UN1TED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  Form 20-F/A-1 Amendment No. 1 (Mark One)   ̈ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934  OR  þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010  OR   ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from ________________to _________________  OR   ̈SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report..  Commission file 0-31100  Kiska Metals Corporation (Exact name of Registrant as specified in its charter)  Not Applicable (Translation of Registrants name into English)  British Columbia (Jurisdiction of incorporation or organization)  Suite 575  510 Burrard Street, Vancouver, British Columbia, Canada, V6C 3A8 (Address of principal executive offices)  - 1 -   Jason S. Weber Telephone (604) 669-6660 Fax (604) 669-0898 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact  Securities registered or to be registered pursuant to Section 12(b) of the Act.  NONE.  Title of each class Name of each exchange on which registered  Securities registered or to be registered pursuant to Section 12(g) of the Act.  Common Shares without par value (Title of Class)  Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act.  Not Applicable (Title of Class) Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report. 79,502,698  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  ̈YesþNo If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  ̈YesþNo Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes ̈No  After submitting its annual report under cover of Form 20-F for fiscal year ended December 31, 2010 with the Commission on May 20, 2011 with a filing date of May 23, 2011, the Corporation subsequently discovered on May 23, 2011 that it did not file all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months. As of May __, 2011, the Corporation has, to the best of its management's knowledge, filed all remaining reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):  Large accelerated filer  ̈ Accelerated filer ̈ Non-accelerated filer þ  - 2 -   Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:


|            |                                                                                                         |       
|----------- | ------------------------------------------------------------------------------------------------------- | ------
|U.S. GAAP  ̈ | International Financial Reporting Standards as issued by the International Accounting Standards Board  ̈ | Otherþ

If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. þItem l7 ̈Item l8  If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ̈YesþNo  (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)  Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  ̈Yes ̈No  EXPLANATORY NOTE  This Amendment No. 1 to the Registrants annual report on Form 20-F for the fiscal year ended December 31, 2010 filed May 23, 2011 is hereby filed to correct certain disclosures made on the cover page of the annual report on Form 20-F filed May 23, 2011 and to include the following exhibits that were inadvertently omitted from inclusion with such report: Exhibit 4.30 Management Contract between Equity Exploration Consultants Ltd. and Kiska Metals Corporation effective January 1, 2011, Exhibit 4.35 Warrant Indenture between the Corporation and Computershare Trust Company of Canada effective March 23, 2011, Exhibit 12.1Sarbanes-Oxley Section 302 Certification by Chief Executive Officer, Exhibit 12.2 Sarbanes-Oxley Section 302 Certification by Chief Financial Officer, Exhibit 13.1 Sarbanes-Oxley Section 906 Certification by Chief Executive Officer, Exhibit 13.2 Sarbanes-Oxley Section 906 Certification by Chief Financial Officer and Exhibit 15.1 Letter/Consent from former principal accountant McGovern, Hurley, Cunningham, LLP.  Other than as expressly set forth above, this Amendment No. 1 does not, and does not purport to, amend, update or restate the information in any Item of the Registrants annual report on Form 20-F for the fiscal year ended December 31, 2010 filed May 23, 2011 or reflect any events that have occurred after such report was filed on May 23, 2011.  - 3 -     FORWARD-LOOKING STATEMENTS   This amended annual report contains forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Certain statements in this Report constitute forward looking statements. These forward looking statements are not guarantees of the Corporations future operational or financial performance and are subject to risks and uncertainties. When used in this amended annual report, the words estimate, intend, expect, anticipate and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these statements, which speak only as of the date of this amended annual report. These statements are subject to risks and uncertainties that could cause results to differ materially from those contemplated in such forward-looking statements.  Actual operational and financial results may differ materially from the Corporations expectations contained in the forward looking statements as a result of various factors, many of which are beyond the control of the Corporation. These factors include, but are not limited to, the need for additional financing to fully execute the Corporations business plan, the risk factors as set forth in more detail in Item 3 - Key Information - Risk Factors, adverse technical factors associated with exploration and development of the Corporations properties, changes in Canadian or U.S. tax or other laws or regulations, and material changes in capital expenditures.  All mineral resources referenced in this amended annual report on Form 20-F have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the SEC Industry Guide 7 ("Guide 7"). NI 43-101 and Guide 7 standards are substantially different. The terms "mineral reserve", "proven mineral reserve" and "probable mineral reserve" are Canadian mining terms as defined in accordance with NI 43-101. These definitions differ from the definitions of "proven (measured) reserves" and "probable (indicated) reserves" in Guide 7.  This amended annual report on Form 20-F may include the terms "mineral resource," "indicated mineral resource" and "inferred mineral resource". We advise investors that these terms are defined in and required to be disclosed by NI 43-101. However, these terms are not defined terms under 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 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.  Please consult the Corporation's public filings at www.sedar.com and www.sec.gov for further, more detailed information concerning these matters.   - 4 -


|        |                                                            |     
|------- | ---------------------------------------------------------- | ----
|        | TABLE OF CONTENTS                                          |     
|        |                                                            |     
|        | PART I                                                     | Page
|        |                                                            |     
|ITEM 1  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS      | 7   
|ITEM 2  | OFFER STATISTICS AND EXPECTED TIMETABLE                    | 7   
|ITEM 3  | KEY INFORMATION                                            | 7   
|ITEM 4  | INFORMATION ON THE CORPORATION                             | 7   
|ITEM 5  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               | 7   
|ITEM 6  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 | 7   
|ITEM 7  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          | 7   
|ITEM 8  | FINANCIAL INFORMATION                                      | 7   
|ITEM 9  | THE OFFER AND LISTING                                      | 7   
|ITEM 10 | ADDITIONAL INFORMATION                                     | 7   
|ITEM 11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 7   
|ITEM 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     | 8   

- 5 -


|         |                                                                              |     
|-------- | ---------------------------------------------------------------------------- | ----
|         | TABLE OF CONTENTS                                                            |     
|         |                                                                              |     
|         | PART II                                                                      | Page
|         |                                                                              |     
|ITEM 13  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 8   
|ITEM 14  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 8   
|ITEM 15  | CONTROLS AND PROCEDURES                                                      | 8   
|ITEM 16A | AUDIT COMMITTEE FINANCIAL EXPERT                                             | 8   
|ITEM 16B | CODE OF ETHICS                                                               | 8   
|ITEM 16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | 8   
|ITEM 16D | EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                    | 8   
|ITEM 16E | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       | 8   
|ITEM 16F | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                 | 8   
|ITEM 16G | CORPORATE GOVERNANCE                                                         | 8   




|        |                      |   
|------- | -------------------- | --
|        | PART III             |   
|        |                      |   
|ITEM 17 | FINANCIAL STATEMENTS | 9 
|ITEM 18 | FINANCIAL STATEMENTS | 9 
|ITEM 19 | EXHIBITS             | 10
|        |                      |   

- 6 -     PART I     ITEM 1IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS    Not Applicable.  ITEM 2OFFER STATISTICS AND EXPECTED TIMETABLE Not Applicable.   ITEM 3KEY INFORMATION  Not Amended  ITEM 4INFORMATION ON THE CORPORATION Not Amended  ITEM 5   OPERATING AND FINANCIAL REVIEW AND PROSPECTS Not Amended    ITEM 6DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Not Amended  ITEM 7MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS Not Amended  ITEM 8FINANCIAL INFORMATION Not Amended  ITEM 9THE OFFER AND LISTING Not Amended  ITEM 10   ADDITIONAL INFORMATION Not Amended  ITEM 11QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not Amended  ITEM 12DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES Not Amended    PART II  ITEM 13DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES Not Amended  ITEM 14MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERSAND USE OF PROCEEDS Not Amended  ITEM 15   CONTROLS AND PROCEDURES Not Amended  - 7 -        ITEM 16AAUDIT COMMITTEE FINANCIAL EXPERT Not Amended  ITEM 16BCODE OF ETHICS Not Amended  ITEM 16CPRINCIPAL ACCOUNTANT FEES AND SERVICES Not Amended  ITEM 16DEXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES Not applicable  ITEM 16EPURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS Not applicable    ITEM 16FCHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT Not Amended  ITEM 16G   CORPORATE GOVERNANCE Not applicable   - 8 -     PART III     ITEM 17FINANCIAL STATEMENTS  The following financial statements are attached and incorporated herein:


|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Description of Statement

Consolidated Balance Sheets for the fiscal years ended December 31, 2010 and 2009
Consolidated Statements of Operations, Consolidated Statements of Cash Flows,
Consolidated Statements of Comprehensive Loss,
Consolidated Statements of Shareholders Equity, and
Consolidated Statements of Mineral Property Expenditures
all for the fiscal years ended December 31, 2010, 2009, and 2008
Notes to Consolidated Financial Statements
Management Discussion and Analysis for the year ended December 31, 2010
Schedule II  Valuation Allowance

ITEM 18FINANCIAL STATEMENTS     Not Amended  ITEM 19EXHIBITS


|               |                                                                                                                                                 |         
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | --------
|Exhibit Number | Description                                                                                                                                     | Footnote
|1.1            | Amended Articles of Incorporation effective August 5, 2009                                                                                      | (2)     
|3.1            | Voting Agreements between Geoinformatics shareholders, Geoinformatics Exploration Inc. and Rimfire Minerals Corporation effective June 11, 2009 | (3)     
|4.30           | Management Contract between Equity Exploration Consultants Ltd. and Kiska Metals Corporation effective January 1, 2011                          | (1)     
|4.31           | Line of Credit Agreement between Geologic Resource Partners LLP and Geoinformatics Exploration Inc. effective March 9, 2009.                    | (2)     
|4.32           | Partial Termination Agreement and First Amendment Thereto between
Kennecott Exploration Company and the Corporation effective May 15, 2009      | (2)     
|4.33           | Acquisition Agreement between Geoinformatics Exploration Inc. and Rimfire Minerals Corporation effective June 11, 2009                          | (4)     
|4.34           | Amended Standardization Agreement between Geoinformatics Exploration Inc.
And Kennecott Exploration Company effective June 12, 2009             | (2)     
|4.35           | Warrant Indenture between the Corporation and Computershare Trust Company of Canada effective March 23, 2011                                    | (1)     
|8.1            | List of Subsidiary Companies of Kiska Metals Corporation                                                                                        | (2)     
|12.1           | Sarbanes-Oxley Section 302 Certification by Chief Executive Officer                                                                             | (1)     
|12.2           | Sarbanes-Oxley Section 302 Certification by Chief Financial Officer                                                                             | (1)     
|13.1           | Sarbanes-Oxley Section 906 Certification by Chief Executive Officer                                                                             | (1)     
|13.2           | Sarbanes-Oxley Section 906 Certification by Chief Financial Officer                                                                             | (1)     
|15.1           | Letter/Consent from former principal accountant McGovern, Hurley, Cunningham, LLP                                                               | (1)     
|               |                                                                                                                                                 |         

(1) Filed as exhibits to this amended annual report on Form 20-F/A-1 for the fiscal year ended December 31, 2010.   - 9 -     (2) Incorporated herein by reference to the Corporations transition report on Form 20-F for the fiscal year ended December 31, 2009 as filed on April 23, 2010.  (3) Incorporated herein by reference to the Corporations Form 6-K furnished to EDGAR effective June 22, 2009.  (4) Incorporated herein by reference to the Corporations Form 6-K furnished to EDGAR effective June 19, 2009.  SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this amended annual report on its behalf.  KISKA METALS CORPORATION  By:Jason S. WeberJason S. WeberPresident, Chief Executive Officer & Director  Date: May 27, 2011   - 10 -


|                                             |  |                              |                                            |               |           |                       
|-------------------------------------------- |  | ---------------------------- | ------------------------------------------ | ------------- | --------- | ----------------------
|Classification                               |  | Balance at beginning of year | Additions charged to costs and expenses[1] | Deductions[2] | Other[3]  | Balance at end of year
|                                             |  |                              |                                            |               |           |                       
|Valuation Allowance for Deferred Tax Assets: |  |                              |                                           
|Year Ended                                   |  |                              |                                            |               |           |                       
|2010                                         |  | $(17,134,849)                | $(2,171,657)                               | $257,023      | $28,331   | $(19,021,152)         
|2009                                         |  | $(14,304,581)                | $(3,847,795)                               | $1,088,589    | $(71,062) | $(17,134,849)         

[1] The 2009 and 2010 increases in the valuation allowance for deferred tax assets are related to the tax effect of current period losses and deductible temporary differences. [2] The decrease in valuation allowance for deferred tax assets reflects changes in the enacted tax rate applicable to the Corporation. [3] Other changes reflect the tax effect of fair value of marketable securities.  - 11 -     [f052711kskform20fa1120f_f001.jpg]   Kiska Metals Corporation (Formerly Geoinformatics Exploration Inc.)   Consolidated Financial Statements Years Ended December 31, 2010, 2009 and 2008     - 12 -      [f052711kskform20fa1120f_f002.jpg]    MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING  The accompanying consolidated financial statements of Kiska Metals Corporation and all information in this annual report are the responsibility of management. The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and, where appropriate, include managements best estimates and judgments. Management has reviewed the financial information presented throughout this report and has ensured it is consistent with the consolidated financial statements.  Management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use, and that financial information is timely and reliable.  The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the consolidated financial statements. The Board carries out this responsibility principally through its Audit Committee.  The Board of Directors appoints the Audit Committee, and all of its members are independent directors. The Audit Committee meets periodically with management and the shareholders auditors to review the financial statements and reports prepared by management, internal controls, audit results, accounting policies and related matters. The Board of Directors approves the consolidated financial statements on recommendation from the Audit Committee.    Hay and Watson, a firm of Independent Registered Chartered Accountants, was appointed by the shareholders at the last annual meeting to examine the consolidated financial statements and provide the independent professional opinion which follows.    Jason S. Weber Adrian Rothwell   Jason S. Weber, P.Geo Adrian Rothwell, CA President & Chief Executive Officer Chief Financial Officer  May 2, 2011     Suite 575, 510 Burrard St., Vancouver, BC, Canada V6C 3A8 Tel: 604.669.6660 | Fax: 604.669.0898 | www.kiskametals.com  -13-    [f052711kskform20fa1120f_f004.gif] REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS  To the Shareholders of Kiska Metals Corporation  We have audited the accompanying consolidated financial statements of Kiska Metals Corporation (the Company), which comprise the consolidated balance sheets as at December 31, 2010 and 2009 and the consolidated statements of operations and comprehensive loss, shareholders equity, and cash flows for the years ended December 31, 2010 and 2009 (all expressed in Canadian dollars) and a summary of significant accounting policies and other explanatory information.  Managements Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.  Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  We conducted our audit in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.  An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.  The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control.   An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.  Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2010 and 2009 and its financial performance and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.  The consolidated financial statements as at December 31, 2008 and for the year then ended were, except as to Note 18 and the effects of accounting for discontinued operations as disclosed in Note 6, audited by other auditors who expressed an opinion without reservation on those statements in their report dated April 17, 2009.  We have audited the information in Note 18 and the effects of accounting for discontinued operations for the year ended December 31, 2008 and in our opinion, such information is presented fairly in all material respects.  Emphasis of Matters Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which indicates that the Company incurred a net loss of $11,912,195 during the year ended December 31, 2010.  This condition, along with other matters as set forth in Note 1, indicate the existence of material uncertainties that may cast significant doubt about the Companys ability to continue as a going concern.  Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States of America. The effect of the application of United States generally accepted accounting principles on the net loss for each year and the total assets and shareholders equity at the end of each year in these consolidated financial statements is summarized in Note 18 to the consolidated financial statements.  Hay & Watson Independent Registered Chartered Accountants Vancouver, Canada May 2, 2011  -14-    KISKA METALS CORPORATION Consolidated Statements of Operations and Comprehensive Loss Years Ended December 31 (Expressed in Canadian Dollars)


|                                                                                |         |                     |                       |                          
|------------------------------------------------------------------------------- | ------- | ------------------- | --------------------- | -------------------------
|Mineral Property Operations                                                     | Note    | 2010                | 2009                  | 2008                     
|Revenue                                                                         |         |                     |                       |                          
|Option proceeds                                                                 |         | $        602,157    | $           157,951   | $                       -
|Project management fees                                                         |         | 31,944              | 115,100               | 880,435                  
|                                                                                |         | 634,101             | 273,051               | 880,435                  
|Expenses                                                                        |         |                     |                       |                          
|Acquisition expenditures                                                        |         | 270,672             | 330,598               | 158,990                  
|Exploration expenditures                                                        |         | 11,105,884          | 5,506,131             | 6,154,386                
|Exploration tax credits                                                         |         | -                   | (9,798)               | -                        
|Reclamation obligations                                                         | 12      | 160,914             | 355,829               | -                        
|Impairment loss on mineral properties                                           | 1       | -                   | 7,817,788             | -                        
|                                                                                |         | 11,537,470          | 14,000,548            | 6,313,376                
|Loss from mineral property operations                                           |         | (10,903,369)        | (13,727,497)          | (5,432,941)              
|Other Operations                                                                |         |                     |                       |                          
|Salaries and employee benefits                                                  |         | 893,344             | 680,772               | 1,349,714                
|Consulting and outsourced services                                              |         | 603,617             | 993,425               | 439,882                  
|Marketing services                                                              |         | 601,007             | 159,774               | -                        
|General and administrative                                                      |         | 450,847             | 443,427               | 1,023,530                
|Depreciation and amortization                                                   |         | 310,610             | 231,730               | 251,303                  
|Share-based compensation                                                        | 13(b)   | 985,883             | 397,273               | 76,461                   
|                                                                                |         | 3,845,308           | 2,906,401             | 3,140,890                
|Operating loss before the following                                             |         | (14,748,677)        | (16,633,898)          | (8,573,831)              
|Financing expense                                                               | 9(a)/10 | (81)                | (59,660)              | (3,565,047)              
|Interest income                                                                 |         | 20,682              | 26,152                | 24,702                   
|Equity loss in investment                                                       | 7       | (489,277)           | (1,176,145)           | (916,181)                
|Dilution gain on equity investment                                              | 7       | 489,277             | -                     | -                        
|Gain on sale of equity investment                                               | 7       | 2,305,579           | -                     | -                        
|Gain (loss) on sale of marketable securities                                    | 5       | 172,236             | (240,285)             | (3,760)                  
|Impairment loss on available for sale investment                                | 5       | -                   | (130,000)             | -                        
|Gain (loss) on disposal of assets                                               |         | 21,526              | (44,026)              | -                        
|Gain on repayment of convertible loan                                           | 10      | -                   | -                     | 279,859                  
|Foreign exchange gain (loss)                                                    | 10      | (149,275)           | 69,676                | (3,160,569)              
|Loss before income taxes                                                        |         | (12,378,010)        | (18,188,186)          | (15,914,827)             
|Recovery of income taxes                                                        | 14      | 32,024              | 2,763                 | 1,094,579                
|Net loss before discontinued operations                                         |         | (12,345,986)        | (18,185,423)          | (14,820,248)             
|Discontinued operations, including gain on disposal of $1,003,577               | 6       | 433,791             | (499,080)             | (1,440,493)              
|Net loss                                                                        |         | (11,912,195)        | (18,684,503)          | (16,260,741)             
|Unrealized foreign exchange loss on available for sale investment               |         | -                   | -                     | (7,668)                  
|Realized (gain) loss on available for sale investments                          |         | (89,762)            | 240,285               | -                        
|Impairment loss on available for sale investment                                |         | -                   | 130,000               | -                        
|Net change in unrealized gains (losses) on available for sale investments       |         | 315,672             | 52,167                | (656,525)                
|Tax effect of changes in other comprehensive loss                               |         | (32,024)            | (2,763)               | 19,807                   
|Comprehensive loss                                                              |         | $ (11,718,309)      | $   (18,264,814)      | $    (16,905,127)        
|                                                                                |         |                     |                       |                          
|Basic and diluted net loss per share                                            |         | $            (0.17) | $              (0.51) | $               (1.84)   
|Basic and diluted weighted average number of shares outstanding during the year |         | 68,460,843          | 36,876,491            | 8,831,930                

KISKA METALS CORPORATION Consolidated Balance Sheets December 31 (Expressed in Canadian Dollars)


|                                                                |          |                      |                           | 
|--------------------------------------------------------------- | -------- | -------------------- | ------------------------- | 
|                                                                | Note     | 2010                 | 2009                     
|Assets                                                          |          |                      |                          
|                                                                |          |                      |                          
|Cash and cash equivalents                                       |          | $         6,297,716  | $               1,071,695
|Restricted cash                                                 | 4        | 35,165               | -                        
|Marketable securities                                           | 5        | 1,749,450            | 370,417                  
|Amounts receivable                                              |          | 347,007              | 51,756                   
|Prepaid expenses and deposits                                   |          | 118,610              | 152,038                  
|Current assets                                                  |          | 8,547,948            | 1,645,906                
|                                                                |          |                      |                          
|Restricted cash                                                 | 4        | 112,730              | 202,707                  
|Property and equipment, net                                     | 8        | 583,135              | 479,282                  
|                                                                |          |                      |                          
|Total Assets                                                    |          | $         9,243,813  | $             2,327,895  
|                                                                |          |                      |                          
|Liabilities and Shareholders Equity                            |          |                      |                          
|Current liabilities                                             |          |                      |                          
|Accounts payable and accrued liabilities                        |          | $            679,101 | $                241,097 
|Due to related parties                                          | 9(b)     | 15,946               | 11,340                   
|Joint venture partner deposits                                  |          | -                    | 32,314                   
|Reclamation obligations                                         | 12       | 378,483              | -                        
|Total current liabilities                                       |          | 1,073,530            | 284,751                  
|                                                                |          |                      |                          
|Reclamation obligations                                         | 12       | 99,105               | 401,391                  
|Total liabilities                                               |          | 1,172,635            | 686,142                  
|                                                                |          |                      |                          
|Shareholders Equity                                            |          |                      |                          
|Share capital                                                   | 13(a)    | 78,904,726           | 65,659,038               
|Contributed surplus                                             | 13(b,c)  | 10,483,540           | 5,581,494                
|Accumulated other comprehensive income                          |          | 209,329              | 15,443                   
|Accumulated deficit                                             |          | (81,526,417)         | (69,614,222)             
|Total shareholders equity                                      |          | 8,071,178            | 1,641,753                
|                                                                |          |                      |                          
|Total Liabilities and Shareholders Equity                      |          | $         9,243,813  | $             2,327,895  
|Mineral Property Interests (Note 6)
Lease Commitments (Note 11) |          |                      |                          
|APPROVED BY THE BOARD                                          
|David A. Caulfield                                            | Director
|Jason S. Weber                                                | Director

