 119,085 |   |   |   | 119,085 |   |
| Marketable securities – public companies (b)  |   |   | 1      |   |          |   | 4,611 |   |   |   | 4,611 |   |
| Marketable securities – private companies (c) |   |   | 3      |   |          |   | 1 |   |   |   | 1 |   |
| Investment in associate (d)                         |   |   | 3      |   |          |   | 1 |   |   |   | 1 |   |
| Accounts payable and accrued liabilities            |   |   | 2      |   |          |   | 538,584 |   |   |   | 538,584 |   |
| Accounts payable, related parties (a)               |   |   | 2      |   |          |   | 1,751,087 |   |   |   | 1,751,087 |   |

|   | a) | Fair value approximates the carrying amounts due to the short-term nature.  During year ended March 31, 2012, short-term investments which were held in Level 2 as at March 31, 2011, were transferred to Level 1. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Recorded at fair value.  Quoted market prices are used to determine fair value.  These investments were re-designated from available-for-sale to fair value through profit or loss on transition to IFRS. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | This investment was re-designated from available-for-sale to fair value through profit or loss on transition to IFRS. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------|

|   | d) | Investment relates to Quorum. |
|--------|----|-------------------------------|

----

| 14. | Financial Instruments and Risk Management (Continued) |
|-----|-------------------------------------------------------|

|                    |   | March 31, 2012 |    |   | March 31, 2011 |   |      | April 1, 2010 |   |
|-------------------------|--------|----------------|---------|--------|----------------|--------|-----------|---------------|--------|
| Amounts receivable      |   |           |    |   |           |   |      |          |   |
| Due within 90 days      |   | $              | 35,597  |   |           | $      | 50,816    |          |   | $ | 8,913 |   |
| Deposits, related party |   |           | 189,963 |   |           |   | 64,000    |          |   |   | -- |   |
|                    |   | $              | 225,560 |   |           | $      | 114,816   |          |   | $ | 8,913 |   |
| Cash                    |   |           | 292,501 |   |           |   | 448,109   |          |   |   | 228,106 |   |
| Short-term investments  |   |           | 175,429 |   |           |   | 4,336,906 |          |   |   | -- |   |
|                    |   | $              | 693,490 |   |           | $      | 4,899,831 |          |   | $ | 237,019 |   |

----

| 14. | Financial Instruments and Risk Management (Continued) |
|-----|-------------------------------------------------------|

|                                                                                                      |   | March 31, 2012 |          |   | March 31, 2011 |   |         | April 1, 2010 |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------------|---------------|--------|---------------------|--------|--------------|---------------|--------|
| Cash                                                                                                      |   | $              | 292,501       |   |                | $      | 448,109      |          |   | $ | 228,106 |   |
| Short-term investments                                                                                    |   |           | 175,429       |   |                |   | 4,336,906    |          |   |   | -- |   |
| Marketable securities                                                                                     |   |           | --            |   |                |   | 8,183        |          |   |   | 4,612 |   |
| Amounts receivable -    Within 90 days or less                                        |   |           |  35,597  |   |                |   |  50,816 |          |   |   | 8,913 |   |
| Deposits from related party -     In later than 90 days, not less than one year  |   |           |  189,963 |   |                |   |  64,000 |          |   |   | -- |   |
|  Accounts payable and accrued liabilities with contractual maturities – Within 90 days or less |   |           | 157,941       |   |                |   | 252,234      |          |   |   | 538,584 |   |
|   Due to related parties with contractual maturities -  Within 90 days or less             |   |           |  88,890  |   |                |   | 194,026      |          |   |   |  1,751,087 |   |

|                                     |   | March 31, 2012 |    |   | March 31, 2011 |   |
|------------------------------------------|--------|----------------|---------|--------|----------------|--------|
| U.S. Dollars                             |   |           |    |   |           |   |
| Cash                                     |   | $              | 146,487 |   |           | $      | 241,461 |   |
| Accounts payable and accrued liabilities |   |           | (14,137 | )      |           |   | (182,425 | ) |
| Mexican Pesos                            |   |           |    |   |           |   |   |   |
| Cash                                     |   |           | 8,316   |   |           |   | 36,742 |   |
| Value-added taxes recoverable            |   |           | 497,865 |   |           |   | 134,228 |   |
| Accounts payable and accrued liabilities |   |           | (10,881 | )      |           |   | (5,038 | ) |

