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|INTERNATIONAL TOWER HILL MINES LTD.
|-----------------------------------
|(An Exploration Stage Company)     
|                                   
|FORM 51-102F1                      
|MANAGEMENT DISCUSSION & ANALYSIS   
|                                   

August 26, 2011

|Introduction
|------------

This Management Discussion & Analysis (MD&A) for
International Tower Hill Mines Ltd. (the Company or ITH) for the year ended
May 31, 2011 has been prepared by management, in accordance with the
requirements of National Instrument 51-102, as of August 26, 2011 and should be
read in conjunction with the Companys audited consolidated financial statements
for the years ended May 31, 2011, 2010 and 2009. Except where otherwise noted,
all dollar amounts are stated in Canadian dollars.

Caution Regarding Forward Looking Statements

This MD&A contains forward-looking statements and
forward-looking information (collectively, forward-looking statements) within
the meaning of applicable Canadian and US securities legislation. These
statements relate to future events or the future activities or performance of
the Company. All statements, other than statements of historical fact are
forward-looking statements. Information concerning mineral resource estimates
also may be deemed to be forward-looking statements in that it reflects a
prediction of the mineralization that would be encountered if a mineral deposit
were developed and mined. Forward-looking statements are typically identified by
words such as: believe, expect, anticipate, intend, estimate, postulate, plans
and similar expressions, or which by their nature refer to future events. These
forward looking statements include, but are not limited to, statements
concerning:

- the Companys strategies and objectives, both generally and specifically in
  respect of the Livengood project;
- the potential for the expansion of the estimated resources at Livengood;
- the potential for a production decision concerning, and any production at,
  the Livengood project;
- the completion of a Pre-feasibility Study for the Livengood project;
- the potential for higher grade mineralization to form the basis for a
  starter surface mine shell in any production scenario at Livengood;
- the potential overburden geometry of the Livengood deposit being amenable
  for a low cost surface mine that could support a high production rate and
  economies of scale;
- the potential for cost savings due to the high gravity gold concentration
  component of some of the Livengood mineralization;

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- the timing of decisions regarding the timing and costs of exploration
  programs with respect to, and the issuance of the necessary permits and
  authorizations required for, the Companys ongoing exploration program at
  Livengood;
- the Companys estimates of the quality and quantity of the resources at
  Livengood;
- the timing and cost of the planned future exploration programs at
  Livengood, and the timing of the receipt of results therefrom;
- the Companys future cash requirements;
- general business and economic conditions;
- the Companys ability to meet its financial obligations as they come due,
  and to be able to raise the necessary funds to continue operations;
- the use of the proceeds from the financing which closed November 10, 2010;
  and
- the ability of the Company to continue to refine the project economics for
  the Livengood project, including by increasing proposed production and
  shortening the proposed mine life.

Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Inherent in forward looking statements are risks and uncertainties
beyond the Companys ability to predict or control, including, but not limited
to, risks related to the Companys inability to identify one or more economic
deposits on its property, variations in the nature, quality and quantity of any
mineral deposits that may be located, variations in the market price of any
mineral products the Company may produce or plan to produce, the Companys
inability to obtain any necessary permits, consents or authorizations required
for its activities, to produce minerals from its property successfully or
profitably, to continue its projected growth, to raise the necessary capital or
to be fully able to implement its business strategies, and other risks
identified herein under Risk Factors.

The Company cautions investors that any forward-looking
statements by the Company are not guarantees of future performance, and that
actual results are likely to differ, and may differ materially, from those
expressed or implied by forward looking statements contained in this MD&A.
Such statements are based on a number of assumptions which may prove incorrect,
including, but not limited to, assumptions about:

- the level and volatility of the price of gold;
- general business and economic conditions;
- the timing of the receipt of regulatory and governmental approvals, permits
  and authorizations necessary to implement and carry on the Companys planned
  exploration and potential development program at Livengood;
- conditions in the financial markets generally;

2

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- the Companys ability to secure the necessary consulting, drilling and
  related services and supplies on favourable terms in connection with not only
  its ongoing exploration program at Livengood but also in connection with the
  completion of its pre-feasibility study and in connection with any feasibility
  study that may be commissioned;
- the Companys ability to attract and retain key staff, particularly in
  connection with the carrying out of a feasibility study and the development of
  any mine at Livengood;
- the accuracy of the Companys resource estimates (including with respect to
  size and grade) and the geological, operational and price assumptions on which
  these are based;
- the timing of the ability to commence and complete the planned work at
  Livengood;
- the anticipated terms of the consents, permits and authorizations necessary
  to carry out the planned exploration and development programs at Livengood and
  the Companys ability to comply with such terms on a safe and cost-effective
  basis;
- the ongoing relations of the Company with its underlying lessors and the
  applicable regulatory agencies;
- that the metallurgy and recovery characteristics of samples from certain of
  the Companys mineral properties are reflective of the deposit as a whole;
- the continued development of and potential construction of any mine at the
  Livengood property not requiring consents, approvals, authorizations or
  permits that are materially different from those identified to date by the
  Company;
- the ability of the Company to predict how the net proceeds of the Financing
  will be used; and
- the timetables for the completion of a pre-feasibility study at Livengood
  and for any feasibility study that may be commissioned.

These forward looking statements are made as of the date hereof
and the Company does not intend and does not assume any obligation, to update
these forward looking statements, except as required by applicable law. For the
reasons set forth above, investors should not attribute undue certainty to or
place undue reliance on forward-looking statements.

Historical results of operations and trends that may be
inferred from the following discussion and analysis may not necessarily indicate
future results from operations. In particular, the current state of the global
securities markets may cause significant reductions in the price of the
Companys securities and render it difficult or impossible for the Company to
raise the funds necessary to continue operations. See Risk Factors 
Insufficient Financial Resources/Share Price Volatility.

3

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Caution Regarding Adjacent or Similar Mineral Properties

This MD&A contains information with respect to adjacent or
similar mineral properties in respect of which the Company has no interest or
rights to explore or mine. The Company advises US investors that the mining
guidelines of the US Securities and Exchange Commission (the SEC) set forth in
the SECs Industry Guide 7 (SEC Industry Guide 7) strictly prohibit
information of this type in documents filed with the SEC. As a foreign private
issuer preparing this MD&A pursuant to Canadian disclosure requirements
under the Canada-U.S. Multi-Jurisdictional Disclosure System, this MD&A is
not subject to the requirements of SEC Industry Guide 7. Readers are cautioned
that the Company has no interest in or right to acquire any interest in any such
properties, and that mineral deposits on adjacent or similar properties, and any
production therefore or economics with respect thereto, are not indicative of
mineral deposits on the Companys properties or the potential production from,
or cost or economics of, any future mining of any of the Companys mineral
properties.

Cautionary Note to US Investors Concerning Reserve and
Resource Estimates

The terms mineral reserve, proven mineral reserve and
probable mineral reserve are Canadian mining terms as defined in accordance
with Canadian National Instrument 43-101  Standards of Disclosure for Mineral
Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and
Petroleum (the CIM) - CIM Definition Standards on Mineral Resources and
Mineral Reserves, adopted by the CIM Council, as amended (CIM Standards).
These definitions differ from the definitions in SEC Industry Guide 7 under the
United States Securities Act of 1933, as amended (the Securities Act). Under
SEC Industry Guide 7 standards, a final or bankable feasibility study is
required to report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority.

In addition, the terms mineral resource, measured mineral
resource, indicated mineral resource and inferred mineral resource are
defined in and required to be disclosed by NI 43-101 and the CIM Standards;
however, these terms are not defined terms under SEC Industry Guide 7 and are
normally not permitted to be used in reports and registration statements filed
with the SEC. Investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into reserves.
Inferred mineral resources have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral resource will ever
be upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that all or
any part of an inferred mineral resource exists or is economically or legally
mineable. Disclosure of contained ounces in a resource is permitted disclosure
under Canadian regulations; however, the SEC normally only permits issuers to
report mineralization that does not constitute reserves by SEC Industry Guide
7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this MD&A and the
documents incorporated by reference herein contain descriptions of the Companys
mineral deposits that may not be comparable to similar information made public
by U.S. companies subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations thereunder.

All of the Company's public disclosure filings, including its
most recent Annual Information Form, management information circular, material
change reports, press releases and other information, may be accessed via
www.sedar.com and readers are urged to review
these materials, including the technical reports filed with respect to the
Companys Livengood project.

4

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|Current
      Business Activities
|---------------------------------

General

During the quarter ended May 31, 2011, and to the date of this
MD&A, the Company advanced its Livengood Gold Project in Alaska with the
continuation of activities in support of the Pre-feasibility Study (PFS). This
included ongoing drill programs, the advancement of engineering and
environmental studies, and the build-up of its team in Fairbanks, Alaska.

Highlights of activities during the quarter include:

- Mr. James J. Komadina was appointed the new CEO of ITH and as a Director,
  effective June 1, 2011.
- The completion of the 2011 winter drill program and commencement of the
  2011 summer drill program at the Livengood Project. With a total of eight
  drill rigs operating, the drill program is designed to: (1) expand the deposit
  in the Southwest (SW) area of the Money Knob deposit; (2) determine the
  continuity, size and geometry of the higher grade structural zones, (3)
  continue infill drilling between the Core and Sunshine zones; (4) develop
  surface mine geotechnical and hydro-geologic data; and (5) develop
  geotechnical data in areas identified as potential infrastructure sites. The
  project is currently operating 8 drill rigs (5 diamond and 3 RC).
- Deeper drilling has revealed at least two major structurally controlled
  higher grade feeder zones in the broader Core Zone, which average 1.0  2.0
  g/t gold with internal intervals of 3.0  5.0 g/t gold. These structural zones
  have strike lengths between 275 metres and 325 metres with vertical extents up
  to 200 metres. Both structures are open at depth and along strike. Further
  drill will focus on extending these high-grade zones and targeting other high
  priority high-grade targets within the deposit.
- A district wide exploration program commenced at the beginning of June
  2011, targeting potential new gold discoveries along the Livengood mineralized
  trend. The program includes 130 line kilometres of a 3D IP geophysical survey,
  and an initial phase of 3,750 metres of diamond drilling.
- PFS work proceeded with substantial progress in the metallurgical testing,
  process design and infrastructure site selections. The PFS is on schedule for
  completion in November 2011.
- An updated NI 43-101 report and revised preliminary economic assessment
  directed at evaluating a large milling only concept for the project was
  completed in August 2011.
- The ITH Board of Directors approved the 2011 fiscal year budget (June 1,
  2011 to May 31, 2012) totalling CAD 67 million.

Corporate Personnel

Mr. James J. Komadina was appointed as the Companys new Chief
Executive Officer and as a director, effective June 1, 2011. He will step into
the role formerly held by Jeff Pontius, who became a director on June 1, 2011.
Mr. Komadina has 32 years of diverse natural resource experience in project
development, construction and operations, having held senior management
positions with major gold producers including Gold Fields, AngloGold and
Newmont.

5

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Most recently, Mr. Komadina was the President and Chief
Operating Officer of Brazauro Resources, a Canadian resource company with
operations in Brazil, where he was responsible for all exploration, development
and operational activities until the company was acquired in July 2010 by
Eldorado Gold at a 92% premium to the market price. Other experience includes
his role as the Senior Vice President, Development Projects for Gold Fields
where he led the development and construction of the USD430 Million Cerro Corona
project in Peru. From 1999 to 2003, he was the President and Chief Executive
Officer, North America, for AngloGold Limited where he was responsible for all
regional business activities. From 1992 to 1999, he held various senior
positions with Minorco/AngloGold North America, including Executive VP and COO
responsible for operations producing approximately 500,000 ounces per year as
well as associated reserve and capital programs including the development and
operation of the Cripple Creek Mine in Colorado. Prior to that, he was the VP
Operations Planning for Newmont Gold Company directing various Nevada expansion
projects and assessing merger opportunities. Mr. Komadina holds a Bachelor of
Science degree in Metallurgical Engineering from the University of Arizona, a
Master of Business Administration from the University of Phoenix and completed
the Advanced Management Program at the Wharton School of Business.

Livengood Project

Drill Results

The winter drill program, which began in February 2011, was
focused on confirming the continuity and grade of the mineralization in the
Southwest (SW), South Core and Sunshine zones of the Money Knob deposit, as well
as follow-up exploration of a new, deeper, higher grade zone with a series of
500-metre core holes. The results continue to outline and expand the high-grade
zones within the deposit, which could form initial surface mining phases in a
potential extraction scenario. The Company will incorporate all results from the
2011 Winter drill program into an updated Resource Estimate planned to be
released by the fourth quarter of 2011.The location of holes reported here are
shown in Figure 1, with significant intercepts listed in Table 1.

Highlights from Drilling:

Hole MK-RC-0504: 33.5 m @ 8.07 g/t gold from 80.8 -
114.3 m depth (infill, Core Zone)Hole MK-RC-0485: 93.0 m @ 1.24
g/t gold from 178.3 - 271.3 m depth (infill, Core Zone)Hole
MK-RC-0488: 88.4 m @ 0.94 g/t goldfrom 185.9 - 274.3 m depth (infill,
Core Zone)Hole MK-11-103: 28.6 m @ 1.83 g/t gold from 156.4 -
185.0 m depth (infill, Core Zone) Hole MK-RC-480CT: 92.3 m @ 1.57 g/t
goldfrom 219.5 m depth (core tail; southern Core Zone) Hole
MK-RC-500CT: 49.9m @ 1.35 g/t gold from 188.7 m depth (core tail;
southern Core Zone) MK-11-108: 29.3 m @ 1.64 g/t from 151.5 m depth
(southern Core Zone) Hole MK-11-116: 92.9 m at 1.62 g/t gold from
163.47 m depth (southern Core Zone)Hole MK-11-116 (continued):
65.4 m at 1.02 g/t gold from 317.3 m depth (southern Core Zone)Hole MK-RC-0518: 39.6 m at 1.68 g/t gold from 137.2 m depth (Core
Zone) Hole MK-RC-0518 (continued): 76.2 m at 1.35 g/t gold from 198.1
m depth (Core Zone)

As a continuation of the programs initial results announced in
news on March 29, 2011, these intersections include part a series of shallow
infill and step out holes completed prior to deeper core drilling designed to
test the deposits new high-grade zone at depth.

6

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Figure 1: Plan map showing locations of drill holes
reported in Q4 news releases,cumulative grade thickness
contoured on collars.

Table 1: Significant new intercepts reported in Q4**Intercepts are calculated using a 0.25g/t gold cut-off and a
maximum of 3 metres of internal waste.

From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and CommentsMK-RC- 0480CT
    91.44
    112.78
    21.34
    1.08
    Southern Core Zone
      infill137.16
    178.31
    41.15
    0.90includes
    146.30
    152.4
    6.10
    1.22includes
    164.59
    169.16
    4.57
    1.85includes
    173.74
    176.78
    3.04
    2.67181.36
    214.88
    33.52
    0.54219.46
    311.81
    92.35
    1.57314.86
    333.15
    18.29
    0.64334.67
    340.62
    5.95
    2.18MK-RC-
    178.31
    271.27
    92.96
    1.24
    Core Zone infill


7

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From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and Comments0485includes
    179.83
    195.07
    15.24
    3.00includes
    201.17
    211.84
    10.67
    2.05272.80
    283.46
    10.66
    0.47347.47
    394.72
    47.25
    0.87includes
    361.19
    368.81
    7.62
    2.72MK-RC- 0487
    237.74
    245.36
    7.62
    0.33
    SW ZoneMK-RC- 0488
    51.82
    57.91
    6.09
    0.82
    Core Zone infill153.92
    181.36
    27.44
    0.56185.93
    274.32
    88.39
    0.94includes
    239.27
    256.03
    16.76
    1.75278.89
    320.04
    41.15
    0.72includes
    278.89
    283.46
    4.57
    3.02324.61
    349
    24.39
    1.80353.57
    362.71
    9.14
    0.71365.76
    413
    47.24
    0.65includes
    391.67
    402.34
    10.67
    1.09MK-RC- 0491
    152.40
    161.54
    9.14
    0.44
    SW ZoneMK-RC- 0492
    117.35
    126.49
    9.14
    1.01
    Sunshine infill134.11
    147.83
    13.72
    1.51includes
    134.11
    138.68
    4.57
    2.92153.92
    166.12
    12.20
    0.70195.07
    225.55
    30.48
    0.71MK-RC- 0493
    70.10
    79.25
    9.15
    0.50
    Core Zone
      infill105.16
    109.73
    4.57
    0.58
    lost,
      re-drilled as 498112.78
    120.4
    7.62
    0.51124.97
    134.11
    9.14
    0.61MK-RC- 0494
    94.49
    99.06
    4.57
    4.03
    SW Zone188.98
    214.88
    25.90
    0.46MK-RC-
    30.48
    71.63
    41.15
    0.64
    Sunshine infill


8

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From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and Comments049576.20
    86.87
    10.67
    0.5692.96
    150.88
    57.92
    0.76155.45
    166.12
    10.67
    0.71201.17
    257.56
    56.39
    0.41MK-RC- 0496
    108.20
    124.97
    16.77
    1.61
    Sunshine
      Zone infillincludes
    108.20
    111.25
    3.05
    6.79138.68
    156.97
    18.29
    0.59includes
    143.26
    146.3
    3.04
    1.70164.59
    199.64
    35.05
    0.53205.74
    263.65
    57.91
    0.59MK-RC- 0497
    179.83
    195.07
    15.24
    0.68
    SW Zone278.89
    291.08
    12.19
    0.49300.23
    318.52
    18.29
    0.34332.23
    341.38
    9.15
    0.84342.90
    352.04
    9.14
    0.74356.62
    381
    24.38
    0.85385.57
    419.1
    33.53
    0.98MK-RC- 0498
    97.54
    105.16
    7.62
    1.12
    Core Zone infill140.21
    150.88
    10.67
    0.45
    lost holeMK-RC-499
    112.78
    131.06
    18.28
    0.87
    SW Zone172.21
    184.4
    12.19
    0.80195.07
    213.36
    18.29
    0.67243.84
    284.99
    41.15
    0.51307.85
    327.66
    19.81
    0.66MK-RC- 0500CT
    143.26
    150.88
    7.62
    1.33
    Southern
      Core Zone infillnew data from 150.88m,
      core188.74
    238.66
    49.92
    1.35
    tailincludes
    201.78
    205.63
    3.85
    2.68244.75
    270.66
    25.91
    1.01includes
    246.28
    253.9
    7.62
    2.08306.72
    310.89
    4.17
    1.42382.00
    392.1
    10.10
    0.71