The accompanying notes are an integral part of these consolidated financial statements  -16-    KISKA METALS CORPORATION Consolidated Statements of Cash Flows Years Ended December 31 (Expressed in Canadian Dollars)


|                                                                       |                                                  |                   |                   |             | 
|---------------------------------------------------------------------- | ------------------------------------------------ | ----------------- | ----------------- | ----------- | 
|                                                                       |                                                  | 2010              | 2009              | 2008       
|Cash Flows Used for Operating Activities                               |                                                  |                   |                  
|Net loss                                                               | $    (11,912,195)                                | $    (18,684,503) | $ (16,260,741)   
|Add (deduct) items not involving cash:                                 |                                                  |                   |                  
|                                                                       | Mineral property option proceeds                 | (382,425)         | (99,665)          | -          
|                                                                       | Mineral property acquisition costs               | -                 | 156,497           | -          
|                                                                       | Reclamation obligation expense                   | 160,914           | 355,829           | -          
|                                                                       | Impairment loss on mineral properties            | -                 | 7,817,788         | -          
|                                                                       | Depreciation and amortization                    | 312,443           | 240,496           | 251,303    
|                                                                       | Equity loss in investment                        | -                 | 1,176,145         | 916,181    
|                                                                       | Financing expense                                | -                 | 59,660            | 3,427,570  
|                                                                       | Foreign exchange (gain) loss                     | (24,212)          | (68,760)          | 3,313,734  
|                                                                       | Future income tax recovery                       | (32,024)          | (2,763)           | (1,063,300)
|                                                                       | Gain on settlement of convertible loan facility  | -                 | -                 | (279,859)  
|                                                                       | (Gain) loss on sale of investments and assets    | (3,506,494)       | 284,311           | 3,760      
|                                                                       | Impairment loss on available-for-sale investment | -                 | 130,000           | -          
|                                                                       | Share-based compensation                         | 1,684,765         | 544,872           | 76,461     
|                                                                       | (13,699,228)                                     | (8,090,093)       | (9,614,891)      
|Reclassify interest income                                             | (20,682)                                         | (26,183)          | (24,702)         
|Net change in non-cash working capital balances related to operations: |                                                  |                  
|                                                                       | Amounts receivable                               | (295,251)         | 258,499           | 569,905    
|                                                                       | Prepaid expenses and deposits                    | 33,428            | 166,009           | 552,569    
|                                                                       | Accounts payable and accrued liabilities         | 412,832           | (638,934)         | (1,042,070)
|                                                                       |                                                  | (13,568,901)      | (8,330,702)       | (9,559,189)
|Cash Flows From (Used for) Investing Activities                        |                                                  |                   |                  
|Restricted cash                                                        | 54,812                                           | (10,923)          | 2,577,999        
|Proceeds from sale of marketable securities and equity investment      | 2,735,800                                        | 90,099            | -                
|Payment of reclamation expenses                                        | (71,199)                                         | -                 | -                
|Interest income received                                               | 18,146                                           | 52,466            | 24,702           
|Purchase of equity investment                                          | -                                                | (410,398)         | -                
|Purchase of property and equipment                                     | (423,117)                                        | (85,168)          | (523,057)        
|                                                                       | 2,314,442                                        | (363,924)         | 2,079,644        
|Cash Flows From (Used for) Financing Activities                        |                                                  |                   |                  
|Proceeds from issuance of shares and warrants                          | 17,176,601                                       | 5,009,747         | 29,430,675       
|Payment of share issue costs                                           | (713,634)                                        | (438,496)         | (172,421)        
|Proceeds from sale of assets                                           | 6,821                                            | -                 | 20,980           
|Proceeds from note payable / convertible loan                          | -                                                | 1,750,000         | -                
|Cash and cash equivalents acquired (Note 1)                            | -                                                | 4,463,269         | -                
|Repayment of note payable / convertible loan                           | -                                                | (1,821,712)       | (23,828,000)     
|Repayment of capital lease obligations                                 | -                                                | -                 | (18,228)         
|                                                                       |                                                  | 16,469,788        | 8,962,808         | 5,433,006  
|Effects of foreign currency translation on cash and cash equivalents   | 10,692                                           | 40,953            | 83,677           
|Increase (Decrease) in Cash and Cash Equivalents                       | 5,226,021                                        | 309,135           | (1,962,862)      
|Cash and Cash Equivalents, Beginning of Year                           | 1,071,695                                        | 762,560           | 2,725,422        
|                                                                       |                                                  |                   |                   |            
|Cash and Cash Equivalents, End of Year                                 | $    6,297,716                                   | $    1,071,695    | $         762,560

-17-    KISKA METALS CORPORATION Consolidated Statements of Cash Flows Years Ended December 31 (Expressed in Canadian Dollars)   201020092008Cash and Cash Equivalents are comprised of:Cash$  5,297,716$       571,695$         712,560Term deposits1,000,000500,00050,000$  6,297,716$    1,071,695$         762,560Supplemental InformationIncome taxes paid$                -$              541$         104,463Interest paid8174,65934,502Non-cash transactions from investing and financing activitiesMarketable securities received for mineral property interest option proceeds382,42599,665-Marketable securities received on the sale of discontinued operations (Note 6)1,000,000--Shares issued for fees and interest on convertible loan--1,440,336Shares and options issued for the acquisition of Rimfire Minerals Corporation (Note 1)-12,786,175-  -18-    KISKA METALS CORPORATION Consolidated Statements of Shareholders Equity Years Ended December 31 (Expressed in Canadian Dollars)


|                                                                            |         |                  |                 |                 
|--------------------------------------------------------------------------- | ------- | ---------------- | --------------- | ----------------
|                                                                            | Note    | 2010             | 2009            | 2008            
|Share capital                                                               | 13(a)   |                  |                 |                 
|Balance, beginning of year                                                  |         | $    65,659,038  | $    50,048,042 | $     20,342,562
|Issued in satisfaction of convertible loan commitment fee and interest      | 10      | -                | -               | 1,440,335       
|Issued for corporate acquisition                                            | 1       | -                | 12,412,717      | -               
|Issued for cash in private placement                                        |         | 12,436,750       | 4,950,000       | 29,328,000      
|Value attributable to warrants issued in private placement                  |         | (5,074,270)      | (1,267,650)     | -               
|Issued upon exercise of stock options/warrants                              |         | 4,739,851        | 59,747          | 102,675         
|Transfer from contributed surplus on exercise of stock options and warrants |         | 2,102,146        | 46,800          | 70,191          
|Share issue costs                                                           |         | (958,789)        | (590,618)       | (1,235,721)     
|Balance, end of year                                                        |         | 78,904,726       | 65,659,038      | 50,048,042      
|Equity component of convertible loan                                        | 10      |                  |                 |                 
|Balance, beginning of year                                                  |         | -                | -               | 4,523,973       
|Equity component of convertible loan                                        |         | -                | -               | (4,523,973)     
|Balance, end of year                                                        |         | -                | -               | -               
|Contributed surplus                                                         | 13(b,c) |                  |                 |                 
|Balance, beginning of year                                                  |         | 5,581,494        | 3,290,195       | 3,283,926       
|Options issued for corporate acquisition                                    | 1       | -                | 373,458         | -               
|Share-based compensation                                                    |         | 1,684,765        | 544,872         | 76,461          
|Transfer to common shares on exercise of options                            |         | (2,102,146)      | (46,800)        | (70,192)        
|Value attributable to warrants issued in private placement                  |         | 5,074,270        | 1,267,650       | -               
|Value attributable to brokers warrants issued in private placement         |         | 245,157          | 152,119         | -               
|Balance, end of year                                                        |         | 10,483,540       | 5,581,494       | 3,290,195       
|Accumulated Deficit                                                         |         |                  |                 |                 
|Balance, beginning of year                                                  |         | (69,614,222)     | (50,929,719)    | (37,313,241)    
|Impact of repayment of convertible loan                                     | 10      | -                | -               | 2,644,263       
|Net loss                                                                    |         | (11,912,195)     | (18,684,503)    | (16,260,741)    
|Balance, end of year                                                        |         | (81,526,417)     | (69,614,222)    | (50,929,719)    
|Accumulated other comprehensive income (loss)                               |         |                  |                 |                 
|Balance, beginning of year                                                  |         | 15,443           | (404,246)       | 240,140         
|Unrealized foreign exchange loss on available-for-sale investment           |         | -                | -               | (7,668)         
|Realized loss on disposal of available-for-sale investments                 |         | (89,762)         | 240,285         | -               
|Impairment loss on available-for-sale-investments                           |         | -                | 130,000         | -               
|Net change in unrealized gains (losses) on available-for-sale investments   |         | 315,672          | 52,167          | (656,525)       
|Tax effect of changes in other comprehensive income (loss)                  |         | (32,024)         | (2,763)         | 19,807          
|Balance, end of year                                                        |         | 209,329          | 15,443          | (404,246)       
|Total shareholders equity                                                  |         | $      8,071,178 | $   1,641,753   | $    2,004,272  

The accompanying notes are an integral part of these consolidated financial statements  -19-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    1. ORGANIZATION AND OPERATIONS  These consolidated financial statements have been prepared in accordance with accounting principles generally accepted (GAAP) in Canada, which, with respect to the Company, conform in all material respects with accounting principles generally accepted in the United States of America, except as described in Note 18 to the consolidated financial statements.  Operations and Basis of Consolidation Kiska Metals Corporation (formerly Geoinformatics Exploration Inc. or "Geoinformatics) and its wholly-owned subsidiaries (collectively the Company or Kiska) is a global resources company which has developed a unique and innovative approach to mineral exploration. Geoinformatics was incorporated on March 21, 1980 under the laws of the Province of British Columbia. On August 29, 1996, Geoinformatics was continued in the Yukon Territory from the Province of British Columbia. On August 5, 2009, the Company completed the 100% acquisition of Rimfire Minerals Corporation (Rimfire), and changed its name to Kiska Metals Corporation. As a result of the acquisition, the consolidated statements of operations and comprehensive loss and cash flows for the year ended December 31, 2009 includes the results of operations and cash flows of Geoinformatics until August 5 and the combined entity from August 6 to December 31, 2009. The comparative consolidated annual statements of operations and comprehensive loss and cash flows for the year ended December 31, 2008 include only the results of operations and cash flows of Geoinformatics in accordance with generally accepted accounting principles for business combinations.  The Company acquired 100% of Rimfire by issuing 22,365,258 common shares and 1,905,300 options to purchase common shares, for an aggregate fair value of $12,786,175. The fair value of the common shares, amounting to $12,412,717, was based on the bid price of the common shares on the date of acquisition, and the fair value of the options issued, amounting to $373,458, was determined using the Black-Scholes option pricing model using the following weighted average assumptions: volatility of 89%, risk free interest rate of 1.8%, an expected life of 2.7 years, and a dividend yield of 0%.  The Company accounted for this transaction using the acquisition method. The fair value of the net assets acquired was:  Cash and cash equivalents$     4,463,269Amounts receivable51,918Marketable securities162,630Prepaid expenses and deposits358,058Property and equipment104,188Future income tax assets-Mineral property interests(1)7,974,288Accounts payable and accrued liabilities(282,614)Reclamation obligations(45,562)Consideration paid$   12,786,175   -20-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    1. ORGANIZATION AND OPERATIONS (continued)  (1) The acquisition cost of mineral properties of $7,974,288 represents the difference between the fair value of the consideration paid of $12,786,175 and the fair value of the net tangible assets acquired. An impairment loss of $7,817,788 was recognized in 2009 on re-evaluation of the fair value of the mineral property interests acquired and was charged to operations. In accordance with the Companys accounting policy for mineral properties, the remaining $156,500 of acquisition costs were also expensed in 2009.  Acquisition costs of $633,875 were expensed and included in consulting and outsourced services ($592,743), general and administrative ($39,864) and marketing services ($1,268) in the Consolidated Statement of Operations for the year ended December 31, 2009. Acquisition costs of $18,000 were included in share issue costs in the year ended December 31, 2009.  In the year ended December 31, 2009, revenues of $60,644 and the net loss of $1,578,442 of Rimfire have been included in the consolidated statement of operations and comprehensive loss from the date of acquisition to the end of the year.  Had the acquisition of Rimfire occurred at the beginning of the year, the revenue of the combined entity for the year ended December 31, 2009 would have been $301,241 with a net loss of $19,636,744.  The Company is in the development stage as defined by the Canadian Institute of Chartered Accountants (CICA) Accounting Guideline 11 - Enterprises in the Development Stage and it is in the process of exploring its mineral properties. As such, the Company has not yet determined whether these properties contain reserves that are economically recoverable. Due to the nature of mineral exploration and the Companys business strategy, the Company expenses all acquisition and exploration expenditures as incurred until such time as the Company does establish that the property contains such reserves, at which time ongoing exploration and development expenditures will be capitalized.  The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. Some of the Companys mineral property interests are located outside of Canada and are subject to the risks associated with foreign investment, including increases in taxes and royalties, renegotiations of contracts, currency exchange fluctuations and political uncertainty. Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, these procedures do not guarantee the Companys title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements.   -21-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    1. ORGANIZATION AND OPERATIONS (continued)  The Companys subsidiaries and their respective jurisdictions are as follows:


|                                                 |                                    |             |             
|------------------------------------------------ | ---------------------------------- | ----------- | ------------
|                                                 | Year of incorporation/
acquisition | % Ownership | Jurisdiction
|Geoinformatics Exploration Australia Pty Ltd (1) | 2002                               | 100%        | Australia   
|Rimfire Australia Pty Ltd.                       | 2009                               | 100%        | Australia   
|2012860 Ontario Limited                          | 2002                               | 100%        | Canada      
|Geoinformatics Exploration Canada Limited (2)    | 2005                               | 100%        | Canada      
|Rimfire Minerals Corporation                     | 2009                               | 100%        | Canada      
|Geoinformatics Explorations Ireland Limited      | 2002                               | 100%        | Ireland     
|Geoinformatics Alaska Exploration, Inc.          | 2003                               | 100%        | USA         
|GXL USA, Inc.                                    | 2007                               | 100%        | USA         
|Rimfire Alaska, Ltd.                             | 2009                               | 100%        | USA         
|Rimfire Nevada Ltd.                              | 2009                               | 100%        | USA         

