| Consolidated Statement of Operations(expressed in thousands of Canadian dollars, except share and per share amounts) |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
| Year ended December 31                                                                                               | Note   |   | 2010 |   |   | 2009Recast – see note (a) |   |   | 2008 |   |
|  Net loss under Canadian GAAP                                                                                   |   |   | $ | (23,259 | ) |   | $ | (30,014 | ) |   | $ | (160,679 | ) |
| Transaction costs relating to a business combination                                                                 | (a)    |   |   |  -- |   |   |   | (884 | ) |   |   |  -- |   |
| Future income tax recovery relating to a business combination                                                        | (a)    |   |   |  -- |   |   |   | 8,500 |   |   |   |  -- |   |
| Future mining tax recovery  (including business combination adjustments)                                   | (a)    |   |   |  384 |   |   |   |  -- |   |   |   |  -- |   |
| Amortization of mining interests                                                                                     | (a)    |   |   | (447 | ) |   |   |  10 |   |   |   |  -- |   |
| Pre-production costs, net                                                                                            | (b)    |   |   | -- |   |   |   | (3,313 | ) |   |   | -- |   |
| Amortization during the pre-production period                                                                        | (b)    |   |   |  -- |   |   |   | (1,651 | ) |   |   |  -- |   |
| Amortization of capitalized interest                                                                                 | (c)    |   |   | (94 | ) |   |   |  -- |   |   |   | (316 | ) |
| Tax liability on flow-through financing                                                                              | (e)    |   |   | (3,136 | ) |   |   |  -- |   |   |   | (407 | ) |
| Accretion expense relating to convertible notes                                                                      | (h)    |   |   |  -- |   |   |   |  -- |   |   |   | (298 | ) |
| Amortization of deferred financing costs                                                                             | (h)    |   |   |  -- |   |   |   |  -- |   |   |   | (387 | ) |
| Fair value adjustment on warrants                                                                                    | (h)    |   |   | (995 | ) |   |   | 965 |   |   |   | 182 |   |
| Fair value adjustment on share purchase warrants - liability                                                         | (i)    |   |   | (542 | ) |   |   |  3,909 |   |   |   |  -- |   |
| Exploration costs                                                                                                    | (j)    |   |   | (2,334 | ) |   |   |  -- |   |   |   |  -- |   |
| Net loss under U.S. GAAP                                                                                             |   |   | $ | (30,423 | ) |   | $ | (22,478 | ) |   | $ | (161,905 | ) |
| Basic and diluted loss per share under U.S. GAAP                                                                     |   |   | $ | (0.21 | ) |   | $ | (0.22 | ) |   | $ | (1.95 | ) |
| Weighted average number of shares outstanding    Basic and diluted                               |   |   |   | 141,537,377 |   |   |   | 102,630,908 |   |   |   | 82,839,706 |   |

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| Year ended December 31                           |   | 2010Canadian GAAP |        |   | Net adjustment to reconcile |   |    | 2010U.S.GAAP |   |
|-------------------------------------------------------|--------|-------------------|-------------|--------|-----------------------------|--------|---------|--------------|--------|
| Revenue – before pricing adjustments       |   | $                 | 99,714      |   |                        | $      | – |         |   | $ | 99,714 |   |
| Pricing adjustments:                                  |   |              |        |   |                        |   |    |         |   |   |   |   |
| Commodities                                           |   |              | 8,941       |   |                        |   | – |         |   |   | 8,941 |   |
| Foreign exchange                                      |   |              | (1,557      | )      |                        |   | – |         |   |   | (1,557 | ) |
| Revenue – after pricing adjustments   |   |              | 107,098     |   |                        |   | – |         |   |   | 107,098 |   |
| Operating expenses                                    |   |              |        |   |                        |   |    |         |   |   |   |   |
| Production costs                                      |   |              | 74,709      |   |                        |   | – |         |   |   | 74,709 |   |
| Smelter treatment, refining and freight costs         |   |              | 4,779       |   |                        |   | – |         |   |   | 4,779 |   |
| Royalty expense                                       |   |              | 4,202       |   |                        |   | – |         |   |   | 4,202 |   |
| Depreciation and amortization                    |   |              | 13,175      |   |                        |   | 541     |         |   |   | 13,716 |   |
| Asset retirement obligation accretion (recovery) |   |              | 577         |   |                        |   | – |         |   |   | 577 |   |
| Gain on disposal of equipment                         |   |              | (270        | )      |                        |   | – |         |   |   | (270 | ) |
