Corriente Resources Inc.



Consolidated Financial Statements





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Managements Responsibility for Financial ReportingThe accompanying consolidated financial statements of
Corriente Resources Inc. ("the company") have been prepared by management in
accordance with accounting principles generally accepted in Canada, and within
the framework of the summary of significant accounting policies in these
consolidated financial statements.
A system of internal accounting control is maintained by
management in order to provide reasonable assurance that assets are safeguarded
and that transactions are properly recorded and executed in accordance with
managements authorization. This system includes established policies and
procedures, the selection and training of qualified personnel and an
organization providing for appropriate delegation of authority and segregation
of responsibilities.
The Audit Committee of the Board of Directors meets
periodically with management and the companys independent auditors to review
the scope and results of their annual audit and to review the consolidated
financial statements and related financial reporting and control matters prior
to submitting the consolidated financial statements to the Board of Directors
for approval.
The consolidated financial statements have been audited by
PricewaterhouseCoopers LLP on behalf of the shareholders and their report
follows.

|"Kenneth R.
    Shannon"                | "Darryl F.
    Jones"      
|--------------------------------------- | ---------------------------
|                                        |                            
|President & Chief
    Executive Officer | Chief Financial
    Officer
|Vancouver, British
    Columbia         |                            
|March 26, 2008                          |                            
|                                        |                            

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Managements Report on Internal Control over Financial
ReportingThe management of Corriente Resources Inc. is responsible for
establishing and maintaining adequate internal control over financial reporting.
The United States Securities and Exchange Act of 1934 in Rule 13a-15(f ) and
15d-15(f ) defines this as a process designed by, or under the supervision of,
the companys principal executive and principal financial officers and effected
by the companys board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:
Pertain to the
  maintenance of records that, in reasonable detail, accurately and fairly
  reflect the transactions and dispositions of the assets of the company;
  Provide reasonable
  assurance that transactions are recorded as necessary to permit preparation of
  financial statements in accordance with generally accepted accounting
  principles, and that receipts and expenditures of the company are being made
  only in accordance with authorizations of management and directors of the
  company; and
  Provide reasonable
  assurance regarding prevention or timely detection of unauthorized
  acquisition, use or disposition of the companys assets that may have a
  material effect on the financial statements.Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements on a timely basis.
Also, projections of any evaluation of effectiveness of internal control over
financial reporting to future periods are subject to risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the companys
internal control over financial reporting as at December 31, 2007. In making
this assessment, the companys management used the criteria, established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Based upon this assessment, management concluded that the
companys internal control over financial reporting was effective as at December
31, 2007.
The effectiveness of the companys internal control over
financial reporting as at December 31, 2007 has been audited by
PricewaterhouseCoopers LLP, our independent auditors, as stated in their report
which appears herein.

|"Kenneth R.
    Shannon"                | "Darryl F.
    Jones"      
|--------------------------------------- | ---------------------------
|                                        |                            
|President & Chief
    Executive Officer | Chief Financial
    Officer
|Vancouver, British
    Columbia         |                            
|March 26, 2008                          |                            
|                                        |                            

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Independent Auditors Report
To the Shareholders of Corriente Resources Inc.We have completed an integrated audit of Corriente Resources
Inc.s 2007 consolidated financial statements and of its internal control over
financial reporting as at December 31, 2007, and audits of its 2006 and 2005
consolidated financial statements. Our opinions, based on our audits, are
presented below.
Consolidated financial statements

We have audited the accompanying consolidated balance sheets
of Corriente Resources Inc. as at December 31, 2007 and 2006, and the related
consolidated statements of changes in shareholders equity, statements of loss,
comprehensive loss and deficit and statements of cash flows for each of the years in the three
year period ended December 31, 2007. These financial statements are the
responsibility of the companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits of the companys financial statements
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 plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. A financial statement audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of the company as at December 31, 2007 and December 31, 2006, and the
results of its operations and its cash flows for each of the years in the three
year period ended December 31, 2007, in accordance with Canadian generally
accepted accounting principles.
Internal control over financial reporting

We have also audited Corriente Resources Inc.s internal
control over financial reporting as at December 31, 2007, based on criteria
established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission ("COSO"). The companys
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying "Managements
Report on Internal Control over Financial Reporting". Our responsibility is to
express an opinion on the effectiveness of the companys internal control over
financial reporting based on our audit.