(1)Until wound up on July 28, 2010. (2) Until wound up on December 31, 2010.  Following the acquisition of Rimfire in 2009 the Company is in process of simplifying its corporate structure. As a result of this internal reorganization, Geoinformatics Exploration Australia Pty Ltd and Geoinformatics Exploration Canada Limited were wound up during the year.  The Company also sold its wholly-owned Mexican subsidiary Minera Geoinformatica S.A. de C.V. during the year (Note 6).  Going Concern These consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. However, the Company currently has no significant sources of revenue and has experienced recurring losses. The Companys ability to continue as a going concern is dependent on the Companys ability to obtain additional debt or equity financing to successfully advance the exploration and development of mineral property interests in its exploration portfolio and/or to be able to derive material proceeds from the sale or divesture of those properties and/or other assets such as royalty rights and equity interests (see Note 20 Subsequent Events). There is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company.  These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Such adjustments and classifications could be material.  -22-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    2. SIGNIFICANT ACCOUNTING POLICIES  These consolidated financial statements reflect the following other significant accounting policies:  Foreign Currency Translation The functional currency of the Company is the Canadian dollar. The Company and its subsidiaries operate in Canada, the United States, and Australia.  The Companys subsidiaries are considered integrated foreign operations. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at exchange rates prevailing at the balance sheet date, and non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expense items are translated at exchange rates prevailing at the time of the transaction. Foreign exchange gains and losses are included in operations.  Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from these estimates.  Significant estimates used in these financial statements include, amongst others, estimates of reclamation obligations, the recoverability of amounts receivable, the calculation of stock based compensation, the fair value of marketable securities and warrants issued, and the recoverability of property and equipment, and future income tax assets.  Cash and Cash Equivalents Cash and cash equivalents includes cash and highly-liquid term deposits that are readily convertible to known amounts of cash.  Restricted cash Restricted cash consists of term deposits in favour of regulatory authorities held as site restoration deposits or performance bonds for mineral properties (see Note 4).  Marketable securities Marketable securities consist of investments in common shares of publicly listed companies that are designated as available-for-sale. Unrealized gains and losses related to available-for-sale investments are excluded from operations and are included in Accumulated Other Comprehensive Income (Loss) until such gains and losses are realized or an other-than-temporary decline in value is determined to have occurred.  Equity investments Investments in shares of incorporated companies in which the Company has significant influence are accounted for using the equity method. Significant influence is the ability to influence the strategic operating, investing and financing policies of the investee, but where control does not exist.  Under the equity method, investments are carried at cost as adjusted for the Companys proportionate share of the earnings or losses of the investee, less any loss in value of the investment that is other than temporary.  -23-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    2. SIGNIFICANT ACCOUNTING POLICIES  (continued)  Financial Assets and Financial Liabilities The Companys financial assets, other than cash and cash equivalents (including restricted cash), and financial liabilities are classified as follows: · Amounts receivable are classified as loans and receivables. They are measured at amortized cost. At December 31, 2010 and 2009, the recorded amounts approximate fair value. · Marketable securities are classified as available for sale. Available for sale assets and liabilities are measured at fair value with unrealized gains and losses recorded in other comprehensive income (loss) until the instrument is either sold or suffers an impairment that is other than temporary. · Accounts payable, due to related party, and joint venture partner deposits are classified as other financial liabilities and are measured at amortized cost. At December 31, 2010 and 2009, the recorded amounts approximate fair value.  The Company classifies and discloses fair value measurements based on a three-level hierarchy: · Level 1  inputs are unadjusted quoted prices in active markets for identical assets or     liabilities; · Level 2  inputs other than quoted prices in Level 1 that are observable for the asset or liability, either directly or indirectly; and · Level 3  inputs for the asset or liability that are not based on observable market data.  Transaction costs directly attributable to the acquisition or issue of a financial asset or financial liability are added to the carrying amount of the financial asset or financial liability, and are amortized to operations using the effective interest rate method.  Mineral Property Interests The Companys mineral property interests are composed of mineral properties owned by the Company and rights to ownership of mineral properties which the Company can earn through cash or share payments, incurring exploration expenditures and combinations thereof. The Companys property ownership and rights to property ownership are described in Note 6.  Mineral Property Interests (continued) The Company accounts for its mineral property interests whereby all acquisition and exploration costs are charged to operations as incurred, and all property sales and option proceeds received are credited to operations. The Company expenses the acquisition costs as there are currently no identifiable mineral reserves on its property interests and, therefore, there is no basis on which to estimate future cash flows for purposes of assessing the recoverability of those costs. When the existence of a mineral reserve on a property has been established, future acquisition, exploration and development costs will be capitalized for that property. After commercial production on a property commences, the net capitalized costs will be charged to future operations using the unit of production method based on estimated recoverable reserves on the property.  -24-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    2. SIGNIFICANT ACCOUNTING POLICIES  (continued)  Property and Equipment Property and equipment are recorded at cost. Depreciation is provided at annual rates considered sufficient to amortize the cost of the assets over their estimated useful lives as follows: Appliances3 yearsCamp structures3 yearsComputer software2 yearsComputer equipment3.5 yearsField equipment5 yearsLeasehold improvementsTerm of leaseMobile equipment2.5 yearsNiton Analyzer3.5 yearsOffice equipment and furniture8 years The Company reviews the carrying values of its property and equipment whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts determined by reference to estimated future operating results and undiscounted net cash flows.  An impairment loss is recognized when the carrying value of those assets is not recoverable and exceeds their fair value.  Mineral Property Reclamation Obligations The Company recognizes the fair value of a liability for a reclamation obligation on mineral property interests when the obligation is incurred and the fair value can be reasonably estimated. The fair value of the obligation is based on the estimated cash flow required to settle the obligation, discounted using the prime lending rate of the Companys primary financial institution adjusted for the Companys credit rating. The fair value of the obligation is recorded as a liability and charged to mineral property expenses. The liability is adjusted for accretion expense representing the increase in the fair value of the obligation due to the passage of time. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash-flows are recognized as an increase or a decrease to the carrying amount of the liability and charged to mineral property expenses. When the existence of a mineral reserve on a property has been established, future reclamation obligation costs will be capitalized to that property.  Revenue recognition Revenue is recognized as services are performed and client-reimbursable expenses are incurred in respect of each project. Services performed can take the form of project management and execution or other management services. Option payments are recognized when they become due, pursuant to binding agreements with exploration joint venture partners. In addition to these revenues earned, the Company may become entitled to future revenue streams, under contracts with these partners deriving from:  · net smelter royalties once mining production has commenced or the sale of the rights to these royalties; · free-carried or joint venture interests in projects that become producing mines or the sale of such free-carried or joint venture interests; and · direct equity interests in mining operations or operating companies or the sale of such interests in mineral properties or share interests in operating companies.  Revenue is not recognized in respect of these future potential revenue streams until earned and the Company can reasonably estimate the related amounts.   -25-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)   2. SIGNIFICANT ACCOUNTING POLICIES  (continued) Exploration Tax Credits The Company may receive refundable exploration tax credits and grants from provincial jurisdictions in Canada equal to a specified rate of qualifying exploration expenditures incurred on mineral property interests located within that jurisdiction. The Company records these exploration tax credits or grants as it incurs the related exploration expenditures.  Share-Based Compensation The Company issues options to purchase shares under the terms of an incentive plan described in Note 13. When options to purchase shares are issued to employees, officers or directors, the fair value of the options on the date of the grant is recognized as compensation expense, with a corresponding increase in contributed surplus, over the period during which the related options vest. The proportion of the share-based compensation attributable to employee activity on each mineral property is charged to exploration expense. When options to purchase shares are issued to non-employees in return for goods and services, the fair value of the options issued is recognized as an expense, with a corresponding increase in contributed surplus, in the period in which the goods or services are received or are expected to be received.  The consideration received on the exercise of share options is credited to share capital. When options are exercised, previously recorded compensation expense is reclassified from contributed surplus to share capital to fully reflect the consideration received for the shares.  Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are recorded based on temporary differences between the carrying amount of balance sheet items and their corresponding tax bases. In addition, the future tax benefits of unused tax losses and other deductions carried forward are recognized, subject to a valuation allowance, to the extent that it is more likely than not that such future benefits will ultimately be realized. Future income tax assets and liabilities are measured using enacted or substantively enacted tax rates and laws expected to apply when the tax liabilities or assets are to be either settled or realized.  Loss per Share The basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. The diluted loss per share is the same as the basic loss per share as the effect of all outstanding options and warrants is anti-dilutive.  All comparative figures have been reclassified to reflect the changes in the number of common shares outstanding due to share consolidations.  Comprehensive Income (Loss) Comprehensive income (loss) comprises the Companys net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) represents changes in shareholders equity during a period arising from non-owner sources and, for the Company, principally includes unrealized gains and losses on available for sale financial assets, net of income taxes. The Companys comprehensive income (loss), components of other comprehensive income (loss), and accumulated other comprehensive income (loss) are presented in the Consolidated Statements of Operations and Comprehensive Loss and the Consolidated Statements of Shareholders Equity.  Warrants Share issuances that include a warrant are bifurcated into a share and warrant component for accounting purposes.  The warrant component is recorded in contributed surplus and is transferred to share capital upon exercise of the underlying warrant.  The fair values of such warrants are determined using the Black-Scholes option pricing model.   -26-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    3. NEW ACCOUNTING STANDARDS  Current Accounting Changes  Comprehensive Revaluation of Assets and Liabilities  Section 1625 In August 2009, the Canadian Institute of Chartered Accountants (CICA) also amended Handbook Section 1625, Comprehensive Revaluation of Assets and Liabilities for consistency with new Handbook Section 1582, Business Combinations. The amendments require that, when push-down accounting is used following the acquisition of an enterprise, the assets and liabilities are to be measured at the values used in accounting for the purchase transaction or transactions in accordance with Section 1582. The amendments also require that, when a future income tax asset that arose prior to the date of a comprehensive revaluation and that was not recognized in the comprehensive revaluation is subsequently recognized; the benefit should be recognized in accordance with Section 1582 and Handbook Section 3465, Income Taxes. The amendments apply prospectively to comprehensive revaluations of assets and liabilities occurring in fiscal years beginning on or after January 1, 2011. Early adoption is permitted as of the beginning of a fiscal year. An entity adopting this Section for a fiscal year beginning before January 1, 2011 would also be required to adopt Section 1582. The Company adopted this section as of January 1, 2010 (Section 1582 was adopted January 1, 2009), and the adoption of Section 1625 had no impact on the Companys consolidated financial statements.  Future Accounting Changes  Convergence with International Financial Reporting Standards In 2006, the Accounting Standards Board of the CICA ratified a strategic plan that will result in Canadian GAAP, as used by public companies, evolving and being converged with International Financial Reporting Standards (IFRS) over a transitional period currently expected to be completed by 2011. The International Accounting Standards Board currently has projects underway that should result in new pronouncements which will be included in the convergence process.  Effective January 1, 2011, the Company will prepare its financial statements in accordance with IFRS.  The Company will prepare its interim financial results on an IFRS basis beginning with the quarter ended March 31, 2011.  The Company will also provide comparative data for the year ended December 31, 2010 on an IFRS basis, including an opening balance sheet as at January 1, 2010.  The Company is in the process of completing a detailed assessment of the requirements of the transition to IFRS, with the intention of identifying: (i) major differences from existing accounting policies (ii) new accounting policies which are appropriate for the Company, (iii) the appropriate disclosures in financial statements prepared under IFRS and (iv) developing an implementation plan.   4. RESTRICTED CASH  Restricted cash of $147,895 (2009 - $202,707) represents project reclamation deposits in favour of regulatory authorities held as site restoration deposits. The amount of the deposit is determined at the time the exploration program is planned and a notice of work is submitted to the regulatory authority. If the work is more extensive than previously planned, the amount of the deposit will be increased. When reclamation work is completed on a project, the deposit is released to the Company.    -27-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    5. MARKETABLE SECURITIES  The following table summarizes the components of available-for-sale financial instruments reported as marketable securities at December 31:  Number of SharesCost2010 
Fair Value2009
Fair ValueArcus Development Group Inc.50,000$       7,000$       11,250$  17,250Evrim Metals Corp.2,000,0001,000,0001,000,000-Brixton Metals Corporation475,000156,750118,750-CVC Cayman Ventures Corp.25,0004,2503,500-Capstone Mining Corporation---24,467Island Arc Exploration Corporation200,00018,00012,00021,000It's Your Nickel Exploration200,000---Laurion Minerals Exploration Inc.500,00022,50052,50090,000Millrock Resources Inc.500,000222,500460,00050,000Plutonic Power Corporation---95,700Silver Quest Resources Ltd.155,00074,33391,45072,000Balance$  1,505,333$  1,749,450$  370,417  The Company has recorded realized gains of $2,477,815 on the sale of its marketable securities, including its shares in Clancy (Note 7). African Consolidated Resources shares were sold during the previous year for gross proceeds of $90,099, on which the Company realized a loss of $240,285. The Company has also recorded an impairment loss in the statement of operations for the year ended December 31, 2009 of $130,000 on Laurion Minerals Exploration Inc. shares. The fair value of marketable securities is determined by the closing bid price of the shares as quoted on a stock exchange, or, where not quoted, as determined by the share of fair values of the underlying net assets of the investee.  The following table summarizes the classification of the Companys marketable securities within the fair value hierarchy at December 31, 2010:  Quoted prices in active markets for identical assets (Level 1)Significant other observable inputs (Level 2)Significant unobservable inputs (Level 3)TotalPublic securities$  749,450$                -$               -$     749,450Private security-1,000,000-1,000,000$  749,450$ 1,000,000$               -$  1,749,450  -28-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)    5. MARKETABLE SECURITIES (continued)  There were no transfers between levels of the fair value hierarchy during the year.  The following table summarizes the classification of the Companys marketable securities within the fair value hierarchy at December 31, 2009:  Quoted prices in active markets for identical assets (Level 1)Significant other observable inputs (Level 2)Significant unobservable inputs (Level 3)TotalPublic securities$  370,417$                -$               -$  370,417Private security----$  370,417$                -$               -$  370,417  There were no transfers between levels of the fair value hierarchy during the previous fiscal year.  The aggregate fair value of investments with unrealized losses and the aggregate amount of the unrealized losses are:  Unrealized Loss Position for Less than 12 monthsFair ValueUnrealized LossesDecember 31, 2010  Public securities$  134,250$   (44,750)December 31, 2009  Public securities$  187,417$   (14,713)  There are four (2009: four) investment positions in an unrealized loss position, all of which are publicly traded securities. These investments have been in an unrealized loss position for less than 12 months, and the temporary impairment has been determined to be due to current market conditions and therefore is included in other comprehensive loss.  -29-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)      6. MINERAL PROPERTY INTERESTS  Some of the property commitments listed below were assumed at the time of the acquisition of Rimfire and relate to prior property option or purchase agreements.  The Companys commitments to earn or acquire its mineral property interests and commitments by exploration joint venture partners to option mineral property interests from the Company are included in the Companys Annual Information Form which is filed with regulatory authorities along with these financial statements. Summaries of each property agreement are included below.  Nevada  Colorback Property The Company has signed a lease and purchase agreement with Desert Hawk Resources Inc. (Desert Hawk) on the Colorback Property, located on the Cortez-Battle Mountain Trend, Nevada. Desert Hawk has agreed to an option to purchase the property for a 19 year period commencing on November 2, 2010 and terminating on November 2, 2029. During the first five years of the agreement, the property may be purchased for US$1,000,000 including any advanced royalty payments and a buy-down of the net smelter royalty (NSR) from 2.5% to 2.0%. Following the first five years, the property may be purchased for US$5,000,000 including any advanced royalty payments and a buy-down of the NSR from 2.5% to 2.0%. Desert Hawk has agreed to an advanced royalty payment schedule of US$50,000 on signing (paid) and every anniversary in years 1 to 4 inclusive, escalating to US$75,000 in years 5 to 9, followed by US$100,000 until the end of the lease.  British Columbia  Gillis Property The Company has signed an option agreement effective September 5, 2008 to earn a 100% interest in the Gillis property, subject to a 2% Net Smelter Return (NSR), 1.5% of which can be purchased for $1.5 million. The Company is required to complete aggregate exploration expenditures of $300,000 by September 5, 2012, make cash payments of 2.5% of mineral exploration expenditures and other cash payments totalling $165,000 on or before September 5, 2011 and issue 217,500 common shares within 10 days of announcing a National Instrument 43-101 compliant gold resource of at least 500,000 ounces. The Company signed an option agreement with CVC Cayman Ventures Corp. (Cayman) effective August 30, 2010, whereby Cayman may earn a 51% interest in the Gillis property in return for a total of $2,000,000 in expenditures, $155,000 in cash payments (received $30,000) and issuing 250,000 common shares (25,000 shares received) prior to August 30, 2014. Cayman can increase their interest by an additional 9% (60% total) by spending an additional $1,000,000 in exploration by August 30, 2015.  RDN Property The Company acquired a 100% interest in the RDN mineral claims, subject to a 1.34% NSR. The Company may purchase one-half of the NSR for $666,666. The Company signed an option agreement with Northgate Minerals Corporation (Northgate) which provides that Northgate can earn a 51% interest in the RDN Property on completion of aggregate exploration expenditures of $5,000,000 and cash payments of $200,000. The Company is the project operator until Northgate has earned its 51% interest. Northgate may earn an additional 9% interest by completing a feasibility study and funding all expenditures up to completion of the feasibility study. This agreement was amended to suspend the terms of the option agreement until such time as road access to the RDN property is constructed.  -30-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     6. MINERAL PROPERTY INTERESTS (continued)  The Company (40%) and Northgate (60%) purchased 100% of the LL property, which is contiguous with the RDN property, for $30,000 cash, subject to an NSR of 2%. This royalty can be purchased at any time for $2,000,000.  Redton Project Under the terms of an option agreement, the Company had an option to fund $4.75 million in exploration expenditures to earn an 85% interest in the Alkali Gold Project (Redton) located in British Columbia, with such expenditures to be incurred over the five-year period ending June 3, 2010. The Company had incurred in excess of $4.75 million in exploration expenditures and earned its 85% interest in Redton. Redton Resources Inc. holds the other 15% interest. The Company made an advance royalty payment of $20,000 during the year.  Thorn Property The Company holds a 100% interest in the Thorn mineral property, subject to a 3.5% NSR. The Company can purchase 2% of the NSR for $3,000,000. The Company is required to issue an additional 175,000 shares upon commencement of commercial production from the property. Cangold Limited (Cangold) subsequently earned a 51% interest in the Thorn property. The Company acquired Cangolds interest in the property by paying cash of $100,000 and issuing 100,000 shares. Cangold maintains an entitlement to 25% of any cash or share payments received by the Company in the event of a third party partner becoming involved in the exploration and development of the property.  On June 3, 2010, the Company signed an agreement with Brixton Metals Corporation (Brixton), granting Brixton an option to earn a 51% interest in the property for cash payments totalling $200,000 (including $25,000 on signing (received 75% - $18,750), and $50,000 in 2010 (received 75% - $37,500)) and issuing a total of 400,000 common shares (of which 100,000 have been issued  the Company has received 75,000 shares, or 75%) on or before December 12, 2013. Brixton can earn their interest by completing exploration expenditures of $1,000,000 in the first year, and $4,000,000 before December 12, 2014. After earning a 51% interest, Brixton may elect to increase its interest from 51% to 65% by spending an additional $10,000,000 in property expenditures within three years of the election.  The option agreement was amended November 9, 2010 whereby Brixton could now earn the initial 51% by spending $200,000 by December 12, 2011 and $4.8 million in exploration expenditures by December 12, 2014. A minimum exploration expenditure of $1,500,000 is required in the second year and $750,000 per year thereafter. Under the amendment, Brixton is required to spend $1,200,000 by December 31, 2011 or deposit to a third party by the same date of not less than $1,000,000 to be incurred as exploration expenditures the following year.  Tide Property The Company purchased the Tide mineral property from Newmont Canada Limited subject to a 1.5% NSR in the event the property becomes commercially feasible to mine. American Creek Resources Ltd. (American Creek) has earned a 51% interest in the property subject to a 1% NSR upon their interest in favour of Serengeti Resources Inc. The Company signed a letter of agreement with American Creek for a second option whereby American Creek can earn an additional 9% interest by funding a further $3.5 million in exploration on or before December 31, 2010 (not spent); an additional 5% interest by funding a bankable feasibility study, and, at the Companys election, another 5% interest (for a total of 70%) by providing 100% of the initial project development financing. At the date of these consolidated financial statements, American Creek has not spent the required $3.5 million in exploration and, hence, the Company continues to carry its 49% interest.   -31-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     6. MINERAL PROPERTY INTERESTS (continued)  Williams Property The Company acquired a 100% interest in the Williams property, subject to a 1.25% NSR. The Company is required to issue an additional 43,500 common shares upon commencement of commercial production from the property. The Company can purchase 0.75% of the NSR for $1,000,000. Advance royalty payments of $5,000 per year are payable to the underlying vendor.  Kliyul Property During the year ended December 31, 2010, the Company completed three separate purchase agreements to acquire the property interests of Rio Tinto Exploration Canada Inc. (Rio Tinto) (as to 45%), First Majestic Silver Corp. (as to 30%) and Daylight Energy Ltd (as to 25%) in the Kliyul Cu-Au porphyry project. Additionally, the project was expanded with the purchase of a mineral claim held by Northwest Enterprises Inc. These transactions result in the Company owning a 100% interest in the property, subject to a 1.5% NSR in favour of Rio Tinto. Total consideration of $115,488 was paid.  Quesnel Trough Properties The Quesnel Trough project covers 34,570 hectares, and is located in the Cariboo Mining Division of British Columbia. A total of seven properties comprise the project and are located from 15 kilometres south of Prince George to 40 kilometres north of Fort St. James. The Company owns 100% of these claims. Xstrata Canada Corporation signed an option agreement to earn a 51% interest in the property by completing a preliminary assessment and spending $3,000,000 by December 31, 2013. In addition, Xstrata must spend no less than $250,000 in each calendar year commencing in 2010. Xstrata may earn an additional 24% (total 75%) by completing a feasibility study and incurring no less than $20 million in feasibility study expenditures which must be completed before the tenth anniversary of Xstrata earning its 51% interest. Xstrata completed MMI soil geochemical surveys on the properties in 2009.  Yukon  Boulevard Property (Northgate Alliance) The Boulevard Property was staked on behalf of an alliance with Northgate Minerals, who earned a 60% interest in the property. The Company signed an option agreement with Silver Quest Resources Ltd. (Silver Quest) whereby Silver Quest can acquire the Companys 40% interest in the property by making staged cash payments totalling $80,000 (paid, of which the Companys 40% portion is $32,000), issuing an aggregate of 400,000 shares (issued, of which the Companys 40% portion is 160,000 common shares) and completing exploration expenditures of $3,000,000 over a five year period. The Company retains a 1% net smelter royalty (NSR) on the property, with Silver Quest having the right to buy back 0.5% of the NSR for $750,000. If additional claims are staked within the areas of interest, Silver Quest will issue additional shares and the NSR will be extended to the new claims. The Company has received an additional 100,000 common shares of Silver Quest upon staking new claims within this project area.   -32-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     6. MINERAL PROPERTY INTERESTS (continued)  Wernecke Breccia Property The Company signed an agreement with Fronteer Development Group Inc. (Fronteer, now Newmont) to acquire 700 mineral claims and a proprietary geoscience dataset covering a large region of the northern Yukon known as the Wernecke Breccias, from Newmont Exploration Canada Limited and NVI Mining Ltd., a subsidiary of Breakwater Resources Ltd. Fronteer is the operator of the project and funded 100% of the required $2 million in exploration expenditures to earn an 80% interest, with the Company earning the remaining 20% interest. Newmont and NVI retain a total 2% NSR. There is a 7.5% to 15% Net Profits Interest (NPI) payable to the underlying vendors. A Joint Venture has been formed between Fronteer and the Company, and ongoing exploration expenses will be shared pro-rata subject to dilution for non-participation. Should either partys interest fall below 5%, their interest will be converted to a 3% NPI after payback of capital.  Alaska  Goodpaster Properties On February 22, 2007, the Company signed an option agreement with Rubicon Minerals Corporation (Rubicon). The terms of the agreement provide that Rubicon is required to fund a total of US$4.8 million in exploration expenditures over 6 years (November 27, 2012) to earn a 60% interest in the properties. Upon vesting, Rubicon may acquire a further 10% interest in the properties by completing a feasibility study, and, at the Companys election, may acquire an additional 5% interest (for a total of 75%) by providing a project financing loan to be repaid from the Companys free cash flow upon production. Underlying royalties of 1.75% to 2% NSR exist on the claims.  Uncle Sam Property On November 2, 2009, the Company signed an option agreement with Millrock Resources Inc. (Millrock) giving Millrock the option to earn a 100% interest in the Uncle Sam property in Alaska. Under the terms of the agreement Millrock is required to make cash payments totalling US$200,000 over four years with US$40,000 being paid upon the TSX Venture Exchanges approval of the agreement (paid). The Company has received additional payments of US$40,000 pursuant to this agreement. In addition, Millrock is required to issue 1,000,000 shares to Kiska over four years (500,000 shares received to date) and has made a commitment to spend US$2,700,000 on exploration over four years. There is an underlying 2% NSR payable to Royal Gold Inc.  Whistler Property Under the terms of a letter agreement dated June 2007 with Kennecott Exploration Company (Kennecott), the Company spent a total of US$5.0 million by December 31, 2008 and earned a 100% interest in the Whistler Project. Kennecott retains a 2% NSR on the Whistler property. During the fiscal year, the Company completed a prescribed exploration program (a three dimensional Induced Polarization geophysical survey and 20 drillholes) on the property and delivered a final report detailing the program as required under a revision of the Kennecott agreement. This work triggered a decision from Kennecott regarding its back-in rights, which they chose to waive, thus allowing the Company 100% ownership and control over the Whistler property, subject to underlying royalties. Some of the claims are subject to a 1.5% net smelter royalty (NSR) to the original owner, which can be brought down to 0.5% by a US$10 million buy-down. Moreover, Teck Cominco owns a 2% net profit interest (NPI) over all of these claims.   -33-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     6. MINERAL PROPERTY INTERESTS (continued)  Copper Joe Property On August 31, 2010, the Company signed an option agreement with Kennecott Exploration Company (Kennecott) to acquire a 100% interest in the Copper Joe Property by incurring a total of US$5 million in exploration expenditures by December 31, 2015, including a commitment to US$170,000 in exploration by December 31, 2011 (completed). Upon completion of a positive National Instrument 43-101 compliant pre-feasibility study, the Company will pay Kennecott a one-time cash payment of US$10 million. Kennecott has a first right of refusal on property assignment or sale subject to a 90 day option exercise period, as well as a 2% NSR on the property. Prior to expending US$2.5 million, the Company will require Kennecotts consent to divest its rights and interest to a third party.  Australia  Lachlan Fold Belt Project The Company signed a farm-in agreement with Inmet Mining (Australia) Pty. Ltd. (Inmet Australia) to explore the Barmedman licence. Inmet Australia can earn a 60% interest in the project by funding exploration expenditures of Australian (A) $5,000,000 over four years and making cash payments to the Company of A$250,000. The Company will be operator until completion of the option requirements. The property is subject to an underlying agreement which requires payment of fees based on exploration expenditures and includes a 2% NSR.  Victoria Goldfields Effective June 27, 2008, the Company signed a letter of agreement for a farm-in and joint venture with Northgate Australian Ventures (Northgate Ventures) for three mining tenements in the Stawell Corridor of the Victoria Goldfields. The Company can earn a 50% interest in one or all of the three properties by funding an additional A$500,000 per property by March 31, 2011 with a minimum expenditure of A$150,000 per property per year.  Upon the Company earning a 50% interest in one or more properties, Northgate Ventures will have the option to earn a 60% interest in the property by funding an additional A$1.5 million in exploration expenditures within 3 years, to form a 50:50 joint venture with the Company or elect not to contribute and allow the Company to earn a 100% interest in the property by funding an additional A$2 million in exploration expenditures over 4 years.  On April 15, 2010, and amended July 26, 2010 and September 15, 2010, the Company assigned to Brixton its option on the Victoria Goldfields properties in return for Brixton assuming the exploration funding commitments to Northgate and making a $100,000 payment to the Company (received), including $50,000 paid on signing (received). Brixton has also agreed to issue the Company the equivalent of $100,000 worth of its common shares as consideration for the option (received an equivalent 400,000 common shares of Brixton during the year).The Company remains the operator of the exploration program and incurs all costs on behalf of Brixton in return for a fee equivalent to 10% of all expenditures. Brixton relinquished their option on this property prior to December 31, 2010.   -34-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     6. MINERAL PROPERTY INTERESTS (continued)  Mexico The Company had held an interest in exploration projects in Sonora, Durango and Sinaloa States in Mexico. Twelve projects were held in a joint venture with Azure Minerals Limited (Azure), which Azure terminated during the year, thus allowing the Company to retain a 100% interest in nine exploration projects.  Pursuant to an agreement dated September 17, 2010, and closing on October 7, 2010, the Company has sold its interest in Minera Geoinformatica (Minera), thereby selling its 100% interest in nine of the Mexican properties to Evrim Metals Corporation (Evrim) for consideration of a total of 2,000,000 common shares of Evrim plus ongoing performance-based share payments. The Company has also appointed a representative to the Evrim Board of  Directors. The performance-based share payments amount to 10,000 to 50,000 shares per property, depending upon the status of the property, for a period of five years. Similar payments are also required if Evrim acquires any property out of the database included in the Minera sale. The Company will also receive a 1,000,000 share payment for every property that is advanced to a positive production decision.  The results of Minera up to the date of sale have been presented as discontinued operations on the statement of operations.  Discontinued operations includes revenue of $39,319, and a gain on the sale of $1,003,577 has been recognized.   7. EQUITY INVESTMENT  During the year, the Company sold its total interest in Clancy Exploration Limited (Clancy) of 28,506,883 ordinary shares for total proceeds of $2,305,579. Pursuant to the sale a gain of $2,305,579 was recognized in these statements. As at December 31, 2009 the 28,506,883 ordinary shares represented 37.9% of Clancys issued and outstanding shares and was accounted for as an equity investment.  During June 2009, Clancy completed a rights offering whereby Clancy ordinary shares were offered at A$0.08 per share (the Rights Offering) raising approximately A$1,000,000. Pursuant to the Rights Offering the Company acquired an additional 5,701,377 ordinary shares for a total cash consideration of A$456,110 (C$410,398). In December 2009, Clancy completed a share purchase plan in which the Company did not participate. Including private placements during the year, Clancy issued 14,621,793 shares. As a result the Companys equity interest in Clancy decreased from 47.7% to 37.9% in 2009.  On March 30, 2010, Clancy completed a placement for gross proceeds of A$900,000 from the issuance of 6,923,077 shares at a price of A$0.13 per share. In addition, on August 11, 2010 Clancy closed a rights offering whereby a total of approximately 27,500,000 shares were offered at A$0.08 per share raising approximately A$2,200,000. The Company did not participate in these placements and received $65,190 for the sale of its Clancy rights and its interest decreased from 37.9% to 26.0% prior to the disposition by the Company of its shares in Clancy. Following from this dilution of the Companys shareholding interest in Clancy, the Company recognized a dilution gain and equity loss on its investment in Clancy of $489,277.  -35-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     7. EQUITY INVESTMENT (continued)  For the years ended December 31, 2010, 2009 and 2008, the Company recorded an equity loss on its investment on Clancy as follows:  201020092008Balance, beginning of year$                    -$           765,747$    1,681,928Acquisition of ordinary shares-410,398-Dilution gain on issuance of shares by Clancy489,277--Equity in loss of Clancy(489,277)(1,176,145)(916,181)Balance, end of year$                    -$                       -$       765,747  The Company had the following transactions with Clancy for the years ended December 31:  2010
A$2009
         A$2008
   A$Revenue earned from services provided to Clancy$             -$             -$    137,268Revenue earned from equipment sold to Clancy-1964,246Expenses paid by the Company on behalf of Clancy---Services purchased from Clancy--6,240Expenses paid by Clancy on behalf of the Company-2,60811,390Amounts received from Clancy in settlement of trade and other receivables-116158,682Amounts paid to Clancy on trade and other payables--26,156Loan repayment by Clancy, on behalf of its subsidiary, 
Geoinformatics Exploration Tasmania Pty Ltd.--1,649  The average foreign exchange rate for the year ended December 31, 2010 for $1 Canadian dollar was A$1.0576 (2009  A$1.1003, 2008 - A$1.1269).  The carrying value and market value of the Clancy shares held by the Company and accounted for using the equity basis were as follows:  20102009Investment in Clancy on an equity basis$                    -$               -Market value of Clancy shares held at December 31-3,767,869    -36-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     8. PROPERTY AND EQUIPMENT  December 31, 2010CostAccumulated depreciationNet book valueAppliances$        124,396$          (77,965)$          46,431Camp structures513,459(231,043)282,416Computer software72,610(58,560)14,050Computer equipment168,691(135,491)33,200Field equipment133,288(40,127)93,161Leasehold improvements70,299(40,534)29,765Mobile equipment97,693(68,440)29,253Niton Analyzer43,586(32,987)10,599Office equipment and furniture78,324(34,064)44,260$     1,302,346$        (719,211)$       583,135  December 31, 2009CostAccumulated depreciationNet book valueAppliances$          98,094$          (37,593)$          60,501Camp structures286,309(109,937)176,372Computer software36,456(24,103)12,353Computer equipment122,843(87,713)35,130Field equipment73,548(15,249)58,299Leasehold improvements20,502(6,407)14,095Mobile equipment121,821(75,739)46,082Niton Analyzer43,586(20,149)23,437Office equipment and furniture62,124(9,111)53,013$       865,283$        (386,001)$       479,282  9. RELATED PARTY TRANSACTIONS   The following transactions are measured at the exchange amount, which is the amount of the consideration established and agreed to by the related parties.   (a) Note Payable On March 9, 2009, the Company announced it had negotiated a line of credit with Geologic Resource Partners LP (GRP), a company with directors in common, allowing it to draw down, as necessary, a maximum amount of $2.6 million. The line of credit bore interest at an annual rate of 15%, payable at maturity. On March 27, 2009 and June 8, 2009, the Company drew $1,000,000 and $750,000, respectively, under the line of credit. The entire amount of note payable including accrued interest of $71,712 was repaid on August 5, 2009.  -37-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     9. RELATED PARTY TRANSACTIONS (continued)   (b) Due to related party Some of the Companys mineral property evaluation and exploration projects are managed by Equity Exploration Consultants Ltd. and Equity Geoscience, Ltd. (collectively Equity), companies partially owned (indirectly) by a director of the Company. Balances payable to Equity for fees and reimbursement of costs incurred on behalf of the Company have been separately disclosed as part of Due to Related Party. Fees charged to the Company by Equity are on the same basis as those charged by Equity to unrelated third parties. It is anticipated that Equity will continue to provide geological consulting and administrative support services to the Company from time to time, and will be remunerated for such services at the rate charged by Equity to all its other customers.  At December 31, 2010, the Company was indebted to Equity in the amount of $15,946 (2009 - $11,340) for project expenses and consulting services provided by Equity to the Company. During the year ended December 31, 2010, the Company paid Equity $173,598 (2009 - $54,000, 2008 - $Nil) for providing management services, which has been included in consulting and outsourced services and $26,901 (2009: $Nil; 2008: $Nil) included in exploration expenditures on the Statement of Operations and Comprehensive Loss.  (c) Mineral property interests One of the directors indirectly owns 11% of a 7.5% to 15% Net Profits Interest (NPI) in the Wernecke Breccia property. The claims were originally staked and explored by a company in which he holds an interest. When the property was sold to the Newmont and NVI Mining Ltd, that company retained an NPI of varying amounts depending on the claim group.  -38-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)       10. CONVERTIBLE LOAN FACILITY  In 2007, the Company drew down on a US$20 million convertible loan facility with Geologic Resource Fund LP (GRF), which bore interest at 5%.  The Chief Investment Officer of GRF was a member of the Board of Directors of the Company. GRF owned a 36% interest in the Company as at December 31, 2010 (2009 - 40.4%, 2008  84.9%).  Over the term of the loan it was  accreted to its face value through a periodic charge to accretion expense with a corresponding credit to the liability component. The accretion expense was based on the effective interest rate method.  For the year ended December 31, 2008, the Company recorded accretion expense of $2,465,774 related to the loans, which is included in financing expense.  On October 20, 2008, the Company closed an equity financing and used a portion of the proceeds to repay the outstanding balance of US$20 million under the convertible loan facility. The Company recorded a settlement gain of $279,859 upon repayment and a realized foreign exchange loss of $2,885,734. In addition, the Company issued 1,065,907 common shares to GRF in satisfaction of the interest of $943,327 on the convertible loan facility for the period from January 1, 2008 to October 16, 2008.   11. LEASE COMMITMENTS  The Company has a lease, which expires August 31, 2015 for office space occupied by its head office and a lease for its Anchorage offices expiring on December 31, 2014. At December 31, 2010, the Company has future minimum annual lease commitments as follows:  20112012201320142015Lease payments$    147,021$     150,126$     158,194$     140,018$      90,328Operating costs (estimate)90,72490,72490,72490,72460,482Total$    237,745$    240,850$     248,918$     230,742$    150,810    -39-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     12. RECLAMATION OBLIGATIONS   The Companys exploration activities are subject to various federal, provincial and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment, and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. Managements current estimate of reclamation and other future site restoration costs to be incurred for existing mineral property interests has been included in these financial statements as reclamation obligations. The undiscounted amount of the estimated cash flows required to settle the obligations, which are expected to be paid over the next four years, is $484,303.  The discount rates used to determine the present value of the estimated cash flows is 1.85% to 2.25%.   Balance, December 31, 2008$                     -Reclamation obligations assumed on acquisition (Note 1)45,562Reclamation obligations recognized355,829Balance, December 31, 2009401,391Reclamation obligations recognized160,914Foreign exchange(13,518)Payments of reclamation expenses(71,199)Balance, December 31, 2010$         477,588  13. SHARE CAPITAL  (a) Common shares Authorized: Unlimited common shares without par value Issued and fully paid common shares Number of SharesAmountJanuary 1, 20084,486,560$20,342,562Issued for cash on private placement19,552,00029,328,000Issued in satisfaction of interest on convertible loan1,178,4161,440,335Issued upon exercise of options including transfer 
from contributed surplus18,300172,866Share issue costs-(1,235,721)December 31, 200825,235,27650,048,042Issued for acquisition (Note 1)22,365,25812,412,717Issued for cash on private placement9,000,0004,950,000Allocation to fair value of warrants issued in private placement-(1,267,650)Issued upon exercise of options including transfer 
from contributed surplus140,827106,547Share issue costs-(590,618)December 31, 200956,741,36165,659,038  -40-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     13. SHARE CAPITAL (continued)  (a) Common shares December 31, 200956,741,36165,659,038Issued for cash on private placement16,940,91412,436,750Allocation to fair value of warrants issued in private placement-(5,074,270)Issued upon exercise of stock options including transfer 
from contributed surplus5,820,4236,841,997Share issue costs-(958,789)December 31, 201079,502,698$  78,904,726  On December 22, 2008, the Company completed a 1 for 10 stock consolidation which had been approved at a special meeting of shareholders held on October 15, 2008. On August 5, 2009, the Company completed a further 1 for 3 stock consolidation which had been approved at a special meeting of shareholders held on July 30, 2009. All share amounts in these consolidated financial statements have been revised to reflect the effects of the stock consolidations.  On September 16, 2009 the Company closed a private placement upon which it issued 9,000,000 common shares at $0.55 for proceeds of $4,950,000, and granted warrants for the purchase of 4,500,000 common shares at $0.80 per share, expiring on March 16, 2011. The Company also granted broker warrants for the purchase of 540,000 common shares at $0.80 per share, expiring on March 16, 2011.  On March 2, 2010, the first tranche of a non-brokered private placement closed. Each unit consisted of one common share and one-half of one non-transferable share purchase warrant and were issued for $0.66 per unit. Each whole warrant entitles the holder to purchase, for a period of one year from the closing of the private placement (the "Closing"), one common share at a price of $0.92 per share. The warrants contain a provision that will enable the Company to force exercise of the warrants if, during the term of any unexercised warrant commencing four months after the Closing, the common shares of the Company trade on any exchange for a period of 20 consecutive trading days at a price of $1.40 per share or greater. There were 6,720,000 units issued in the first tranche and the warrants expire on March 2, 2011. In addition, a cash commission of $114,840 was paid and 24,000 broker warrants were issued. The broker warrants have the same exercise provisions as the share purchase warrants. The value ascribed to the broker warrants in this tranche was $10,609 which was charged against share issue costs. The net cash proceeds from this placement were $4,320,360.  The second tranche of the placement closed on March 11, 2010. There were 2,372,500 units issued for $0.66 per unit. The warrants expire on March 11, 2011. In addition, a cash commission of $73,458 was paid and 111,300 broker warrants were issued. The broker warrants have the same exercise provisions as the share purchase warrants. The value ascribed to the broker warrants in this tranche was $54,473 which was charged against share issue costs. The net cash proceeds from this placement were $1,492,392.   -41-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     13. SHARE CAPITAL (continued)  (a) Common shares (continued) On August 10, 2010 the Company closed the brokered portion of a private placement of units for total proceeds of $4,102,800. Each unit was priced at $0.82 and consisted of one common share and one half of one non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $1.15 per share until August 10, 2012. A commission of 6% of gross proceeds ($246,168) was paid and is included in share issue costs. Moreover, a total of 80,693 agents warrants, valued at $61,917 and charged against share issue costs, were granted in connection with the placement, each entitling the holder to purchase one common share at a price of $0.82 per share until August 10, 2012.  On August 16, 2010 the Company closed the non-brokered portion of the private placement of units for gross proceeds of $2,332,900. Each unit was priced at $0.82 and consisted of one common share and one half of one non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase one common share at a price of $1.15 per share until August 16, 2012. The common shares and warrants comprising the units and the common shares issuable upon exercise of the warrants are subject to a four-month hold period expiring December 17, 2010. A cash commission of $126,296 was paid and included in share issue costs in addition to the granting of 154,020 agents warrants valued at $118,158 and charged against share issue costs. Each agents warrant entitles the holder to purchase one common share at a price of $0.82 per share until August 16, 2012.  (b) Incentive stock options The Company issues share purchase options to directors, officers and employees of the Company and persons who provide ongoing services to the Company under an incentive stock option plan. The aggregate number of shares of the Company that may be granted pursuant to the Plan is limited to 10% of the issued and outstanding shares of the Company. The Plan is administered by the Board of Directors, which determines individual eligibility under the Plan, the number of shares optioned to each grantee and the vesting period. The exercise price of share purchase options will be no less than the closing price of the shares on the TSX Venture Exchange on the date on which the option is granted. Options will expire no later than five years from the grant date, except that they will expire within thirty days when the holder is no longer qualified to hold the option (other than for cause, when the option will expire immediately). Individual grants vest over two years with one-half vesting immediately, one-quarter vesting on the first anniversary date of the grant and the remaining one-quarter vesting on the second anniversary date. Individual grants of up to 30,000 shares vest immediately.  Details of outstanding share purchase options are as follows:


| |                                    |                   |                                 |                   |                  |                                
| | ---------------------------------- | ----------------- | ------------------------------- | ----------------- | ---------------- | -------------------------------
| |                                    | December 31, 2010 |                                 | December 31, 2009
| |                                    | Number of shares  | Weighted average exercise price |                   | Number of shares | Weighted average exercise price
| | Outstanding at beginning of year   | 4,383,844         | $               1.06            |                   | 134,808          | $               8.61           
| | Granted                            | 3,000,000         | 0.87                            |                   | 3,353,328        | 0.65                           
| | Issued on acquisition (Note 1)     | -                 | -                               |                   | 1,905,300        | 1.51                           
| | Exercised                          | (746,073)         | 0.57                            |                   | (140,827)        | 0.42                           
| | Expired                            | (79,633)          | 1.49                            |                   | (169,650)        | 1.33                           
| | Forfeit/Cancelled                  | (523,311)         | 0.72                            |                   | (699,115)        | 1.87                           
| | Outstanding at end of year         | 6,034,827         | $               1.05            |                   | 4,383,844        | $               1.06           
| | Options exercisable at end of year | 4,194,043         | $               1.14            |                   | 2,771,982        | $               1.30           

-42-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     13. SHARE CAPITAL (continued)  (b) Incentive stock options (continued) The following share purchase options are outstanding at December 31, 2010.


| |                   |                                        |                                        |                |                                
| | ----------------- | -------------------------------------- | -------------------------------------- | -------------- | -------------------------------
| | Expiry Date       | Options Outstanding
(number of shares) | Options Exercisable
(number of shares) | Exercise price | Weighted Average Remaining Life
| | June 27, 2011     | 3,000                                  | 3,000                                  | $         7.50 | 0.49                           
| | July 17, 2011     | 556,800                                | 556,800                                | 1.90           | 0.54                           
| | January 11, 2012  | 100,050                                | 100,050                                | 2.29           | 1.03                           
| | July 16, 2012     | 287,100                                | 287,100                                | 2.24           | 1.54                           
| | August 1, 2012    | 5,998                                  | 5,998                                  | 6.90           | 1.59                           
| | December 10, 2012 | 208,800                                | 208,800                                | 1.84           | 1.95                           
| | July 16, 2013     | 69,600                                 | 69,600                                 | 0.98           | 2.54                           
| | December 19, 2013 | 176,175                                | 176,175                                | 0.17           | 2.97                           
| | March 1, 2014     | 65,250                                 | 48,938                                 | 0.25           | 3.17                           
| | March 19, 2014    | 394,554                                | 287,582                                | 0.45           | 3.22                           
| | December 15, 2014 | 1,320,000                              | 982,500                                | 0.90           | 3.96                           
| | February 4, 2015  | 250,000                                | 175,000                                | 0.72           | 4.10                           
| | June 25, 2015     | 250,000                                | 125,000                                | 1.00           | 4.48                           
| | July 12, 2015     | 2,347,500                              | 1,167,500                              | 0.87           | 4.53                           
| |                   | 6,034,827                              | 4,194,043                              | 1.05           | 3.55                           

The weighted average grant-date fair value of share purchase options granted during the year ended December 31, 2010 was $0.87 per option (2009 - $0.41; 2008 - $0.37). The Company determines the fair value of the options for the purposes of determining share-based compensation expense using the Black-Scholes option pricing model and used the following weighted average assumptions:


| |                         |                   |  |                   |  |                  
| | ----------------------- | ----------------- |  | ----------------- |  | -----------------
| |                         | December 31, 2010 |  | December 31, 2009 |  | December 31, 2008
| | Volatility              | 281%              |  | 96%               |  | 105%             
| | Risk-free interest rate | 2.21%             |  | 2.02%             |  | 2.88%            
| | Expected life           | 5 years           |  | 4.3 years         |  | 5 years          
| | Expected dividend yield | -                 |  | -                 |  | -                

The expected life of options is determined using historical information comparing grant date to exercise or forfeiture date for each of the option groups (employees, officers and directors). The volatility is calculated using the closing price of the common shares over the same period as the expected life of the option granted. The riskfree interest rate is determined from the latest zero-coupon yield rate as published by the Bank of Canada for the period which most closely matches the expected life of the option.  The total share-based compensation expense charged against operations for the year ended December 31, 2010 was $1,684,765 (2009 - $544,872, 2008 - $76,461), of which $581,333 has been allocated to exploration expenditures (2009 - $147,599, 2008 - $Nil), and $117,549 (2009 - $nil, 2008 - $nil) was recognized in consulting and outsourced services. The total share-based compensation cost related to non-vested awards not yet recognized is $1,414,849, to be recognized over a weighted-average 0.91 years.   -43-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     13. SHARE CAPITAL (continued)  (c) Warrants Details of outstanding warrants are as follows:


| |                                  |                   |                                 |                   |                  |                                
| | -------------------------------- | ----------------- | ------------------------------- | ----------------- | ---------------- | -------------------------------
| |                                  | December 31, 2010 |                                 | December 31, 2009
| |                                  | Number of shares  | Weighted average exercise price |                   | Number of shares | Weighted average exercise price
| | Outstanding at beginning of year | 5,040,000         | $         0.80                  |                   | -                | $               -              
| | Issued on equity financing       | 8,840,471         | 1.02                            |                   | 5,040,000        | 0.80                           
| | Exercised                        | (5,074,350)       | 0.85                            |                   | -                | -                              
| | Expired                          | -                 | -                               |                   | -                | -                              
| | Outstanding at end of year       | 8,806,121         | $         0.99                  |                   | 5,040,000        | $         0.80                 