| Total operating expenses                              |   |              | 97,172      |   |                        |   | 541     |         |   |   | 97,713 |   |
| Income from mining operations                         |   |              | 9,926       |   |                        |   | (541    | )            |   |   | 9,385 |   |
| Other expenses                                        |   |              |        |   |                        |   |    |         |   |   |   |   |
| General and administration                            |   |              | 10,676      |   |                        |   | – |         |   |   | 10,676 |   |
| Exploration                                           |   |              | 30,126      |   |                        |   | 2,334   |         |   |   | 32,460 |   |
| Interest and other income                        |   |              | (295        | )      |                        |   | (56     | )            |   |   | (351 | ) |
| Foreign exchange gain                                 |   |              | (23         | )      |                        |   | – |         |   |   | (23 | ) |
| Total other expenses                                  |   |              | 40,484      |   |                        |   | 2,278   |         |   |   | 42,762 |   |
| Loss before taxes                                     |   |              | (30,558     | )      |                        |   | (2,819  | )            |   |   | (33,377 | ) |
| Income and mining tax recovery (expense)              |   |              | 7,299       |   |                        |   | (4,345  | )            |   |   | 2,954 |   |
| Loss and comprehensive loss for the year              |   | $                 | (23,259     | )      |                        | $      | (7,164  | )            |   | $ | (30,423 | ) |
| Loss per share                                        |   |              |        |   |                        |   |    |         |   |   |   |   |
| Basic and diluted                                |   | $                 | (0.16       | )      |                        |   |    |         |   | $ | (0.21 | ) |
| Weighted average number of shares outstanding         |   |              |        |   |                        |   |    |         |   |   |   |   |
| Basic and diluted                                |   |              | 141,537,377 |   |                        |   |    |         |   |   | 141,537,377 |   |

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| Year ended December 31                          |   | 2009Canadian GAAP |        |   | Net adjustment to reconcile |   |    | 2009U.S.GAAP |   |
|------------------------------------------------------|--------|-------------------|-------------|--------|----------------------------------|--------|---------|--------------|--------|
| Revenue – before pricing adjustments      |   | $                 | –     |   |                             | $      | – |         |   | $ | – |   |
| Pricing adjustments:                                 |   |              |        |   |                             |   |    |         |   |   |   |   |
| Commodities                                          |   |              | 4,614       |   |                             |   | – |         |   |   | 4,614 |   |
| Foreign exchange                                     |   |              | (595        | )      |                             |   | – |         |   |   | (595 | ) |
| Revenue – after pricing adjustments  |   |              | 4,019       |   |                             |   | – |         |   |   | 4,019 |   |
| Operating expenses                                   |   |              |        |   |                             |   |    |         |   |   |   |   |
| Production costs                                     |   |              | –     |   |                             |   | 3,313   |         |   |   | 3,313 |   |
| Smelter treatment, refining and freight costs        |   |              | 109         |   |                             |   | – |         |   |   | 109 |   |
| Royalty expense                                      |   |              | 201         |   |                             |   | – |         |   |   | 201 |   |
| Inventory pricing adjustment                    |   |              | (3,634      | )      |                             |   | – |         |   |   | (3,634 | ) |
| Depreciation and amortization                   |   |              | 269         |   |                             |   | 1,641   |         |   |   | 1,910 |   |
| Asset retirement obligation accretion           |   |              | 355         |   |                             |   | – |         |   |   | 355 |   |
| Loss (gain) on disposal of equipment                 |   |              | (36         | )      |                             |   | – |         |   |   | (36 | ) |
| Care and maintenance costs                           |   |              | 12,987      |   |                             |   | – |         |   |   | 12,987 |   |
| Total operating expenses                             |   |              | 10,251      |   |                             |   | 4,954   |         |   |   | 15,205 |   |
| Loss from mining operations                          |   |              | (6,232      | )      |                             |   | (4,954  | )            |   |   | (11,186 | ) |
| Other expenses                                       |   |              |        |   |                             |   |    |         |   |   |   |   |
| General and administration                           |   |              | 9,021       |   |                             |   | 884     |         |   |   | 9,905 |   |