9

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From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and Comments415.42
    423.81
    8.39
    0.69MK-RC-501
    109.73
    114.3
    4.57
    3.06
    SW Zone234.70
    275.84
    41.14
    0.69includes
    249.94
    254.51
    4.57
    2.35312.42
    326.14
    13.72
    0.61MK-RC-502
    213.36
    224.03
    10.67
    0.55
    SW Zone225.55
    239.27
    13.72
    0.62246.89
    260.6
    13.71
    0.42MK-RC-503
    27.43
    38.1
    10.67
    0.68
    Sunshine infill56.39
    70.1
    13.71
    1.3677.72
    85.34
    7.62
    1.2396.01
    102.11
    6.10
    0.99121.92
    144.78
    22.86
    0.71146.30
    198.12
    51.82
    0.82236.22
    243.84
    7.62
    0.76includes
    161.54
    167.64
    6.10
    1.82MK-RC-504
    80.77
    114.3
    33.53
    8.07
    Core Zone
      infillincludes
    80.77
    96.01
    15.24
    14.59includes
    99.06
    111.25
    12.19
    3.73155.45
    164.59
    9.14
    0.50169.16
    178.31
    9.15
    0.55188.98
    211.84
    22.86
    0.47277.37
    315.47
    38.10
    0.56339.85
    356.62
    16.77
    0.86MK-RC-505
    45.72
    76.2
    30.48
    0.74
    Sunshine infill92.96
    135.64
    42.68
    0.94includes
    96.01
    99.06
    3.05
    6.47MK-RC-506
    291.08
    300.23
    9.15
    1.18
    SW Zone303.28
    324.61
    21.33
    1.25includes
    318.52
    324.61
    6.09
    1.88MK-RC-507
    30.48
    33.53
    3.05
    2.13
    Core Zone infill, lost hole121.92
    150.88
    28.96
    0.65
    redrilled as 512175.26
    192.02
    16.76
    0.44196.60
    234.7
    38.10
    1.14


10

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From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and Commentsincludes
    205.74
    211.84
    6.10
    3.91MK-RC-508
    86.87
    92.96
    6.09
    0.95
    SW Zone292.61
    312.42
    19.81
    0.52326.14
    342.9
    16.76
    0.43MK-RC-509
    111.25
    121.92
    10.67
    0.78
    Sunshine infill167.64
    251.46
    83.82
    0.84includes
    219.46
    233.17
    13.71
    1.07265.18
    284.99
    19.81
    0.65MK-RC-510
    41.15
    45.72
    4.57
    0.91
    SW Zone53.34
    57.91
    4.57
    1.41MK-RC-511
    7.62
    13.72
    6.10
    1.55
    Sunshine infill51.82
    64.01
    12.19
    0.49192.02
    236.22
    44.20
    0.80includes
    205.74
    214.88
    9.14
    1.37245.36
    256.03
    10.67
    0.51260.60
    272.8
    12.20
    1.46includes
    262.13
    269.75
    7.62
    1.91MK-RC-512
    28.96
    33.53
    4.57
    1.06
    Core Zone infill146.30
    182.88
    36.58
    0.44184.40
    201.17
    16.77
    0.50204.22
    242.32
    38.10
    0.43265.18
    286.51
    21.33
    1.14includes
    278.89
    281.94
    3.05
    3.35289.56
    315.47
    25.91
    0.55MK-RC-513
    97.54
    108.2
    10.66
    1.45
    SW Zone208.79
    231.65
    22.86
    0.86240.79
    243.84
    3.05
    3.54260.60
    291.08
    30.48
    0.46298.70
    320.04
    21.34
    0.49350.52
    377.95
    27.43
    0.48MK-RC- 0514
    64.01
    73.15
    9.14
    0.64
    Sunshine Zone infill135.64
    146.3
    10.66
    0.53173.74
    182.88
    9.14
    0.88


11

---

From
    To
    Length
    GoldHole ID
    (metres)
    (metres)
    (metres)
    (g/t)
    Area and Comments*includes*
    178.31
    181.36
    3.05
    1.74254.51
    268.22
    13.71
    0.96*includes*
    260.60
    266.7
    6.10
    1.80MK-RC- 0515
    4.57
    15.24
    10.67
    0.77
    Core Zone
      infill35.05
    53.34
    18.29
    0.4870.10
    83.82
    13.72
    0.60120.40
    129.54
    9.14
    0.62134.11
    192.02
    57.91
    0.85*includes*
    158.50
    161.54
    3.04
    4.61196.60
    207.26
    10.66
    0.50211.84
    230.12
    18.28
    0.56259.08
    288.04
    28.96
    0.56MK-RC- 0516
    129.54
    140.21
    10.67
    1.61
    Southern
      Core Zone infill*includes*
    134.11
    137.16
    3.05
    4.05169.16
    195.07
    25.91
    0.75*includes*
    175.26
    179.83
    4.57
    1.43219.46
    240.79
    21.33
    1.07*includes*
    219.46
    225.55
    6.09
    2.65288.04
    310.9
    22.86
    0.41313.94
    349
    35.06
    0.70385.57
    409.96
    24.39
    0.67*includes*
    400.81
    403.86
    3.05
    1.93414.53
    426.72
    12.19
    0.57MK-RC- 0517
    42.67
    65.53
    22.86
    1.34
    Sunshine
      Zone infill*includes*
    47.24
    51.82
    4.58
    3.62*includes*
    56.39
    62.48
    6.09
    1.4473.15
    85.34
    12.19
    0.81*includes*
    79.25
    82.3
    3.05
    1.8997.54
    114.3
    16.76
    0.39120.40
    128.02
    7.62
    2.24*includes*
    120.40
    124.97
    4.57
    3.56257.56
    353.57
    96.01
    0.88*includes*
    281.94
    286.51
    4.57
    1.79***includes***
    313.94
    335.28
    21.34
    1.51358.14
    374.9
    16.76
    1.03*includes*
    358.14
    361.19
    3.05
    1.91


12

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From
      To
      Length
      GoldHole ID
      (metres)
      (metres)
      (metres)
      (g/t)
      Area and CommentsMK-RC- 0518
      36.58
      41.15
      4.57
      1.19
      Core Zone infill67.06
      74.68
      7.62
      0.70115.82
      129.54
      13.72
      0.55137.16
      176.78
      39.62
      1.68includes
      147.83
      175.26
      27.43
      2.24198.12
      274.32
      76.20
      1.35includes
      202.69
      216.41
      13.72
      3.56includes
      222.50
      230.12
      7.62
      1.55includes
      237.74
      240.79
      3.05
      1.93includes
      257.56
      263.65
      6.09
      1.31MK-RC- 0519
      25.91
      33.53
      7.62
      2.33
      Core Zone infillincludes
      25.91
      32
      6.09
      2.8450.29
      99.06
      48.77
      0.68includes
      73.15
      79.25
      6.10
      1.15includes
      86.87
      91.44
      4.57
      1.38106.68
      109.73
      3.05
      8.10MK-RC- 0520
      36.58
      60.96
      24.38
      0.84
      Sunshine Zone infillincludes
      53.34
      56.39
      3.05
      3.5977.72
      94.49
      16.77
      0.53103.63
      114.3
      10.67
      0.70129.54
      147.83
      18.29
      0.41224.03
      237.74
      13.71
      0.74256.03
      266.7
      10.67
      0.58280.42
      292.61
      12.19
      0.81includes
      284.99
      289.56
      4.57
      1.60MK-RC- 0521
      67.06
      79.25
      12.19
      1.11
      Money Knob infillMK-10-95
      geotechnical hole, no significant
        interceptsMK-11-103
      156.44
      185.01
      28.57
      1.83
      Core Zone infill, lost hole187.20
      194.6
      7.40
      0.63MK-11-104
      no significant intercepts
      Core Zone, lost , re-drilled as 11-108 (assays
        pending)


13

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From
      To
      Length
      GoldHole ID
      (metres)
      (metres)
      (metres)
      (g/t)
      Area and CommentsMK-11-105
      94.26
      102.57
      8.31
      0.74
      Core Zone infill, lost hole107.90
      117.58
      9.68
      0.89MK-11-107
      geotechnical hole, no significant interceptsMK-11-108
      125.58
      128.6
      3.02
      2.59
      Southern Core Zone infill139.29
      144.17
      4.88
      1.88151.49
      180.76
      29.27
      1.64includes
      160.16
      165.2
      5.04
      1.96181.24
      212.57
      31.33
      0.53221.10
      228.23
      7.13
      1.14247.50
      256.64
      9.14
      1.03285.90
      315.78
      29.88
      0.54317.46
      333.41
      15.95
      0.46359.00
      366.08
      7.08
      2.52includes
      361.27
      364.48
      3.21
      5.12454.46
      456.6
      2.14
      3.88MK-11-109
      geotechnical hole, no significant interceptsMK-11-110
      29.87
      31.39
      1.52
      3.27
      Core Zone infill63.84
      69.49
      5.65
      1.32110.98
      130.45
      19.47
      0.73131.97
      154.39
      22.42
      0.78includes
      144.17
      149.5
      5.33
      1.13180.59
      210.26
      29.67
      0.40MK-11-111
      geotechnical hole, no significant
        interceptsMK-11-115
      geotechnical hole, no significant
        interceptsMK-11-116
      72.74
      80.00
      7.26
      0.76
      Southern Core Zone infill163.47
      256.34
      92.87
      1.62includes
      165.72
      182.12
      16.40
      4.76270.01
      280.11
      10.10
      1.05284.68
      299.42
      14.74
      0.57317.30
      382.71
      65.41
      1.02includes
      334.21
      339.44
      5.23
      5.29MK-11-119
      19.66
      21.34
      1.68
      5.72
      NE geotechnical hole


14

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From
      To
      Length
      GoldHole ID
      (metres)
      (metres)
      (metres)
      (g/t)
      Area and CommentsMK-11-122
      geotechnical hole, no significant
        interceptsMK-11-123
      28.04
      35.51
      7.47
      1.03
      NE geotech hole, partial results76.98
      80.21
      3.23
      1.81


Southwest Zone

Current drill results on the western edge of the SW zone appear
to be defining a limit to the shallow oxide zone in the area; however, strong
near-surface gold-in-soil anomalies located 300 to 500 metres to the west have
yet to be tested. The SW zone also remains open at depth with six holes
mineralized to the lower limit of drilling, potentially part of the same deep
high-grade mineralized zone being explored in the south Core zone. This deeper
mineralization will be targeted in follow-up drilling programs.

Southern Core Zone

Eleven of the holes were drilled as infill holes in the
southern Core zone. Two holes (holes MK-RC-0504 and MK-RC-0485) intersected
higher grade mineralization related to quartz veining, extending a zone of
high-grade mineralization further to the west (see Figure 1). The remaining
holes are similar in grade and thickness to the surrounding holes and continue
to add continuity to the deposit.

Infill Drilling of Oxide Resource

Drill results continued to expand high-grade zones within the
deposit, with multiple thick zones of higher grade mineralization encountered in
shallow drilling, including 92.9 metres of 1.62 g/t gold (hole MK-11-116), while
deeper core drilling has revealed two major structurally controlled higher grade
feeder zones.

High Grade Zones at Depth

The drill program also included deeper core drilling designed
to test the deposit at depth, and the results have now revealed at least two
major structurally controlled higher grade feeder zones in the broader Core Zone
which average 1.0  2.0 g/t gold with intervals of 3.0  5.0 g/t gold. One of
these structural zones occurs over a strike length of at least 325 metres with a
dip length of greater than 160 metres. The second structure occurs over a strike
length of at least 275 metres with a vertical extent of more than 200 metres.
Both structures are near vertical in orientation and open at depth, but appear
to be capped up-dip. Continued exploration drilling will focus on expanding
these currently defined zones as well as explore for additional zones within the
deposit.

District-wide Exploration Program

A district-wide exploration program commenced at the beginning
of June, 2011 targeting potential new gold discoveries along the Livengood
mineralized trend both to the east-northeast and to the west of the existing
Livengood gold deposit. The first phase of this program includes 3,750 metres of
exploration diamond drilling and 130 line kilometres of 3D IP ground geophysics.
Drilling of the first target and a major geophysical survey has begun, with
results expected over the summer and fall of 2011.

15

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Pre-feasibility Study

Optimization studies for Livengood mine and process design,
metallurgy, and environmental characterization were advanced during Q4 as part
of the PFS.

Since December 2010, when major contracts were awarded to carry
out its Pre-Feasibility Study, the Company has made significant technical
progress and expects the study to be published in the fourth quarter of 2011.
Key work programs completed or underway to date include:

- Completion of a preliminary surface mine slope geotechnical evaluation by
  SRK Consulting;
- Completion of grinding/comminution test work by FLSmidth Consulting;
- Continuation of baseline environmental studies by third party contractors
  and in-house personnel;
- Near-completion of metallurgical work programs  including column
  leaching, gravity concentration and flotation-CIL testing  by FLSmidth,
  McClelland Labs, RDi, Knelson and Falcon;
- Commencement of Process Design and Trade-Off Studies by FLSmidth;
- Commencement of Plant Design and Engineering by FLSmidth; and
- Commencement of infrastructure and site facility engineering by Knight
  Piésold, including field work currently underway to determine potential
  locations for processing plants, electrical lines and substations, roads,
  pipelines, workshops and tailing storage sites.

New Fiscal Year 2011 Budget

Following a review of 2011/2012 objectives for the updated PEA
work, prefeasibility studies, exploration and permitting support activities, on
June 20, 2011 the Companys Board of Directors approved the 2011 fiscal year
budget (June 1, 2011 to May 30, 2012) totalling CAD 67 million.

Updated 2011 Preliminary Economic Assessment

The
Company has completed an updated NI 43-101 technical report as required to
support the required in connection with the filing of its 2011 Annual
Information Form in August, 2011. The Company completed its initial PEA in
November 2010 outlining various conceptual development options for the project
at a base gold price of USD 950/oz. The updated PEA focuses on development
options to maximize project value based on an updated economic review and a
higher gold price. The following is the summary from the technical report dated
August 25, 2011 entitled August 2011 Summary Report on the Livengood Project,
Tolovana District, Alaska by Carl E. Brechtel (PE, SME), Tim Carew (P.Geo,
MIMMM), Russell Myers (CPG), William Pennstrom Jr. (QPMMSA, SME), Chris Puchner
(CPG) and Scott Wilson (CPG) (the Livengood Report). Readers are encouraged to
review the entire Livengood Report, which is filed on SEDAR at www.sedar.com.

1.0 Introduction

The Livengood Report has been prepared to update the mining
configuration and Preliminary Economic Assessment (PEA) for the Livengood
Project to reflect recent information developed as part of the ongoing
Pre-feasibility Studies (PFS). The Livengood project is currently performing
exploration, resource definition and technical studies as part of the PFS which
is scheduled for completion in Q4 of 2011. A PEA was performed previously to
evaluate preliminary project concepts including possible mineralization
processing methods, estimates of capital and operating costs, and preliminary
surface mine design scenarios in November 2010. This update of the November 2010
technical report is based on the resource estimate updated
August 22, 2011, prepared from data to May 31, 2011 and based on other PFS
technical information as of August 1, 2011.

16

---

Field investigations at the Livengood property are ongoing,
with a total of 9 drilling rigs working at the site during the Summer 2011
program. Ongoing field data collection includes environmental baseline data
collection (water quality sampling, wildlife studies, air quality) and
meteorological sampling, geotechnical data collection for mine design, site
evaluation and geotechnical data collection for project infrastructure location,
groundwater hydrogeological testing, and rock geochemical characterization.
Drilling activities have been expanded to include district exploration and site
condemnation, as well as continuing the resource definition and infill drilling
at Money Knob. A 3D IP geophysical program to survey the Livengood District will
be completed in Q3 2011. The geologic database supporting the Livengood Report
is the 648 diamond and reverse circulation holes that had been drilled on the
property to May 31, 2011, and provided the basis for reporting an update of the
in-situ gold resource estimate.

The Livengood Report is the twelfth in the series of technical
reports and the eleventh that supports resource estimates which have been
regularly updated as new drill information has become available. The Livengood
Report describes the pre-feasibility concept based on a gravity-flotation-CIL
recovery method processing mineralized material recovered by surface mining.
Estimates of capital and operating cost, and a preliminary surface mine design
are included, along with the geological and resource estimation procedures that
have been undertaken by the Company. The updated mineral resource estimate
includes material in the measured, indicated and inferred classification based
on borehole data up to May 31, 2011. It does not include drill results from the
Copmpanys 2011 Summer drill program which is currently in progress.

All costs in the Livengood Report are reported in US Dollars.

2.0 Description and Location

The Livengood property is located approximately 115 km
northwest of Fairbanks, Alaska in the Tolovana Mining District within the
Tintina Gold Belt. The project area is centered on Money Knob, a local
topographic high point. This feature and the adjoining ridge lines are the
probable lode gold source for the Livengood placer deposits which lie in the
adjacent valleys which have been actively mined since 1914 and have produced
more than 500,000 ounces of gold.

The Company controls 100% of its ~125 square kilometre
Livengood land package, which is made up of 115 Alaska State mining claims, fee
simple land leased from the Alaska Mental Health Land Trust, and four leases
with holders of state and federal patented and unpatented mining and placer
claims.

3.0 Accessibility, Climate, Local Resources, Infrastructure
and Physiography

Livengood is located approximately 115 km north of Fairbanks,
Alaska next to the Elliot Highway, a paved, all weather road linking the north
slope oil fields at Prudhoe Bay to southern Alaska. It is also adjacent to the
Alyeska Pipeline corridor, which transports crude oil from Prudhoe Bay south and
contains the fiber optic communications cable utilized at the Livengood site.

Topography at the site is eroded hills and valleys with
generally 200 m elevation difference. The valleys generally contain active
streams draining into the Tolovana River system to the west.

The site is approximately 65 km south of the Arctic Circle, and
has a subarctic climate with long, cold winters and short, warm summers. Annual
precipitation is roughly 41 cm. Average low temperatures in winter are -21 to
-28 degrees C, with records reaching as low as -55 degrees C.

17

---

The Fairbanks metropolitan area has a population of
approximately 98,000 people, and comprises the regional center with hospitals,
government offices, businesses and the University of Alaska, Fairbanks. The city
is linked to southern Alaska along a north-south transportation and utility
corridor that includes 2 paved highways, a railroad, an interlinked electrical
grid, and communications infrastructure. The city has a regional airport
serviced by up to 3 major airlines.

4.0 History

The property has been prospected and explored by several
companies and private individuals since the 1970s. Geochemical surveys by
Cambior in 2000 and AngloGold Ashanti (U.S.A.) Exploration Inc. (AGA) in 2003
and 2004 outlined a 1.6 x 0.8 km area with anomalous gold in soil. Scattered
anomalous samples continue along strike for an additional 5 km to the northeast
and 1.6 km to the southwest. Eight reverse circulation holes were drilled by AGA
in 2003 and a further 4 diamond core holes were drilled in 2004 to evaluate this
anomaly. Favourable results from these holes revealed wide intervals of gold
mineralization (BAF-7: 138.7m @ 1.07 g/t Au; MK-04-03: 55.3m @ 0.51 g/t Au)
along with lesser intervals over a broad area. Over the past 5 years,
exploration by ITH through its wholly owned Alaskan subsidiary, Talon Gold
Alaska, Inc., has evaluated this mineralization utilizing both RC drilling and
core drilling.