---

We conducted our audit of internal control over financial
reporting in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. An audit of internal control over financial reporting includes
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the company maintained, in all material
respects, effective internal control over financial reporting as at December 31,
2007, based on criteria established in Internal Control  Integrated Framework
issued by the COSO.
"PricewaterhouseCoopers LLP"

Chartered Accountants 
Vancouver, British Columbia 
March 26, 2008



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|Corriente Resources
    Inc.                         |   |              |   |             
|---------------------------------------------------- | - | ------------ | - | ------------
|(a development stage
    enterprise)                 |   |              |   |             
|Consolidated Balance
    Sheets                      |   |              |   |             
|As at December 31, 2007 and 2006                     |   |              |   |             
|(expressed in Canadian dollars)                      |   |              |   |             
|                                                     |   |              |   |             
|                                                     |   |              |   |             
|                                                     |   | 2007         |   | 2006        
|Assets                                               |   |              |   |             
|Current assets                                       |   |              |   |             
|Cash and cash
    equivalents                        | $ | 93,272,082   | $ | 127,110,679 
|Accounts receivable
    and prepayments              |   | 338,859      |   | 213,856     
|Convertible loan (note 3)                            |   | 460,994      |   |            
|                                                     |   | 94,071,935   |   | 127,324,535 
|Long-term assets                                     |   |              |   |             
|Mineral properties
    (note 3)                      |   | 77,778,685   |   | 61,249,060  
|Plant and equipment
    (note 4)                     |   | 1,914,221    |   | 2,490,457   
|Other assets (note 5)                                |   | 4,260,397    |   | 4,933,384   
|                                                     |   | 83,953,303   |   | 68,672,901  
|TOTAL ASSETS                                         | $ | 178,025,238  | $ | 195,997,436 
|                                                     |   |              |   |             
|Liabilities                                          |   |              |   |             
|Current liabilities                                  |   |              |   |             
|Accounts payable
    relating to mineral properties  | $ | 1,656,158    | $ | 6,448,508   
|Other accounts payable
    and accrued liabilities   |   | 222,338      |   | 263,871     
|Accounts payable relating to plant and
    equipment |   | -            |   | 547,638     
|                                                     |   | 1,878,496    |   | 7,260,017   
|Shareholders Equity                                 |   |              |   |             
|Share capital (note 6
    (b))                       |   | 234,437,635  |   | 233,552,783 
|Options (note 6 (c))                                 |   | 3,736,352    |   | 2,584,710   
|Contributed surplus                                  |   | 1,378,499    |   | 993,697     
|Deficit                                              |   | (63,405,744) |   | (48,393,771)
|                                                     |   | 176,146,742  |   | 188,737,419 
|TOTAL LIABILITIES AND SHAREHOLDERS
    EQUITY       | $ | 178,025,238  | $ | 195,997,436 
|                                                     |   |              |   |             
|Nature of
    operations  note 1                    |   |              |   |             
|Commitments  note
    3                             |   |              |   |             

|                                       |          |                  |         
|-------------------------------------- | -------- | ---------------- | --------
|Approved by the
    Board of Directors |          |                  |         
|                                       |          |                  |         
|"Kenneth Shannon"                      | Director | "Anthony Holler" | Director

The accompanying notes are an integral part of these
consolidated financial statements.