----

| 14. | Financial Instruments and Risk Management (Continued) |
|-----|-------------------------------------------------------|

| 15.  | Management of Capital |
|-----------|-----------------------|

|                                 |   | March 31, 2012 |        |   | March 31, 2011 |   |        | April 1, 2010 |   |
|--------------------------------------|--------|----------------|-------------|--------|----------------|--------|-------------|---------------|--------|
| Equity (deficiency) is comprised of: |   |           |        |   |           |   |        |          |   |
| Share capital                        |   | $              | 32,589,847  |   |           | $      | 32,110,200  |          |   | $ | 24,652,771 |   |
| Share subscriptions                  |   |           | --          |   |           |   | --          |          |   |   | 873,475 |   |
| Warrant reserve                      |   |           | 2,836,637   |   |           |   | 2,922,556   |          |   |   | 170,613 |   |
| Share-based payments reserve         |   |           | 4,506,782   |   |           |   | 4,035,325   |          |   |   | 2,276,786 |   |
| Deficit                              |   |           | (38,765,013 | )      |           |   | (33,881,723 | )             |   |   | (29,276,477 | ) |

----

| 16.  | Exploration Costs |
|-----------|-------------------|

| Year ended March 31, 2012     |   | Kaslo Silver Property, British Columbia |   |   | ManitobaProperties,Manitoba |   |   | Nuevo Milenio Property, Mexico |   |   | TotalMarch 31,2012 |   |
|-------------------------------|--------|---------------------------------------------------|--------|--------|-----------------------------|--------|--------|-----------------------------------------------|--------|--------|--------------------|--------|
| Incurred during the year      |   |                                              |   |   |                        |   |   |                                          |   |   |               |   |
| Assays and analysis           |   | $                                                 | --     |   |                        | $      | --     |                                          |   | $      | 142,656            |   |   | $ | 142,656 |   |
| Drilling                      |   |                                              | --     |   |                        |   | --     |                                          |   |   | 1,997,886          |   |   |   | 1,997,886 |   |
| Geological and geophysical    |   |                                              | 19,800 |   |                        |   | 2,300  |                                          |   |   | 284,690            |   |   |   | 306,790 |   |
| Site activities               |   |                                              | 3,536  |   |                        |   | --     |                                          |   |   | 277,023            |   |   |   | 280,559 |   |
| Travel and accommodation      |   |                                              | 15,691 |   |                        |   | --     |                                          |   |   | 19,537             |   |   |   | 35,228 |   |
| Total Expenses March 31, 2012 |   | $                                                 | 39,027 |   |                        | $      | 2,300  |                                          |   | $      | 2,721,792          |   |   | $ | 2,763,119 |   |

|  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 year        |   |                                                |   |   |                                                               |   |   |                                            |   |   |                                       |   |   |                                 |      |
| 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 |   |
| Share-based payments            |   |                                                | --     |   |                                                               |   | --     |                                            |   |   | --                                         |   |   |                                 | 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 |   |

| 17.  | Transition to IFRS |
|-----------|--------------------|

|   | For all periods up to and including the year ended March 31, 2011, the Company prepared its consolidated financial statements in accordance with CGAAP.  The consolidated financial statements as at and for the year ended March 31, 2012 are the first audited statements which the Company has prepared in accordance with IFRS. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In preparing these consolidated financial statements, the opening consolidated statement of financial position was prepared as at April 1, 2010, the Company’s Transition Date. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | This note explains the principal adjustments made in restating the previous CGAAP consolidated balance sheet as at April 1, 2010 and its previously published CGAAP consolidated financial statements as at and for the year ended March 31, 2011. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