The following warrants are outstanding at December 31, 2010. Number ofIssue PriceWarrantsPer WarrantExpiry Date2,084,150$       0.80March 16, 20111,639,0000.92March 2, 2011924,0500.92March 11, 20112,582,4010.82August 10, 20121,576,5200.82August 16, 20128,806,121       14. INCOME TAXES  The Companys future income tax assets and liabilities are:


| |                                        |                                 |                          |                                 |                         
| | -------------------------------------- | ------------------------------- | ------------------------ | ------------------------------- | ------------------------
| |                                        |                                 | December 31             
| |                                        |                                 | 2010                     |                                 | 2009                    
| | Future income tax assets (liabilities) |                                 |                          |                                
| |                                        | Mineral property interests      | $              2,958,304 |                                 | $              2,483,279
| |                                        | Other assets                    | 18,038                   |                                 | 3,572                   
| |                                        | Marketable securities           | (24,265)                 |                                 | 669                     
| |                                        | Investments                     | -                        |                                 | 168,938                 
| |                                        | Tax loss carry-forwards         | 16,069,075               |                                 | 14,478,391              
| |                                        |                                 | 19,021,152               |                                 | 17,134,849              
| |                                        | Valuation allowance             | (19,021,152)             |                                 | (17,134,849)            
| | Net future income tax assets           | $                             - |                          | $                             -

-44-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)       -45-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     14. INCOME TAXES (continued)   A reconciliation of the provision for income taxes is as follows:


| |                                                                |                                                             |                                    |                        |             |                    |             |          
| | -------------------------------------------------------------- | ----------------------------------------------------------- | ---------------------------------- | ---------------------- | ----------- | ------------------ | ----------- | ---------
| |                                                                |                                                             | Year ended December 31            
| |                                                                |                                                             | 2010                               |                        | 2009        |                    | 2008       
| | Loss before income taxes                                       | $   (11,944,218)                                            |                                    | $     (18,687,266)     |             | $   (17,355,320)  
| |                                                                |                                                             |                                    |                        |             |                   
| | Combined Canadian and provincial statutory tax rates           | 28.5%                                                       |                                    | 30.0%                  |             | 32.5%             
| |                                                                |                                                             |                                    |                        |             |                   
| | Recovery of income taxes based on combined statutory tax rates | $        3,404,102                                          |                                    | $         5,606,180    |             | $       5,640,479 
| |                                                                |                                                             |                                    |                        |             |                    |            
| | Add (deduct):                                                  |                                                             |                                    |                        |             |                   
| |                                                                | Higher (lower) effective tax rates in foreign jurisdictions | 578,918                            |                        | 67,116      |                    | 127,074    
| |                                                                | Non-deductible expenses                                     |                                    |                        |             |                    |            
| |                                                                |                                                             | Share-based compensation           | (280,977)              |             | (130,217)          |             | (24,850) 
| |                                                                |                                                             | Equity investment dilution gain    | -                      |             | -                  |             | -        
| |                                                                |                                                             | Accretion expense                  | -                      |             | -                  |             | (801,377)
| |                                                                |                                                             | Mineral property acquisition costs | -                      |             | (2,392,286)        |             | -        
| |                                                                |                                                             | Other                              | (710,060)              |             | (546,570)          |             | 319,594  
| |                                                                | Tax effect of current period losses not recognized          | (2,991,983)                        |                        | (2,604,223) |                    | (4,166,341)
| |                                                                | Future income tax asset not previously recognized           | 32,024                             |                        | 2,763       |                    | -          
| | Income tax recovery                                            | $             32,024                                        |                                    | $                2,763 |             | $        1,094,579

At December 31, 2010, the Company has unrecognized losses for income tax purposes of approximately $51,152,000 which may be used to offset taxable incomes of future years. If unused, these losses will expire as follows:  2014$955,00020152,628,00020265,304,00020278,992,000202814,765,00020298,010,000203010,498,000$51,152,000  -46-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     14. INCOME TAXES (continued)  The Company also has unrecognized resource related tax deductions of approximately $6,995,000 available for deduction against future Canadian taxable income, which can be carried forward indefinitely.  In assessing the Companys ability to utilize future tax assets, management considers whether it is more likely than not that some portion or all of the future tax assets will be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are or become deductible or during the periods before expiry of the loss carry forwards. Management considers the scheduled reversal of future tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which tax assets are deductible, management currently believes it is more likely than not that the Company will not realize the benefits of the future income tax assets.   15. CAPITAL MANAGEMENT  The Companys objective when managing capital, which is unchanged from prior years, is to safeguard the Companys ability to continue as a going concern so that it can continue to provide returns to shareholders and benefits for other stakeholders in the exploration and development of its mineral properties. The Company considers its capital to include the components of shareholders equity.  The Companys capital structure reflects that of a company focused on mineral exploration and financing both internal and external growth opportunities. The exploration for and development of mineral deposits involves significant risk which even a combination of careful evaluation, experience and knowledge may not adequately mitigate.  The Company manages and adjusts its capital structure when changes to the risk characteristics of the underlying assets or changes in economic conditions occur. To maintain or adjust the capital structure, the Company may issue new shares or acquire or dispose of mineral property interests. The Company is not subject to externally imposed capital requirements.  In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets which are revised periodically based on the results of its exploration programs, availability of financing and industry conditions. Annual and materially updated budgets are approved by the Board of Directors.  In order to maximize ongoing development efforts, the Company does not pay out dividends. The Companys investment policy is to invest any excess cash in liquid short-term interest-bearing instruments with maturities of one year or less. When utilized, these instruments are selected with regard to the expected timing of expenditures from continuing operations.   -47-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     16. RISK MANAGEMENT  The Companys activities expose it to a variety of financial risks, which include market risk, foreign currency risk, interest rate risk, credit risk and liquidity risk. The Companys risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Companys financial performance.  Market Risk The Companys financial instruments include marketable securities which are publicly traded and therefore are subject to the market risks that affect all publicly traded securities. Some of these investments are thinly traded which could result in lower quoted market values. The Company monitors the market of these securities and sells appropriate portions of the portfolio when price and market conditions permit. When the value of individual marketable securities is determined to have suffered impairment due to investee circumstances or project developments, the resulting loss is reported in the statement of operations as an impairment loss on marketable securities.  Foreign Currency Risk The Company incurs certain expenses in currencies other than the Canadian dollar which is the functional currency for the Company. The Company is subject to foreign exchange risk as a result of fluctuations in exchange rates. The Company manages this risk by maintaining bank accounts in US Dollars, Australian Dollars and Mexican Pesos related to its United States, Australian and Mexican operations, to pay these foreign currency expenses as they arise. Receipts in foreign currencies are maintained in those currencies. The Company does not undertake currency hedging activities. The Company also does not attempt to hedge the net investment and equity of integrated foreign operations. During the year ended December 31, 2010, as a result of fluctuations of the Canadian dollar, the Company recognized a foreign exchange loss of $149,275 in continuing operations. During the year ended December 31, 2009, the Company recognized a foreign exchange gain of $68,760 (2008  loss of $3,130,547) in operations which was mainly attributable to the US denominated convertible loan facility as described in Note 10.  Interest Rate Risk The Companys financial instruments may include bankers acceptances and treasury bills. These instruments bear a fixed rate of interest and a fixed maturity date of one year or less. If the Company is required to liquidate them prior to the maturity date, there is a risk that interest rates will have increased such that the market value of the instrument is less than the carrying or face value. As at December 31, 2010, the Company did not hold any of this type of financial instrument. The Company maintains term deposits with varying maturity dates to take advantage of changing interest rates and to ensure that sufficient funds are available when required.   -48-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     16. RISK MANAGEMENT (continued)  Credit Risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. To reduce credit risk, cash and cash equivalents are on deposit at major financial institutions. Credit risk relating to amounts receivable arises from the possibility that any counterparty to an instrument fails to perform. The majority of the Companys receivables relate to recoveries of the Goods and Services Tax, and the Company is not aware of any counterparty risk that could have an impact on the fair value of such receivables. As such, the Company considers this risk to be minimal.  Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Accounts payable and accruals are due within the current operating period. The Company manages liquidity risk through the management of its capital structure (Note 15).  The Company uses sensitivity analysis to measure the effect on total assets or total receipts of reasonably foreseen changes in interest rates and foreign exchange rates. The analysis is used to determine if these risks are material to the financial position of the Company. On the basis of current market conditions, the Company has determined that a 1% change in interest rates would affect the expected total receipts by $63,000 (2009 - $10,700) and a 10% change in foreign exchange rates would affect the fair value of total assets by $118,600 (2009 - $98,900). Actual financial results for the coming year will vary since the balances of financial assets are expected to decline as funds are used for Company expenses.   17. OPERATING SEGMENTS  The Company operates in one industry segment, mineral exploration, within four geographic areas: Canada, United States, Australia, and, until October 7, 2010, Mexico (Note 6). All subsidiaries are operated as one entity with management in common located at the Companys head office. There is an inactive subsidiary in Ireland.   -49-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     17. OPERATING SEGMENTS (continued)  The following table shows the assets attributable to each geographical area at the balance sheet dates:


|                  |                               |                |                     |                      |                   |                  |                | 
|----------------- | ----------------------------- | -------------- | ------------------- | -------------------- | ----------------- | ---------------- | -------------- | 
|December 31, 2010 | Canada                        | United States  | Australia           | Mexico(Discontinued) | Ireland           | Total           
|Current Assets    |                               |                |                     |                      |                   |                 
|                  | Cash and cash equivalents     | $    6,127,520 | $                 - | $     151,220        | $               - | $         18,976 | $    6,297,716
|                  | Restricted cash               | 8,719          | 6,086               | 20,360               | -                 | -                | 35,165        
|                  | Marketable securities         | 1,749,450      | -                   | -                    | -                 | -                | 1,749,450     
|                  | Amounts receivable            | 328,525        | 16,395              | 2,087                | -                 | -                | 347,007       
|                  | Prepaid expenses and deposits | 117,423        | 259                 | 123                  | -                 | 805              | 118,610       
|                  | 8,331,637                     | 22,740         | 173,790             | -                    | 19,781            | 8,547,948       
|                  | Restricted cash               | 97,690         | 15,040              | -                    | -                 | -                | 112,730       
|                  | Property and equipment, net   | 124,744        | 457,377             | 1,014                | -                 | -                | 583,135       
|Total Assets      | $    8,554,071                | $     495,157  | $     174,804       | $               -    | $         19,781  | $    9,243,813  
|                  |                               |                |                     |                      |                   |                 




|                  |                               |                 |              |                      |                 |                   |                | 
|----------------- | ----------------------------- | --------------- | ------------ | -------------------- | --------------- | ----------------- | -------------- | 
|December 31, 2009 | Canada                        | United States   | Australia    | Mexico(Discontinued) | Ireland         | Total            
|Current Assets    |                               |                 |              |                      |                 |                  
|                  | Cash and cash equivalents     | $       665,016 | $     51,966 | $     325,760        | $     28,837    | $             116 | $    1,071,695
|                  | Marketable securities         | 370,417         | -            | -                    | -               | -                 | 370,417       
|                  | Amounts receivable            | 40,116          | 2            | 2,156                | 9,482           | -                 | 51,756        
|                  | Prepaid expenses and deposits | 78,650          | 69,623       | 3,765                | -               | -                 | 152,038       
|                  | 1,154,199                     | 121,591         | 331,681      | 38,319               | 116             | 1,645,906        
|                  | Restricted cash               | 106,346         | 27,500       | 18,882               | -               | 49,979            | 202,707       
|                  | Property and equipment, net   | 116,915         | 341,696      | 1,450                | 19,221          | -                 | 479,282       
|                  |                               |                 |              |                      |                 |                   |               
|Total Assets      | $    1,377,459                | $    490,787    | $    352,013 | $     57,540         | $        50,095 | $  2,327,895     

-50-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     17. OPERATING SEGMENTS (continued)  Revenues are derived from option receipts and the management of exploration programs for joint venture partners and are allocated to the jurisdiction based on where the underlying agreement and services were delivered. During 2010, five customers represented 11% ($72,800), 5% ($33,625), 43% ($285,921), 5% ($30,473) and 31% ($211,282), respectively, of total revenues. During 2009, four customers individually comprised 37% ($111,956), 33% ($99,871), 19% ($58,080) and 10% ($28,566), respectively, of total revenues across all geographic segments. During 2008, four customers individually comprised 33% ($300,000), 26% ($236,775), 20% ($182,421) and 13% ($116,229), respectively, of total revenues.  Year endedYear endedYear ended201020092008RevenuesCanada$            167,925$            170,036$            719,196United States211,28299,871-Australia254,8943,144161,239Mexico (discontinued)39,319-16,880Ireland---$            673,420$            273,051$            897,315


|                                              |                                       |               |                |               |                       |               |             
|--------------------------------------------- | ------------------------------------- | ------------- | -------------- | ------------- | --------------------- | ------------- | ------------
|                                              |                                       | Canada        | United States  | Australia     | Mexico
(Discontinued) | Ireland       | Total       
|                                              |                                       |               |                |               |                       |               |             
|Net Loss for the year ended
December 31, 2010 | $ (570,319)                           | $(10,761,195) | $       50,750 | $   (569,787) | $   (61,644)          | $(11,912,195)
|Included in Net Loss                          |                                       |               |                |               |                       |              
|                                              | Mineral property revenue              | 167,925       | 211,282        | 254,894       | 39,319                | -             | 673,420     
|                                              | Mineral property expenditure          | (399,176)     | (10,643,580)   | (58,215)      | (428,951)             | -             | (11,529,922)
|                                              | Interest income                       | 19,584        | 19             | 1,079         | -                     | -             | 20,682      
|                                              | Gain on sale of marketable securities | 172,236       | -              | -             | -                     | -             | 172,236     
|                                              | Gain on sale of equity investment     | 2,305,579     | -              | -             | -                     | -             | 2,305,579   
|                                              | Gain on disposal of assets            | 1,025,432     | -              | (329)         | 3,577                 | -             | 1,028,680   
|                                              | Future income tax recovery            | 32,024        | -              | -             | -                     | -             | 32,024      
|                                              | Salaries and employee benefits        | (890,412)     | -              | (2,127)       | (46,994)              | (805)         | (940,338)   
|                                              | Consulting and outsourced services    | (532,740)     | (14,223)       | (22,051)      | (24,985)              | (34,603)      | (628,602)   
|                                              | Marketing services                    | (600,050)     | (724)          | (233)         | (5,239)               | -             | (606,246)   
|                                              | General and administrative            | (396,871)     | (27,860)       | (207)         | (29,699)              | (25,908)      | (480,545)   
|                                              | Depreciation and amortization         | (78,655)      | (231,629)      | (326)         | (1,833)               | -             | (312,443)   
|                                              | Share-based compensation              | (985,883)     | -              | -             | -                     | -             | (985,883)   
|                                              | Foreign exchange gain/(loss)          | (122,313)     | 87,181         | (113,815)     | (75,851)              | (328)         | (225,126)   

-51-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     17. OPERATING SEGMENTS (continued)


|                                              |                                                  |              |               |             |                       |               |              | 
|--------------------------------------------- | ------------------------------------------------ | ------------ | ------------- | ----------- | --------------------- | ------------- | ------------ | 
|                                              |                                                  | Canada       | United States | Australia   | Mexico
(Discontinued) | Ireland       | Total       
|                                              |                                                  |              |               |             |                       |               |             
|Net Loss for the year ended
December 31, 2009 | $(9,616,209)                                     | $(6,844,866) | $(1,677,528)  | $(499,080)  | $(46,820)             | $(18,684,503)
|Included in Net Loss                          |                                                  |              |               |             |                       |              
|                                              | Mineral property revenue                         | 170,036      | 99,871        | 3,144       | -                     | -             | 273,051     
|                                              | Mineral property expenditure                     | (5,825,476)  | (6,361,696)   | (1,813,376) | (347,406)             | -             | (14,347,954)
|                                              | Interest income                                  | 23,308       | 259           | 2,585       | 31                    | -             | 26,183      
|                                              | Loss on sale of marketable securities            | (240,285)    | -             | -           | -                     | -             | (240,285)   
|                                              | Impairment loss on available for sale investment | (130,000)    | -             | -           | -                     | -             | (130,000)   
|                                              | Future income tax recovery                       | 2,763        | -             | -           | -                     | -             | 2,763       
|                                              | Equity loss in investment                        | (1,176,145)  | -             | -           | -                     | -             | (1,176,145) 
|                                              | Depreciation and amortization                    | (25,809)     | (190,900)     | (15,021)    | (8,766)               | -             | (240,496)   
|                                              | Share-based compensation                         | (397,273)    | -             | -           | (27,243)              | -             | (424,516)   
|                                              | Foreign exchange gain/(loss)                     | 70,691       | (1,015)       | -           | (916)                 | -             | 68,760      




|                                              |                                       |              |               |              |                       |                |            
|--------------------------------------------- | ------------------------------------- | ------------ | ------------- | ------------ | --------------------- | -------------- | -----------
|                                              |                                       | Canada       | United States | Australia    | Mexico
(Discontinued) | Ireland        | Total      
|                                              |                                       |              |               |              |                       |                |            
|Net Loss for the year ended
December 31, 2008 | $ (8,561,353)                         | $(4,394,496) | $ (1,819,236) | $(1,440,493) | $(45,163)             | $ (16,260,741)
|Included in Net Loss                          |                                       |              |               |              |                       |               
|                                              | Mineral property revenue              | 719,196      | -             | 161,239      | 16,880                | -              | 897,315    
|                                              | Mineral property expenditure          | (1,906,110)  | (4,407,266)   | -            | (1,050,862)           | -              | (7,364,238)
|                                              | Interest income                       | 23,087       | 548           | 1,067        | -                     | -              | 24,702     
|                                              | Loss on sale of marketable securities | (3,760)      | -             | -            | -                     | -              | (3,760)    
|                                              | Future income tax recovery            | 1,094,579    | -             | -            | -                     | -              | 1,094,579  
|                                              | Equity loss in investment             | (180,726)    | -             | (735,455)    | -                     | -              | (916,181)  
|                                              | Financing expense                     | (3,565,047)  | -             | -            | -                     | -              | (3,565,047)
|                                              | Gain on repayment of convertible loan | 279,859      | -             | -            | -                     | -              | 279,859    
|                                              | Depreciation and amortization         | (55,939)     | (17,579)      | (159,596)    | (18,189)              | -              | (251,303)  
|                                              | Share-based compensation              | (76,461)     | -             | -            | -                     | -              | (76,461)   
|                                              | Foreign exchange gain/(loss)          | (3,406,389)  | 12,951        | 225,348      | 30,023                | 7,520          | (3,130,547)