| Exploration                                          |   |              | 13,234      |   |                             |   | – |         |   |   | 13,234 |   |
| Interest and other income                       |   |              | (1,957      | )      |                             |   | (4,874  | )            |   |   | (6,831 | ) |
| Foreign exchange loss                                |   |              | 247         |   |                             |   | – |         |   |   | 247 |   |
| Total other expenses                                 |   |              | 20,545      |   |                             |   | (3,990  | )            |   |   | 16,555 |   |
| Loss before taxes                                    |   |              | (26,777     | )      |                             |   | (964    | )            |   |   | (27,741 | ) |
| Income and mining tax recovery (expense)             |   |              | (3,237      | )      |                             |   | 8,500   |         |   |   | 5,263 |   |
| Loss and comprehensive loss for the year             |   | $                 | (30,014     | )      |                             | $      | 7,536   |         |   | $ | (22,478 | ) |
| Loss per share                                       |   |              |        |   |                             |   |    |         |   |   |   |   |
| Basic and diluted                               |   | $                 | (0.29       | )      |                             |   |    |         |   | $ | (0.22 | ) |
| Weighted average number of shares outstanding        |   |              |        |   |                             |   |    |         |   |   |   |   |
| Basic and diluted                               |   |              | 102,630,908 |   |                             |   |    |         |   |   | 102,630,908 |   |

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| Year ended December 31                          |   | 2008Canadian GAAP |       |   | Net adjustment to reconcile |   |    | 2008U.S.GAAP |   |
|------------------------------------------------------|--------|-------------------|------------|--------|-----------------------------|--------|---------|--------------|--------|
| Revenue – before pricing adjustments      |   | $                 | 156,241    |   |                        | $      | – |         |   | $ | 156,241 |   |
| Pricing adjustments:                                 |   |              |       |   |                        |   |    |         |   |   |   |   |
| Commodities                                          |   |              | (40,667    | )      |                        |   | – |         |   |   | (40,667 | ) |
| Foreign exchange                                     |   |              | 16,522     |   |                        |   | – |         |   |   | 16,522 |   |
| Revenue – after pricing adjustments  |   |              | 132,096    |   |                        |   | – |         |   |   | 132,096 |   |
| Operating expenses                                   |   |              |       |   |                        |   |    |         |   |   |   |   |
| Production costs                                     |   |              | 115,037    |   |                        |   | – |         |   |   | 115,037 |   |
| Smelter treatment, refining and freight costs        |   |              | 20,342     |   |                        |   | – |         |   |   | 20,342 |   |
| Royalty expense                                      |   |              | 5,588      |   |                        |   | – |         |   |   | 5,588 |   |
| Inventory pricing adjustment                    |   |              | 3,875      |   |                        |   | – |         |   |   | 3,875 |   |
| Depreciation and amortization                   |   |              | 36,026     |   |                        |   | 703     |         |   |   | 36,729 |   |
| Asset retirement obligation accretion           |   |              | 321        |   |                        |   | – |         |   |   | 321 |   |
| Loss on disposal of equipment                        |   |              | 2,466      |   |                        |   | – |         |   |   | 2,466 |   |
| Asset impairment charge                         |   |              | 90,000     |   |                        |   | – |         |   |   | 90,000 |   |
| Insurance recovery                              |   |              | (13,800    | )      |                        |   | – |         |   |   | (13,800 | ) |
| Total operating expenses                             |   |              | 259,855    |   |                        |   | 703     |         |   |   | 260,558 |   |
| Loss from mining operations                          |   |              | (127,759   | )      |                        |   | (703    | )            |   |   | (128,462 | ) |
| Other expenses                                       |   |              |       |   |                        |   |    |         |   |   |   |   |
| General and administration                           |   |              | 7,666      |   |                        |   | – |         |   |   | 7,666 |   |
| Exploration                                          |   |              | 23,070     |   |                        |   | – |         |   |   | 23,070 |   |
| Interest and other income                       |   |              | 3,443      |   |                        |   | 116     |         |   |   | 3,559 |   |
| Foreign exchange loss                                |   |              | 971        |   |                        |   | – |         |   |   | 971 |   |
| Total other expenses                                 |   |              | 35,150     |   |                        |   | 116     |         |   |   | 35,266 |   |