|   | Reconciliations: |
|--------|------------------|

|   | (i) | reconciliation of the consolidated statement of financial position and equity as at April 1, 2010; |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (ii) | reconciliation of the consolidated statement of financial position and equity as at March 31, 2011; and |
|--------|------|---------------------------------------------------------------------------------------------------------|

|   | (iii) | reconciliation of the consolidated statements of operations and comprehensive loss for the year ended March 31, 2011. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------|

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

|   | (i) | The reconciliation between CGAAP and IFRS consolidated statement of financial position as at April 1, 2010 is provided below: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------|

|                                                 | April 1, 2010 |   |
|------------------------------------------------------|---------------|--------|
|                                                 | Note          |   | CGAAP |   |   | Effect of transition to IFRS |   | IFRS |   |
|                                                 |          |   |   |   |   |   |   |   |   |   |
| Current Assets                                       |          |   |   |   |   |   |   |   |   |   |
|   Cash                                     |          |   | $ | 228,106 |   |   | $ | -- |   |   | $ | 228,106 |   |
|   Marketable securities at fair value      | (b)           |   |   | -- |   |   |   | 4,612 |   |   |   | 4,612 |   |
|   Amounts receivable and prepaid expenses  |          |   |   | 119,085 |   |   |   | -- |   |   |   | 119,085 |   |
| Non-current Assets                                   |          |   |   | 347,191 |   |   |   | 4,612 |   |   |   | 351,803 |   |
|   Exploration and evaluation assets        |          |   |   | 454,853 |   |   |   | -- |   |   |   | 454,853 |   |
|   Foreign value-added taxes recoverable    |          |   |   | 139,556 |   |   |   | -- |   |   |   | 139,556 |   |
|   Equipment                                |          |   |   | 3,934 |   |   |   | -- |   |   |   | 3,934 |   |
|   Deferred finance costs                   |          |   |   | 18,692 |   |   |   | -- |   |   |   | 18,692 |   |
|   Investments                              | (b)           |   |   | 4,613 |   |   |   | (4,612 | ) |   |   | 1 |   |
|   Reclamation deposits                     |          |   |   |  18,000 |   |   |   | -- |     |   |   | 18,000 |   |
| Total Assets                                         |          |   | $ | 986,839 |   |   | $ | -- |   |   | $ | 986,839 |   |
|                                                 |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Current Liabilities                                  |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Accounts payable and accrued liabilities |          |   | $ | 538,584 |   |   | $ | -- |   |   | $ | 538,584 |   |
|   Accounts payable, related parties        |          |   |   | 1,751,087 |   |   |   | -- |   |   |   | 1,751,087 |   |
| Total Liabilities                                    |          |   |   | 2,289,671 |   |   |   | -- |   |   |   | 2,289,671 |   |
|  Equity (Deficiency)                            |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Share capital                            | (a)           |   |   | 24,596,256 |   |   |   | 56,515 |   |   |   | 24,652,771 |   |
|   Share subscriptions                      |          |   |   | 873,475 |   |   |   | -- |   |   |   | 873,475 |   |
|   Warrant reserve                          |          |   |   | 170,613 |   |   |   | -- |   |   |   | 170,613 |   |
|   Share-based payments reserve             |          |   |   | 2,276,786 |   |   |   | -- |   |   |   | 2,276,786 |   |
|   Accumulated other comprehensive loss     | (b)           |   |   | (27,093 | )    |   |   | 27,093 |   |   |   | -- |   |
|   Deficit                                  | (a, b)        |   |   | (29,192,869 | )    |   |   | (83,608 | ) |   |   | (29,276,477 | )    |
| Total Equity (Deficiency)                            |          |   |   | (1,302,832 | )    |   |   | -- |   |   |   | (1,302,832 | )    |
| Total Liabilities and Equity                         |          |   | $ | 986,839 |   |   | $ | -- |   |   | $ | 986,839 |   |