-52-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     18. DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES  These financial statements have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) which, with respect to the Company, differ in certain material respects from United States generally accepted accounting principles (U.S. GAAP).  The Financial Accounting Standards Board ("FASB") has published the Accounting Standards Codification ("ASC") as the sole source of authoritative non-governmental U.S. GAAP.  The references to the standards reflect the new ASC, which is not intended to change U.S. GAAP but rather reorganize existing guidance by accounting topic to allow easier identification of applicable standards.  The following discussion focuses on material differences between Canadian GAAP and US GAAP which affect presentation of financial Information for the Company. The following tables summarize the differences in the consolidated statements of operations and the consolidated balance sheets:  Consolidated Statements of Operations201020092008Net loss under Canadian GAAP$   (11,912,195)$   (18,684,503)$   (16,260,741)Mineral property interest acquisition costs233,279330,598158,990Impairment of mineral property acquisition costs-(98,221)-Net mineral property interest acquisition costs (a)233,279232,377158,990Gain on sale of assets(37,707)--Equity loss in investment (a)-274,750-Future income tax recovery (b)--(1,063,300)Deferred tax benefit (b)--52,293195,572507,127(852,017)Net loss under U.S. GAAP$   (11,716,623)$   (18,177,376)$   (17,112,758)Basic and diluted loss per share 
under U.S. GAAP$              (0.17)$              (0.49)$              (1.94)Comprehensive loss under Canadian GAAP$   (11,718,271)$   (18,264,814)$   (16,905,127)Net adjustments to consolidated statements of operations per above195,572507,127(852,017)Comprehensive loss under U.S. GAAP$   (11,522,699)$   (17,757,687)$   (17,757,144)   -53-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     18. DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES (continued)  Consolidated Balance Sheets2010Canadian GAAPAdjustmentsU.S. GAAPMineral property interests (a)$                       -$      1,080,546$     1,080,546Equity investment (a)---Share capital (b)78,904,7262,895,51681,800,242Deficit (a,b)(81,526,417)(1,814,970)(83,341,387)2009Mineral property interests (a)$                       -$       884,973$         884,973Equity investment (a)-274,750274,750Share capital (b)65,659,0382,895,51668,554,554Deficit (a,b)(69,614,222)(1,735,793)(71,350,015)  Consolidated Statements of Cash Flows201020092008Cash Flows Used for Operating Activities under Canadian GAAP$  (13,568,901)$  (8,330,702)$  (9,559,189)Net mineral property interest acquisition costs (a)233,279232,377158,990Cash Flows Used for Operating Activities under U.S. GAAP$  (13,335,622)$  (8,098,325)$  (9,400,199)Cash Flows Used for Investing Activities
under Canadian GAAP$      2,314,442$     (363,924)$    2,079,644Net adjustments to consolidated statements of operations(233,279)(232,377)(158,990)Cash Flows Used for Investing Activities
under U.S. GAAP$      2,081,163$     (596,301)$    1,920,654   -54-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     18. DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES (continued)  (a) Acquisition costs of mineral property interests The Company's accounting policy under Canadian GAAP is to expense the acquisition of mineral properties as incurred until there are identifiable reserves on a property, when they will be capitalized and amortized over production from the property. With the introduction of Emerging Issues Task Force (EITF) Abstract 04-2, effective April 30, 2004, now contained within ASC 930-805, mineral property acquisition costs are capitalized under U.S. GAAP, unless there is evidence that they are impaired and not recoverable, when they are written off. This difference has also been reflected in the equity loss in investment, as Clancy also expenses the acquisition costs of mineral property interests.  (b) Flow-through shares Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur qualifying expenditures and renounce the related income tax deductions to the investors. Under Canadian GAAP, the Company has recorded the full amount of the proceeds received on issuance as share capital.  Upon renouncing the income tax deductions, share capital is reduced by the amount of the future income tax benefits recognized.  Under U.S. GAAP, the recognition of this future income tax benefit is limited to the extent that the issue price of the flow-through shares exceeds the fair value of the Companys shares on the date that the flow-through shares are sold.  Impact of recently adopted United States accounting pronouncements:  ASC 820-10 Fair Value Measurements and Disclosures  The new disclosure requirements regarding inputs and valuation techniques for Level 2 fair value measurements are effective for interim and annual reporting periods beginning after December 15, 2009, and are consistent with IFRS 7 Financial Instruments: Disclosures. The Company uses Level 1 inputs (Quoted prices in active market) for determination of fair value of public available-for-sale securities. The Company uses Level 2 inputs (significant observable inputs, using the market approach) to estimate the fair value of private available-for-sale securities and incentive stock options when determining compensation expense to be recognized. There has been no change in the nature of inputs or in the valuation techniques applied, and no transfers between Level 1 and Level 2 have occurred. The Company adopted this standard on January 1, 2010 and it had no material impact on the Companys financial statements.    -55-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)     19. COMPARATIVE AMOUNTS  The comparative amounts have been reclassified where necessary to conform to the presentation used in the current year.   20. SUBSEQUENT EVENTS  The Company has entered into the following transactions since the end of the fiscal year, not otherwise disclosed in these consolidated financial statements:  (a) On February 21, 2011, the Company granted 1,735,000 incentive stock options to directors, officers and employees of the Company at a price of $1.35, expiring February 17, 2016. Individual grants exceeding 30,000 per person will vest over two years. Options were granted in accordance with the Companys Incentive Stock Option plan approved at the Annual General Meeting held June 23, 2010.  (b) On March 23, 2011, the Company completed an offering of 15,065,000 units (the Units) of the Company, which included the full exercise of the underwriters over-allotment option of 1,965,000 units, at a price of $1.15 per Unit for gross proceeds of $17,324,750 (the "Offering"). The Units comprise of one common share and one half of a common share purchase warrant, with each Warrant entitling the purchaser to acquire, at any time until March 23, 2013, one Common Share at an exercise price of $1.60. A commission of $1,039,485, representing 6% of the total gross proceeds realized from the placement, was paid to a syndicate of underwriters.  (c) Since the end of the fiscal year, total proceeds of $35,250 and $3,964,666 have been received by the Company on the exercise of 40,000 options and 4,576,700 warrants, respectively.  (d) The Company has sold a total of 447,500 common shares of Evrim Resources Corp. since the end of the fiscal year, for net proceeds of $350,805.          -56-  KISKA METALS CORPORATION  Notes to the Consolidated Financial Statements December 31, 2010, 2009 and 2008 (Expressed in Canadian Dollars)        [f052711kskform20fa1120f_f005.jpg]   Managements Discussion and Analysis of Financial Results  For the Year Ended December 31, 2010      Dated: May 2, 2011   -1-    KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010  This Managements Discussion and Analysis (MD&A) of financial position and results of Kiska Metals Corporation (formerly Geoinformatics Exploration Inc.) (the Company) as of May 2, 2011 and should be read in conjunction with the Companys consolidated financial statements and related notes as at and for the year ended December 31, 2010. Readers are cautioned that the MD&A contains forward-looking statements and that actual events may vary from managements expectations. Readers are encouraged to read the Forward Looking Statement included with this MD&A. The consolidated financial statements and MD&A are presented in Canadian dollars and have been prepared in accordance with Canadian generally accepted accounting principles (CDN GAAP).  Unless otherwise indicated, all funds in this document are in Canadian dollars.  About Kiska  Kiska is a mineral exploration company with a large portfolio of assets anchored by the Whistler Project, a multi-million ounce gold resource in Alaska. In addition to Alaska, the Company concentrates exploration efforts in British Columbia, Mexico and Australia. The Company strives for the highest technical expertise in exploration combining an innovative targeting approach developed by the Company since its inception with more traditional exploration methods. Kiska is listed on the TSX Venture Exchange, trading under the symbol KSK.  Over the past five years, the Company has evolved from that of a technology service company to that of a pure exploration company through its alliances with strategic partners within the mining and exploration industry. Over the past several years, the Company has acquired a portfolio of exploration projects from its own exploration activities and under the Master Strategic Alliance Agreement (MSAA) with Kennecott Exploration Company (Kennecott). When Kiska acquired Rimfire Minerals Corporation, a large portfolio of early stage exploration projects was added to the Company. At the same time, the Company acquired management with experience and expertise in deriving value from projects through option or joint venture arrangements.    2   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.2 Overview  During the third quarter of 2010, the Company completed the field program as required by Kennecott Exploration Company (Kennecott) and delivered the final report. The trigger program consisted of a total of 224 line kilometers of 3D IP geophysics, 40 line kilometers of 2D IP geophysics and 23 drill holes for a total of 8,687 metres of diamond drilling. While the Company was waiting for Kennecott s decision, a program of exploration drilling was undertaken on the Whistler resource area where a total of five holes totaling 4,456 metres were completed. These drill holes, and 10 previously reported holes not included in a 2008 resource estimate have been incorporated into a new resource estimate reported on January 12, 2011.  Three holes were also completed on the Raintree West prospect located immediately to the east of the Whistler deposit for a total of 1,092 metres. The most southerly hole at Raintree West returned a highlight interval of 83 m grading 1.2 g/t gold, 11.8 g/t silver and 0.06% copper. Nine holes were completed on Island Mountain totaling 3,937 metres with several returning strongly gold and copper mineralized intervals. One of the best intersections, collared 100 m north of the 2009 discovery hole, returned a highlight interval of 114.9 m grading 1.25 g/t gold and 0.23% copper.. Geological mapping and soil and rock geochemical surveys were completed concurrent with the drilling on Island Mountain.  Kennecott notified the company at the end of August that they would not exercise their right to back in on the Whistler Project, and now retain a 2% Net Smelter Royalty on the property. The Company now owns 100% of the project subject to the underlying royalties and net profits interest.  In August 2010, the Company completed concurrent brokered and non-brokered private placements of 7,848,414 units at a price of $0.82 per unit, for gross proceeds of $6.4 million. Each unit consisted of one common share and one-half of one non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase, for a period of two years from the closing of the private placement, one common share at a price of $1.15 per share. In addition, 234,713 broker warrants at an exercise price of $0.82 were issued. The value ascribed to the broker warrants in this placement was $180,075 which was charged against share issue costs. The net cash proceeds from this placement were $6,063,236.  Pursuant to an agreement dated September 17, 2010, and closing on October 7, 2010, the Company agreed to sell its Mexican subsidiary, Minera Geoinformatica, to Evrim Metals Corporation (Evrim). Minera Geoinformatica (Minera) holds all nine of Kiskas Mexican properties and a geological database for Mexico and parts of the southern United States. Evrim assumed Kiskas Mexican offices and staff. In consideration, Evrim issued two million shares to Kiska and will make ongoing performance-based share payments.  In late 2010, the Company commenced the relocation of the exploration camp from the north end of the property to a new location southeast of the Whistler Deposit, at a newly constructed 3000 foot airstrip. The new location for the camp was chosen for its proximity to the area of drilling to reduce associated costs.  In November 2010, the Company sold its 26.0% interest in Clancy Exploration Limited (Clancy) of 28,506,883 ordinary shares for total proceeds of $2,305,579. Pursuant to the sale a gain of $2,305,579 was recognized in these statements. As at December 31, 2009 the 28,506,883 ordinary shares represented 37.9% of Clancys issued and outstanding shares and was accounted for as an equity investment.   3   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.3 Selected Annual Performance


|                                                  |      |              |      |              |   |             
|------------------------------------------------- | ---- | ------------ | ---- | ------------ | - | ------------
|                                                  | 2010 | 2009         | 2008
|                                                  |      |              |      |              |   |             
|                                                  |      |              |      |              |   |             
|Mineral property revenues                         | $    | 634,101      | $    | 273,051      | $ | 880,435     
|Net loss before discontinued operations           |      | (12,435,986) |      | (18,185,423) |   | (14,820,248)
|Net loss per share before discontinued operations |      | (0.18)       |      | (0.49)       |   | (1.68)      
|Net loss                                          |      | (11,912,195) |      | (18,684,503) |   | (16,260,741)
|Net loss per share                                |      | (0.17)       |      | (0.51)       |   | (1.84)      
|Total assets                                      |      | 9,243,813    |      | 2,327,895    |   | 2,645,343   
|Long-term liabilities                             |      | 99,105       |      | 401,391      |   | -           
|Shareholders equity (deficit)                    |      | 8,071,178    |      | 1,641,753    |   | 2,004,272   
|                                                  |      |              |      |              |   |             
|                                                  |      |              |      |              |   |             