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|Corriente Resources Inc.                                      
|--------------------------------------------------------------
|(a development stage enterprise)                              
|Consolidated Statements of Changes
    in Shareholders Equity
|For the years ended December 31,
    2007, 2006 and 2005      
|(expressed in Canadian dollars)                               

|                                                                                     | Common Shares |                   | Estimated Fair Value |             |   |                             |   |                         |  
|------------------------------------------------------------------------------------ | ------------- | ----------------- | -------------------- | ----------- | - | --------------------------- | - | ----------------------- | -
|                                                                                     | Number        | Share
    Capital |                      | Options     |   | Share
    Purchase Warrants |   | Contributed
    Surplus |  
|Balance at December 31, 2004                                                         | 45,421,393    | 83,525,397        | $                    | 1,655,163   | $ | 96,455                      | $ | 930,660                 | $
|Common shares issued for cash
    pursuant to private placements, net of issue costs | 7,605,000     | 27,853,364        |                      |            |   |                            |   |                        |  
|Common shares issued for cash
    pursuant to exercise of options (note 6 (c))       | 475,000       | 435,250           |                      |            |   |                            |   |                        |  
|Common shares issued for cash
    pursuant to exercise of warrants                   | 250,000       | 200,000           |                      |            |   |                            |   |                        |  
|Fair value of options exercised
    (note 6 (c))                                     |              | 257,189           |                      | (257,189)   |   |                            |   |                        |  
|Fair value of warrants
    exercised                                                 |              | 96,455            |                      |            |   | (96,455)                    |   |                        |  
|Stock based compensation
    expense on unexercised options (note 6 (c))             |              |                  |                      | 1,224,274   |   |                            |   |                        |  
|Loss for the year ended
    December 31, 2005                                        |              |                  |                      |            |   |                            |   |                        |  
|                                                                                     |               |                   |                      |             |   |                             |   |                         |  
|Balance at December 31, 2005                                                         | 53,751,393    | 112,367,655       |                      | 2,622,248   |   |                            |   | 930,660                 |  
|Common shares issued for cash
    pursuant to private placements, net of issue costs | 19,231,000    | 117,662,735       |                      |            |   |                            |   |                        |  
|Common shares issued for cash
    pursuant to exercise of options (note 6 (c))       | 1,770,000     | 2,354,950         |                      |            |   |                            |   |                        |  
|Fair value of options exercised
    (note 6 (c))                                     |              | 1,167,443         |                      | (1,167,443) |   |                            |   |                        |  
|Fair value of options forfeited
    (note 6 (c))                                     |              |                  |                      | (63,037)    |   |                            |   | 63,037                  |  
|Stock based compensation on
    unexercised options (note 6 (c))                     |              |                  |                      | 1,192,942   |   |                            |   |                        |  
|Income for the year ended
    December 31, 2006                                      |              |                  |                      |            |   |                            |   |                        |  
|                                                                                     |               |                   |                      |             |   |                             |   |                         |  
|Balance at December 31, 2006                                                         | 74,752,393    | 233,552,783       |                      | 2,584,710   |   |                            |   | 993,697                 |  
|Stock based compensation on
    unexercised options (note 6 (c))                     |              |                  |                      | 1,829,296   |   |                            |   |                        |  
|Common shares issued for cash
    pursuant to exercise of options                    | 175,000       | 592,000           |                      |            |   |                            |   |                        |  
|Fair value of options exercised
    (note 6 (c))                                     |              | 292,852           |                      | (292,852)   |   |                            |   |                        |  
|Fair value of options expired
    (note 6 (c))                                       |               |                   |                      | (277,180)   |   |                             |   | 277,180                 |  
|Fair value of vested options
    forfeited (note 6 (c))                              |              |                  |                      | (107,622)   |   |                            |   | 107,622                 |  
|Loss for the year ended
    December 31, 2007                                        |              |                  |                      |            |   |                            |   |                        |  
|                                                                                     |               |                   |                      |             |   |                             |   |                         |  
|Balance at December 31, 2007                                                         | 74,927,393    | 234,437,635       | $                    | 3,736,352   | $ |                            | $ | 1,378,499               | $

The accompanying notes are an integral part of these
consolidated financial statements.