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

|   | (ii) | The reconciliation between CGAAP and IFRS consolidated statement of financial position as at March 31, 2011 is provided below: |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------|

|                                                  | March 31, 2011 |   |
|-------------------------------------------------------|----------------|--------|
|                                                  | Note           |   | CGAAP |   |   | Effect of transition to IFRS |   |   | IFRS |   |
|                                                  |           |   |   |   |   |   |   |   |   |   |
| Current Assets                                        |           |   |   |   |   |   |   |   |   |   |
|   Cash                                      |           |   | $ | 448,109 |   |   | $ | -- |   |   | $ | 448,109 |   |
|   Short-term investments                    |           |   |   | 4,336,906 |   |   |   | -- |   |   |   | 4,336,906 |   |
|   Marketable securities at fair value       | (b)            |   |   | -- |   |   |   | 8,183 |   |   |   | 8,183 |   |
|   Amounts receivable and prepaid expenses   |           |   |   | 86,544 |   |   |   | -- |   |   |   | 86,544 |   |
|                                                  |           |   |   | 4,871,559 |   |   |   | -- |   |   |   | 4,879,742 |   |
| Non-current Assets  Deposits, related party |           |   |   |  64,000 |   |   |   |  -- |   |   |   |  64,000 |   |
|   Exploration and evaluation assets         |           |   |   | 483,605 |   |   |   | -- |   |   |   | 483,605 |   |
|   Foreign value-added taxes recoverable     |           |   |   | 134,255 |   |   |   | -- |   |   |   | 134,255 |   |
|   Equipment                                 |           |   |   | 53,015 |   |   |   | -- |   |   |   | 53,015 |   |
|   Investments                               | (b)            |   |   | 8,184 |   |   |   | (8,183 | ) |   |   | 1 |   |
|   Reclamation deposits                      |           |   |   | 18,000 |   |   |   | -- |   |   |   | 18,000 |   |
|                                                  |           |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Assets                                          |           |   | $ | 5,632,618 |   |   | $ | -- |   |   | $ | 5,632,618 |   |
|                                                  |           |   |   |   |   |   |   |   |   |   |   |   |   |
| Current Liabilities                                   |           |   |   |   |   |   |   |   |   |   |   |   |   |
|   Accounts payable and accrued liabilities  |           |   | $ | 252,234 |   |   | $ | -- |   |   | $ | 252,234 |   |
|   Accounts payable, related parties         |           |   |   | 194,026 |   |   |   | -- |   |   |   | 194,026 |   |
| Total Liabilities                                     |           |   |   | 446,260 |   |   |   | -- |   |   |   | 446,260 |   |
|  Equity                                          |           |   |   |   |   |   |   |   |   |   |   |   |   |
|   Share capital                             | (a)            |   |   | 32,053,685 |   |   |   | 56,515 |   |   |   | 32,110,200 |   |
|   Warrant reserve                           |           |   |   | 2,922,556 |   |   |   | -- |   |   |   | 2,922,556 |   |
|   Share-based payments reserve              |           |   |   | 4,035,325 |   |   |   | -- |   |   |   | 4,035,325 |   |
|   Accumulated other comprehensive loss      | (b)            |   |   | (23,522 | )    |   |   | 23,522 |   |   |   | -- |   |
|   Deficit                                   | (a, b)         |   |   | (33,801,686 | )    |   |   | (80,037 | )    |   |   | (33,881,723 | )    |
| Total Equity (Deficiency)                             |           |   |   | 5,186,358 |   |   |   | -- |   |   |   | 5,186,358 |   |
| Total Liabilities and Equity                          |           |   | $ | 5,632,618 |   |   | $ | -- |   |   | $ | 5,632,618 |   |