| Loss before taxes                                    |   |              | (162,909   | )      |                        |   | (819    | )            |   |   | (163,728 | ) |
| Income and mining tax recovery (expense)             |   |              | 2,230      |   |                        |   | (407    | )            |   |   | 1,823 |   |
| Loss and comprehensive loss for the year             |   | $                 | (160,679   | )      |                        | $      | (1,226  | )            |   | $ | (161,905 | ) |
| Loss per share                                       |   |              |       |   |                        |   |    |         |   |   |   |   |
| Basic and diluted                               |   | $                 | (1.94      | )      |                        |   |    |         |   | $ | (1.95 | ) |
| Weighted average number of shares outstanding        |   |              |       |   |                        |   |    |         |   |   |   |   |
| Basic and diluted                               |   |              | 82,839,706 |   |                        |   |    |         |   |   | 82,839,706 |   |

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| Consolidated Balance Sheets(expressed in thousands of Canadian dollars)                                            |    |
|--------------------------------------------------------------------------------------------------------------------|---------|
| December 31                                                                                                        | Note    |   | 2010 |   |   | 2009Recast – see note (a) |   |   | 2008 |   |
|  Total assets under Canadian GAAP                                                                             |    |   | $ | 348,347 |   |   | $ | 219,211 |   |   | $ | 146,904 |   |
| Increase in mining interests relating to a business combination                                                    | (a)     |   |   | 13,716 |   |   |   | 14,455 |   |   |   | -- |   |
| Increase (decrease) in mining interests relating to amortization                                                   | (a)     |   |   | (437 | ) |   |   | 10 |   |   |   | -- |   |
| Increase in goodwill relating to a business combination                                                            | (a)     |   |   | 8,500 |   |   |   | 8,500 |   |   |   | -- |   |
| Pre-production costs, net                                                                                          | (b)     |   |   | (3,313 | ) |   |   | (3,313 | ) |   |   | -- |   |
| Amortization during the pre-production period                                                                      | (b)     |   |   | (1,651 | ) |   |   | (1,651 | ) |   |   |  -- |   |
| Increase in capitalized interest                                                                                   | (c)     |   |   | 2,421 |   |   |   | 2,421 |   |   |   | 2,421 |   |
| Increase in accumulated amortization of capitalized interest                                                       | (c)     |   |   |  (1,582 | ) |   |   |  (1,488 | ) |   |   |  (1,488 | ) |
| Decrease in mining interests relating to capitalized exploration costs                                             | (j)     |   |   | (2,334 | ) |   |   | -- |   |   |   | -- |   |
| Total assets under U.S. GAAP                                                                                       |    |   | $ | 363,667 |   |   | $ | 238,145 |   |   | $ | 147,837 |   |
|  Total liabilities under Canadian GAAP                                                                        |    |   | $ | 56,970 |   |   | $ | 26,950 |   |   | $ | 30,003 |   |
| Increase in future mining tax liability                                                                            | (a)     |   |   | (212 | ) |   |   | 911 |   |   |   | -- |   |
| Tax liability on flow-through financing                                                                            | (e)     |   |   |  -- |   |   |   |  2,000 |   |   |   |  -- |   |
| Fair value of share purchase warrants - liability                                                                  | (h)     |   |   |  -- |   |   |   | 56 |   |   |   | 1,021 |   |
| Total liabilities under U.S. GAAP                                                                                  |    |   | $ | 56,758 |   |   | $ | 29,917 |   |   | $ | 31,024 |   |
|  Shareholders’ equity under Canadian GAAP                                                               |    |   | $ | 291,377 |   |   | $ | 192,261 |   |   | $ | 116,901 |   |
| Cumulative adjustments under U.S. GAAP relating to prior years                                                     |    |   |   | 15,967 |   |   |   | (88 | ) |   |   | (717 | ) |
| Reverse opening equity adjustment relating to adoption of inventory standards under Canadian GAAP                  |    |   |   | -- |   |   |   | -- |   |   |   | 403 |   |
| Increase in equity instruments relating to a business combination                                                  | (a)     |   |   | -- |   |   |   | 14,428 |   |   |   | -- |   |
| Increase (decrease) in common share capital relating to liability on flow-through financing                        | (e)     |   |   |  5,136 |   |   |   | (2,000 | ) |   |   | 1,452 |   |
| Increase (reduction) of purchase warrants relating to fair value adjustment on share purchase warrants - liability | (h),(i) |   |   | 1,593 |   |   |   | (3,909 | ) |   |   |  -- |   |
| Adjustments to current year net income (loss) under U.S. GAAP                                                      |    |   |   | (7,164 | ) |   |   |  7,536 |   |   |   | (1,226 | ) |
| Shareholders’ equity underU.S. GAAP                                                                          |    |   | $ | 306,909 |   |   | $ | 208,228 |   |   | $ | 116,813 |   |