Beginning in 2009, technical studies have been performed to
generate metallurgical data for process definition, to generate preliminary
surface mine designs, and to develop pre-conceptual information on the location
and capacities of potential tailings management, overburden management, water
reservoir, and mill process facilities. Conceptual project configurations have
been generated from these studies which have been used as the basis for
projected operating and capital cost estimation. A PEA for a large surface
mining and mill processing facility was generated to update ITH information
being developed for the current Pre-feasibility Study.

5.0 Geologic Setting and Mineralization

Rocks at Livengood are part of the Livengood Terrane, an
eastwest belt, approximately 240 km long, consisting of tectonically
interleaved assemblages of various ages. These assemblages include the Amy Creek
Assemblage, a sequence of latest Proterozoic and/or early Paleozoic basalt,
mudstone, chert, dolomite, and limestone. An early Cambrian ophiolite sequence
of mafic and ultramafic sea floor rocks was thrust over the Amy Creek Assemblage
and was, in turn, overthrust by a sequence of Devonian shale, siltstone,
conglomerate, volcanic, and volcaniclastic rocks, which are the dominant host to
the mineralization currently under exploration at Livengood. The Devonian
assemblage was overthrust by a second klippe of Cambrian ophiolite rocks. All of
these rocks are intruded by Cretaceous multiphase monzonitic and syenitic dikes
and sills. Gold mineralization is spatially and temporally associated with these
intrusive rocks.

Gold mineralization occurs in association with disseminated
arsenopyrite and pyrite in volcanic, sedimentary, and intrusive rocks, and in
quartz veins cutting the more competent lithologies, primarily volcanic rocks,
sandstones, and, to a lesser degree, ultramafic rocks. Three principal stages of
alteration are currently recognized, an early biotite stage, followed by
albite-quartz, and a late sericite-quartz assemblage. Carbonate appears to have
been introduced with and subsequent to these stages. Arsenopyrite and pyrite
were introduced primarily during the albite-quartz and sericite-quartz stages.
Gold correlates strongly with arsenic and occurs primarily within and on the
margins of arsenopyrite and pyrite.

18

---

Mineralization is interpreted as intrusion-related, consistent
with other gold deposits of the Tintina Gold Belt, and has a similar As-Sb
geochemical association. Mineralization is controlled partly by lithologic
units, but thrust-fold architecture was key to providing pathways for intrusive
and associated hydrothermal fluids.

Local fault and contact limits to mineralization have been
identified, but overall the deposit has not been closed off in any direction.
The current resource and area drilled covers the most significant portion of the
area with anomalous gold in surface soil samples, but still represents only
about 25% of the total gold-anomalous area.

6.0 Deposit Type

Among deposits of the Tintina Gold Belt, Livengood
mineralization is most similar to the dike and sill-hosted mineralization at the
Donlin Creek deposit, where gold occurs in narrow quartz veins associated with
dikes and sills of similar composition. The age of the intrusions and the
genetic link between the mineralization and intrusive rocks are typical of those
of other nearby gold deposits of the Tintina Gold Belt, which have been
characterized as intrusion-related gold systems and for these reasons Livengood
is best classified with them.

7.0 Exploration

Prior to ITH, several companies have explored the Livengood
area and identified a sizeable area of anomalous gold in soil samples, and
intervals of anomalous gold mineralization in drill holes. The Company advanced
the soil sampling coverage and undertook to drill surface geochemical anomalies
beginning in 2006. The Company has continued its exploration with step-out
drilling on a 75 m grid, and infilling the 75 m pattern in the core of the
mineralized areas. Infill and step out drilling in the resource area has
continued in the Summer 2011 drill program.

The Company has also implemented a district exploration
program, which includes core drilling in geochemical anomalies distal to the
resource area and condemnation drilling in potential infrastructure locations. A
3D IP survey has also been conducted during the Summer of 2011 to generate
targets over much of the district.

8.0 Drilling

The Company has conducted drilling campaigns on the Livengood
property since 2006. These programs initially identified mineralization in the
Core Zone and then identified the Northeast, Sunshine, and Southwest zones
through step out drilling and drill testing of areas with anomalous values in
surface soil samples.

Nearly all drill holes at Money Knob have been drilled in a
northerly direction at an inclination of -50° (RC) and -60° (core) in order to
best intercept the south dipping structures and mineralized zones as close to
perpendicular as possible. A few holes have been drilled in other directions to
test other features and aspects of mineralization. Most holes have been spaced
at 75m along lines 75m apart, subsequent infill drilling in the center of 75m
squares brings the nominal drill spacing to 50m for a significant portion of the
deposit.

Diamond core holes represent 16% of the total number of holes
drilled. Core is recovered using triple tube techniques to ensure good recovery
(>95%) and confidence in core orientation. The core is oriented using either
the ACTTM or the EZ MarkTM tools.

19

---

Reverse circulation holes are bored and cased for the upper
0-30m to prevent down hole contamination and to help keep the hole open for ease
of drilling at greater depths. Recovery of sample material from RC holes is done
via a cyclone and dry or wet splitter, according to conditions. Drill cuttings
are collected over the course of each 1.5 m (five-foot) interval and captured
for a primary sample, an equivalent secondary sample (Met sample) and a third
batch of chips for logging purposes.

In the deposit drill hole locations are determined by sub-meter
differential GPS surveys at the drill collar. The initial azimuth of drill hole
collars is measured using a tripod mounted transit compass in conjunction with a
laser alignment device mounted on the hole collar. Down hole surveys of core and
RC drill holes are completed using a Gyro-Shot survey instrument manufactured by
Icefield Tools Corporation. Results of surveys and duplicate tests show normal
minor deviation in azimuth and inclination for drill holes.

All RC samples are logged in on site, analyzed with a field
portable Thermo Fisher Scientific NITONTM XRF before being sealed in
super sacks and delivered to ALS Chemex in Fairbanks for preparation. Detail
logging and mark-up of core is done at the Livengood camp. Core is sawed in half
and bagged according to geologic intervals up to 1.5m and sealed in super sacks
for delivery to ALS Chemex in Fairbanks.

Samples are analyzed by standard 50g fire assay for the gold
determinations. All core samples and select RC drilling samples are also
submitted for multi-element ICP-MS analyses using a 4 acid digestion technique.
All RC samples are analyzed on site for trace elements using a Thermo Fisher
Scientific NITONTM portable XRF before shipment to the laboratory.

9.0 Sample Preparation, Analyses and Security

The Company samples all holes from surface to total depth,
using defined procedures. For RC samples, pulverized material is passed through
a cyclone to separate solids from drilling fluids, then over a spinning conical
splitter. The splitter is set to collect two identical splits of sample weighing
2-5 kg each. Representative coarse material is collected and saved in chip trays
for geological description. Samples are put in pre-numbered, bar-coded bags by
the drill site crew. One sample is submitted for analysis, and one sample is
kept for reference. Samples are secured on site, and transported to a sample
preparation facility operated by ALS Chemex in Faribanks.

Core materials are collected at the drill site and placed in
core boxes. Run blocks, orientation blocks and depths are placed in the boxes at
site. The core is transported to a sample management facility at Livengood,
where it is described, then sawn in half. Half of the core is collected for
assaying and half remains for reference. Core samples are weighed before
shipping.

The QA/QC program implemented by the Company meets or exceeds
industry standards. A QA/QC program includes insertion of blanks and standards
(1/10 samples) and duplicates (1/20 samples). Blanks help assess the presence of
any contamination introduced during sample preparation and help calibrate the
low end of the assay detection limits. Commercial standards are used to assess
the accuracy of the analyses. Duplicates help assess the homogeneity of the
sample material and the overall sample variance. The Company has undertaken
rigorous protocols to assure accurate and precise results. Among other methods,
weights are tracked throughout the various steps performed in the laboratory to
minimize and track errors. A group of 2096 metallic screen fire assays performed
in 2011 did not indicate any bias in the matching fire assays.

20

---

Data entry and database validation procedures have been checked
and found to conform to industry practices. Procedures are in place to minimize
data entry errors. These include pre-numbered, pre-tagged, bar-coded bags, and
bar-coded data entry methods which relate all information to sample and drill
interval information. Likewise, data validation checks are run on all
information used in the geologic modeling and resource estimation process.
Database entries for a random sample (10%) of drill holes used for the resource
estimate were checked against the original Assay Certificates by one of the
independent authors of the Livengood Report and the error rate was found to be
within acceptable limits.

Analysis of assay data from core and RC sampling has been
performed to check for downhole contamination of RC and to compare the data
distributions produced by the two methods. Analysis of RC data has not indicated
cyclic down hole contamination. Decay analysis conducted on both core drilling
and RC drilling indicates similar patterns of monotonic grade increase or
decrease. Comparison of the grade distributions between core and RC data were
conducted using Quantile-Quantile plots, and simulation of population means for
different numbers of samples. The comparison indicated that the mean of all core
data was 4% lower than RC data. Comparison of core and RC data below the water
table showed similar population means suggesting that down hole contamination
was not occurring.

10.0 Data Verification

Core and RC check samples have been collected during each
drilling campaign by independent third parties. Results from these samples, as
well as blanks and standards included, are consistent with the Companys initial
results. This includes a similar increase in variance for samples at higher
grades, a pattern consistent with nugget effect. No systematic high or low bias
has been observed.

The Summer 2011 drilling includes three separate programs to
develop data on grade continuity at reduced drill spacing, and on precision of
grade estimation using both core and RC data. Two cross patterns are being
drilled with spacing reduced to 15 m along the primary grid axes to evaluate
grade continuity between holes. A block of approximately 9 million tonnes is
being drilled with equal numbers of RC and core holes, drilled with 2 different
orientations. This block will allow the evaluation of the precision of resource
modeling at different data densities and with different types of sampling.

11.0 Mineral Processing and Metallurgical Testing

The Company has undertaken metallurgical and processing test
work to determine optimal recoveries using numerous conventional flow sheets:
including milling with gravity, flotation, and Carbon in Leach (CIL) or
gravity and CIL of the gravity tails, and heap leaching. Current test work
focuses on determining the best means of optimizing these combined recovery
methods. This work involves studies that evaluate how gold mineralization occurs
and how the mineralized materials vary in their physical and metallurgical
response to process treatment parameters according to the various lithologic
units that host mineralization. The characteristics under review include
grindability, abrasiveness, optimal particle size for downstream treatment, and
response to leach, flotation, or gravity unit operations as a function of
oxidation and lithology.

21

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Specific metallurgical characteristics, identified in the
testing programs to date, have shaped the processing strategies used as the
basis for the PEA and assumed project configuration. These important
metallurgical findings are:

|1) | variable metallurgy (chemical and physical properties),
      depending upon mineralization type, degree of oxidation, amount of organic
      carbon, etc.;                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2) | identification of mineralization types that are amenable
      to simple cyanide leaching process techniques such as heap leaching in
      conjunction with a carbon in column adsorption plant (CIC), particularly
      oxidized and partially oxidized mineralization;
|3) | identification of sediment-hosted mineralization that
      contains organic preg-robbing carbon that will require CIL process
      techniques;                                                                                                                        
|4) | higher recoveries for most mineralization types using
      gravity separation in combination with downstream CIL and/or flotation
      separation techniques; and                                                                                                       
|5) | lower recoveries for mineralization types with arsenic
      association.                                                                                                                                                                                                 

Specific observations about metallurgical performance are
listed in the following:

|• | Most Livengood mineralization could be considered
      moderately soft to medium hard in hardness with an average Bond Ball Work
      index of 15.8. The mineralization varied significantly in hardness, with
      Bond Ball Work indices varying from a minimum of 11.1 to a maximum of
    19.1.                        
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | The majority of the mineralization would be considered
      non-abrasive, with an average Abrasion Index of 0.0809. The mineralization
      type abrasion characteristics varied significantly from 0.0023 to
      0.2872.                                                                                                 
|• | All of the Livengood mineralization types respond to
      cyanide leaching to some degree.                                                                                                                                                                                                                                   
|• | Some of the unoxidized mineralization with organic carbon
      has active or preg- robbing carbon.                                                                                                                                                                                                                       
|• | The effect of leach times on gold recovery and gravity
      concentration results indicate some of the mineralization contains coarse
      gold.                                                                                                                                                                            
|• | Gold recovery at 10 mesh particle size on some of the
      mineralization types exceeded 90 percent.                                                                                                                                                                                                                         
|• | Gold recovery on some of the mineralization types, but
      not all, is improved with finer grinding. A grind size where 80 percent
      (p80) of the particles are smaller than 200 mesh (74 microns) has been
      tested to date.                                                                                       
|• | The leaching of flotation concentrates, in preliminary
      tests, shows variable results depending on the mineralization type and the
      amount of arsenopyrite present.                                                                                                                                                 
|• | Fine grinding of flotation concentrates to less than 20
      microns, in preliminary tests, does not significantly improve CIL gold
      recovery from this material.                                                                                                                                                       
|• | Initial flotation and gravity concentration tests
      indicate the combined processes exceed 90% gold recovery to the
      concentrates.                                                                                                                                                                                   
|• | The degree of oxidation of the mineralization, as
      observed by the geologists, has a marginal impact on the gold
    recovery.                                                                                                                                                                                           
|• | Differences in gold recovery between cyanide shake leach
      tests, bottle roll leach tests, and Carbon-in-Leach tests suggest organic
      carbon in the mineralization is active to varying degrees in some of the
      mineralization types, particularly the un-oxidized portions of those
      mineralization types.
|• | The gold is often associated with sulfides, but this
      mineralization would not be classified as a sulfide refractory
  type.                                                                                                                                                                                             

22

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12.0 Resource Estimation

The Livengood Report presents a global mineral resource
estimate updated from the April 2011 estimate. The resource model was
constructed using Gemcom GEMS® and the Stanford GSLIB (Geostatistical
Software Library) MIK post processing routine. The resource was estimated using
Multiple Indicator Kriging techniques.

Model parameters include, among others, two oxidation
indicators and a single lithology indicator for each minor lithology. A
three-dimensionally defined lithology model, based on interpretations by ITH
geologists, was used to code the rock type block model. A three-dimensionally
defined probability grade shell (0.1 g/t) was used to constrain the gold
estimation. Gold contained within each block was estimated using nine indicator
thresholds. The block model was tagged with the geologic model using a block
majority coding method. Because there are significant grade discontinuities at
lithologic contacts, hard boundaries were used between each of the lithologic
units so that data for each lithology was used only for that unit.

A summary of the estimated global (in-situ) mineral resource is
presented below for cutoff grades of 0.2, 0.3, 0.5, and 0.7 g/t gold.

Model validation checks include global bias check, visual
validation, and swath plots. In all cases, the model appears to be unbiased and
fairly represent the drilling data.

Table 2:Global Resource Estimation Summary- August 2011

Classification
      Au Cutoff (g/t)
      Tonnes (millions)
      Au (g/t)
      Million Ounces AuMeasured
    0.20
    742
    0.54
    12.8Indicated
    0.20
    322
    0.47
    4.8Inferred
    0.20
    447
    0.42
    6.1Measured
    0.30
    562
    0.63
    11.4Indicated
    0.30
    216
    0.58
    4.0Inferred
    0.30
    279
    0.53
    4.8Measured
    0.50
    298
    0.84
    8.0Indicated
    0.50
    96
    0.81
    2.5Inferred
    0.50
    102
    0.79
    2.6Measured
    0.70
    149
    1.09
    5.2Indicated
    0.70
    42
    1.10
    1.5Inferred
    0.70
    39
    1.10
    1.4


Economic testing of the global mineral resource has been
performed using Whittle mine optimization to generate a surface mining shell
defined at a long term gold price of $US 1,400 per ounce. Based on this mine
optimization, the surface mining mineral resource at the Money Knob deposit is
listed in Table 3.

23

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Table3: Surface Mine Mineral Resource defined at US $1,400
per Au ounce.

Classification
      Au Cutoff (g/t)
      Tonnes (millions)
      Au (g/t)
      Million Ounces AuMeasured
    0.22*
    676
    0.56
    12.2Indicated
    0.22*
    257
    0.52
    4.3M&I
    0.22*
    933
    0.55
    16.5Inferred
    0.22*
    257
    0.50
    4.1


*- Cutoff grade* is average for
variable processing costs and recoveries.

Based on the study herein reported, delineated mineralization
of the Livengood Deposit is classified as a resource according to the following
definitions from NI 43-101 and from CIM (2005):

In this Instrument, the terms "mineral resource", "inferred
mineral resource", "indicated mineral resource" and "measured mineral resource"
have the meanings ascribed to those terms by the Canadian Institute of Mining,
Metallurgy and Petroleum, as the CIM Definition Standards on Mineral Resources
and Mineral Reserves adopted by CIM Council, as those definitions may be
amended. Due to the uncertainty that may be attached to Inferred Mineral
Resources, it cannot be assumed that all or any part of an Inferred Mineral
Resource will be upgraded to an Indicated or Measured Mineral Resource as a
result of continued exploration. Confidence in the estimate is insufficient to
allow the meaningful application of technical and economic parameters or to
enable an evaluation of economic viability worthy of public disclosure. Inferred
Mineral Resources must be excluded from estimates forming the basis of
feasibility or other economic studies.

Mineralization may be classified as an Indicated Mineral
Resource by the Qualified Person when the nature, quality, quantity and
distribution of data are such as to allow confident interpretation of the
geological framework and to reasonably assume the continuity of mineralization.
The Qualified Person must recognize the importance of the Indicated Mineral
Resource category to the advancement of the feasibility of the project. An
Indicated Mineral Resource estimate is of sufficient quality to support a
Preliminary Feasibility Study which can serve as the basis for major development
decisions.

Mineralization or other natural material of economic
interest may be classified as a Measured Mineral Resource by the Qualified
Person when the nature, quality, quantity and distribution of data are such that
the tonnage and grade of mineralization can be estimated to within close limits
and that variation from the estimate would not significantly affect potential
economic viability. This category requires a high level of confidence in, and
understanding of the geology and controls of the mineral deposit.

The current basis of project information is not
sufficient to convert the in-situ mineral resources to mineral reserves, and
mineral resources that are not mineral reserves do not have demonstrated
economic viability.

13.0 Mineral Reserve Estimates

Mineral reserves have not been estimated for Livengood, because
the project does not currently meet the minimum requirement of a completed PFS.

24

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14.0 Mining Methods

The project configuration assumes a large scale surface mining
operation using drill-blast-load-haul mining techniques. Major material handling
was assumed to be based on hydraulic excavators with 34 cubic meter buckets and
220 tonne capacity haul trucks. Peak mining rates are 75 million tonnes of
material, to sustain an annual throughput of 33.2 million tonnes of mineralized
material at the processing plant. The total production rates in early years
allow stockpiling of lower grade mineralized material to allow streaming of
higher grade materials to the process plant.

The mine life is projected to be 23 years to support a mill
throughput of 91,000 tonnes per day. Total mine production of mineralized
material is projected to be 750 Mt with 892 Mt of overburden material. The strip
ratio would be 1.19 overburden material to mineralized material. The mineralized
material would be comprised of measured, indicated and inferred classifications
in the proportions of 60%, 24%, and 16%, respectively.