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

|   | (iii) | The reconciliation between CGAAP and IFRS consolidated statement of operations and comprehensive loss for the year ended March 31, 2011 is provided below: |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                    | Year EndedMarch 31, 2011 |   |
|-------------------------------------------------------------------------|--------------------------|--------|
|                                                                    |    Note   |   |   CGAAP |   |   | Effect of transition to IFRS |   |   |   IFRS |   |
|                                                                    |                     |   |   |   |   |   |   |   |   |   |
| REVENUE                                                                 |                     |   |   |   |   |   |   |   |   |   |
|     Interest income                                 |                     |   | $ | 13,575 |   |   | $ | -- |   |   | $ | 13,575 |   |
|     Gains on marketable securities                  |   (b)          |   |   | -- |   |   |   | 3,571 |   |   |   | 3,571 |   |
|                                                                    |                     |   |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                                                |                     |   |   |   |   |   |   |   |   |   |   |   |   |
|     Exploration costs                               |                     |   |   | 1,702,150 |   |   |   | -- |   |   |   | 1,702,150 |   |
|     Finance costs                                   |                     |   |   | 32,428 |   |   |   | -- |   |   |   | 32,428 |   |
|     Foreign exchange loss                           |                     |   |   | 14,438 |   |   |   | -- |   |   |   | 14,438 |   |
|     General and administrative                      |                     |   |   | 177,951 |   |   |   | -- |   |   |   | 177,951 |   |
|     Professional fees                               |                     |   |   | 139,125 |   |   |   | -- |   |   |   | 139,125 |   |
|     Take-over bid                                   |                     |   |   | 524,212 |   |   |   | -- |   |   |   | 524,212 |   |
|     Salaries and benefits                           |                     |   |   | 381,433 |   |   |   | -- |   |   |   | 381,433 |   |
|     Shareholder communications                      |                     |   |   | 297,859 |   |   |   | -- |   |   |   | 297,859 |   |
|     Share-based payments                            |                     |   |   | 1,339,990 |   |   |   | -- |   |   |   | 1,339,990 |   |
|     Write-down of exploration and evaluation assets |                     |   |   | 12,806 |   |   |   | -- |   |   |   | 12,806 |   |
| Net loss for the year                                                   |                     |   |   | 4,608,817 |   |   |   | (3,571 | ) |   |   | 4,605,246 |   |
|     Unrealized gains on investments                 |   (b)          |   |   | (3,571 | ) |   |   | 3,571 |   |   |   | -- |   |
| Comprehensive Loss for the Year                                         |                     |   | $ | 4,605,246 |   |   | $ | -- |   |   | $ | 4,605,246 |   |

----

| 17. | Transition to IFRS (Continued) |
|-----|--------------------------------|

|   | a) | Flow-through Shares |
|--------|----|---------------------|

|   | Under  IFRS, the Company bifurcates the flow-through share into i)  a  flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital.  Upon expenses being incurred, the Company recognizes a deferred tax liability for the amount of the tax deduction renounced to the shareholders and the premium liability is reversed.   The reversal of the premium liability and the deferred tax liability are recognized as tax recoveries to the extent that suitable deferred tax assets are available.  Under CGAAP, the Company recorded the tax cost of expenditures renounced to subscribers on the date the deductions were renounced to the subscribers.  Share capital was reduced and future income tax liabilities were increased by the tax cost of expenditures renounced to the subscribers, except that the amount was recognized as a tax recovery to the extent that suitable future tax assets were available. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | As a result of this change in policy, for issuances of flow-through shares for which expenditures have been incurred, share capital and deficit were increased by $83,608 at the date of transition, and at March 31, 2011.  Where flow-through shares were issued at a premium and expenditures were incurred, $56,515 was reclassified from share capital to deficit on the date of transition, and the year ended March 31, 2011. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Marketable Securities |
|--------|----|-----------------------|

| 18.  | Subsequent Event |
|-----------|------------------|

----