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|Corriente Resources Inc.                                           
|-------------------------------------------------------------------
|(a development stage enterprise)                                   
|Consolidated Statements of Loss,
    Comprehensive Loss and Deficit
|For the years ended December 31,
    2007, 2006 and 2005           
|(expressed in Canadian dollars)                                    

|                                                                   |   |             |   |             |   |            
|------------------------------------------------------------------ | - | ----------- | - | ----------- | - | -----------
|                                                                   |   | 2007        |   | 2006        |   | 2005       
|Administration                                                     |   |             |   |             |   |            
|                                                                   |   |             |   |             |   |            
|Management fees,
    wages, benefits & stock-based compensation    | $ | 1,608,536   | $ | 1,458,749   |   | 1,811,185  
|Legal, accounting and
    regulatory                               |   | 1,007,207   |   | 729,214     |   | 205,285    
|Corporate development
    and shareholder expenses                 |   | 517,537     |   | 473,799     |   | 435,596    
|Office and related                                                 |   | 245,466     |   | 234,463     |   | 172,617    
|Other                                                              |   | 119,314     |   | 52,906      |   | 15,296     
|                                                                   |   | 3,498,060   |   | 2,949,131   |   | 2,639,979  
|Other expenses (income)                                            |   |             |   |             |   |            
|Foreign exchange loss
    (gain) (note 11)                         |   | 15,538,886  |   | (58,667)    |   | 9,379      
|Interest income                                                    |   | (5,110,775) |   | (3,994,855) |   | (209,422)  
|Severance costs                                                    |   | 1,256,626   |   |            |   |           
|Gain on sale of assets                                             |   | (110,824)   |   |            |   | (1,970,320)
|Management fees (note
    7)                                       |   | (60,000)    |   |            |   |           
|(Gain) loss on sale of
    marketable securities (note 11)         |   |            |   | (336,253)   |   | 96,877     
|General exploration                                                |   |            |   | 37,616      |   | 38,535     
|Write-down of deferred power project
    costs                     |   |            |   |            |   | 2,739,111  
|                                                                   |   | 11,513,913  |   | (4,352,159) |   | 704,160    
|Loss (earnings) and comprehensive
    loss (earnings) for the year |   | 15,011,973  |   | (1,403,028) |   | 3,344,139  
|Deficit  beginning of year                                        |   | 48,393,771  |   | 49,796,799  |   | 46,452,660 
|Deficit  end of year                                              | $ | 63,405,744  | $ | 48,393,771  |   | 49,796,799 
|Loss (earnings) per
    share                                      |   |             |   |             |   |            
|Basic and diluted                                                  | $ | 0.20        | $ | (0.02)      | $ | 0.07       
|Weighted average
    number of shares outstanding                  |   |             |   |             |   |            
|Basic and diluted                                                  |   | 74,844,105  |   | 66,603,215  |   | 45,825,859 

The accompanying notes are an integral part of these
consolidated financial statements.

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|Corriente Resources Inc.                                
|--------------------------------------------------------
|(a development stage enterprise)                        
|Consolidated Statements of Cash
    Flows               
|For the years ended December 31,
    2007, 2006 and 2005
|(expressed in Canadian dollars)                         