Initial pioneering for the surface mine is assumed to start
with the initiation of construction at the site to provide borrow material for
construction of the tail dam. Minor production of mineralized material would
begin in the second year of construction, and then ramp up to deliver 22.5 Mtpa,
31.6 Mtpa and 32.6 Mtpa in production years 1, 2 and 3, respectively. Full
capacity would be achieved in year 4.

15.0 Recovery Methods

Preliminary processing assumptions are based on a flow sheet
that assumes a gravity gold circuit, followed by flotation to produce a
concentrate. Gold would be recovered from the concentrate using carbon-in-leach
cyanide leaching.

A single train plant is assumed with run-of-mine (ROM)
mineralized material delivered to a primary gyratory crusher, which would feed a
coarse stockpile. Coarse mineralized material would be reclaimed by apron
feeders discharging onto a SAG mill feed conveyor. A grinding circuit would
include a single SAG mill feeding two ball mills in parallel.

The ground, mineralized material would be routed through a
gravity circuit producing a rougher concentrate, which would be cleaned to
produce a gravity concentrate and gravity middlings. The gravity cleaner
concentrate would be processed in a gold refinery to produce dore'. Gravity
rougher tail would be returned to the grinding circuit, after a cyclone
separation of the fine fraction which would go to flotation directly.

Ground mineralized material, after removal of the gravity
recoverable gold, would go to a flotation cell where a rougher concentrate would
be created, which combined with the gravity middlings would be reground and then
leached in a CIL circuit to recover the contained gold. The CIL circuit would
produce a loaded carbon which would be acid washed, stripped of gold and then
reactivated for reuse. The refinery would use electrowinning to recover the
gold, which would then be refined to produce a dore'.

The plant throughput would be controlled by the SAG milling
capacity. Estimated gold recoveries have been based on the existing test work
and industry experience, and varies between 58-94 % for the different
lithologies and oxidations.

25

---

Projected metallurgical recoveries for each lithologic unit
have been estimated from the currently existing metallurgical test data. These
estimates have been used as the basis of the mine optimization work, but have
been increased by an additional 4 percentage points in the economic analysis to
account for anticipated improvements that may be possible with further process
optimization. Average recovery in the mine optimization output was 77.6%, but
has been increased to 81.6% in the economic analysis. This projected improvement
in recovery is based on previous experience of the Qualified Person in process
testing and plant optimization.

16.0 Project Infrastructure

Alaska infrastructure has been developed in a north-south
corridor between ports on the south coast (Anchorage, Valdez and others) and
Fairbanks in the center of the State. This includes communications, paved
highways, railroad, railbelt electrical grid, and major airports. The
metropolitan area around Fairbanks has a population of approximately 98,000
people.

The paved, all weather Elliot Highway runs north from Fairbanks
to the North Slope oilfields at Prudhoe Bay, and passes within several
kilometers of the Money Knob deposit. Communications infrastructure (fibreoptic)
has been extended to the North Slope along the Alyeska Pipeline, which parallels
the Elliot Highway and passes just west of Livengood.

In preliminary, nonbinding discussions, the local utility in
Fairbanks (Golden Valley Electrical Association) has indicated that 80-100 MW of
power could be available to the Livengood Project. Livengood would be connected
to the local grid by building a 64 km 230- kVA line along the pipeline corridor.
Environmental baseline studies required for the electrical line construction
were begun in 2011.

The development of site layout plans is underway as part of the
PFS. Primary infrastructure requiring construction at Livengood would be the
process plant, tail pipeline, electrical line, mine shops and buildings, and
site roads. Alternative sites have been investigated along the northern side of
the ridge containing the Money Knob deposit for the process plant, overburden
management facility and tail storage facility. A historical dam site, used to
store water for placer mining operations, is being investigated for water
storage.

17.0 Market Studies and Contracts

The market for gold is global in nature and is unlikely to be
unaffected by production from the Livengood Project. There are several large
third party gold refineries with well established industry relationships in
North America. Among the more notable ones are:

- Metalor; North Attleboro, Massachusetts
- Johnson Matthey; Salt Lake City, Utah
- Canadian Mint; Ottawa, Ontario

The Company has not contacted any of the aforementioned
companies for competitive treatment bids, rather utilizing industry averages for
this stage of development.

26

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18.0 Environmental Studies, Permitting and Social and
Community Impacts

Based on review of the studies completed to date, there are no
known environmental issues that are anticipated to materially impact the
Livengood Projects ability to extract the gold resource. The Company has been
conducting environmental baseline studies at the Livengood Project since 2008.
The environmental baseline programs conducted or currently underway at Livengood
include:

- surface water quality and hydrology;
- groundwater hydrogeology;
- wetlands extent and characteristics;
- meteorology and air quality;
- aquatic life and resources;
- wildlife;
- cultural resources;
- and, rock geochemical characteristics.

A site-specific monitoring plan and water management plan for
both operations and post mine closure will be developed in the future in
conjunction with detailed engineering and project permit planning. Since
development of the Livengood Project will require a number of US Federal
permits, the National Environmental Policy Act (NEPA) and Council of
Environmental Quality (CEQ) Regulations 40 CFR parts 1500-1508 will govern the
federal permitting portion of the Livengood Project. In fulfillment of the NEPA
requirements, the Livengood Project will be required to prepare an Environmental
Impact Statement (EIS). Although at this time it is unknown which department
will become the lead federal agency, the State of Alaska is expected to take a
cooperating role to coordinate the NEPA review with the State permit process.

Actual permitting timelines are controlled by the US Federal
NEPA review and US Federal and State agency decisions.

The Livengood Project is located 115 km northwest of Fairbanks,
Alaska and approximately 65 km north of the boundary of the Fairbanks North Star
Borough, in an unincorporated area of the State and encompasses a combination of
State of Alaska mining claims, State of Alaska Mental Health Trust lands,
private lands, and federal mining claims. While the old mining town of Livengood
no longer has year round residents or an organized government, there are
approximately 15 residents living on remote homesteads on the road system within
a 15 km radius of the Livengood Project. The nearest community is the village of
Minto, a town of 200 located approximately 65 km southwest by road from the
Livengood Project. Thus, while the local residents and the community of Minto
are important stakeholders in the region and to the Livengood Project, there are
no municipal or community agreements required for the Livengood Project.

19.0 Capital and Operating Costs

Capital cost estimates have been developed from evaluation of
the project configuration based on surface mining with a 91,000 tonne/day
processing plant. The Company engaged MTB Project Management Professionals, Inc.
to review capital cost that had been prepared in previous PEA estimates, make
appropriate adjustments, prepare capital estimates, develop a work breakdown
structure (WBS) for the capital cost, and develop an execution schedule for
the capital expenditures, based on the scope of work as defined as of July 2011.
Also, a sustaining capital cost estimate was to be prepared.

27

---

The capital cost scope was developed to a WBS. This WBS was
developed from several historical projects of similar scope. The capital
components of the estimate were allocated into two major groupings:

- Initial capital
- Sustaining capital cost for both incremental capital and replacement
  capital.

Costs were defined by the preproduction milestone schedule,
with an approved feasibility study initiating the start of the capital cost
being incurred; costs prior to the approved feasibility study were considered to
be sunk costs. Initial capital cost was defined as all cost incurred before
startup, which is when the first mineralized material is discharged into the
primary crusher. Production year +1 begins at startup and defines operating
cost.

The capital cost summary is as follows:

Initial Capital
      Cost...$1,614 millionLOM Sustaining Capital Cost...$585
      millionContingency included in initial capital
      cost . $323 million


Project operating costs are based on comparison to similar
mining operations in Alaska and the USA. Table 4 lists the operating cost
assumptions used in the economic analysis.

Table 4: Operating Cost Assumptions

Operating area
      $/tonne processed
      $/tonne mined
      $/ozMining
    $ 3.87
    $ 1.77
    $ 225Processing
    $ 6.81
    -
    $ 395Administration
    $ 0.81
    -
    $ 47Refining and Transportation
    $ 0.08
    -
    $4.73Reclamation
    $ 0.07
    -
    $ 4.16Royalty @ 2.5%
    $0.47
    
    $27.50Total
    $ 12.12
    --
    $ 703


20.0 Economic Analyses

A pre-tax, 100% equity economic analysis has been performed
based on the following assumptions:

- Long term gold price of $1,100 per ounce in constant US dollars;
- US dollar terms (Exchange rate of US $1.00 = CAD $1.01)
- No cost escalation or inflation has been provided for
- Annual discount rate of 5%, as well as undiscounted cash flow and
  alternative annual discount rates of 7.5% and 10.0%.
- All cost prior to construction engineering, long lead item ordering and
  construction start up are considered sunk costs.

Under these assumptions, the Livengood Project is projected to
have an Internal Rate of Return (IRR) of 14.1%, an undiscounted cash flow of US
$3.41 B, and an NPV @ 5% of $1.24 B. Key economic performance parameters are
listed in Table 5.

28

---

Table 5: Projected Key economic performance parameters at
a long term gold price of US $1,100 per ounce.

EconomicsIRR
      
      
      
      
      14.14%NPV*
      
      0.00%
      
      $
      3,109,058NPV*
      
      5.00%
      
      $
      1,241,153NPV*
      
      7.50%
      
      $
      734,472NPV*
      
      10.00%
      
      $
      380,496Summary StatisticsInitial Capex
      
      
      
      $
      1,613,805Sustaining Capex
      
      
      
      $
      584,658Working Capex
      
      
      
      $
      31,774Gold recovered-oz
      
      
      
      
      12,924,668Cash operating cost/oz
      
      
      
      $
      703Total cost/oz
      
      
      
      $
      875Stripping ratio
      
      
      
      
      1.19LOM mill Au recovery
      
      
      
      
      81.6%


* - 000' $ US

Projected annual gold production and annual cash cost per Au
ounce are shown graphically in Figure 2 for the life-of-mine (LOM).
Sensitivities to gold price, recovery, opex and capes variations are listed in
Tables 6, 7, 8 and 9, respectively.

Figure 2: Projected annual gold production and annual cash
cost per produced Au ounce for the LOM.



29

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Table 6: Variation of Projected Livengood Project IRR and
NPV (000' US $) for a gold price range of US $800 -$1,700.

Gold Price

Change
    IRR
    NPV 0%
    NPV 5%
    NPV 7.5%
    NPV 10%800
    -6.7%
    $ (654,735)
    $ (816,710)
    $ (857,480)
    $ (882,725)900
    3.7%
    $ 599,863
    $ (130,756)
    $ (326,829)
    $ (461,652)1000
    9.5%
    $ 1,854,461
    $ 555,198
    $ 203,821
    $ (40,578)1100
      14.1%
      $ 3,109,058
      $ 1,241,153
      $ 734,472
      $ 380,4961200
    18.2%
    $ 4,363,656
    $ 1,927,107
    $ 1,265,123
    $ 801,5701300
    22.0%
    $ 5,618,253
    $ 2,613,061
    $ 1,795,774
    $ 1,222,6441400
    25.5%
    $ 6,872,851
    $ 3,299,016
    $ 2,326,425
    $ 1,643,7181500
    28.8%
    $ 8,127,448
    $ 3,984,970
    $ 2,857,075
    $ 2,064,7911600
    32.0%
    $ 9,382,046
    $ 4,670,924
    $ 3,387,726
    $ 2,485,8651700
    35.1%
    $ 10,636,643
    $ 5,356,879
    $ 3,918,377
    $ 2,906,939


Table 7: Variation of Projected Livengood Project IRR and
NPV (000' US $) for process recovery change of 85-115% of the base assumption
(81.6%) .

Process recovery

Change
    IRR
    NPV 0%
    NPV 5%
    NPV 7.5%
    NPV 10%15%
    20.7%
    $ 5,179,144
    $ 2,372,977
    $ 1,610,046
    $ 1,075,26810%
    18.6%
    $ 4,489,115
    $ 1,995,703
    $ 1,318,188
    $ 843,6775%
    16.4%
    $ 3,799,087
    $ 1,618,428
    $ 1,026,330
    $ 612,0870%
      14.1%
      $ 3,109,058
      $ 1,241,153
      $ 734,472
      $ 380,496-5%
    11.7%
    $ 2,419,029
    $ 863,878
    $ 442,614
    $ 148,905-10%
    9.0%
    $ 1,729,001
    $ 486,603
    $ 150,756
    $ (82,685)-15%
    6.0%
    $ 1,038,972
    $ 109,328
    $ (141,102)
    $ (314,276)


Table 8: Variation of Projected Livengood Project IRR and
NPV (000' US $) for change in Opex of 85-115% of the base
assumption.

Opex

Change
    IRR
    NPV 0%
    NPV 5%
    NPV 7.5%
    NPV 10%15%
    9.6%
    $ 1,815,100
    $ 554,864
    $ 210,542
    $ (30,494)10%
    11.2%
    $ 2,246,419
    $ 783,627
    $ 385,186
    $ 106,5035%
    12.7%
    $ 2,677,739
    $ 1,012,390
    $ 559,829
    $ 243,4990%
      14.1%
      $ 3,109,058
      $ 1,241,153
      $ 734,472
      $ 380,496-5%
    15.5%
    $ 3,540,377
    $ 1,469,916
    $ 909,115
    $ 517,493-10%
    16.8%
    $ 3,971,697
    $ 1,698,679
    $ 1,083,759
    $ 654,490-15%
    18.0%
    $ 4,403,016
    $ 1,927,442
    $ 1,258,402
    $ 791,486


Table 9: Variation of Projected Livengood Project IRR and
NPV (000' US $) for change in Capex of 85-115% of the base assumption (81.6%) .

Capex

Change
    IRR
    NPV 0%
    NPV 5%
    NPV 7.5%
    NPV 10%15%
    11.5%
    $ 2,804,541
    $ 983,139
    $ 493,698
    $ 154,15710%
    12.3%
    $ 2,906,047
    $ 1,069,143
    $ 573,956
    $ 229,6035%
    13.2%
    $ 3,007,553
    $ 1,155,148
    $ 654,214
    $ 305,0500%
      14.1%
      $ 3,109,058
      $ 1,241,153
      $ 734,472
      $ 380,496-5%
    15.2%
    $ 3,210,564
    $ 1,327,157
    $ 814,730
    $ 455,943-10%
    16.3%
    $ 3,312,069
    $ 1,413,162
    $ 894,988
    $ 531,389-15%
    17.5%
    $ 3,413,575
    $ 1,499,167
    $ 975,246
    $ 606,836


30

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21.0 Other Relevant Data and Information

No additional information or explanation is known by the
authors of the Livengood Report to be necessary to make the technical report
understandable and not misleading.

22.0 Interpretation and Conclusions

A PFS for the Livengood mineral resource is currently underway.
The Livengood Report provides an update of the anticipated project
configuration, and an overview of the geological, exploration, metallurgical
test work, process plant and infrastructure engineering, and surface mine
planning work that has been completed to date. A PEA of the updated
configuration has been developed which is based on a surface mining operation
supplying mineralized material to a processing plant with average throughput of
91,000 tonnes per day. The processing plant would produce gravity and flotation
concentrates with gold recovered by Carbon-in-Leach processing of the
concentrates. The PEA addresses the basic framework of how gold mineralization
will be mined, mineralized material processed, and recovery achieved.

The interpretation and conclusions supplied in the Livengood
Report are preliminary and are provided for the purposes of updating information
about ITHs progress in the PFS since the issuance of the November 2010
technical report. The information is subject to revision prior to its
incorporation into the final PFS document.

23.0 Recommendations

The Company will continue its investigations and studies at
Livengood with a projected FY 2011-2012 budget of US$ 68.1M ($67M CAD). The
continuing PFS work accounts for approximately 75% of the expenditure, with the
remaining 25% allocated to start up of the preparations for permit submittal and
start up of feasibility engineering.

During the Summer 2011 field program, completion of several
studies to demonstrate grade continuity and confirm precision of modeling with
increased drill density will provide important verification of the resource
estimation.

The PEA is preliminary in nature, and is based on forward
looking technical and economic assumptions which will be evaluated in the
Pre-feasibility Study. The PEA is based on the Livengood in-situ resource model
(August 2011, effective date of May 31, 2011) which consists of material in the
measured, indicated and inferred classification. Inferred mineral resources are
considered too speculative geologically to have technical and economic
considerations applied to them. The current basis of project information is not
sufficient to convert the in-situ mineral resources to mineral reserves, and
mineral resources that are not mineral reserves do not have demonstrated
economic viability. Accordingly, there can be no certainty that the results
estimated in the PEA will be realized. The PEA results are only intended as an
initial, first-pass review of the potential project economics based on
preliminary information.

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Augmentation of Development Team

ITH has continued to strengthen its technical management
structure within the Fairbanks development team with the addition of Mr. Rick
Solie to the ITH Fairbanks team as the Community and Government Relations
Manager. Mr. Solie has over 20 years of government and public affairs experience
as an executive for various Alaska based corporations. Prior to joining ITH, Mr.
Solie was the Director of Alaska Government and Community Affairs for Denali 
The Alaska Gas Pipeline LLC. He joined Denali from ConocoPhillips where he
managed the Fairbanks regional office as Director of Government and Community
Relations. Before joining ConocoPhillips, he was the Director, Marketing &
Planning for the Fairbanks Memorial Hospital. Mr. Solie has a Bachelor of Arts
in Economics from the University of Alaska and is a long-time Alaska resident
with substantial experience in different aspects of the Alaska industry and
credibility with the Fairbanks community and the State of Alaska.

Use of Financing Proceeds

The Company closed a bought deal short form prospectus and a
private placement financing announced September 28, 2010 (the Offering) on
November 10, 2010. The Company intends to use the net proceeds from the two
financings for continued work on its Livengood Gold project in Alaska and for
general working capital purposes. The Use of Proceeds plan contained in the
Companys short form prospectus dated November 5, 2010, projected total
Livengood project expenditures dating from September 1, 2010 (beginning of Q2
for the Fiscal Year ending May 31, 2011) to May 31, 2014. Included in the Use of
proceeds plan were the items listed in Table 10.

Table 10 - Components of the ITH net proceeds accounting
from September 1, 2010

|Cash
      at September 1, 2010                                       | $ | 31,200,000  |  
|--------------------------------------------------------------------- | - | ----------- | -
|Gross proceeds of the Offering                                        |   | 65,000,000  |  
|Gross proceeds of the Over-Allotment Option
      (exercised in full) |   | 9,750,000   |  
|Gross proceeds from Private Placement                                 |   | 30,625,000  |  
|Less:                                                                 |   |             |  
|Underwriters Commission and Offering Cost                            |   | (3,737,500  | )
|Offering Costs                                                        | $ | (100,000    | )
|                                                                      |   |             |  
|Net Proceeds                                                          | $ | 132,737,500 |  

Table 11 compares the total planned and estimated actual
expenditures for the Use of Proceeds for the periods Q2, Q3 and Q4 of the Fiscal
Year ending May 31, 2011.