1.4 Results of Operations  Exploration Projects  Alaska  Whistler Project  As part of the amended Kennecott Agreement negotiated in June 2009, the Company agreed to complete a specified work program (the trigger program) with defined amounts of geophysics and drilling on several targets within the Whistler project area. On completion of that program and delivery of a report detailing the program, plus up to a 90 day study period, Kennecott was to decide whether to exercise its right to back in or relinquish back-in rights and revert to a royalty. The program which was completed in the third quarter and was to consist of:  - Up to 341 line kilometers of 2D and 3D Induced Polarization (IP) geophysics on regional targets. - Drilling of a minimum of 20 holes with a minimum depth of 200m per hole, for at least 7,000m in aggregate.  The trigger program was supervised by a technical committee comprised of two geoscientists from each of Kiska and Kennecott.  The 2D portion of the IP survey was completed on September 24th 2009. The 3D portion of the survey was approximately 78% complete in early November 2009 when it was terminated due to frozen ground conditions. During 2009, five holes were drilled for a total of 1,520 metres. The IP survey revealed multiple targets which exhibit a similar geophysical response to the response associated with current gold-copper resource at Whistler. An 11 hole drill program was initiated in mid-March. Upon completion of the program in early May, a total of 4,225 metres had been drilled. Of the trigger program, a total of 16 holes and 5,745 metres had been drilled.  4   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Alaska (continued) Whistler Project In early June, the technical committee decided not to continue with the completion of the remaining 3D IP survey as originally planned. In exchange for this reduction in the amount of IP, 3 more drill holes were added to the program. The final phase of the trigger program commenced in early June with three holes drilled on Island Mountain, two on Round Mountain and the final two on reconnaissance targets in the Whistler Orbit area for a total of 7 holes and 1,990 metres drilled. The trigger program field program was completed as of July 8, 2010 with totals of 224 line kilometers of 3D IP geophysics, 40 line kilometers of 2D IP geophysics and 23 drill holes for a total of 8,687 metres. A technical report on the trigger program was delivered to Kennecott in the first week of August ending all commitments to Kennecott. Kennecott notified the company at the end of August that they would not exercise their right to back in on the Whistler Project, but will retain a 2% Net Smelter Royalty on the property. Some of the claims are subject to a 1.5% net smelter royalty (NSR) to the original owner, which can be brought down to 0.5% by a US$10 million buy-down. Moreover, Teck Cominco owns a 2% net profit interest (NPI) over all of these claims.  The post-trigger program consisted of exploration drilling on the Whistler resource where five holes totaling 4,456 metres were completed within the reporting period. These drill holes will be incorporated into a new resource estimate completed and reported on January 12, 2011. Three holes were also completed on the Raintree West prospect located 1.5 kilometres to the east of the Whistler deposit for a total of 1,092 metres. Highlights include drill hole WH10-24, drilled at the Raintree West target, which returned 83.0 metres of 1.2 g/t gold, 11.8 g/t silver, 0.06% copper, 0.53% lead and 1.08% zinc within a larger interval that averaged 0.47 g/t gold, 5.4 g/t silver, 0.04% copper, 0.23% lead and 0.51% zinc over 299 metres.  An additional nine holes, totaling 3,937 metres, were completed at Island Mountain after completion of the trigger program. Hole IM10-013 was collared 110 metres northwest of the Island Mountain discovery section and intersected 114.9 metres of 1.251 g/t gold, 4.0 g/t silver and 0.23% copper. Mapping and soil and rock geochemical surveys were completed concurrent with the drilling on Island Mountain. Results from Hole IM10-013 indicate that gold-copper mineralization is open at depth and to the northwest of the Discovery Breccia, where recent surface work has mapped intrusive and hydrothermal breccias for a strike length in excess of 800 metres as well as expansive areas of altered and mineralized diorite intrusive rocks. Activities in the next quarter will center around the building of a new camp facility at the new gravel strip constructed in a location more central to planned exploration as well the interpretation and reporting of results.  Initial metallurgical studies were carried out on gold-copper mineralization from Island Mountain. Tests on two composite samples utilizing open circuit flotation followed by cyanide leaching of flotation tailings returned average copper concentrates grading 23% copper with recoveries averaging 67% for copper and 82% for gold. Further metallurgical work will investigate maximizing gold recoveries by gravity separation and locked cycle flotation processing, as well as other methods of process optimization. These additional techniques seeking better recoveries represent the standard procedure that follows initial tests. Metallurgical testing was carried out by G&T Metallurgical Labs in Kamloops B.C. under the supervision of Robert J. Tucker, P.Eng. who also provided the interpretation of results.  The SRK technical report and NI 43-101 resource estimate statements on the Whistler Project are available on SEDAR at www.sedar.com under the Kiska Metals Corporation filing profile.  On January 12, 2011, a revised NI 43-101 compliant mineral resource estimate was reported for the Whistler Deposit. The updated resource was completed by Robert Morris, M.Sc., P.Geo of Moose Mountain Technical Services and has been filed on SEDAR. Mr. Morris is a Qualified Person as defined under the terms of NI 43-101. The estimate incorporates the results of 10 previously reported drillholes not included in the 2008 SRK estimate, including five drillholes completed by Kiska in the fall of 2010. The update pit-constrained resource, using a $7.50/ton cut-off (approximately 0.3 g/t Au Eq cut-off) yields an indicated resource of 79.2M tonnes at 0.51 g/t gold, 0.17% copper and 1.97 g/t silver (2.3M oz Au Eq) and an inferred resource of 145.7M tonnes at 0.40 g/t gold, 0.15% copper and 1.75 g/t silver (3.5M oz Au Eq).  The Qualified Person for this project is Mark Baknes, P.Geo, Vice President Exploration for the Company.  5   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Alaska (continued)  Uncle Sam Project The Uncle Sam Gold Project is an intrusion-related gold target, located approximately 75 kilometres southeast of Fairbanks. The Uncle Sam project consists of extensive anomalous surface gold geochemistry highlighted by a drill intersection of 10.6 metres averaging 6.1g/t gold.  On November 2, 2009 the Company signed an option agreement with Millrock Resources Inc. (Millrock) giving Millrock the option to earn a 100% interest in the Uncle Sam property in Alaska. Under the terms of the agreement Millrock will make cash payments totaling US$200,000 over four years with US$40,000 being paid upon TSX approval (paid). In addition, to complete the option, Millrock will issue 1,000,000 shares to Kiska (500,000 shares received to date) and spend US$2,700,000 on exploration over four years. There is an underlying 2% NSR payable to Royal Gold, Inc. In December 2010, Millrock granted an option agreement to Crescent Resources Corp. to purchase an undivided 100% interest in the property. The recommended exploration program for 2011 consists of a spring-time soil sampling program using a track mounted auger, 2850 meters of core drilling and further soil sampling in during the summer drill program. The exploration budget of approximately US $2.5 million is planned.  Goodpaster Properties The Goodpaster Properties, located 65 kilometres northeast of Delta Junction, Alaska consist of four claim groups totaling 183,920 acres (74,430 hectares). The claim groups are referred to as the California-Surf, ER-Ogo-Fire, Eagle and Bou-Swede claims. Rubicon Minerals Corporation (Rubicon) has an option agreement to explore the properties dated February 22, 2007. Rubicon will fund a total of USD$4.8 million in exploration over 6 years (to November 27, 2012, the date of the initial letter agreement) to earn a 60% interest in the Alaska properties. Upon vesting, they may obtain a further 10% interest in the properties by completing a feasibility study, and at the Companys election, may obtain an additional 5% (for a total of 75% interest) by providing a project financing loan to be repaid from the Companys free cash flow upon production. The ER-Ogo-Fire and portions of the Eagle-Hawk claim groups are subject to a 2% NSR in favor of AngloGold Ashanti (U.S.A.) Exploration Inc. Portions of the California-Surf are subject to a 1.75% NSR in favor of Capstone Mining Corp. Bou-Swede is wholly owned by Rimfire Alaska, Ltd., a wholly-owned subsidiary of the Company. No work was conducted on the Goodpaster properties in 2010.  Copper Joe On August 31, 2010, the Company signed an option agreement with Kennecott Exploration Company to acquire a 100% interest in the Copper Joe Property ("Copper Joe"). Copper Joe is a copper-gold-molybdenum porphyry prospect located 50 km south-southwest of the Company's Whistler Project in Alaska. Kiska can earn a 100% interest in the Copper Joe Property from Kennecott by incurring a total of US$5.0 million in exploration expenditures by December 31, 2015, including a commitment to US$170,000 in exploration by December 31, 2011 (completed). Kiska will pay Kennecott a one-time cash payment of US$10 million upon completion of a positive 43-101 compliant pre-feasibility study. In addition, before effecting a sale or assigning rights and interests to the property, Kiska will give Kennecott a 90 day period to acquire such rights and interests at 90% of the price and terms stated in the notice. Kiska is permitted to divest all or part of its interest, subject to the first right of refusal and the option period, provided at least US$2.5 million in expenditures have been completed. Prior to reaching the $2.5 million expenditure level, Kiska requires Kennecott's consent to divest its rights and interest. If Kennecott elects not to exercise its first right of refusal, Kennecott will retain a 2% NSR.  6   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Alaska (continued)  Copper Joe A five week program was completed on the property in August consisting of approximately 20.8 line-kilometers of 2D IP geophysics, 14.8 line-kilometers ground magnetics geophysics, soil and rock geochemical surveys and surface mapping. Final interpretation and receipt of geochemical results for the program will occur in the next quarter, forming the basis for future exploration.  Australia  Lachlan Fold Belt Properties The Company holds two exploration licences covering 27,513 hectares in the Lachlan Fold Belt, New South Wales, Australia. The Lachlan Fold Belt in New South Wales Australia is richly endowed with a diversity of deposit types that host in excess of 150 million ounces of gold. Deposit types include copper gold porphyry, epithermal gold, volcanogenic massive sulphide (VMS), gold-copper skarn, sediment-hosted disseminated gold and intrusion-related gold deposits.  Effective December 12, 2008, the Corporation signed a Farm-in agreement for the Barmedman exploration licence with Inmet Mining (Australia) Pty. Ltd. Under the terms of the agreement, Inmet is earning a 60% interest by funding at least A$5 million in exploration on the property over four years. Inmet has been  making staged cash payments which will total A$250,000 over the earn-in period.  In the first quarter of 2010, the Inmet funded a 900 metre, 4 hole aircore/diamond drill program on the Barmedman exploration licence, targeting copper and gold anomalies identified during a deep penetrating (partial leach geochemistry and pH measurements) geochemical soil survey completed in November and December of 2009. The program targeted three distinct copper and  gold anomalies with associated pathfinder elements. Results of the drill program were unsuccessful in identifying any significant bedrock-hosted mineralization.  Victoria Goldfields Properties Effective June 27th 2008, the Company entered into a new exploration partnership with Northgate Minerals Corporation, which granted the Company an option on its Stawell Corridor gold exploration properties in the State of Victoria, Australia. The Company is exploring three licences, Murtoa, Ararat South and Dundonnell, totaling 120 km of the corridor length, representing all ground outside of a 50 km buffer around the Stawell Gold Mine. In addition to greenfields opportunities, more advanced targets exist including the 10 kilometre-long Murtoa target, which surrounds the Kewell gold resource.  On April 15, 2010, and amended July 26, 2010 and September 15, 2010, the Company assigned the option agreement to Brixton Metals Corporation (Brixton). The Company will receive cash payments totalling $100,000 (received) and common shares of Brixton with a value of $100,000 at the lesser of $0.50 per share or the initial public offering price (received an equivalent 400,000 common shares of Brixton during the year). The Company remained the operator of the exploration program and incurred all costs on behalf of Brixton in return for a fee equivalent to 10% of all expenditures.  On November 15, 2010 Brixton informed the Company that they are no longer pursuing the option on the Victoria Goldfields properties have  reassigned the option back to the Company.  7   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Australia (continued)  As part of the agreement, Brixton has funded a regional gravity survey over portions of the Ararat South and Dundonnell properties beginning in April. This work was designed to fill in areas of low data density and follow-up on more detailed gravity and IP surveys undertaken by the company in early 2009. The gravity survey highlighted some new areas of potential and these will be followed up by IP (induced polarization) surveys in subsequent programs. On the Murtoa License a mineralogical study was completed using samples from historical drill holes focused on the Kewell gold prospect. The studies revealed that certain mineral species and degree of iron enrichment can be used to detect more confined areas of gold mineralization. This technique will be applied in subsequent drilling programs.  British Columbia and Yukon Projects  The Company controls an extensive property portfolio in British Columbia and the Yukon. Projects include:  Boulevard Property This propertyconsists, consisting of 238 claims, and is located approximately 135 kilometres south of Dawson City, Yukon. The Boulevard Property was staked on behalf of an alliance with Northgate Minerals, who earned a 60% interest in the property. The Company signed an option agreement with Silver Quest Resources Ltd. (Silver Quest) whereby Silver Quest can acquire the Companys 40% interest in the property by making staged cash payments totalling $80,000 (paid, of which the Companys 40% portion is $32,000), issuing an aggregate of 400,000 shares (issued, of which the Companys 40% portion is 160,000 common shares) and completing exploration expenditures of $3,000,000 over a five year period. The Company retains a 1% net smelter royalty (NSR) on the property, with Silver Quest having the right to buy back 0.5% of the NSR for $750,000. If additional claims are staked within the areas of interest, Silver Quest will issue additional shares and the NSR will be extended to the new claims. The Company has received an additional 100,000 common shares of Silver Quest upon staking new claims within this project area.  Since optioning the project Silver Quest completed substantial auger soil-geochemical surveys leading to the definition of 3 distinct anomalies that were later tested by a 20 hole (3,006 m) diamond drilling program in 2010. Drilling intersected generally lower grade mineralization over widths of less than 25 m core length. No programs have been announced for the 2011 season.  Gillis Property The Gillis property covers 6,182 hectares, and is located in the Nicola Mining Division of British Columbia, approximately 30 kilometres southwest of Merritt. The Company signed an option agreement effective September 5, 2008 to earn a 100% interest in the property by funding a total of $300,000 in exploration by September 5, 2012, and making cash payments totaling $165,000 by September 5, 2011. The vendor will also be paid 2.5% of annual exploration expenditures until a positive decision to mine. Upon a public announcement by the Company of a NI 43-101 compliant gold resource of at least 500,000 oz, the Company will issue 217,500 shares to the vendors. Effective August 30, 2010, the Company signed a joint venture option agreement with CVC Cayman Ventures Corp. (Cayman) whereby Cayman can earn a 51% interest in the Gillis property subject to the underlying 2% NSR upon completion of cash payments totaling $155,000 (received $30,000), exploration expenditures of $2,000,000, and issuing 250,000 common shares of Cayman Ventures Corporation to the Company by August 30, 2014. Cayman can increase their interest by an additional 9% (60% total) by spending an additional $1,000,000 in exploration by August 30, 2015.  To date, the property work has progressed from area identification, through reconnaissance stream sediment and soil sampling to extensive soil geochemical grid sampling, outlining large areas of anomalous gold, silver, arsenic and antimony soil values.  In 2011, Cayman will undertake an exploration program focused on trenching, as well as mapping and prospecting. The trenching will ascertain the orientation, extent and grade of promising mineralization discovered to date.  8   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   British Columbia and Yukon Projects (continued)  Grizzly Property Grizzly property covers 2,652 hectares, and is located in the Liard Mining Division of British Columbia, approximately 50 kilometres east of the Galore Creek project and within four kilometres of the partially completed Galore Creek access road. The Company owns a 100% interest in these claims, subject to an underlying 2% NSR, 100% of which can be purchased for $2 million. No work was conducted on the Grizzly property in 2010.  Poker Creek The Poker Creek property and covers 2,516 hectares, and is located in the Liard Mining Division of British Columbia, approximately 16 kilometres west of Telegraph Creek. The Company owns 100% of these claims.  No work was conducted on this prospect in 2010.  RDN Property The RDN property covers approximately 8,576 hectares, and is located in the Liard Mining Division of British Columbia, approximately 120 kilometres northwest of Stewart, British Columbia. This property is currently optioned (as to 51%) to Northgate Minerals Corporation, subject to an underlying NSR. Northgate may earn an additional 9% interest by completing a feasibility study and funding all expenditures up to completion of the feasibility study. On February 21, 2007, the Company signed an amendment suspending the terms of the Joint Venture Option agreement until such time as the Galore Creek road access is constructed across the RDN property.  The Company (40%) and Northgate (60%) purchased 100% of the LL property, which is contiguous with the RDN property, for $30,000 cash, subject to an NSR of 2%. This royalty can be purchased at any time for $2,000,000.  Redton Project The Redton project is located in the Quesnel Trough in northern British Columbia. The project adjoins Serengeti Resources Inc.s Kwanika property and is within 1,500 metres of the recent porphyry copper-gold discovery made by Serengeti. Kiska has earned an 85% interest, subject to underlying royalties, in the project by spending in excess of $4.75 million. Redton Resources Inc. holds the other 15% interest. In the late summer, a 600 line kilometre airborne magnetic and VTEM electromagnetic survey was carried out over two separate target areas on the project. The northern block (400 line kilometres) targeted previously identified porphyry targets east of the adjacent Kwanika property.  The 200 line kilometer south block was centred over the Falcon porphyry prospect drilled by the Company in 2008. The Company made an advance royalty payment of $20,000 during the year.  Quesnel Trough Project The Quesnel Trough project covers 34,570 hectares, and is located in the Cariboo Mining Division of British Columbia. A total of seven properties comprise the project and are located from 15 kilometres south of Prince George to 40 kilometres north of Fort St. James. The Company owns 100% of these claims. Xstrata Canada Corporation signed an option agreement to earn a 51% interest in the property by completing a preliminary assessment and spending $3,000,000 by December 31, 2013. In addition, Xstrata must spend no less than $250,000 in each calendar year commencing in 2010. Xstrata may earn an additional 24% (total 75%) by completing a feasibility study and incurring no less than $20 million in feasibility study expenditures which must be completed before the tenth anniversary of Xstrata earning its 51% interest. Xstrata completed MMI (mobile metal ion) soil geochemical surveys on the properties in 2009. This method applies an ultra-sensitive sampling and analytical technique designed to detect mineralization concealed by post-mineral cover sediments such as glacial till. The surveys did create some moderate contrast anomalies that were followed up by tighter spaced sampling. In 2010 a 4 hole program of diamond drilling totaling 245 m tested targets on 3 of the claim groups. Xstrata employed a small  9   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   British Columbia and Yukon Projects (continued)  scale self-propelled drill rig with the intent of testing bedrock to a very shallow depth beneath the glacial till cover. Results included traces of copper mineralization as well as some porphyry style alteration. Xstrata plans to continue the shallow drilling program in 2011.Xstrata completed MMI soil geochemical surveys on the properties in 2009.  Thorn Property The Thorn property, covering 14,689 hectares is located in the Atlin Mining Division of British Columbia, approximately 120 kilometres northwest of Telegraph Creek. The Company owns 100% of this property subject to payments to Cangold Limited in the event a third party partner becomes involved and an underlying 3.5% NSR. The Company can purchase 2% of the NSR for $3,000,000. Effective June 3, 2010 the company optioned the property to Brixton Metals Corporation whereby Brixton can earn a 51% interest in the property by making cash payments totaling $200,000 (including $25,000 on signing (received 75% - $18,750), and $50,000 in 2010 (received 75% - $37,500)) and issuing a total of 400,000 common shares (of which 100,000 have been issued  the Company has received 75,000 shares, or 75%) on or before December 12, 2013. One-quarter of the payments will be made to Cangold Limited as part of the underlying agreement. Work requirements include a minimum of $1,000,000 in expenditures before the first anniversary and an additional $4,000,000 before December 12, 2014. After earning a 51% interest, Brixton may elect to increase its interest from 51% to 65% by spending an additional $10,000,000 in property expenditures within three years of this election.  The option agreement was amended November 9, 2010 whereby Brixton could now earn the initial 51% by spending $200,000 by December 12, 2011 and $4.8 million in exploration expenditures by December 12, 2014. A minimum exploration expenditure of $1,500,000 is required in the second year and $750,000 per year thereafter. Under the amendment, Brixton is required to spend $1,200,000 by December 31, 2011 or deposit to a third party by the same date of not less than $1,000,000 to be incurred as exploration expenditures the following year.  Since the corporation acquired the property exploration programs have included the drilling of 32 holes (3840 m) property wide airborne EM and magnetic surveys, surface rock, soil and silt geochemical surveys, prospecting\mapping, ground EM and IP and mechanized trenching programs. Work was in general property wide, however, the majority of focus was in the Camp Creek area and targeted both high sulphidation vein prospects\anomalies and breccia hosted mineralization.  In late 2010, Brixton completed helicopter-borne geophysics which consisted of 467 line-kilometres of Versatile Time Domain Electromagnetic (VTEM) and magnetic surveying designed to cover the portion of the Windy Table volcanic rocks on the property which had not previously been surveyed. The Camp Creek and Talisker high-sulphidation alteration/veining corridors are marked by broad conductive zones. Another, previously unrecognized, broad conductive zone is located approximately 2,000 metres northwest of the Talisker corridor and parallel to it. It is thought to represent another high sulphidation alteration/veining corridor within the Thorn Stock below its nonconformity with the Windy Table volcanic rocks and will be a future drill target.  Brixton is planning a 3000 metre drill program for 2011.  Tide Property The Tide property, covering 2,964 hectares, is located in the Skeena Mining Division of British Columbia, approximately 36 kilometres north of Stewart, British Columbia. American Creek Resources Ltd. has earned 51% of the project. American Creek can earn an additional 9% interest by funding a further $3.5 million in exploration on or before December 31, 2010 (not spent) and can be increased to 65% interest by funding a bankable feasibility study, and, at the Companys election, to a 70% interest by providing 100% of the initial project development financing. No exploration work was conducted by American Creek in 2010 and as such their project interest is crystallized at 51%.   10   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   British Columbia and Yukon Projects (continued)  Wernecke Breccia Project Wernecke Breccia project, is situated in the Wernecke Mountains approximately 180 kilometers northeast of Mayo in east-central Yukon Territory. During 2007, the field program focused on a series of high priority drill targets designed to test iron-oxide-copper-gold systems +/- uranium and standalone uranium targets, all of which are characterized by coincident geophysical, geological and geochemical anomalies. Many of these targets were newly defined in 2006, while some were historical targets that remain open for expansion. No exploration was undertaken in 2009 or 2010. Fronteer (now Newmont) is the operator of the project and funded 100% of the required $2 million in exploration expenditures to earn an 80% interest, with the Company earning the remaining 20% interest. Newmont and NVI retain a total 2% NSR. There is a 7.5% to 15% Net Profits Interest (NPI) payable to the underlying vendors. A Joint Venture has been formed between Fronteer and the Company, and ongoing exploration expenses will be shared pro-rata subject to dilution for non-participation. Should either partys interest fall below 5%, their interest will be converted to a 3% NPI after payback of capital. Fronteer, who owns 80% of the project, and the Company will be seeking joint venture partners to continue exploration of the property.  No work was conducted on the project in 2010.  Williams Property The Williams property, covering 26,136 hectares, is located in the Liard Mining Division of British Columbia, approximately 150 kilometres southeast of Dease Lake, British Columbia and 330 kilometres north of Smithers. The Company owns 100% of the property subject to a 1.25% NSR. The Company is required to issue an additional 43,500 common shares upon commencement of commercial production from the property. The Company can purchase 0.75% of the NSR for $1,000,000. Advance royalty payments of $5,000 per year are payable to the underlying vendor.  Kliyul Property Kliyul is a gold-copper porphyry project located in the Omineca Mining Division of British Columbia, approximately 115 kilometres north of Takla Landing. The Company has completed three separate purchase agreements to acquire the property interests of Rio Tinto Exploration Canada Inc. (as to 45%), First Majestic Silver Corp. (as to 30%) and Daylight Energy Ltd (as to 25%) in the Kliyul Cu-Au porphyry project. Additionally, the project was expanded with the purchase of a mineral claim held by Northwest Enterprises Inc. These transactions result in the Company owning a 100% interest in the 4350 hectacre property, subject to a 1.5% NSR in favour of Rio Tinto. Total consideration of $115,488 was paid. In September, a short program was undertaken consisting of examination and the re-logging of historical drill core.  Mexico  The company held an interest in fifteen projects in Sonora, Durango and Sinaloa States in Mexico. Twelve projects were held in a 60/40 Joint Venture with Azure Minerals Limited (60%).  All projects were subject to certain back in rights held by Minera Kennecott S.A. de C.V., (MKE) a subsidiary of Rio Tinto. During the first quarter, the Joint Venture was terminated and MKE relinquished its back in rights on all projects. The Company held a 100% interest in nine projects each of which is subject to a 2% NSR held by MKE including six of the former joint venture properties.  The majority of the projects have been targeted for their porphyry coppergoldmolybdenum potential, while some projects show potential for epithermal goldsilverbase metal mineralization. The projects span a range from grassroots to exploration drilling levels of advancement.  Pursuant to an agreement dated September 17, 2010, and closing on October 7, 2010, the Company sold its interest in all nine projects in Mexico, a proprietary database covering Mexico, Arizona and its Mexico subsidiary, Minera Geoinformatica S.A. de C.V. to Evrim Metals Corp (Evrim) for an initial share payment of 2 million shares of Evrim.   11   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Mexico (continued)  In addition to the initial two-million share payment, Kiska will receive on a yearly basis share payments of 10,000 or  50,000 shares per property, depending on the status of the property, for a period of five years. Similar payments are also required if Evrim acquires any property out of the database included in the Minera sale.  Kiska will also receive a one-million-share payment for every property that is advanced to a positive production decision.  Nevada and New Mexico Properties  Colorback Property Colorback is a sediment-hosted gold target in the Cortez-Battle Mountain Trend, Nevada.  The property consists of 120 claims, located in Lander County  approximately 100 kilometers southwest of Elko. The Company has signed a lease and purchase agreement with Desert Hawk Resources Inc. (Desert Hawk) on the Colorback Property, located on, Nevada. Desert Hawk has agreed to an option to purchase the property for a 19 year period commencing on November 2, 2010 and terminating on November 2, 2029. During the first five years of the agreement, the property may be purchased for US$1,000,000 including any advanced royalty payments and a buy-down of the net smelter royalty (NSR) from 2.5% to 2.0%. Following the first five years, the property may be purchased for US$5,000,000 including any advanced royalty payments and a buy-down of the NSR from 2.5% to 2.0%. Desert Hawk has agreed to an advanced royalty payment schedule of US$50,000 on signing (paid) and every anniversary in years 1 to 4 inclusive, escalating to US$75,000 in years 5 to 9, followed by US$100,000 until the end of the lease.  No exploration has been conducted on the property since 2007. Exploration plans for 2011 include further consolidation of the land position and the RC - core drilling of both the shallow and deep targets generated during the 2006-2007 effort by the Company.  Hilltop Property The Hilltop property is a sediment-hosted gold target in the Cortez-Battle Mountain Trend, Nevada. The property is comprised of 82 claims located in Lander County, approximately 100 kilometres southwest of Elko.  No work has been conducted on the property since 2007.   12   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   San Juan The San Juan property, consisting of 5 state mining leases, located in Socorro County, New Mexico approximately 42 kilometers southwest of San Antonio. The San Juan leases contain gold-molybdenum-silver targets that are untested by drilling.  No work was conducted on the property in 2010 and the property was returned to Kennecott Exploration Company in this past quarter.  Expenditures for the year ending December 31, 2010 are summarized in the following table: (all amounts in Canadian dollars): USAAustraliaBC & YukonMexico
(Discontinued)TotalAcquisition costs$     97,073$        2,673$    170,925$        4,045$    274,716Exploration costsAircraft and helicopter3,804,926-9,177-3,814,103Assays and analysis411,38366,1781431,489479,192Community CSR82,084567--82,651Camp and support73,5643,5891,5583,53982,249Data management and maps4,2202435349205,916Drilling & trenching2,436,184125,918--2,562,102Equipment112,9712,133238(2,655)112,688Geological and engineering544,06237,76434,384158,133774,343Geophysical surveying126,25746,90968,304-241,471Licencing and filing271,19633512,046251,822535,399Materials and supplies265,47310,7495,4171,573283,212Project management1,827,565103,162259,7279,2192,199,672Telephone34,8132,0791961,78238,870Travel648,88324,6497,45321,061702,04510,643,578424,276399,177446,88211,913,914Exploration reimbursements-(366,061)-(17,931)(383,992)Reclamation obligation44,5895,165116,073(4,913)160,91410,688,16863,380515,250424,03811,690,836Total Acquisition & Exploration Costs10,785,24166,053686,175428,08311,965,552Option proceeds & management fees(211,282)(254,894)(167,925)(39,319)(673,420)Net Expenditures$ 10,573,959$      (188,841)$    518,250$    388,764$11,292,132   13   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Financial Results  For the year ended December 31, 2010, Kiska incurred a net loss of $11,912,195 ($0.17 per share) compared with a net loss of $18,684,503 ($0.51 per share) for the year ended December 31, 2009. The decrease in the loss is attributable to the impairment loss on the mineral properties acquired from Rimfire Minerals Corporation during the third quarter of 2009. This was partly offset by the Kennecott exploration program undertaken in 2010 below. The majority of exploration expenditures were incurred on the Whistler project. During the latter half of 2009, the Company adopted a care and maintenance budget for all other exploration projects while the Company continued to undertake the Kennecott exploration program, as required to maintain control of its Whistler project, and corporate acquisition opportunities were examined.  Revenue increased during the fourth quarter primarily from the receipt of option payments. Overall option proceeds are significantly higher than in the previous year with an increase in option fees earned on Alaskan properties (2010: $211,282 versus 2009: $99,871) and Australian properties (2010: $254,894 versus 2009: $3,144). The Company negotiated a number of option agreements during the year. This resulted in the receipt of option fees from Brixton ($100,000 plus 400,000 common shares of Brixton  an equivalent additional $100,000 value) on the Victorian Goldfields project, cash payments of US$40,000 and 250,000 common shares (with an equivalent value of US$165,209) received from Millrock Resources on the Uncle Sam (Alaska) project. Additionally, fees received by the Company on the BC and Yukon properties are largely consistent with the previous fiscal year (2010: $167,925 versus 2009: $170,036) with option fees received from Brixton on the Thorn project (cash $37,500 plus 75,000 common shares with an equivalent value of $24,000), Silver Quest Resources Ltd on the Boulevard Project (cash $16,000 and 80,000 common shares with an equivalent value of $56,800) and CVC Cayman Ventures Corp. on the Gillis Project (cash $30,000 and 25,000 common shares with an equivalent value of $3,625).  Losses from discontinued Mexican operations increased slightly from $499,080 to $569,786, despite operations being de-consolidated after October 7, 2010. Losses from Mexican operations increased as a result of higher geological consulting and mineral license feeslicencing expended in 2010 on the Mexican projects. The gain on sale of the Mexican assets of $1,003,577 has been offset against these losses, resulting in a net gain from discontinued operations of $433,791.  The most significant item comprising general and administrative expenses was salaries for administration of the exploration programs and management of the portfolio of exploration properties. Wages have increased year on year, net of transfers to projects, from $680,772 in 2009 to $893,344 in 2010 as a result of an increase in corporate human resources and stock-based compensation (gross stock-based compensation was $1,684,785  2009: $544,872, and net of transfers to projects $985,883  2009: $397,273). Stock based compensation has increased as a result of the vesting of options and increase in volatility over the previous period (refer Note 13(b) of the annual consolidated financial statements). Transfers on wages to projects include project management fees ($2,199,672  2009: $724,535) and geological and engineering ($774,343  2009: $408,394). Net increases in these balances also result from the increase in stock-based compensation charged to projects and staffing, consistent with the Companys retention of 100% of the Whistler project and increase in year on year exploration. Marketing costs were also a significant expense as the Company participated in conferences and arranged analyst and investor meetings to increase the profile of the combined company in the market. In the previous year, significant costs were associated with the search for a corporate acquisition and a failed merger attempt. These costs were categorized as consulting and outsourced services in the previous year. Consulting and outsourced services in the current year include corporate accounting, audit and legal fees. Financing expenses in the previous fiscal year ($59,660) were paid as part of the acquisition of Rimfire Minerals Corporation.  The Companys equity loss on its investment in Clancy arose as a result of dilution gains earned in the year of $489,277 resulting from rights offerings by Clancy for total proceeds of A$3,100,000 (refer Note 7 of the annual consolidated financial statements). In the previous fiscal year, the Company wrote its investment in Clancy down to a $Nil value, incurring an equity loss of $1,176,145.  During the year, the Company sold its total investment in Clancy  14   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   for net proceeds of $2,305,579 (Note 7 of the annual consolidated financial statements). Moreover, the Company realized gains on sales of its marketable securities of $172,236 (2009: loss of $240,285). Market conditions in 2010 were, generally, more favorable than the previous fiscal year.  The Company sold its Mexican projects to Evrim Metals Corporation effective October 7, 2010 for a gain of $1,003,577. Proceeds included 2,000,000 common shares of Evrim with a fair market value of $1,000,000. Contingent consideration exists and is disclosed in Note 6 of the annual consolidated financial statements.   15   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.5 Summary of Quarterly Results  Selected quarterly information for each of the eight most recently completed financial periods is set out below: (figures in thousands)


|                      |             |              |              |              |             |                    |               |              
|--------------------- | ----------- | ------------ | ------------ | ------------ | ----------- | ------------------ | ------------- | -------------
|                      | Q4
2010     | Q3
2010      | Q2
2010      | Q1
2010      | Q4
2009     | Q3
2009
(restated) | Q2
2009       | Q1
2009      
|Revenues              | $       462 | $         75 | $         82 | $         15 | $       205 | $         68       | $           - | $           -
|Loss from operations  | (2,595)     | (6,429)      | (3,732)      | (1,993)      | (2,736)     | (12,353)           | (817)         | (728)        
|Net gain (loss)       | 265         | (6,470)      | (3,708)      | (1,999)      | (3,583)     | (12,226)           | (1,618)       | (1,258)      
|Loss per common share | $   (0.00)  | $   (0.09)   | $   (0.06)   | $   (0.03)   | $   (0.10)  | $   (0.31)         | $   (0.06)    | $   (0.05)   