|                                                                |   | 2007         |   | 2006         |  | 2005       
|--------------------------------------------------------------- | - | ------------ | - | ------------ |  | -----------
|Cash flows from (applied to)
    operating activities           |   |              |   |              |  |            
|(Loss) / earnings for
    the period                            | $ | (15,011,973) | $ | 1,403,028    |  | (3,344,139)
|Items not affecting
    cash                                    |   |              |   |              |  |            
|Stock-based compensation                                        |   | 699,251      |   | 567,734      |  | 1,224,274  
|Depreciation                                                    |   | 27,753       |   | 19,291       |  | 15,296     
|Interest (note 3)                                               |   | (24,855)     |   |             |  |           
|Loss (gain) on sale of marketable securities                    |   |             |   | (336,253)    |  | 96,877     
|Write-down of deferred power project costs                      |   |             |   |             |  | 2,739,111  
|Gain on sale of assets                                          |   |             |   |             |  | (1,882,000)
|Changes in non-cash
    working capital                         |   |              |   |              |  |            
|Accounts receivable and prepayments                             |   | (133,313)    |   | (57,040)     |  | (61,483)   
|Accounts payable and accrued liabilities                        |   | 320,006      |   | (325,827)    |  | 54,244     
|                                                                |   | (14,123,131) |   | 1,270,933    |  | (1,157,820)
|Cash flows from (applied to)
    investing activities           |   |              |   |              |  |            
|Mineral property costs                                          |   | (18,544,827) |   | (21,553,066) |  | (8,642,746)
|Payments to acquire
    plant and equipment                     |   | (1,473,248)  |   | (1,882,845)  |  | (154,859)  
|Convertible loan, net
    of interest (note 3)                  |   | (436,139)    |   |             |  |           
|Other assets (note 5)                                           |   | 240,208      |   | (3,518,971)  |  |           
|Cash balance of
    spun-off company (note 3)                   |   | (93,460)     |   |             |  |           
|Proceeds from sale of
    marketable securities                 |   |             |   | 336,253      |  | 2,339,123  
|Deferred power project
    costs                                |   |             |   |             |  | (1,034,449)
|Deposit                                                         |   |             |   |             |  |           
|                                                                |   | (20,307,466) |   | (26,618,629) |  | (7,492,931)
|Cash flows from (applied to)
    financing activities           |   |              |   |              |  |            
|Proceeds from issuance
    of share capital, net of issue costs |   | 592,000      |   | 120,017,685  |  | 28,488,614 
|Repayment of long-term debt                                     |   |             |   |             |  |           
|                                                                |   | 592,000      |   | 120,017,685  |  | 28,488,614 
|Increase (decrease) in cash and
    cash equivalents            |   | (33,838,597) |   | 94,669,989   |  | 19,837,863 
|Cash and cash equivalents 
    beginning of year               |   | 127,110,679  |   | 32,440,690   |  | 12,602,827 
|Cash and cash equivalents  end of
    year                     | $ | 93,272,082   | $ | 127,110,679  |  | 32,440,690 

Supplemental cash flow information (note 10)

The accompanying notes are an integral part of these
consolidated financial statements.

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

1

Corriente Resources Inc. and its subsidiaries (collectively,
"Corriente" or "the company") are engaged in the exploration and development of
mineral properties in Ecuador, South America. The company considers itself to be
a development stage enterprise.

The business of mining and exploring for minerals involves a
high degree of risk and there can be no assurance that current exploration and
development programs will result in profitable mining operations. The
recoverability of amounts shown for mineral properties is dependent upon the
discovery of economically recoverable reserves, receipt of necessary permits and
regulatory approvals, the ability of the company to obtain financing to complete
its development and future profitable operations or sale of the properties. The
investment in and expenditures on mineral properties comprise a significant
portion of the companys assets.

2

Basis of
presentation

These consolidated financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") in Canada,
which as described in note 12, differ in certain respects from GAAP in the
United States of America.

Basis of consolidation

The consolidated financial statements include the accounts of
the company, its subsidiaries, all of which are wholly-owned, and any variable
interest entities ("VIEs") where the company is the primary beneficiary. The
company has determined that it does not have any VIEs as at December 31, 2007
and 2006. All significant inter-company balances have been eliminated.

Mineral properties

The company capitalizes all costs related to investments in
mineral property interests on a property-by-property basis. Such costs include
mineral property acquisition costs, exploration and development expenditures.
The company also capitalizes the costs for future income taxes related to
mineral property costs that will not be eligible for deduction against future
taxable income.

The amounts shown for mineral property acquisition costs and
deferred exploration expenditures represent costs incurred to date and do not
necessarily reflect present or future values.

Mineral property expenditures will be amortized over the
useful lives of the properties upon commencement of commercial production or
written down to fair value if the properties are abandoned, become impaired or
the claims allowed to lapse.

The acquisition of title to mineral properties is a
complicated and uncertain process. The company has taken steps, in accordance
with industry standards, to verify mineral properties in which it has an
interest. Although the company has made efforts to ensure that legal title to
its properties is properly recorded in the name of the company, there can be no
assurance that such title will ultimately be secured.