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Table 11 - Comparison of planned and estimated actual Use
of Proceeds (CAD) to date by ITH in Q3 of theFiscal Year ended May 31, 2011 [() -negative variance actual less than
  projected].

|                                       |   |             |  |   | Total Plan   |  |   | Actual*     |  |   | Variance     |  
|-------------------------------------- | - | ----------- |  | - | ------------ |  | - | ----------- |  | - | ------------ | -
|                                       |   | Total Plan  |  |   | Year Ended   |  |   | Q2, Q3 & Q4 |  |   | Year Ended   |  
|Project Cost
      Center              |   | (2011-2014) |  |   | May 31, 2011 |  |   | to date     |  |   | May 31, 2011 |  
|                                       |   |             |  |   |              |  |   |             |  |   |              |  
|Project administration                 | $ | 31,101,700  |  | $ | 3,413,500    |  | $ | 1,743,696   |  | $ | (1,669,804   | )
|Geological and field operations        |   | 67,136,000  |  |   | 22,448,800   |  |   | 26,167,682  |  |   | 3,718,882    |  
|Metallurgical studies                  |   | 6,883,400   |  |   | 1,469,500    |  |   | 1,497,520   |  |   | 28,020       |  
|Infrastructure and engineering         |   | 8,887,400   |  |   | 1,221,900    |  |   | 2,284,341   |  |   | 1,062,441    |  
|Environmental and community engagement |   | 14,431,300  |  |   | 2,452,100    |  |   | 1,753,691   |  |   | (698,409     | )
|Mining studies                         |   | 2,415,400   |  |   | 194,200      |  |   | 208,694     |  |   | 14,494       |  
|Project integration                    |   | 1,882,300   |  |   | -            |  |   | -           |  |   | -            |  
|                                       |   |             |  |   |              |  |   |             |  |   |              |  
|Subtotal                               |   | 132,737,500 |  |   | 31,200,000   |  |   | 33,655,624  |  |   | 2,455,624    |  
|                                       |   |             |  |   |              |  |   |             |  |   |              |  
|Offering costs                         |   | -           |  |   | -            |  |   | 502,208     |  |   | 502,208      |  
|                                       |   |             |  |   |              |  |   |             |  |   |              |  
|Total                                  | $ | 132,737,500 |  | $ | 31,200,000   |  | $ | 34,157,832  |  | $ | 2,957,832    |  

*Unaudited Livengood Project Reporting

The Table 11 variance from the total plan year ended May 31,
2011 is nominally 9 % above the plan value. Approximately half of this variance
is related to labor costs associated with changes in the corporate organization
and to the Offering Costs both of which were unanticipated. Actual Use of
Proceeds was 109% of the plan for the year ended May 31, 2011.

Progress on the planned activities scheduled for the completed
year is on schedule, and the planned completion of the PFS is projected in
November 2011. Project administration expenditures are below the planned rate,
but were adequate for the needs of the project. Geological and field operations
achieved higher rates of drill productivity, and were extended beyond the
typical winter shutdowns to accelerate infrastructure geotechnical
investigations. This required 17% greater expenditure than the plan, due to the
additional drilling, extended programs and requirement for helicopter support to
move drills and personnel. The acceleration/extension has added confidence that
the infrastructure characterization, which is a critical path item in the PFS,
will be on schedule. Metallurgical expenditures were nominally on plan.
Infrastructure and engineering work has also been accelerated to assure delivery
of the PFS requirements and has required additional geotechnical and
hydrological investigations. This has required an 87% increase above the planned
expenditure. Environmental and community engagement is on schedule, but has
required less expenditure than planned. Expenditure for mining studies was
nominally on plan for the end of Q4. No expenditure was planned for project
integration in current year. Offering costs were higher than expected due to the
length of time involved in filing the final short form prospectus.

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Qualified Person and Quality Control/Quality Assurance

Jeffrey A. Pontius (CPG 11044), a qualified person as defined
  by National Instrument 43-101, has supervised the preparation of the scientific
  and technical information that forms the basis for this MD&A and has
  approved the disclosure herein. Mr. Pontius is not independent of ITH, as he was
  the CEO, is on the Board of Directors, and continues to hold common shares and
  incentive stock options.

Development work at the Livengood Project is directed by Carl
E. Brechtel (Colorado PE 23212, Nevada PE 8744). He is a graduate geological
engineer with an MS degree in mining engineering. He is a Registered Member of
the Society for Mining, Metallurgy and Exploration. Mr. Brechtel has supervised
the preparation of some of the technical and economic information that forms the
basis for this MD&A and has approved the disclosure herein. Mr. Brechtel is
not independent of ITH, as he is the President and COO, and holds incentive
stock options.

The geologic work program at Livengood was designed and is
supervised by Chris Puchner, Chief Geologist (CPG 07048) of the Company who is a
qualified person as defined by National Instrument 43-101. Mr. Puchner is
responsible for all aspects of the work, including the quality control/quality
assurance program. On-site personnel at the project photograph the core from
each individual borehole prior to preparing the split core. Duplicate reverse
circulation drill samples are collected with one split sent for analysis.
Representative chips are retained for geological logging. On-site personnel at
the project log and track all samples prior to sealing and shipping. All sample
shipments are sealed and shipped to ALS Chemex in Fairbanks, Alaska, for
preparation and then on to ALS Chemex in Reno, Nevada, or Vancouver, B.C., for
assay. ALS Chemexs quality system complies with the requirements for the
International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy
and precision are monitored by the analysis of reagent blanks, reference
material and replicate samples. Quality control is further assured by the use of
international and in-house standards. Finally, representative blind duplicate
samples are forwarded to ALS Chemex and an ISO compliant third party laboratory
for additional quality control.

|Risk
      Factors
|------------------

Due to the nature of the Companys proposed business and the
present stage of exploration of its Livengood property interests (which is an
advanced stage exploration project, but with no known reserves), the following
risk factors, among others, will apply:

Resource
Exploration and Development is Generally a Speculative Business: Resource
exploration and development is a speculative business and involves a high degree
of risk, including, among other things, unprofitable efforts resulting both from
the failure to discover mineral deposits and from finding mineral deposits
which, though present, are insufficient in size and grade at the then prevailing
market conditions to return a profit from production. The marketability of
natural resources which may be acquired or discovered by the Company will be
affected by numerous factors beyond the control of the Company. These factors
include market fluctuations, the proximity and capacity of natural resource
markets, government regulations, including regulations relating to prices,
taxes, royalties, land use, importing and exporting of minerals and
environmental protection. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in the Company not
receiving an adequate return on invested capital.

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While
the Livengood project has estimated measured, inferred and indicated resources
identified, there are no known reserves on any of the Companys properties.
The majority of exploration projects do not result in the discovery of
commercially mineable deposits of ore. Substantial expenditures are required to
establish ore reserves through drilling and metallurgical and other testing
techniques, determine metal content and metallurgical recovery processes to
extract metal from the ore, and construct, renovate or expand mining and
processing facilities. No assurance can be given that any level of recovery of
ore reserves will be realized or that any identified mineral deposit will ever
qualify as a commercial mineable ore body which can be legally and economically
exploited.

Fluctuation
of Metal Prices: Even if commercial quantities of mineral deposits are
discovered by the Company, there is no guarantee that a profitable market will
exist for the sale of the metals produced. The Companys long-term viability and
profitability depend, in large part, upon the market price of metals which have
experienced significant movement over short periods of time, and are affected by
numerous factors beyond the control of the Company, including international
economic and political trends, expectations of inflation, currency exchange
fluctuations, interest rates and global or regional consumption patterns,
speculative activities and increased production due to improved mining and
production methods. The supply of and demand for metals are affected by various
factors, including political events, economic conditions and production costs in
major producing regions. There can be no assurance that the price of any
minerals produced from the Companys properties will be such that any such
deposits can be mined at a profit.

Permits
and Licenses: The operations of the Company will require licenses and
permits from various governmental authorities. There can be no assurance that
the Company will be able to obtain all necessary licenses and permits that may
be required to carry out exploration, development and mining operations at its
projects, on reasonable terms or at all. Delays in obtaining, or a failure to
obtain, any such licenses and permits, or a failure to comply with the terms of
any such licenses and permits that the Company does obtain, could have a
material adverse effect on the Company.

Acquisition
of Mineral Claims under Agreements: The agreements pursuant to which the
Company has the right to acquire interests in a number of its properties at
Livengood provide that the Company must make a series of cash payments over
certain time periods and/or expend certain minimum amounts on the exploration of
the properties. Failure by the Company to make such payments or make such
expenditures in a timely fashion may result in the Company losing its interest
in such properties. There can be no assurance that the Company will have, or be
able to obtain, the necessary financial resources to be able to maintain all of
its property agreements in good standing, or to be able to comply with all of
its obligations thereunder, with the result that the Company could forfeit its
interest in one or more of its mineral properties.

Proposed
Amendments to the United States General Mining Law of 1872: In recent years,
the United States Congress has considered a number of proposed amendments to the
U.S. General Mining Law of 1872 (Mining Law). If adopted, such
legislation, among other things, could impose royalties on mineral production
from unpatented mining claims located on United States federal lands (which
includes certain of the mining claims at Livengood), result in the denial of
permits to mine after the expenditure of significant funds for exploration and
development, reduce estimates of mineral reserves and reduce the amount of
future exploration and development activity on United States federal lands, all
of which could have a material and adverse effect on the Companys cash flow,
results of operations and financial condition.

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Uncertainties
Relating to Unpatented Mining Claims:Some of the mining claims at the
Livengood property are federal or Alaska State unpatented mining claims. There
is a risk that a portion of such unpatented mining claims could be determined to
be invalid, in which case the Company could lose the right to mine any minerals
contained within those mining claims. Unpatented mining claims are created and
maintained in accordance with the applicable US federal and Alaska state mining
laws. Unpatented mining claims are unique to United States property interests,
and are generally considered to be subject to greater title risk than other real
property interests due to the validity of unpatented mining claims often being
uncertain. This uncertainty arises, in part, out of the complex federal and
state laws and regulations under the Mining Law. Unpatented mining claims are
always subject to possible challenges of third parties or contests by the United
States federal or Alaska State governments. The validity of an unpatented mining
claim, in terms of both its location and its maintenance, is dependent on strict
compliance with a complex body of federal and state statutory and decisional
law. Title to the unpatented mining claims may also be affected by undetected
defects such as unregistered agreements or transfers. The Company has not
obtained full title opinions for the majority of its mineral properties. Not all
the mineral properties in which the Company has an interest have been surveyed,
and their actual extent and location may be in doubt.

Surface
Rights and Access:Although the Company acquires the rights to some or all
of the minerals in the ground subject to the mineral tenures that it acquires,
or has a right to acquire, in most cases it does not thereby acquire any rights
to, or ownership of, the surface to the areas covered by its mineral tenures. In
such cases, applicable mining laws usually provide for rights of access to the
surface for the purpose of carrying on mining activities, however, the
enforcement of such rights through the courts can be costly and time consuming.
It is necessary to negotiate surface access or to purchase the surface rights if
long-term access is required. There can be no guarantee that, despite having the
right at law to access the surface and carry on mining activities, the Company
will be able to negotiate satisfactory agreements with any such existing
landowners/occupiers for such access or purchase of such surface rights, and
therefore it may be unable to carry out planned mining activities. In addition,
in circumstances where such access is denied, or no agreement can be reached,
the Company may need to rely on the assistance of local officials or the courts
in such jurisdiction the outcomes of which cannot be predicted with any
certainty. The inability of the Company to secure surface access or purchase
required surface rights could materially and adversely affect the timing, cost
or overall ability of the Company to develop any mineral deposits it may locate.

No
Assurance of Profitability: The Company has no history of production or
earnings and due to the nature of its business there can be no assurance that
the Company will be profitable. The Company has not paid dividends on its shares
since incorporation and does not anticipate doing so in the foreseeable future.
All of the Companys properties are in the exploration stage and the Company has
not defined or delineated any proven or probable reserves on any of its
properties. None of the Companys properties are currently under development.
Continued exploration of its existing properties and the future development of
any properties found to be economically feasible, will require significant
funds. The only present source of funds available to the Company is through the
sale of its equity shares, short-term, high-cost borrowing or the sale or
optioning of a portion of its interest in its mineral properties. Even if the
results of exploration are encouraging, the Company may not have sufficient
funds to conduct the further exploration that may be necessary to determine
whether or not a commercially mineable deposit exists. While the Company may
generate additional working capital through further equity offerings, short-term
borrowing or through the sale or possible syndication of its properties, there
is no assurance that any such funds will be available on favourable terms, or at
all. At present, it is impossible to determine what amounts of additional funds,
if any, may be required. Failure to raise such additional capital could put the
continued viability of the Company at risk.

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Uninsured
or Uninsurable Risks: Exploration, development and mining operations involve
various hazards, including environmental hazards, industrial accidents,
metallurgical and other processing problems, unusual or unexpected rock
formations, structural cave-ins or slides, flooding, fires, metal losses and
periodic interruptions due to inclement or hazardous weather conditions. These
risks could result in damage to or destruction of mineral properties, facilities
or other property, personal injury, environmental damage, delays in operations,
increased cost of operations, monetary losses and possible legal liability. The
Company may not be able to obtain insurance to cover these risks at economically
feasible premiums or at all. The Company may elect not to insure where premium
costs are disproportionate to the Companys perception of the relevant risks.
The payment of such insurance premiums and of such liabilities would reduce the
funds available for exploration and production activities.

Government
Regulation: Any exploration, development or mining operations carried on by
the Company will be subject to government legislation, policies and controls
relating to prospecting, development, production, environmental protection,
mining taxes and labour standards. The Company cannot predict whether or not
such legislation, policies or controls, as presently in effect, will remain so,
and any changes therein (for example, significant new royalties or taxes), which
are completely outside the control of the Company, may materially adversely
affect to ability of the Company to continue its planned business within any
such jurisdictions.

Recent
market events and conditions:From 2007 into 2010, the U.S. credit
markets have experienced serious disruption due to a deterioration in
residential property values, defaults and delinquencies in the residential
mortgage market (particularly, sub-prime and non-prime mortgages) and a decline
in the credit quality of mortgage backed securities. These problems have led to
a slowdown in residential housing market transactions, declining housing prices,
delinquencies in non-mortgage consumer credit and a general decline in consumer
confidence. These conditions caused a loss of confidence in the broader U.S. and
global credit and financial markets and resulting in the collapse of, and
government intervention in, major banks, financial institutions and insurers and
creating a climate of greater volatility, less liquidity, widening of credit
spreads, a lack of price transparency, increased credit losses and tighter
credit conditions. Notwithstanding various actions by the U.S. and foreign
governments, concerns about the general condition of the capital markets,
financial instruments, banks, investment banks, insurers and other financial
institutions caused the broader credit markets to further deteriorate and stock
markets to decline substantially. In addition, general economic indicators have
deteriorated, including declining consumer sentiment, increased unemployment and
declining economic growth and uncertainty about corporate earnings.

While
these conditions appear to have improved slightly in 2011, unprecedented
disruptions in the credit and financial markets have had a significant material
adverse impact on a number of financial institutions and have limited access to
capital and credit for many companies. These disruptions could, among other
things, make it more difficult for the Company to obtain, or increase its cost
of obtaining, capital and financing for its operations. The Companys access to
additional capital may not be available on terms acceptable to it or at all.

37

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General
economic conditions:The recent unprecedented events in global financial
markets have had a profound impact on the global economy. Many industries,
including the gold and base metal mining industry, are impacted by these market
conditions. Some of the key impacts of the current financial market turmoil
include contraction in credit markets resulting in a widening of credit risk,
devaluations and high volatility in global equity, commodity, foreign exchange
and precious metal markets, and a lack of market liquidity. A continued or
worsened slowdown in the financial markets or other economic conditions,
including but not limited to, consumer spending, employment rates, business
conditions, inflation, fuel and energy costs, consumer debt levels, lack of
available credit, the state of the financial markets, interest rates, and tax
rates may adversely affect our growth and profitability. Specifically:

- The global credit/liquidity crisis could impact the cost and availability
  of financing and the Companys overall liquidity
- the volatility of gold and other base metal prices may impact the
  Companys future revenues, profits and cash flow
- volatile energy prices, commodity and consumables prices and currency
  exchange rates impact potential production costs
- the devaluation and volatility of global stock markets impacts the
  valuation of the Common Shares, which may impact the Companys ability to
  raise funds through the issuance of Common Shares

These
factors could have a material adverse effect on the Companys financial
condition and results of operations.

Insufficient
Financial Resources: The Company does not presently have sufficient
financial resources to undertake by itself the preparation of a feasibility
study and, if a production decision is made, the construction of a mine at
Livengood. The completion of a feasibility study, and any construction of a mine
at Livengood following the making of a production decision, will therefore
depend upon the Companys ability to obtain financing through the sale of its
equity securities, a possible joint venturing of the project or the securing of
significant debt financing. There is no assurance that the Company will be
successful in obtaining the required financing to complete a feasibility study
or construct and operate a mine at Livengood (should a production decision be
made). Failure to raise the required funds could result in the interest of the
Company in the Livengood project being significantly diluted, or lost altogether
or the Company being unable to complete a feasibility study or construct a mine
at Livengood (following any production decision that may be made).

Financing
Risks: The Company has limited financial resources, has no source of
operating cash flow and has no assurance that additional funding will be
available to it for further exploration and development of the Livengood project
or to fulfil its obligations under any applicable agreements. Although the
Company has been successful in the past in obtaining financing through the sale
of equity securities, there can be no assurance that it will be able to obtain
adequate financing in the future or that the terms of such financing will be
favourable. Failure to obtain such additional financing could result in delay or
indefinite postponement of further exploration and development of Livengood with
the possible loss of its interest in such property.

38

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Dilution
to the Companys existing shareholders:The Company may require additional
equity financing be raised in the future. The Company may issue securities on
less than favourable terms to raise sufficient capital to fund its business
plan. Any transaction involving the issuance of equity securities or securities
convertible into Common Shares would result in dilution, possibly substantial,
to present and prospective holders of Common Shares.

Increased
costs:Management anticipates that costs at the Companys projects will
frequently be subject to variation from one year to the next due to a number of
factors, such as changing ore grade, metallurgy and revisions to mine plans, if
any, in response to the physical shape and location of the ore body. In
addition, costs are affected by the price of commodities such as fuel, rubber
and electricity. Such commodities are at times subject to volatile price
movements, including increases that could make production at certain operations
less profitable. A material increase in costs at any significant location could
have a significant effect on the Companys profitability.

Dependence
Upon Others and Key Personnel: The success of the Companys operations will
depend upon numerous factors, many of which are beyond the Companys control,
including (i) the ability of the Company to enter into strategic alliances
through a combination of one or more joint ventures, mergers or acquisition
transactions; and (ii) the ability to attract and retain additional key
personnel in exploration, mine development, sales, marketing, technical support
and finance. These and other factors will require the use of outside suppliers
as well as the talents and efforts of the Company. There can be no assurance of
success with any or all of these factors on which the Companys operations will
depend. The Company has relied and may continue to rely, upon consultants and
others for operating expertise.

Currency
Fluctuations: The Company maintains its accounts in Canadian and U.S.
dollars, making it subject to foreign currency fluctuations. Such fluctuations
may materially affect the Companys financial position and results.