Expenditures generally exhibit a seasonal variation being lower in the first and last quarters and higher during the second and third quarters of each year. This variation is due to the climate where exploration is taking place, which limits exploration in the winter months.  1.6 Liquidity  The Companys cash and cash equivalents balance at December 31, 2010 was $6,297,716 compared with $1,071,695 at December 31, 2009. The Company had working capital of $7,474,418 at December 31, 2010 compared with working capital of $1,361,155 at December 31, 2009. The increase in working capital is attributable to the completion of a brokered private placement during the first and third quarters, as well as exercises of warrants and options during the period.  For the year ended December 31, 2010 and 2009, cash used in operating activities was $13,568,904 and $8,330,702, respectively. The increase is attributable to increased exploration and administrative activities in the current year compared to curtailed activities to preserve cash in the previous year. The sale of the Companys Clancy investment and other marketable securities resulted in a cash inflow from investing activities (2010  $2,314,442, 2009  outflow of $363,924 as a result of the Companys additional investment in Clancys rights offering in the prior year). The proceeds were partially offset by purchases of exploration equipment for the Whistler and Australia projects.  The Companys financial instruments are all fully cashable at any time so there are no restrictions on availability of funds. There is no long-term debt. The Companys current obligations include lease commitments for office space. Effective September 1, 2010, the Company has signed a five year lease for expanded head office space at 510 Burrard Street. The other current obligations are statutory withholding and payroll taxes.  1.7 Capital Resources  The Company had 79,502,698 issued and outstanding common shares as of December 31, 2010. During the year, there were 5,074,350 warrants and 746,073 options exercised for cash proceeds of $4,313,700 and $426,151 respectively.  Note 13(a) of the annual consolidated financial statements outlines details of private placements during the year.   16   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.7 Capital Resources (continued)  Options  Details of outstanding share purchase options are as follows:


| |                                    |                   |                                 |                   |                  |                                
| | ---------------------------------- | ----------------- | ------------------------------- | ----------------- | ---------------- | -------------------------------
| |                                    | December 31, 2010 |                                 | December 31, 2009
| |                                    | Number of shares  | Weighted average exercise price |                   | Number of shares | Weighted average exercise price
| | Outstanding at beginning of year   | 4,383,844         | $               1.06            |                   | 134,808          | $               8.61           
| | Granted                            | 3,000,000         | 0.87                            |                   | 3,353,328        | 0.65                           
| | Issued on acquisition (Note 1)     | -                 | -                               |                   | 1,905,300        | 1.51                           
| | Exercised                          | (746,073)         | 0.57                            |                   | (140,827)        | 0.42                           
| | Expired                            | (281,716)         | 0.55                            |                   | (169,650)        | 1.33                           
| | Forfeit/Cancelled                  | (321,228)         | 1.06                            |                   | (699,115)        | 1.87                           
| | Outstanding at end of year         | 6,034,827         | $               1.05            |                   | 4,383,844        | $               1.06           
| | Options exercisable at end of year | 4,194,043         | $               1.14            |                   | 2,771,982        | $               1.30           

The following share purchase options are outstanding at December 31, 2010.


| |                   |                                        |                                        |                |                                
| | ----------------- | -------------------------------------- | -------------------------------------- | -------------- | -------------------------------
| | Expiry Date       | Options Outstanding
(number of shares) | Options Exercisable
(number of shares) | Exercise price | Weighted Average Remaining Life
| | June 27, 2011     | 3,000                                  | 3,000                                  | $         7.50 | 0.49                           
| | July 17, 2011     | 556,800                                | 556,800                                | 1.90           | 0.54                           
| | January 11, 2012  | 100,050                                | 100,050                                | 2.29           | 1.03                           
| | July 16, 2012     | 287,100                                | 287,100                                | 2.24           | 1.54                           
| | August 1, 2012    | 5,998                                  | 5,998                                  | 6.90           | 1.59                           
| | December 10, 2012 | 208,800                                | 208,800                                | 1.84           | 1.95                           
| | July 16, 2013     | 69,600                                 | 69,600                                 | 0.98           | 2.54                           
| | December 19, 2013 | 176,175                                | 176,175                                | 0.17           | 2.97                           
| | March 1, 2014     | 65,250                                 | 48,938                                 | 0.25           | 3.17                           
| | March 19, 2014    | 394,554                                | 287,582                                | 0.45           | 3.22                           
| | December 15, 2014 | 1,320,000                              | 982,500                                | 0.90           | 3.96                           
| | February 4, 2015  | 250,000                                | 175,000                                | 0.72           | 4.10                           
| | June 25, 2015     | 250,000                                | 125,000                                | 1.00           | 4.48                           
| | July 12, 2015     | 2,347,500                              | 1,167,500                              | 0.87           | 4.53                           
| |                   | 6,034,827                              | 4,194,043                              | 1.05           | 3.55                           

The weighted average grant-date fair value of share purchase options granted during the year ended December 31, 2010 was $0.87 per option (2009 - $0.41; 2008 - $0.37).   17   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.7 Capital Resources (continued)  Warrants  Details of outstanding warrants are as follows:


| |                                  |                   |                                 |                   |                  |                                
| | -------------------------------- | ----------------- | ------------------------------- | ----------------- | ---------------- | -------------------------------
| |                                  | December 31, 2010 |                                 | December 31, 2009
| |                                  | Number of shares  | Weighted average exercise price |                   | Number of shares | Weighted average exercise price
| | Outstanding at beginning of year | 5,040,000         | $         0.80                  |                   | -                | $               -              
| | Issued on equity financing       | 8,840,471         | 1.02                            |                   | 5,040,000        | 0.80                           
| | Exercised                        | (5,074,350)       | 0.85                            |                   | -                | -                              
| | Outstanding at end of year       | 8,806,121         | $         0.99                  |                   | 5,040,000        | $         0.80                 

The following warrants are outstanding at December 31, 2010. Number ofIssue PriceWarrantsPer WarrantExpiry Date2,084,150$       0.80March 16, 20111,639,0000.92March 2, 2011924,0500.92March 11, 20112,582,4010.82August 10, 20121,576,5200.82August 16, 20128,806,121  Contractual Obligations  Kiska has future obligations under various contracts relating to operating leases and minimum conditional and non-conditional exploration commitments to keep properties and tenements in good standing. The obligations for any conditional exploration expenditures are non-binding, as the Company has the option to relinquish these licenses and tenements and any rights to the properties at any time.  The table below provides a summary of these contractual obligations (based on undiscounted cash flows) as at December 31, 2010:


|                                     |                |                   |               |              |                  
|------------------------------------ | -------------- | ----------------- | ------------- | ------------ | -----------------
|                                     | Total          | Less than 1 year  | 1  3 years   | 3  5 years  | More than 5 years
|Operating leases                     | $    1,109,065 | $       237,745   | $     489,768 | $    381,552 | $            -   
|Conditional Option payments          | 104,375        | 81,875            | 12,500        | 10,000       | -                
|Conditional exploration expenditures | 5,175,000      | 75,000            | 100,000       | 5,000,000    | -                
|Total contractual obligations        | $    6,284,065 | $         394,620 | $    602,268  | $ 5,391,552  | $       -        

1.8 Off-Balance Sheet Arrangements  As a policy, the Company does not enter into off-balance sheet arrangements with special-purpose entities in the normal course of its business, nor does it have any unconsolidated affiliates.   18   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.9 Transactions with Related Parties  (a) Note Payable On March 9, 2009, the Company announced it had negotiated a line of credit with Geologic Resource Partners LP (GRP), a company with directors in common, allowing it to draw down, as necessary, a maximum amount of $2.6 million. The line of credit bore interest at an annual rate of 15%, payable at maturity. On March 27, 2009 and June 8, 2009, the Company drew $1,000,000 and $750,000, respectively, under the line of credit. The entire amount of note payable including accrued interest of $71,712 was repaid on August 5, 2009.  (b) Due to related party Some of the Companys mineral property evaluation and exploration projects are managed by Equity Exploration Consultants Ltd. and Equity Geoscience, Ltd. (collectively Equity), companies partially owned (indirectly) by a director of the Company. Balances payable to Equity for fees and reimbursement of costs incurred on behalf of the Company have been separately disclosed as part of Due to Related Party. Fees charged to the Company by Equity are on the same basis as those charged by Equity to unrelated third parties. It is anticipated that Equity will continue to provide geological consulting and administrative support services to the Company from time to time, and will be remunerated for such services at the rate charged by Equity to all its customers.  At December 31, 2010, the Company was indebted to Equity in the amount of $15,946 (2009 - $11,340) for project expenses and consulting services provided by Equity to the Company. During the year ended December 31, 2010, the Company paid Equity $173,598 (2009 - $54,000, 2008 - $Nil) for providing management services, which has been included in consulting and outsourced services and $26,901 (2009: $Nil; 2008: $Nil) included in exploration expenditures on the Statement of Operations and Comprehensive Loss.  (c) Mineral property interests One of the directors indirectly owns 11% of a 7.5% to 15% Net Profits Interest (NPI) in the Wernecke Breccia property. The claims were originally staked and explored by a company in which he holds an interest. When the property was sold to the Newmont and NVI Mining Ltd, that company retained an NPI of varying amounts depending on the claim group.  1.10 Fourth Quarter  The Company sold its interest in the Mexican properties to Evrim Metals Corporation in the fourth quarter. Accordingly, a gain of $1,003,577 was recognized on sale (Note 6 of the annual consolidated financial statements).  The Company also sold its equity investment in 28,506,883 (26.0%) common shares of Clancy Exploration Limited, an Australian listed corporation, for net proceeds (and gain) of $2,305,579 (Note 7 of the annual consolidated financial statements).  Additional stock-based compensation was recognized in the fourth quarter of $332,474 as a result of the Companys re-assessment of stock volatility. Average volatility for vested awards during the year was 281% (2009: 96%). Total stock-based compensation for the year (including that prorated to exploration expenditures) was $1,684,765 (2009: $544,872).  1.11 Proposed Transactions  The Company has a business plan that includes identifying exploration projects, conducting initial exploration then optioning the project to a partner. Acquisitions and dispositions are an essential and on-going part of this plan.   19   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.12 Critical Accounting Estimates  Not applicable  1.13 Changes in Accounting Policies including Initial Adoption  Future Accounting Changes:International Financial Reporting Standards  Canada's Accounting Standards Board ratified a strategic plan in 2006 that will result in Canadian GAAP, as used by the Company, evolving and being converged with International Financial Reporting Standards (IFRS) over a transitional period to be completed by 2011. The International Accounting Standards Board also has projects currently under way that should result in new pronouncements which will be included in the convergence process. The Company will prepare the first interim report under IFRS for the period ending March 31, 2011 with the first annual report for the period ending December 31, 2011, with IFRS comparatives for 2010.  The Company is in the process of completing a detailed assessment of the requirements of the transition to IFRS, with the intention of identifying: (i) the timing of the implementation of the transition, (ii) major differences from existing accounting policies (iii) new accounting policies which are appropriate for the Company, (iv) the appropriate disclosures in financial statements prepared under IFRS and (v) developing an implementation plan. The Company has put some systems in place to ensure adequate data collection and is developing disclosure templates to ensure compliance with the standards at the transition date.  The Company has commenced preparation of the opening balance sheet for the adoption of IFRS. The most significant change may be inclusion of Mineral Properties on the balance sheet where Company policy has been to expense all acquisition and exploration costs as incurred.  IFRS 6 Exploration for and Evaluation of Mineral Resources permits the Company to continue with the current accounting policy for mineral property expenditures. The IASB is currently conducting an Extractive Industries project to amend IFRS 6. The draft recommendation includes a historical cost model with periodic impairment assessment as one alternative to fair value measurement. The Company would use prior accounting records to determine the appropriate historical cost to be used and take advantage of the available exemption, if required, to achieve a fair value for the transition opening balance sheet.  Since the Company does not have any reserves on the mineral properties, it is difficult to determine an appropriate stream of probable cash flows to determine the fair value of the mineral properties. It is likely that the Company will continue the current policy whereby all mineral property expenditures are expensed as incurred. Once an economically recoverable reserve is determined for the properties then a fair value in use based on probable cash flows will be calculated. Final figures have not been compiled as of the date of these financial statements.  In addition, IFRS 2Share-based Payment requires that share-based payments to employees with different vesting periods be treated as separate awards for the purpose of determining their fair value.  In addition, IFRS requires that the number of anticipated forfeitures be estimated at the grant date and incorporated into the calculation of share-based compensation expense.  Under Canadian GAAP, share-based payments with different vesting periods can be treated as a single award and forfeitures recorded as they occur.   20   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.14 Financial Instruments and Other Instruments  The company does not employ a hedging strategy or a foreign exchange protection strategy. The majority of the Companys income and expenses are denominated in Canadian dollars. The income which is received in U.S. Dollars is preserved in a U.S. Dollar account for use in paying U.S. Dollar denominated expenses.  1.15 Other Requirements  Events Subsequent to Year End  The Company has entered into the following transactions since the end of the fiscal year, not otherwise disclosed in this management discussion and analysis:  (e) On February 21, 2011, the Company granted 1,735,000 incentive stock options to directors, officers and employees of the Company at a price of $1.35, expiring February 17, 2016. Individual grants exceeding 30,000 per person will vest over two years. Options were granted in accordance with the Companys Incentive Stock Option plan approved at the Annual General Meeting held June 23, 2010.  (f) On March 23, 2011, the Company completed an offering of 15,065,000 units (the Units) of the Company, which included the full exercise of the underwriters over-allotment option of 1,965,000 units, at a price of $1.15 per Unit for gross proceeds of $17,324,750 (the "Offering"). The Units comprise of one common share and one half of a common share purchase warrant, with each Warrant entitling the purchaser to acquire, at any time until March 23, 2013, one Common Share at an exercise price of $1.60. A commission of $1,039,485, representing 6% of the total gross proceeds realized from the placement, was paid to a syndicate of underwriters.  (g) Since the end of the fiscal year, total proceeds of $35,250 and $3,964,666 have been received by the Company on the exercise of 40,000 options and 4,576,700 warrants, respectively.  (h) The Company has sold a total of 447,500 common shares of Evrim Resources Corp. since the end of the fiscal year, for net proceeds of $350,805.  (i) On January 12, 2011 the Company reported the results  of a revised NI 43-101 compliant mineral resource estimate for the Whistler Deposit. The estimate incorporates the results of 10 previously reported drillholes not included in the 2008 SRK estimate, including five drillholes completed by Kiska in the fall of 2010. A pit-constrained resource, using a $7.50/ton cut-off (approximately 0.3 g/t Au Eq cut-off) yields an indicated resource of 79.2M tonnes at 0.51 g/t gold, 0.17% copper and 1.97 g/t silver (2.3M oz Au Eq) and an inferred resource of 145.7M tonnes at 0.40 g/t gold, 0.15% copper and 1.75 g/t silver (3.5M oz Au Eq). The updated resource was completed by Moose Mountain Technical Services. A NI 43-101 Technical Report will be filed on SEDAR. Robert J. Morris, M.Sc., P. Geo., of Moose Mountain Technical Services Ltd.   21   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   Risks Factors and Uncertainties  Overview  The Company is subject to many risks that may affect future operations over which the Company has little control. These risks include, but are not limited to, market conditions and the Companys ability to access new sources of capital, the results from property exploration and development activities, and currency fluctuations.  Access to Capital  The exploration and subsequent development of mineral properties is capital intensive. Should it not be possible to raise additional equity funds when required, the Company may not be able to continue to fund its operations which would have a material adverse effect on the Companys potential profitability and ability to continue as a going concern.  Speculative Nature of Mineral Exploration and Development  The exploration for and development of mineral deposits involves significant risk which even a combination of careful evaluation, experience and knowledge may not adequately mitigate.  While the discovery of an ore body may result in substantial rewards, few properties which are explored are ultimately developed into producing mines.  There is no assurance that commercial quantities of ore will be discovered on any of Kiskas sole-risk or ventured properties. Even if commercial quantities of ore are discovered, there is no assurance that the mineral property will be brought into production.  Whether a mineral deposit will be commercially viable depends on a number of factors, including the particular attributes of the deposit, such as its size, grade and proximity to infrastructure; commodity prices, which have fluctuated widely in recent years; and government regulations, including those relating to taxes, royalties, land tenure, land use, aboriginal rights, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but Kiskas business may be adversely affected by the inability of Kiska or those companies with which Kiska forms exploration or development alliances, to bring projects into commercial production.  Commodity Prices  The prices of gold, copper, zinc and other minerals have fluctuated widely in recent years and are affected by a number of factors beyond the control of Kiska, including international economic and political conditions, expectations of inflation, international currency exchange rates, consumption patterns, and levels of supply and demand.  Fluctuations in commodity prices will influence the willingness of investors to fund mining and exploration companies and the willingness of such companies to participate in joint ventures with Kiska and the level of their financial commitment. Similarly, the ability of Kiska to monetize assets may also be affected by fluctuations in commodity prices.   22   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010   1.15 Other Requirements (continued)  Risks Factors and Uncertainties (continued) Competition  Other exploration companies, including those with greater financial resources than Kiska, could adopt or may have adopted the business strategies of Kiska and thereby compete directly with Kiska, or may seek to acquire and develop mineral claims in areas targeted by Kiska. While the risk of direct competition may be mitigated by Kiskas experience and technical capabilities, there can be no assurance that competition will not increase or that Kiska will be able to compete successfully.  Conflicts of Interest  Certain directors and officers of Kiska also serve as directors, officers and advisors of other companies involved in natural resource exploration and development. To the extent that such companies may participate in ventures with Kiska, such directors and officers may have conflicts of interest in negotiating and concluding the terms respecting the extent of such participation.  Such other companies may also compete with Kiska for the acquisition of mineral property rights.  In the event that any such conflict of interest arises, Kiskas policy is that such director or officer will disclose the conflict to the board of directors and, if the conflict involves a director, such director will abstain from voting on the matter. In accordance with the Business Corporations Act (Yukon), the directors and officers of Kiska are required to act honestly, in good faith with a view to the best interests of Kiska.  Government Regulation  The Company operates in an industry which is governed by environmental regulations as well as occupation health and safety regulations. Most of the Companys mineral properties are subject to government tenure requirements. At present, the Company fully complies with all regulations and holds clear title to the mineral property interests. However, it is possible that regulations or tenure requirements could be changed by the respective government resulting in additional costs or barriers to development of the properties. This would adversely affect the value of properties and ability to hold onto them without incurring significant additional costs.  Other Information  The Company files technical reports on all material properties, press releases and material change reports on SEDAR at www.sedar.com. The company is a foreign private issuer as defined by the Securities and Exchange Commission in the United States. As such, the Company files an annual report on Form 20-F and interim reports and other filings on Form 6-K. These reports are available on EDGAR at www.sec.gov/edgar. Additional information about the company can be accessed at the companys website (www.kiskametals.com).   23   KISKA METALS CORPORATION MANAGEMENTS DISCUSSION AND ANALYSIS For the year ended December 31, 2010    Forward-Looking Statements  This document includes certain forward looking statements concerning the future performance of Kiskas business, its operations and its financial performance and condition, as well as managements objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as may, will, plan, expect, anticipate, estimate, intend and similar words referring to future events and results.  Forward-looking statements are based on the current opinions and expectations of management.  All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties. Factors that may cause actual results to vary include, but are not limited to, the Companys ability to access capital, the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and reliance on key personnel, as described in more detail in this document under Risk Factors and Uncertainties.  Statements relating to estimates of reserves and resources are also forward-looking statements as they involve risks and assumptions (including but not limited to assumptions with respect to future commodity prices and production economics) that the reserves and resources described exist in the quantities and grades estimated and are capable of economic extraction. Actual events or results may differ materially from those projected in the forward-looking statements and we caution against placing undue reliance thereon.  All mineral resources referenced in the technical report filed for the Whistler Property have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the SEC Industry Guide 7 ("Guide 7"). NI 43-101 and Guide 7 standards are substantially different. The terms "mineral reserve", "proven mineral reserve" and "probable mineral reserve" are Canadian mining terms as defined in accordance with NI 43-101. These definitions differ from the definitions of "proven (measured) reserves" and "probable (indicated) reserves" in Guide 7. Under 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.  The technical report uses or may use the terms "mineral resource," "indicated mineral resource" and "inferred mineral resource". We advise investors that these terms are defined in and required to be disclosed by NI 43-101. However, these terms are not defined terms under 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 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.      24