1

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Plant and equipment

Plant and equipment is stated at cost. Depreciation of plant
and equipment is provided on a declining-balance basis over their estimated
useful lives at annual rates of between 5% and 100%, commencing when the related
asset is available for use.

Asset impairment

When events or changes in circumstances indicate that the
carrying amounts of the related mineral properties, plant and equipment may not
be recoverable, management of the company reviews and evaluates the carrying
value of each asset for impairment. If the total estimated future cash flows on
an undiscounted basis are less than the carrying amount of the asset, an
impairment loss is measured and assets are written down to fair value which is
normally the discounted value of future cash flows. Where estimates of future
net cash flows are not available and where other conditions suggest impairment,
management assesses whether carrying value can be recovered by considering
alternative methods of determining fair value. When it is determined that an
asset is impaired, it is written down to its estimated fair value in accordance
with the Canadian Institute of Chartered Accountants ("CICA") Handbook Section
3063 "Impairment of Long-Lived Assets".

Managements estimates of mineral prices, mineral resources,
foreign exchange, production levels and operating, capital and reclamation costs
are subject to risks and uncertainties that may affect the determination of the
recoverability of deferred mineral property costs. Although management has made
its best estimate of these factors, it is possible that material changes could
occur that may adversely affect managements estimate of the net cash flows to
be generated from its properties.

Cash and cash equivalents

Cash and cash equivalents comprise cash on deposit with banks
and highly liquid short-term interest bearing investments with a term to
maturity at the date of purchase of 90 days or less from the date of
acquisition.

Marketable securities

Marketable securities are recorded at their fair value on the
date of receipt and are classified as available-for-sale or held for trading.
The fair value of the securities is adjusted at each subsequent balance sheet
date and the resulting unrealized gains or losses are included in other
comprehensive income or net income for the period.

Foreign currency translation

As at December 31, 2007, the Canadian dollar is the
functional currency of the company.

The companys subsidiaries are considered integrated foreign
operations and their financial statements are translated into Canadian currency,
the parent companys functional currency, using the temporal method. Monetary
assets and liabilities are translated at the exchange rate in effect at the
balance sheet date; non-monetary items are translated at historical exchange
rates; revenue and expense items are translated at the average rate of exchange
for the period, except for depreciation, which is translated at the same rate as
the assets to which they relate. Translation gains and losses are reflected in
the companys reported income or loss for the period.

2

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Income taxes

Income taxes are calculated using the asset and liability
method. Temporary differences arising from the difference between the tax basis
of an asset or liability and its carrying amount on the balance sheet are used
to calculate future income tax liabilities or assets. Future income tax assets
and liabilities are measured using tax rates and laws that are expected to apply
when the temporary differences are expected to reverse. Assets are recognized
only to the extent it is more likely than not that they will be realized. A
valuation allowance is provided against future income tax assets to the extent
it is considered not likely that the future income tax assets will be realized.

Loss (earnings) per share

Loss (earnings) per share is presented for basic and diluted
loss (income). Basic loss (earnings) per share is computed by dividing income or
loss by the weighted average number of outstanding common shares for the year.
The computation of diluted earnings per share reflects the dilutive effect of
the exercise of stock options and warrants outstanding as at year-end using the
treasury stock method. In years of loss, basic and diluted loss per share are
the same because the effect of potential issuances of shares under options and
warrants would be anti-dilutive.

Use of estimates

The preparation of financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates and assumptions are used in
determining possible impairment of mineral property costs, the fair values of
stock options and financial instruments, asset retirement obligations and future
income tax assets. The company evaluates its estimates on an on-going basis and
bases them on various assumptions that are believed to be reasonable under the
circumstances. The companys estimates form the basis for making judgments about
the carrying value for assets and liabilities that are not readily apparent from
other sources. Actual results may differ from those estimates. Should the
company be unable to meet its ongoing obligations, the realizable value of its
assets may decline materially from current estimates.

Stock-based compensation plan

The company has a stock-based compensation plan as described
in note 6 (c).