Share
Price Volatility: In recent years, the securities markets in the United
States and Canada have experienced a high level of price and volume volatility,
and the market price of securities of many companies, particularly those
considered exploration or development stage companies, have experienced wide
fluctuations in price which have not necessarily been related to the operating
performance, underlying asset values or prospects of such companies. There can
be no assurance that significant fluctuations in the trading price of the
Companys common shares will not occur, or that such fluctuations will not
materially adversely impact on the Companys ability to raise equity funding
without significant dilution to its existing shareholders, or at all.

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Exploration
and Mining Risks: Fires, power outages, labour disruptions, flooding,
explosions, cave-ins, landslides and the inability to obtain suitable or
adequate machinery, equipment or labour are other risks involved in the
operation of mines and the conduct of exploration programs. Substantial
expenditures are required to establish reserves through drilling, to develop
metallurgical processes, to develop the mining and processing facilities and
infrastructure at any site chosen for mining. Although substantial benefits may
be derived from the discovery of a major mineralized deposit, no assurance can
be given that minerals will be discovered in sufficient quantities to justify
commercial operations or that funds required for development can be obtained on
a timely basis. The economics of developing mineral properties is affected by
many factors including the cost of operations, variations of the grade of ore
mined, fluctuations in the price of gold or other minerals produced, costs of
processing equipment and such other factors as government regulations, including
regulations relating to royalties, allowable production, importing and exporting
of minerals and environmental protection. In addition, the grade of
mineralization ultimately mined may differ from that indicated by drilling
results and such differences could be material. Short term factors, such as the
need for orderly development of ore bodies or the processing of new or different
grades, may have an adverse effect on mining operations and on the results of
operations. There can be no assurance that minerals recovered in small scale
laboratory tests will be duplicated in large scale tests under on-site
conditions or in production scale operations. Material changes in geological
resources, grades, stripping ratios or recovery rates may affect the economic
viability of projects.

Environmental
Restrictions: The activities of the Company are subject to environmental
regulations promulgated by government agencies in different countries from time
to time. Environmental legislation generally provides for restrictions and
prohibitions on spills, releases or emissions into the air, discharges into
water, management of waste, management of hazardous substances, protection of
natural resources, antiquities and endangered species and reclamation of lands
disturbed by mining operations. Certain types of operations require the
submission and approval of environmental impact assessments. Environmental
legislation is evolving in a manner which means stricter standards, and
enforcement, fines and penalties for non-compliance are more stringent.
Environmental assessments of proposed projects carry a heightened degree of
responsibility for companies and directors, officers and employees. The cost of
compliance with changes in governmental regulations has a potential to reduce
the profitability of operations.

Regulatory
Requirements: The activities of the Company are subject to extensive
regulations governing various matters, including environmental protection,
management and use of toxic substances and explosives, management of natural
resources, exploration, development of mines, production and post-closure
reclamation, exports, price controls, taxation, regulations concerning business
dealings with indigenous peoples, labour standards on occupational health and
safety, including mine safety, and historic and cultural preservation. Failure
to comply with applicable laws and regulations may result in civil or criminal
fines or penalties, enforcement actions thereunder, including orders issued by
regulatory or judicial authorities causing operations to cease or be curtailed,
and may include corrective measures requiring capital expenditures, installation
of additional equipment, or remedial actions, any of which could result in the
Company incurring significant expenditures. The Company may also be required to
compensate those suffering loss or damage by reason of a breach of such laws,
regulations or permitting requirements. It is also possible that future laws and
regulations, or more stringent enforcement of current laws and regulations by
governmental authorities, could cause additional expense, capital expenditures,
restrictions on or suspension of the Companys operations and delays in the
exploration and development of the Companys properties.

40

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Limited
Experience with Development-Stage Mining Operations: The Company has limited
experience in placing resource properties into production, and its ability to do
so will be dependent upon using the services of appropriately experienced
personnel or entering into agreements with other major resource companies that
can provide such expertise. There can be no assurance that the Company will have
available to it the necessary expertise when and if it places the Livengood
project into production.

Estimates
of Mineral Reserves and Resources and Production Risks: The mineral resource
estimates included in this MD&A are estimates only and no assurance can be
given that any particular level of recovery of minerals will in fact be realized
or that an identified reserve or resource will ever qualify as a commercially
mineable (or viable) deposit which can be legally and economically exploited.
The estimating of mineral resources and mineral reserves is a subjective process
and the accuracy of mineral resource and mineral reserve estimates is a function
of the quantity and quality of available data, the accuracy of statistical
computations, and the assumptions used and judgments made in interpreting
available engineering and geological information. There is significant
uncertainty in any mineral resource or mineral reserve estimate and the actual
deposits encountered and the economic viability of a deposit may differ
materially from the Companys estimates. In addition, the grade of
mineralization ultimately mined may differ from that indicated by drilling
results and such differences could be material. Production can be affected by
such factors as permitting regulations and requirements, weather, environmental
factors, unforeseen technical difficulties, unusual or unexpected geological
formations and work interruptions. Short term factors, such as the need for
orderly development of deposits or the processing of new or different grades,
may have a material adverse effect on mining operations and on the results of
operations. There can be no assurance that minerals recovered in small scale
laboratory tests will be duplicated in large scale tests under on-site
conditions or in production scale operations. Material changes in reserves or
resources, grades, stripping ratios or recovery rates may affect the economic
viability of projects. The estimated resources described in this MD&A should
not be interpreted as assurances of mine life or of the profitability of future
operations. Estimated mineral resources and mineral reserves may have to be
re-estimated based on changes in applicable commodity prices, further
exploration or development activity or actual production experience. This could
materially and adversely affect estimates of the volume or grade of
mineralization, estimated recovery rates or other important factors that
influence mineral resource or mineral reserve estimates. Market price
fluctuations for gold, silver or base metals, increased production costs or
reduced recovery rates or other factors may render any particular reserves
uneconomical or unprofitable to develop at a particular site or sites. A
reduction in estimated reserves could require material write downs in investment
in the affected mining property and increased amortization, reclamation and
closure charges.

Mineral
resources are not mineral reserves and there is no assurance that any mineral
resources will ultimately be reclassified as proven or probable reserves.
Mineral resources which are not mineral reserves do not have demonstrated
economic viability.

Enforcement
of Civil Liabilities: As substantially all of the assets of the Company and
its subsidiaries are located outside of Canada, and certain of the directors and
officers of the Company are resident outside of Canada, it may be difficult or
impossible to enforce judgements granted by a court in Canada against the assets
of the Company or the directors and officers of the Company residing outside of
Canada.

41

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Mining
Industry is Intensely Competitive: The Companys business of the
acquisition, exploration and development of mineral properties is intensely
competitive. The Company may be at a competitive disadvantage in acquiring
additional mining properties because it must compete with other individuals and
companies, many of which have greater financial resources, operational
experience and technical capabilities than the Company. The Company may also
encounter increasing competition from other mining companies in efforts to hire
experienced mining professionals. Competition for exploration resources at all
levels is currently very intense, particularly affecting the availability of
manpower, drill rigs and helicopters. Increased competition could adversely
affect the Companys ability to attract necessary capital funding or acquire
suitable producing properties or prospects for mineral exploration in the
future.

ITH
may be a passive foreign investment company under the U.S. Internal Revenue
Code, which may result in material adverse U.S. federal income tax consequences
to investors in Common Shares that are U.S. taxpayers: Investors in Common
Shares that are U.S. taxpayers should be aware that ITH believes that it has
been in prior years, and expects it will be in the current year, a passive
foreign investment company under Section 1297(a) of the U.S. Internal Revenue
Code (a PFIC). If ITH is or becomes a PFIC, generally any gain recognized on
the sale of the Common Shares and any excess distributions (as specifically
defined) paid on the Common Shares must be rateably allocated to each day in a
U.S. taxpayers holding period for the Common Shares. The amount of any such
gain or excess distribution allocated to prior years of such U.S. taxpayers
holding period for the Common Shares generally will be subject to U.S. federal
income tax at the highest tax applicable to ordinary income in each such prior
year, and the U.S. taxpayer will be required to pay interest on the resulting
tax liability for each such prior year, calculated as if such tax liability had
been due in each such prior year.

Alternatively,
a U.S. taxpayer that makes a qualified electing fund (a QEF) election with
respect to ITH generally will be subject to U.S. federal income tax on such U.S.
taxpayers pro rata share of ITHs net capital gain and ordinary earnings
(as specifically defined and calculated under U.S. federal income tax rules),
regardless of whether such amounts are actually distributed by ITH. U.S.
taxpayers should be aware, however, that there can be no assurance that ITH will
satisfy record keeping requirements under the QEF rules or that ITH will supply
U.S. taxpayers with required information under the QEF rules, in event that ITH
is a PFIC and a U.S. taxpayer wishes to make a QEF election. As a second
alternative, a U.S. taxpayer may make a mark-to-market election if ITH is a
PFIC and the Common Shares are marketable stock (as specifically defined). A
U.S. taxpayer that makes a mark-to-market election generally will include in
gross income, for each taxable year in which ITH is a PFIC, an amount equal to
the excess, if any, of (a) the fair market value of the Common Shares as of the
close of such taxable year over (b) such U.S. taxpayers adjusted tax basis in
the Common Shares.

|Selected
      Financial Information
|------------------------------------

Selected Annual Information

The Companys audited consolidated financial statements for the
year ended May 31, 2011 (the Financial Statements) have been prepared in
accordance with Canadian generally accepted accounting principles (GAAP) and
practices. The following selected financial information is taken from the
Companys Financial Statements for the years ended May 31, 2011, 2010 and 2009
and should be read in conjunction with those statements. Selected annual
financial information appears below.

42

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|                                                                                   |   | May
      31, 2011 |   |   | May
      31, 2010 |   |   | May
      31, 2009 |  
|---------------------------------------------------------------------------------- | - | ------------------ | - | - | ------------------ | - | - | ------------------ | -
|                                                                                   |   | $                  |   |   | $                  |   |   | $                  |  
|Description                                                                        |   | (annual)           |   |   | (annual)           |   |   | (annual)           |  
|Operations:                                                                        |   |                    |   |   |                    |   |   |                    |  
|Interest Income                                                                    | $ | 675,146            |   | $ | 116,936            |   | $ | 126,402            |  
|Consulting fees (including
      stock-based
         compensation)                |   | 1,570,146          |   |   | 3,722,579          |   |   | 1,236,468          |  
|Property investigation                                                             |   | 2,557              |   |   | 395                |   |   | 85,739             |  
|Wages and benefits (including
      stock-based
         compensation)             |   | 5,263,652          |   |   | 5,878,461          |   |   | 2,167,850          |  
|Investor relations (including stock-based
         compensation)                   |   | 1,148,359          |   |   | 1,117,835          |   |   | 518,419            |  
|Foreign exchange gain (loss)                                                       |   | 41,225             |   |   | (76                | ) |   | 127,283            |  
|                                                                                   |   |                    |   |   |                    |   |   |                    |  
|Loss from continuing
      operations                                              |   | (9,287,012         | ) |   | (14,264,957        | ) |   | (6,427,244         | )
|Loss from discontinued operations                                                  |   | (934,157           | ) |   | (3,603,369         | ) |   | (3,346,679         | )
|Net and comprehensive loss                                                         |   | (10,221,169        | ) |   | (17,868,326        | ) |   | (9,773,923         | )
|                                                                                   |   |                    |   |   |                    |   |   |                    |  
|Basic and fully diluted loss
      per share
         from continuing operations   |   | (0.12              | ) |   | (0.24              | ) |   | (0.14              | )
|Basic and fully diluted loss per share
         from discontinued
      operations | $ | (0.01              | ) | $ | (0.06              | ) | $ | (0.07              | )
|Balance sheet:                                                                     |   |                    |   |   |                    |   |   |                    |  
|Cash                                                                               | $ | 111,165,126        |   | $ | 43,460,324         |   | $ | 32,489,341         |  
|Total Current Assets                                                               |   | 112,391,851        |   |   | 44,218,447         |   |   | 32,845,989         |  
|Mineral Properties  continuing                                                    |   |                    |   |   |                    |   |   |                    |  
|operations                                                                         |   | 80,169,668         |   |   | 41,849,485         |   |   | 22,363,153         |  
|Mineral Properties  discontinued                                                  |   |                    |   |   |                    |   |   |                    |  
|operations                                                                         |   | -                  |   |   | 12,245,690         |   |   | 11,054,413         |  
|Long term financial liabilities                                                    |   | -                  |   |   | -                  |   |   | -                  |  
|Cash dividends                                                                     | $ | -                  |   | $ | -                  |   | $ | -                  |  

Year Ended May 31, 2011 and Transfer of Net Assets

The Company ended the fourth quarter with $111,165,126 of cash
and cash equivalents. The Company spent $35,896,786 (2010 - $21,303,867; 2009 -
$11,294,605) in exploration costs of continuing operations, used $6,670,925
(2010 - $4,276,027; 2009 - $1,938,845) in operating activities of continuing
operations, and raised $113,817,925 (2010 - $38,340,040; 2009 - $36,936,388)
through the issuance of common shares, net of costs. Stock-based compensation
expense of $3,254,815 (2010 - $7,659,829; 2009  $2,744,674) from continuing
operations in the year ended May 31, 2011 was due to the granting of options and
recognizing the expense associated with the vesting of certain stock options
granted in the year to employees and consultants.

43

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Discontinued Operations and Transfer of the Nevada and Other
Alaska Business under the Arrangement

On August 26, 2010, the Company completed the arrangement under
the Plan of Arrangement (Arrangement) pursuant to which it transferred its
other existing Alaska (other than the Livengood project) and Nevada assets to a
new public company, Corvus Gold Inc. (Corvus).

Under the Arrangement, each shareholder of the Company received
one Corvus common share for every two ITH common shares held as at the effective
date of the Arrangement as a return of capital and exchanged each existing
common share of ITH for a new common share of ITH. The new ITH common shares
are identical in every respect (other than CUSIP number) to the old ITH common
shares. ITH has transferred its wholly-owned subsidiaries, Raven Gold Alaska
Inc. (Raven Gold), incorporated in Alaska, and Corvus Gold Nevada Inc.
(formerly Talon Gold Nevada Inc.), incorporated in Nevada to Corvus. As a
result of the Arrangement, there was an effective spin-out by ITH of certain of
its mineral properties, being Chisna, West Pogo, Terra and LMS in Alaska, and
North Bullfrog in Nevada (the Spin-out Properties), (together the Nevada and
Other Alaska Business) to Corvus.

The Company did not realize any gain or loss on the transfer of
the Nevada and Other Alaska Business, which was comprised of a working capital
contribution of $3,300,000 in cash and the Nevada and Other Alaska Business
assets and liabilities as at the effective date of the Arrangement. Costs of the
Arrangement, comprised principally of legal and regulatory expense, off-set by
property facilitation payments and interest from payments made in connection
with the Chisna spin-out property, amounted to a net expense of $282,442 (2010 -
$25,961 net recovery; 2009 - $nil net expenses) during the year.

As a result of the Arrangement being completed, the Company has
accounted for results related to the Nevada and Other Alaska Business up to the
effective date of the Arrangement as discontinued operations (see below) and as
a result the balance sheet of the Company at May 31, 2011 excludes the assets
and liabilities related to the discontinued operations and reflects the
decreased deficit which arises on the transfer of the Nevada and Other Alaska
Business assets to Corvus, consequently, there are significant differences when
compared to the year ended May 31, 2010. Due to the ongoing exploration at
Livengood and the transfer of $3.3 million in cash and the Nevada and Other
Alaska Business to Corvus, the net assets of the Company have decreased by
approximately $12.8 million.

The Company has, in accordance with CICA 3475, Disposal of
Long-lived Assets and Discontinued Operations, accounted for the financial
results associated with the Nevada and Other Alaska Business up to the date of
the Arrangement as discontinued operations in its consolidated financial
statements and has reclassified the related amounts for the current and prior
period.

The amount recognized as loss from discontinued operations
includes the direct operating results of the Nevada and Other Alaska Business
and an allocation of head office general and administrative expense. The
allocation of head office general and administrative expense was calculated on
the basis of the ratio of costs incurred on the Spin-out Properties in each
period presented as compared to the costs incurred on all mineral properties of
the Company in each of the periods. Management cautions readers of the Companys
consolidated financial statements that the allocation of expenses does not
necessarily reflect future general and administrative expenses.

44

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The following table shows the results related to discontinued
operations for the years ended May 31, 2011 and 2010. Included therein is
$756,202 (2010 - $2,241,363) of stock-based compensation charges:

|                                  |   | 2011    |   |   | 2010      | 
|--------------------------------- | - | ------- | - | - | --------- | 
|                                  |   |         |   |   |           | 
|Administration                    | $ | 1,780   |   | $ | 8,712     | 
|Charitable donations              |   | 5,413   |   |   | 14,819    | 
|Consulting fees                   |   | 265,721 |   |   | 1,089,274 | 
|Foreign exchange (gain) loss      |   | (20,318 | ) |   | 7,181     | 
|Insurance                         |   | 10,099  |   |   | 37,633    | 
|Investor relations                |   | 130,737 |   |   | 327,092   | 
|Office and miscellaneous          |   | 7,214   |   |   | 29,614    | 
|Professional fees                 |   | 40,741  |   |   | 182,477   | 
|Property investigations           |   | 291     |   |   | 83        | 
|Regulatory                        |   | 3,816   |   |   | 66,040    | 
|Rent                              |   | 5,302   |   |   | 26,180    | 
|Telephone                         |   | 2,418   |   |   | 7,099     | 
|Travel                            |   | 5,625   |   |   | 37,757    | 
|Wages and benefits                |   | 475,318 |   |   | 1,769,408 | 
|Write-off of mineral properties   |   | -       |   |   | -         | 
|                                  |   |         |   |   |           | 
|Loss from discontinued operations | $ | 934,157 |   | $ | 3,603,369 | 

The transfer of the assets is summarized in the table below:

|                                 |   | August 25, 2010 |   |   | May 31, 2010 |  
|-------------------------------- | - | --------------- | - | - | ------------ | -
|                                 |   |                 |   |   |              |  
|Cash and cash equivalents        | $ | 1,203,240       |   | $ | -            |  
|Accounts receivable              |   | 199             |   |   | 97           |  
|Prepaid expenses                 |   | 3,200           |   |   | 13,566       |  
|Mineral Properties               |   | 12,392,408      |   |   | 12,245,690   |  
|Accounts payable                 |   | (773,264        | ) |   | (85,094      | )
|                                 |   |                 |   |   |              |  
|Net assets transferred to Corvus | $ | 12,825,783      |   |   |              |  

Comparison to Selected Prior Quarterly Periods

The following selected financial information is a summary of
quarterly results taken from the Companys audited consolidated financial
statements of the Company. The information relates to the Companys continuing
operations.

|Three months ended May 31                                                |   | 2011       |   |   | 2010       |  
|------------------------------------------------------------------------ | - | ---------- | - | - | ---------- | -
|                                                                         |   |            |   |   |            |  
|Interest Income                                                          | $ | 317,865    |   | $ | 29,643     |  
|Stock-based compensation                                                 |   | 190,868    |   |   | 6,849,480  |  
|Net loss from continuing
      operations                                |   | (1,603,186 | ) |   | (7,762,533 | )
|Basic and diluted loss per common share from
      continuing operations | $ | (0.02      | ) | $ | (0.13      | )

45

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|                                                   |   | May
      31, |  |   | May
      31, | 
|-------------------------------------------------- | - | ------------- |  | - | ------------- | 
|As at                                              |   | 2011          |  |   | 2010          | 
|                                                   |   |               |  |   |               | 
|Working capital from
      continuing operations   | $ | 108,354,423   |  | $ | 43,016,919    | 
|Total assets from continuing operations            | $ | 192,705,090   |  | $ | 86,134,309    | 
|Total liabilities from
      continuing operations | $ | 4,037,428     |  | $ | 1,187,865     | 
|Share capital                                      | $ | 215,544,180   |  | $ | 124,277,370   | 

Year ended May 31, 2011 Compared to Year ended May 31, 2010

For the year ended May 31, 2011, the Company had loss from
continuing operations of $9,287,012, as compared to loss of $14,264,957 in the
prior year. The decreased loss of $4,977,945 in the current year was due to a
combination of factors discussed below.