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| Consolidated Statements of Cash Flows(expressed in thousands of Canadian dollars)                |   |
|--------------------------------------------------------------------------------------------------|--------|
| Year ended December 31                                                                           | Note   |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|  Cash provided by (used in) operations under Canadian GAAP                                  |   |   | $ | (73,892 | ) |   | $ | 4,822 |   |   | $ | 6,746 |   |
| Transaction costs relating to a business combination                                             | (a)    |   |   |  -- |   |   |   | (884 | ) |   |   |  -- |   |
| Pre-production costs, net                                                                        | (b)    |   |   |  -- |   |   |   | (3,313 | ) |   |   | -- |   |
| Tax liability on flow-through financing                                                          | (e)    |   |   |  -- |   |   |   |  2,000 |   |   |   | -- |   |
| Tax expenses for changes in common share capital relating to liability on flow-through financing | (e)    |   |   |  -- |   |   |   |  -- |   |   |   | (1,452 | ) |
| Exploration costs                                                                                | (j)    |   |   | (2,334 | ) |   |   |  -- |   |   |   | -- |   |
| Cash provided by (used in) operations under U.S. GAAP                                            |   |   | $ | (76,226 | ) |   | $ | 2,625 |   |   | $ | 5,294 |   |
|  Cash provided by (used in) financing activities under Canadian GAAP                        |   |   | $ | 99,353 |   |   | $ | 63,669 |   |   | $ | 2,105 |   |
| Increase (decrease) in common share capital relating to liability on flow-through financing      | (e)    |   |   |  -- |   |   |   | (2,000 | ) |   |   | 1,452 |   |
| Cash provided by (used in) financing activities under U.S. GAAP                                  |   |   | $ | 99,353 |   |   | $ | 61,669 |   |   | $ | 3,557 |   |
|  Cash provided by (used in) investing activities under Canadian GAAP                        |   |   | $ | (48,557 | ) |   | $ | (13,304 | ) |   | $ | (40,389 | ) |
| Decrease in acquisition costs associated with Cadiscor Resources Inc. transaction costs          | (a)    |   |   |  -- |   |   |   | 884 |   |   |   |  -- |   |
| Decrease in additions to mining interests relating to pre-production costs                       | (b)    |   |   |  -- |   |   |   | 3,313 |   |   |   | -- |   |
| Exploration costs                                                                                | (j)    |   |   | 2,334 |   |   |   |   |   |   |   |   |   |
| Cash provided by (used in) investing activities under U.S. GAAP                                  |   |   | $ | (46,223 | ) |   | $ | (9,107 | ) |   | $ | (40,389 | ) |

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| ASSETS                                             |   |   |   |
|----------------------------------------------------|--------|--------|--------|
| Current Assets                                     |   |   |   |
| Cash and cash equivalents                          |   | $      | 7,248  |   |
| Taxes recoverable                                  |   |   | 461    |   |
| Inventories                                        |   |   | 420    |   |
| Other assets                                       |   |   | 559    |   |
| Future mining tax asset                            |   |   | 31     |   |
|                                               |   |   | 8,719  |   |
| Mining interests                                   |   |   | 53,806 |   |
| Mine restoration deposit                           |   |   | 1,769  |   |
| Goodwill                                           |   |   | 8,500  |   |
|                                               |   | $      | 72,794 |   |
| LIABILITIES                                        |   |   |   |   |
| Current Liabilities                                |   |   |   |   |
| Accounts payable and accrued liabilities           |   | $      | 3,531  |   |
| Current portion of obligation under capital leases |   |   | 7      |   |
|                                               |   |   | 3,538  |   |
| Mine restoration obligation                        |   |   | 4,291  |   |
| Long-term debt                                     |   |   | 11,066 |   |
| Obligation under capital leases                    |   |   | 27     |   |
| Future income tax liability                        |   |   | 8,500  |   |
|                                               |   | $      | 27,422 |   |
| Net assets acquired                                |   | $      | 45,372 |   |
| TOTAL PURCHASE CONSIDERATION                       |   |   |   |   |
| Common share capital                               |   | $      | 38,457 |   |
| Stock options                                      |   |   | 1,582  |   |
| Purchase warrants                                  |   |   | 2,003  |   |
| Convertible rights on convertible debenture        |   |   | 3,330  |   |
| Total purchase price                               |   | $      | 45,372 |   |

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| Revenue from metal sales – after pricing adjustments |   | $ | 6,140   |   |
|------------------------------------------------------------|--------|---|---------|--------|
| Net loss                                                   |   | $ | (23,177 | )      |
| Basic and diluted loss per share                           |   | $ | (0.23   | )      |

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