General and administrative (operating) expenses for the year
totalled $10,857,916 compared to $15,733,858 in 2010. These figures combine the
Companys continued and discontinued operations as overall expense categories
and are best understood on a combined basis for this quarter due to the timing
of the Arrangement transaction late in the first quarter on August 25, 2010. As
discussed above, operating costs were allocated to Corvus on the basis of the
ratio of Spin-out Properties book values to the book values of all properties
during the quarter and up to the date of the Arrangement transaction. For the
year ended May 31, 2011, 19.8% of eligible costs from June 1 to the date of the
Arrangement were allocated to Corvus.

|                                               |   |             |   |   | Allocated to |   |   |            |  
|---------------------------------------------- | - | ----------- | - | - | ------------ | - | - | ---------- | -
|2011                                           |   | Combined    |   |   | Corvus       |   |   | Net to ITH |  
|                                               |   |             |   |   |              |   |   |            |  
|Administration                                 | $ | 33,324      |   | $ | (1,780       | ) | $ | 31,544     |  
|Amortization                                   |   | 42,375      |   |   | -            |   |   | 42,375     |  
|Charitable donations                           |   | 70,050      |   |   | (5,413       | ) |   | 64,637     |  
|Consulting fees                                |   | 1,835,867   |   |   | (265,721     | ) |   | 1,570,146  |  
|Insurance                                      |   | 225,327     |   |   | (10,099      | ) |   | 215,228    |  
|Investor relations                             |   | 1,279,096   |   |   | (130,737     | ) |   | 1,148,359  |  
|Office and miscellaneous                       |   | 289,054     |   |   | (7,214       | ) |   | 281,840    |  
|Professional fees                              |   | 708,146     |   |   | (40,741      | ) |   | 667,405    |  
|Property investigation                         |   | 2,848       |   |   | (291         | ) |   | 2,557      |  
|Regulatory                                     |   | 191,937     |   |   | (3,816       | ) |   | 188,121    |  
|Rent                                           |   | 172,999     |   |   | (5,302       | ) |   | 167,697    |  
|Telephone                                      |   | 52,106      |   |   | (2,418       | ) |   | 49,688     |  
|Travel                                         |   | 215,817     |   |   | (5,625       | ) |   | 210,192    |  
|Wages and benefits                             |   | 5,738,970   |   |   | (475,318     | ) |   | 5,263,652  |  
|                                               |   |             |   |   |              |   |   |            |  
|Subtotal                                       |   | (10,857,916 | ) |   | 954,475      |   |   | (9,903,441 | )
|Foreign exchange loss (gain)                   |   | 61,543      |   |   | (20,318      | ) |   | 41,225     |  
|Interest income                                |   | 675,146     |   |   | -            |   |   | 675,146    |  
|Spin-out (cost) recovery                       |   | (282,442    | ) |   | -            |   |   | (282,442   | )
|Unrealized gain on held for trading investment |   | 182,500     |   |   | -            |   |   | 182,500    |  
|                                               |   |             |   |   |              |   |   |            |  
|                                               | $ | (10,221,169 | ) | $ | 934,157      |   | $ | (9,287,012 | )

46

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|                                               |   |             |   |   | Allocated to |   |   |             |  
|---------------------------------------------- | - | ----------- | - | - | ------------ | - | - | ----------- | -
|2010                                           |   | Combined    |   |   | Corvus       |   |   | Net to ITH  |  
|                                               |   |             |   |   |              |   |   |             |  
|Administration                                 | $ | 38,484      |   | $ | (8,712       | ) | $ | 29,772      |  
|Amortization                                   |   | 28,477      |   |   | -            |   |   | 28,477      |  
|Charitable donations                           |   | 65,459      |   |   | (14,819      | ) |   | 50,640      |  
|Consulting fees                                |   | 4,811,853   |   |   | (1,089,274   | ) |   | 3,722,579   |  
|Insurance                                      |   | 166,240     |   |   | (37,633      | ) |   | 128,607     |  
|Investor relations                             |   | 1,444,927   |   |   | (327,092     | ) |   | 1,117,835   |  
|Office and miscellaneous                       |   | 128,738     |   |   | (29,614      | ) |   | 99,124      |  
|Professional fees                              |   | 797,345     |   |   | (182,477     | ) |   | 614,868     |  
|Property investigation                         |   | 478         |   |   | (83          | ) |   | 395         |  
|Regulatory                                     |   | 290,183     |   |   | (66,040      | ) |   | 224,143     |  
|Rent                                           |   | 115,653     |   |   | (26,180      | ) |   | 89,473      |  
|Telephone                                      |   | 31,360      |   |   | (7,099       | ) |   | 24,261      |  
|Travel                                         |   | 166,792     |   |   | (37,757      | ) |   | 129,035     |  
|Wages and benefits                             |   | 7,647,869   |   |   | (1,769,408   | ) |   | 5,878,461   |  
|                                               |   |             |   |   |              |   |   |             |  
|Subtotal                                       |   | (15,733,858 | ) |   | 3,596,188    |   |   | (12,137,670 | )
|Foreign exchange loss (gain)                   |   | (7,257      | ) |   | 7,181        |   |   | (76         | )
|Interest income                                |   | 116,936     |   |   | -            |   |   | 116,936     |  
|Spin-out (cost) recovery                       |   | 25,961      |   |   | -            |   |   | 25,961      |  
|Write-off mineral properties                   |   | (2,372,358  | ) |   | -            |   |   | (2,372,358  | )
|Unrealized gain on held for trading investment |   | 102,250     |   |   | -            |   |   | 102,250     |  
|                                               |   |             |   |   |              |   |   |             |  
|                                               | $ | (17,868,326 | ) | $ | 3,603,369    |   | $ | (14,264,957 | )

During the year ended May 31, 2011, some expense categories
increased significantly when compared with the prior year.

Consulting fees decreased to $1,570,146 (2010 - $3,722,579)
mainly due to SBC expense of $1,010,894 during the current year compared to
$3,295,260 in the prior year. The increase of $131,933 is mainly due to increase
in consulting personnel in the current year compared to the prior year.

Investor relations expenses increased to $1,148,359 (2010 -
$1,117,835) due to SBC expense of $366,667 during the current year compared to
$710,090 in the prior year. The additional increase of $373,947 was due to a
combination of an increase in the number of personnel, an increase in investor
relations-related travelling, an increase in the number and amount of mail-outs,
printing and reproduction due to the Companys increased effort in fully
informing the investment community during the Arrangement process.

Professional fees increased to $667,405 (2010 - $614,868)
mainly due to SBC expenses of $87,356 during the current year compared to
$59,481 in the prior year. As well, the Company increased its audit accrual in
the current year by approximately $30,000 in anticipation of the increased
disclosure requirements due to the Arrangement.

Wages and benefits decreased to $5,263,652 (2010  $5,878,461)
as a result of SBC expense of $1,789,898 during the current year compared to
$3,594,998 in the prior year. The additional increase was due to higher labour
costs per person combined with additional personnel and officers being hired in
the current year.

47

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Insurance costs increased to $215,228 (2010  $128,607) due to
increased coverage for general liability and contractor equipment now required
for the level of exploration activity currently underway at Livengood. Travel
expenses increased to $210,192 (2010 - $129,035) due to increase in personnel
and increase in activities in Livengood.

Amortization expenses increased to $42,375 (2010 - $28,477) due
to the amortization of remaining balance in leasehold improvements in the
Vancouver office after relocation. Regulatory expenses decreased to $188,121
(2010 - $224,143) mainly due to the cost of original listing fee of $200,000
paid to the TSX in the prior year. Rent increased to $167,697 (2010 - $89,473)
and telephone expenses increased to $49,688 (2010 - $24,261) due to additional
expenses incurred in the Alaska office. Office and miscellaneous expenses
increased to $281,840 (2010 - $99,124) for additional expenses on Alaskas
office and software purchased.

Other expenses categories which reflected only moderate change
period over period were charitable donations of $64,637 (2010 - $50,640),
property investigation expenses of $2,557 (2010 - $395) and administration
expenses of $31,544 (2010 - $29,772).

Other items amounted to a gain of $616,429 compared to a loss
of $2,127,287 in the prior year. The decreased loss in the current year resulted
from an increase in interest income to $675,146 (2010  $116,936) due to the
Company having a stronger cash position. There was an additional net expense of
$282,442 related to legal and regulatory expense, off-set by property
facilitation payments and interest from earned-in of the Chisna spin-out
property due to the Arrangement in the current year compared to $25,961 net
recovery in the prior year. The additional expense was offset by the write-off
of mineral property expenses of $2,372,358 in the prior year. The changes in
foreign exchange gain of $41,225 (2010  $76 loss) and the unrealized gain on
held-for-trading investments of $182,500 (2010 - $102,250) are both the result
of factors outside of the Companys control.

Three Months ended May 31, 2011 compared to Three Months
ended May 31, 2010

The Company incurred a net loss of $1,603,186 for the quarter
ended May 31, 2011, compared to a net loss of $9,915,596 in the same period of
the prior year. Besides stock-based compensation of $190,868 (2010 -
$6,849,480), the decrease in the net loss was due mainly to the following:

Consulting fees decreased to $273,785 (2010 - $3,369,139) as a
result of SBC expense of $nil during the current period compared to $3,295,260
in the comparative period of the prior year. The increase of $199,906 is mainly
due to increase in consulting personnel in the current period compared to the
same period in the prior year.

Investor relations expenses decreased to $170,639 (2010 -
$677,685) due to SBC expense of $54,019 during the current quarter compared to
$553,304 in the comparative quarter of the prior year.

Professional fees decreased to $211,128 (2010 - $307,472) due
to SBC expense of $14,405 during the current period compared to $59,481 in the
comparative period of the prior year. The decrease of $51,268 is due to the
Company having additional legal fees in the comparative period of the prior year
leading up to the Arrangement of approximately $50,000.

Wages and benefits decreased to $965,685 (2010  $3,279,530) as
a result of SBC expense of $122,444 during the current period compared to
$2,941,435 in the comparative period of the prior year. The remaining increase
was due to higher labour costs per person combined with additional personnel and
officers being hired in the current period.

48

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Insurance costs increased to $52,099 (2010  $41,476) due to
increased coverage for general liability and contractor equipment now required
for the level of exploration activity currently underway at Livengood. Travel
expenses increased to $91,556 (2010 - $39,697) due to increase in personnel and
increase in activities in Livengood.

Regulatory expenses increased to $88,282 (2010 - $45,737)
mainly due increased cost of the base and variable fee paid to the TSX in the
current period. Office and miscellaneous expenses increased to $70,133 (2010 -
$28,776) for additional expenses on Alaskas office. Rent increased to $48,436
(2010 - $26,655) and telephone expenses increased to $13,765 (2010 - $9,908) due
to additional expenses incurred in the Alaska office. Amortization expenses
increased to $20,580 (2010 - $6,415) due to the amortization of remaining
balance in leasehold improvements in the Vancouver office after relocation.

Other expenses categories which reflected only moderate change
period over period were charitable donations of $11,207 (2010 - $31,767) and
administration expenses of $4,461 (2010 - $8,324).

Other items amounted to a gain of $418,843 compared to a gain
of $109,259 in the same period of the prior year. The increased gain in the
current period resulted from an increase in interest income to $317,865 (2010 
$29,643) due to the Company having a stronger cash position. There was an
additional net recovery of $217,660 related to legal and regulatory expense,
off-set by property facilitation payments and interest from payments in
connection with the Chisna spin-out property due to the Arrangement in the
current period compared to $25,961 net recovery in the comparative period of the
prior year. The changes in foreign exchange gain of $29,818 (2010  $13,143
loss) and the unrealized loss on held for trading investments of $146,500 (2010
- $53,500 (gain)) are both the result of factors outside of the Companys
control.

Stock-based compensation (SBC)

SBC charges for the year ended May 31, 2011 of $3,254,815 (2010
- $7,659,829) were allocated as follows:

|                   |   | Before allocation |  |   |           |  |   | After Allocation | 
|------------------ | - | ----------------- |  | - | --------- |  | - | ---------------- | 
|2011               |   | of SBC            |  |   | SBC       |  |   | of SBC           | 
|                   |   |                   |  |   |           |  |   |                  | 
|Consulting         | $ | 559,252           |  | $ | 1,010,894 |  | $ | 1,570,146        | 
|Investor relations |   | 781,692           |  |   | 366,667   |  |   | 1,148,359        | 
|Professional fees  |   | 580,049           |  |   | 87,356    |  |   | 667,405          | 
|Wages and benefits |   | 3,473,754         |  |   | 1,789,898 |  |   | 5,263,652        | 
|                   |   |                   |  |   |           |  |   |                  | 
|                   |   |                   |  | $ | 3,254,815 |  |   |                  | 

|                   |   | Before allocation |  |   |           |  |   | After Allocation | 
|------------------ | - | ----------------- |  | - | --------- |  | - | ---------------- | 
|2010               |   | of SBC            |  |   | SBC       |  |   | of SBC           | 
|                   |   |                   |  |   |           |  |   |                  | 
|Consulting         | $ | 427,319           |  | $ | 3,295,260 |  | $ | 3,722,579        | 
|Investor relations |   | 407,745           |  |   | 710,090   |  |   | 1,117,835        | 
|Professional fees  |   | 555,387           |  |   | 59,481    |  |   | 614,868          | 
|Wages and benefits |   | 2,283,463         |  |   | 3,594,998 |  |   | 5,878,461        | 
|                   |   |                   |  |   |           |  |   |                  | 
|                   |   |                   |  | $ | 7,659,829 |  |   |                  | 

49

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Supplemental Information:Comparison to Prior
Quarterly Periods

The following selected financial information is a summary of
quarterly results taken from the Companys unaudited quarterly consolidated
financial statements:

|                                        |   | May
      31, |   |   | February 28, |   |   | November 30, |   |   | August 31, |  
|--------------------------------------- | - | ------------- | - | - | ------------ | - | - | ------------ | - | - | ---------- | -
|Description                             |   | 2011          |   |   | 2011         |   |   | 2010         |   |   | 2010       |  
|                                        |   |               |   |   |              |   |   |              |   |   |            |  
|Interest Income                         | $ | 317,865       |   | $ | 269,602      |   | $ | 27,142       |   | $ | 60,537     |  
|Net loss  continuing operations        |   | (1,603,186    | ) |   | (1,363,198   | ) |   | (2,152,456   | ) |   | (4,168,172 | )
|Net loss  discontinued operations      |   | -             |   |   | -            |   |   | -            |   |   | (934,157   | )
|Net loss                                |   | (1,603,186    | ) |   | (1,363,198   | ) |   | (2,152,456   | ) |   | (5,102,329 | )
|Basic and diluted loss per common share | $ | (0.01         | ) | $ | (0.02        | ) | $ | (0.03        | ) | $ | (0.08      | )

|                                                                         |   | May
      31, |   |   | February 28, |   |   | November 30, |   |   | August 31, |  
|------------------------------------------------------------------------ | - | ------------- | - | - | ------------ | - | - | ------------ | - | - | ---------- | -
|Description                                                              |   | 2010          |   |   | 2010         |   |   | 2009         |   |   | 2009       |  
|                                                                         |   |               |   |   |              |   |   |              |   |   |            |  
|Interest Income                                                          | $ | 29,643        |   | $ | 28,488       |   | $ | 32,077       |   | $ | 26,728     |  
|Net loss  continuing operations                                         |   | (7,762,533    | ) |   | (3,373,101   | ) |   | (2,507,666   | ) |   | (621,657   | )
|Net loss  discontinued operations                                       |   | (2,153,063    | ) |   | (531,654     | ) |   | (679,950     | ) |   | (238,702   | )
|Net loss                                                                 |   | (9,915,596    | ) |   | (3,904,755   | ) |   | (3,187,616   | ) |   | (860,359   | )
|Basic and diluted loss per common share from continuing
      operations | $ | (0.16         | ) | $ | (0.07        | ) | $ | (0.05        | ) | $ | (0.02      | )

The previous discussion discusses the reasons for some of the
variations in the quarterly numbers but, as with most junior mineral exploration
companies, the results of operations (including interest income and net losses)
are not the main factor in establishing the financial health of the Company. Of
far greater significance are the mineral properties in which the Company has, or
may earn an interest, its working capital and how many shares it has
outstanding. The variation seen over such quarters is primarily dependent upon
the success of the Companys ongoing property evaluation program and the timing
and results of the Companys exploration activities on its then current
properties (following the spin-out of its non-Livengood properties to Corvus,
its only mineral property is the Livengood project), none of which are possible
to predict with any accuracy. There are no general trends regarding the
Companys quarterly results, and the Companys business of mineral exploration
is not seasonal. Quarterly results can vary significantly depending on whether
the Company has abandoned any properties or granted any stock options or paid
any employee bonuses and these are the factors that account for material
variations in the Companys quarterly net losses, none of which are predictable.
The write-off of mineral properties can have a material effect on quarterly
results as and when they occur (as, for example in the quarters ended November
30, 2009 and February 28, 2010). Another factor which can cause a material
variation in net loss on a quarterly basis is the grant of stock option due to
the resulting stock-based compensation charges which can be significant when
they arise. This can be seen in the quarters ended February 28, 2010 and May 31,
2010). The payment of employee bonuses (which tend to be awarded in
November/December), being once-yearly charges can also materially affect
operating losses (as, for example, in the quarters ended February 28, 2010 and
February 28, 2011). General operating costs other than the specific items noted
above tend to be quite similar from period to period, although they will
increase quarter over quarter as the Company increases the number of employees
as necessary to meet the requirements of its increased work at the Livengood
project. The variation in income is related solely to the interest earned on
funds held by the Company, which is dependent upon the success of the Company in
raising the required financing for its activities which will vary with overall
market conditions, and is therefore difficult to predict.

50

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Liquidity and Capital Resources

The Company has no revenue generating operations from which it
can internally generate funds. To date, the Companys ongoing operations have
been predominantly financed by the sale of its equity securities by way of
private placements and the subsequent exercise of share purchase warrants and
broker warrants and options issued in connection with such private placements.
However, the exercise of warrants/options is dependent primarily on the market
price and overall market liquidity of the Companys securities at or near the
expiry date of such warrants/options (over which the Company has no control) and
therefore there can be no guarantee that any existing warrants/options will be
exercised. This situation is unlikely to change until such time as the Company
can develop a bankable feasibility study for the Livengood projects.

As at May 31, 2011, the Company reported cash and cash
equivalents of $111,165,126 compared to $43,460,324 at May 31, 2010. The
increase of approximately $68 million resulted both from the completion of the
Arrangement, pursuant to which $3.3 million in cash and the Spin-out Properties
and associated expenses plus an allocation of administrative expenses, were
transferred to Corvus, and from the expenditures on its Livengood project
through the 2010-2011 exploration season. The Company continues to utilize its
cash resources to fund the Livengood project exploration and administrative
requirements. During the year ended May 31, 2011, the Company had changes in its
cash position as the net result of share issuances in financing activities
totalling $113,817,925 (2010 - $38,340,040) for the year, being issuances to
AngloGold on a private placement basis for gross proceeds of $8,776,508 (2010 -
$3,630,650), a bought deal and non-brokered financings at $6.25 per share for
gross proceeds of $100,657,719 (2010  non-brokered financings at $6.00 per
share for gross proceeds of $30,000,000) plus the issuance of shares upon the
exercise of incentive stock options and warrants for proceeds of $8,644,792
(2010 - $6,003,358). Share issuance costs for the foregoing totalled $4,261,094
(2010 - $1,293,968). Offsetting this were investing activities comprised
primarily of mineral property expenditures of $35,896,786 (2010 - $21,303,867),
purchase of property and equipment of $105,906 (2010 - $41,248) and general
operating costs of $6,670,925 (2010 - $4,276,027) during the period.

As at May 31, 2011, the Company had working capital of
$108,354,423 compared to working capital of $42,945,488 at May 31, 2010. The
Company expects that it will operate at a loss for the foreseeable future, but
believes the current cash and cash equivalents will be sufficient for it to
complete the planned exploration programs and pre-feasibility/feasibility study
activities at Livengood, and its currently anticipated general and
administrative costs, for the next 32 months to April 2014. However, the Company
will require significant additional financing to continue its operations
(including general and administrative expenses) beyond that date, particularly
in connection with any post feasibility study activities at Livengood and the
development of any mine that may be determined to be built at Livengood, and
there is no assurance that the Company will be able to obtain the additional
financing required on acceptable terms, if at all. In addition, any significant
delays in the issuance of required permits for the ongoing work at Livengood, or
unexpected results in connection with the ongoing work, could result in the
Company being required to raise additional funds to complete the feasibility
study.

51

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Despite the Companys success to date in raising significant
equity financing to fund its operations, there is significant uncertainty that
the Company will be able to secure any additional financing in the current or
future equity markets  see Risk Factors  Insufficient Financial
Resources/Share Price Volatility. The quantity of funds to be raised and the
terms of any proposed equity financing that may be undertaken will be negotiated
by management as opportunities to raise funds arise. Specific plans related to
the use of proceeds will be devised once financing has been completed and
management knows what funds will be available for these purposes.

The Company has no exposure to any asset-backed commercial
paper. Other than cash held by its subsidiaries for their immediate operating
needs in Alaska and Colorado, all of the Companys cash reserves are on deposit
with a major Canadian chartered bank or invested in Government of Canada
Treasury Bills or Bankers Acceptances issued by major Canadian chartered banks.
The Company does not believe that the credit, liquidity or market risks with
respect thereto have increased as a result of the current market conditions.
However, to achieve greater security for the preservation of its capital, the
Company has, of necessity, been required to accept lower rates of interest which
has also lowered its potential interest income.

The following table discloses, as of August 31, 2011 the
Companys contractual obligations for optional mineral property payments and
work commitments and committed office and equipment lease obligations. The
Company does not have any long-term debt or loan obligations. Under the terms of
the Companys mineral property purchase agreements, mineral leases and the terms
of the unpatented mineral claims held by it, the Company is required to make
certain scheduled acquisition payments, incur certain levels of expenditures,
make lease and/or advance royalty payments, make payments to government
authorities and incur assessment work expenditures as summarized in the table
below in order to maintain and preserve the Companys interests in the related
mineral properties. If the Company is unable or unwilling to make any such
payments or incur and such expenditures, it is likely that the Company would
lose or forfeit its rights to acquire or hold the related mineral properties.
The following table assumes that the Company retains the rights to all of its
current mineral properties and exercises the purchase option under an existing
ten-year mineral property lease required to be exercised on or before September
1, 2016 (the end of the term of the lease), but no other lease purchase or
royalty buyout options:

Contractual Obligations
      Payments Due by Period(4)Total
      Prior to May 31, 2012
        (9 months)
      June 1, 2012 to May
        31, 2015 (36months)
      June 1, 2015 to ***May
        31, 2018 (36*** months)Mineral Property Leases(1)(2)
      12,751,859
      141,359
      11,302,750
      1,307,750Mining Claim Government Fees
      373,590
      53,370
      160,110
      160,110Office and Equipment Lease Obligations(3)
      2,863,173
      340,775
      1,323,497
      1,198,901Total Contractual Obligations
      15,988,622
      535,504
      12,786,357
      2,666,761


Notes:

| | 1. | Does not include required work expenditures, as it is
      assumed that the required expenditure level is significantly below the
      work for which will actually be carried out by the Company.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Does not include potential royalties that may be payable
      (other than annual minimum royalty payments).                                                                                        

52

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| | 3. | Assumes that current office and storage leases are
      extended beyond current termination dates at the same terms.
| | -- | ---------------------------------------------------------------------------------------------------------------------
| | 4. | Assumes CAD and USD at par.                                                                                          

|Transactions
      with Related Parties
|---------------------------------------

During the three months ended May 31, 2011, the Company
incurred the following related party expenditures. These figures do not include
stock-based compensation.

|Name                                                  |  | Relationship                                                            |  |  | Purpose of transaction |  |   | Amount | 
|----------------------------------------------------- |  | ----------------------------------------------------------------------- |  |  | ---------------------- |  | - | ------ | 
|                                                      |  |                                                                         |  |  |                        |  |   |        | 
|Steve Aaker                                           |  | Director of the
      Company                                           |  |  | Directors fees        |  | $ | 7,500  | 
|Daniel Carriere                                       |  | Director of the Company                                                 |  |  | Directors fees        |  | $ | 7,500  | 
|Anton Drescher                                        |  | Director of the
      Company                                           |  |  | Directors fees        |  | $ | 7,500  | 
|Timothy Haddon                                        |  | Director of the Company                                                 |  |  | Directors fees        |  | $ | 7,500  | 
|Ronald Sheardown                                      |  | Director of the
      Company                                           |  |  | Directors fees        |  | $ | 8,000  | 
|Jeff Pontius                                          |  | Director and former CEO of the
      Company (resigned on June 1, 2011) |  |  | Wages & Benefits       |  | $ | 72,535 | 
|Carl Brechtel                                         |  | President &
      COO of the Company                                    |  |  | Wages &
      Benefits |  | $ | 60,554 | 
|Lawrence Talbot                                       |  | VP & General Counsel of the
      Company                               |  |  | Wages & Benefits       |  | $ | 12,500 | 
|Russell E. Myers                                      |  | VP, Exploration
      of the Company                                    |  |  | Wages &
      Benefits |  | $ | 47,148 | 
|Winslow Associates Management and Communications Inc. |  | Company controlled by the CFO of
      the Company                      |  |  | Consulting             |  | $ | 22,500 | 
|Marla Ritchie                                         |  | Corporate
      Secretary VP Corporate Communications                   |  |  | Consulting             |  | $ | 3,000  | 
|Shirley Zhou                                          |  | (commenced January 11, 2011)                                            |  |  | Investor relations     |  | $ | 41,598 | 
|Lawrence W. Talbot Law Corporation                    |  | Company
      controlled by VP & General Counsel of the Company         |  |  | Professional fees      |  | $ | 12,500 | 
|Cardero Resource Corp.                                |  | Company with common officers and
      directors                        |  |  | Administration         |  | $ | 4,461  | 
|Cardero Resource Corp.                                |  | Company with common officers and directors                              |  |  | Rent                   |  | $ | 7,274  | 

The Company has entered into a retainer agreement dated August
1, 2008 with Lawrence W. Talbot Law Corporation (LWTLC), pursuant to which
LWTLC agrees to provide legal services to the Company. Pursuant to the retainer
agreement, the Company has agreed to pay LWTLC a minimum annual retainer of
$50,000 (plus applicable taxes and disbursements). The retainer agreement may be
terminated by LWTLC on reasonable notice, and by the Company on one years
notice (or payment of one years retainer in lieu of notice). An officer of the
Company is a director and shareholder of LWTLC.

The Company also entered into a private placement transaction
with AngloGold as discussed under Financing Activities. This transaction is
considered to be a related party transaction by virtue of the ownership by
AngloGold of in excess of 10% of the Companys outstanding common shares.

These transactions with related parties have been valued in
these consolidated financial statements at the exchange amount, which is the
amount of consideration established and agreed to by the related parties.

53

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|Off-Balance
      Sheet Arrangements
|------------------------------------

The Company has no off-balance sheet arrangements.

|Proposed
      Transactions
|---------------------------

As at the date of this MD&A there are no proposed
transactions that the board of directors, or senior management who believe that
confirmation of the decision by the board is probable, have decided to proceed
with and that have not been publicly disclosed, except that management of the
Company, having been granted authority to do so by the board, is currently
negotiating with a number of landowners to acquire additional ground in the
vicinity of the Livengood project and believes that it will be successful in
negotiating one or more of such acquisitions at prices acceptable to the
Company. If this is the case, the Company will proceed with such acquisitions.
However, to date, no agreements regarding any such acquisitions have been
executed and there can be no certainty that any such agreements will be
successfully concluded or executed.

|Critical
      Accounting Estimates
|-----------------------------------

The preparation of the Companys consolidated financial
statements in conformity with Canadian GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the consolidated financial statements, and the reported amounts of revenues and
expenses during the reporting period. Areas requiring the use of estimates in
the preparation of the Companys consolidated financial statements include the
rates of amortization for equipment, the recoverability of mineral properties,
the assumptions used in the determination of the fair value of financial
instruments and SBC, allocation of administrative expenses to discontinued
operations, and the determination of the valuation allowance for future income
tax assets and accruals. Management believes the estimates used are reasonable;
however, actual results could differ materially from those estimates and, if so,
would impact future results of operations and cash flows.

|Changes in
      Accounting Policies Including Initial Adoption
|---------------------------------------------------------------

International Financial Reporting Standards (IFRS)

The Canadian Accounting Standards Board has confirmed that
effective on January 1, 2011, IFRS will replace Canadian GAAP as the basis for
accounting for publicly accountable enterprises. The first period reported under
IFRS by the Company will be the three month period ended August 31, 2011 and the
Companys first fiscal year end date under IFRS will be the fiscal year ending
May 31, 2012.

The change from Canadian GAAP to IFRS will be a significant
undertaking and may have significant effects on the Companys accounting,
internal controls, disclosure controls and financial statement presentation.

Design and planning

The Company commenced transition plan development in 2009. The
Company has determined its preliminary IFRS policy decisions and significant
expected accounting differences, based on an analysis of the current IFRS
standards, and the following section outlines each of these. As the conversion
work continues, additional differences between Canadian GAAP and IFRS may be
identified. As a result, these accounting policy choices may change prior to the
adoption of IFRS on June 1, 2011. Although the Company has identified key
accounting policy differences, the impact of these differences to its consolidated financial statements has
not been determined at this time. Decisions with respect to accounting policy
changes, outlined below, may change once management has quantified and
thoroughly analyzed the effects of such changes and has presented them for final
review and approval by the Companys Audit Committee.

54

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First-time Adoption of IFRS (IFRS 1)

In the first year of transition to IFRS, a company is allowed
to elect certain exceptions from IFRS not to apply each IFRS on a retrospective
basis. IFRS 1 has certain mandatory exemptions as well as limited optional
exemptions. Based on analysis to date, the Company expects to apply the
following optional exemptions under IFRS 1 that will be significant in preparing
the financial statements under IFRS:

Share-Based Payments

A company may elect not to apply IFRS 2 Share-Based Payments
to equity instruments which vested before the transition date to IFRS. The
Company will elect, on transition to IFRS, to apply the optional exemption such
that equity instruments which vested prior to the transition date of June 1,
2010, will not be restated.

Accounting policies

The Company has determined that the main impact of IFRS on the
Company will involve a significant increase in note disclosure as well as
certain presentation differences.

Property, plant and equipment

Although the design stage is not completed yet, the Company is
not expecting to apply the fair value method to determine the deemed opening
cost under IFRS which is one of the significant IFRS 1 exemptions.

The accounting policy of the Company will be amended to:

- Review useful life, residual value and method of depreciation on an annual
  basis.
- Identify all significant components and their respective useful lives.
- Capitalize major maintenance and replacement of significant parts and
  derecognize the carrying value of the replaced parts.
- Include constructive obligations for significant dismantling and removal
  costs.

Financial instruments

The accounting policy of the Company will be amended to:

- Include changes to impairments of financial assets and their possible
  reversal.
- Detail the conditions that need to be met for the designation of a
  financial instrument as fair value through profit and loss.

Impairment of assets

The accounting policy of the Company will be amended to:

- Change the assessment method of whether impairment exists. The two step
  approach allowed under Canadian GAAP is not acceptable under IFRS. Therefore,
  the discounted cash flows are taken as an indication to determine impairment.

55

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Share-based payments

Canadian GAAP allows certain policy choices in the calculation
of stock based compensation. The Company currently amortizes grants in their
entirety on a straight-line basis over the vesting term. IFRS standards require
each tranche in the grant to be amortized over its respective vesting period. As
a result of these changes, share-based compensation expense will be accelerated
under IFRS. At each reporting date, the amount recognized as SBC under IFRS is
adjusted to reflect managements estimate of forfeiture, whereas under Canadian
GAAP forfeitures are recorded when incurred. In addition, unvested options at
May 31, 2010 will be re-valued under IFRS, with consequent adjustments to
opening retained earnings. The Company currently has unvested options as at May
31, 2011.

This list should not be regarded as a complete list of changes
that will result from transition to IFRS. It is intended to highlight those
areas we believe to be most significant; however, our analysis of possible
changes is still in process and not all decisions have been made where choices
of accounting policies are available. Until our adoption date is finalized, the
Company is not able to reliably quantify the impacts expected on our
consolidated financial statements for these differences.

Presentation and disclosure

IFRS will require more in depth disclosure. The Company has
taken the necessary steps to adjust the system requirements to ensure
appropriate data collection for disclosure purposes.

Post implementation

During this stage the Company will perform a review of the IFRS
transition and ensure the preparation of financial statements in compliance with
IFRS without external support.

The Company will stay informed on the upcoming changes to the
IFRS based on the projects in place or to be initiated by the International
Accounting Standards Board and will adjust its plan accordingly to include all
key elements to ensure its compliance during 2011.

|Changes in
      Accounting Policies Including Initial Adoption
|---------------------------------------------------------------

There have been no changes in accounting policies since June 1,
2010, being the start of the Companys most recently completed fiscal year.

|Financial
      Instruments and Other Instruments
|-------------------------------------------------

The carrying values of the Companys financial instruments,
which include cash and cash equivalents, marketable securities, accounts
receivable, and accounts payable and accrued liabilities, approximate their
respective fair values due to their short-term maturity. Due to the short term
of all such instruments, the Company does not believe that it is exposed to any
material risk with respect thereto.

The Companys cash and cash equivalents at May 31, 2011 was
$111,165,126 of which $4,002,559 was held in US dollars.

The Companys accounts receivables and payables at May 31, 2011
were normal course business items that are settled on a regular basis. The
Companys investment in Millrock Resources Inc. (Millrock) and Ocean Park
Ventures Corp. (OPV) were carried at quoted market value, and were classified
as held-for-trading for accounting purposes. The Company has no current plans
to dispose of any significant portion of its investments in Millrock and OPV.

56

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|Managements
      Report on Internal Control Over Financial Reporting
|----------------------------------------------------------------------

The management of the Company is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of the Companys financial reporting for external
purposes in accordance with GAAP in Canada and in the United States of America.
Internal control over financial reporting includes maintaining records that in
reasonable detail accurately and fairly reflect the Companys transactions and
dispositions of the assets of the Company; providing reasonable assurance that
transactions are recorded as necessary for preparation of the Companys
consolidated financial statements in accordance with GAAP; providing reasonable
assurance that receipts and expenditures are made in accordance with
authorizations of management and the directors of the Company; and providing
reasonable assurance that unauthorized acquisition, use or disposition of
Companys assets that could have a material effect on the Companys consolidated
financial statements would be prevented or detected on a timely basis. Because
of its inherent limitations, internal control over financial reporting is not
intended to provide absolute assurance that a misstatement of the Companys
consolidated financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of the
Companys internal control over financial reporting based on the framework and
criteria established in Internal Control  Integrated Framework, issued
by the Committee of Sponsoring Organizations of the Treadway Commission. This
evaluation included review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation,
management concluded that the Companys internal control over financial
reporting was effective as of May 31, 2011.

|Changes in
      Internal Control Over Financial Reporting
|----------------------------------------------------------

Internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with Canadian GAAP. The Chief Executive Officer and Chief Financial Officer have
concluded that there has been no change in the Companys internal control over
financial reporting during the three months ended May 31, 2011 that has
materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.

|Disclosure of
      Outstanding Share Data (At August 26, 2011)
|---------------------------------------------------------------

Authorized and Issued capital stock:

|Authorized                                  |  | Issued     |  |   | Value       | 
|------------------------------------------- |  | ---------- |  | - | ----------- | 
|                                            |  |            |  |   |             | 
|500,000,000 common shares without par value |  | 86,683,919 |  | $ | 215,774,130 | 

57

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Incentive Stock Options Outstanding:

|Number    | Exercise Price | Expiry Date     
|--------- | -------------- | ----------------
|          |                |                 
|250,000   | $ 7.95         | January 12, 2012
|2,660,000 | $ 7.34         | April 14, 2012  
|1,390,000 | $ 6.57         | August 19, 2012 
|265,000   | $ 9.15         | January 10, 2013
|1,000,000 | $ 8.35         | May 9, 2016     
|950,000   | $ 7.47         | July 28, 2013   
|650,000   | $ 8.07         | August 24, 2016 
|          |                |                 
|7,165,000 |                |                 

Warrants Outstanding:

There were no share purchase warrants outstanding at the date
of this MD&A.

|Additional
      Sources of Information
|---------------------------------------

Additional disclosures pertaining to the Company, including its
most recent Annual Information Form, financial statements, management
information circular, material change reports, press releases and other
information, are available on the SEDAR website at www.sedar.com or on the Companys website at www.ithmines.com. Readers are urged to review these
materials, including the technical reports filed with respect to the Company's
mineral properties.

58

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