The company applies the fair value method of accounting for
all stock options granted pursuant to CICA Handbook Section 3870, which
established standards for the recognition, measurement and disclosure of
stock-based compensation and other stock-based payments. Under this method,
stock-based compensation on options granted to employees, directors and
consultants is recorded as an expense or capitalized to mineral properties (for
grants to individuals working directly on mineral projects) over the vesting
period of the respective options, ranging from terms of up to 48 months, based
on the estimated fair value at the measurement date using the Black-Scholes
Option Pricing Model.

Asset retirement obligations

The company accounts for asset retirement obligations ("ARO")
by recognizing the fair value of a liability for an ARO in the period in which
it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are recorded to the capitalized carrying
amount of the related long-lived asset. The company has determined that it has
no material AROs at December 31, 2007 and 2006.

3

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Comparative figures

Certain comparative figures have been reclassified to conform
to the presentation adopted in the current period.

The company has adopted the following CICA standards
effective January 1, 2007:

Financial instruments

CICA Section 3855, Financial Instruments - Recognition and
Measurement, requires that all financial assets, except those classified as held
to maturity, and derivative financial instruments be measured at fair value on
initial recognition. Subsequent measurement depends on the classification of the
instrument. All financial liabilities must be measured at fair value when they
are classified as held for trading; otherwise, they are measured at amortized
cost. Investments classified as available-for-sale are reported at fair market
value (or marked to market) based on quoted market prices with unrealized gains
or losses excluded from earnings and reported as other comprehensive income or
loss. Investments subject to significant influence are not adjusted to fair
value.

The companys cash balances have been classified as
held-for-trading and are recorded at fair value. The companys cash equivalent
balances, which consist of overnight term deposits, have been classified as
held-to-maturity and are recorded at amortized cost. The convertible loan
receivable (note 3) has been classified as a receivable and recorded at
amortized cost.

Derivatives embedded in other financial instruments or other
host contracts are treated as separate derivatives when the risks and
characteristics are not closely related to those of the host contracts and the
host contracts are not measured at fair value, with changes in fair value
recognized in loss (earnings) for the period.

Any derivatives are recorded on the balance sheet at fair
value. Mark-to-market adjustments on these instruments are included in loss
(earnings) for the period. The company does not have any material derivative
financial instruments at December 31, 2007 or 2006.

All other financial instruments have been recorded at
amortized cost. Transaction costs incurred to acquire or issue financial
instruments are included in the underlying balance.

The adoption of CICA Section 3855 did not impact the
consolidated balance sheet of the company as at January 1, 2007.

Comprehensive income

Other comprehensive income is the change in the companys net
assets that results from transactions, events and circumstances from sources
other than the companys shareholders and includes items that would not normally
be included in net earnings such as unrealized gains or losses on
available-for-sale investments. Other comprehensive income includes the holding
gains and losses from available-for-sale securities that are not included in net
income (loss) until realized.

Investments classified as available for sale are reported at
fair market value (or marked to market) based on quoted market prices with
unrealized gains or losses excluded from earnings and reported as other
comprehensive income or loss. At December 31, 2007, the company had no
investments designated as available for sale.

4

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

The adoption of CICA Section 1530, Comprehensive Income, did
not impact the consolidated balance sheet of the company as at January 1, 2007.

Stripping costs

In March 2006, the CICA issued EIC-160, "Stripping Costs
Incurred in the Production Phase of a Mining Operation" that is effective for
fiscal years beginning on or after July 1, 2006. EIC-160 requires the costs
associated with the removal of overburden and other mine waste materials that
are incurred in the production phase of mining operations be charged to income
in the period in which they are incurred, except when the costs represent
betterment to the mineral property. Stripping costs represent betterment to the
mineral property when the stripping activity provides access to reserves that
will be produced in future periods and that would otherwise not have been
accessible without the stripping activity. When stripping costs are deferred in
relation to betterment, the costs are amortized to operations over the reserves
accessed by the stripping activity using the units of production method. This
Abstract has been adopted by the company as of January 1, 2007 and the adoption
of this new accounting policy did not impact the consolidated financial
statements.

Accounting changes

CICA Handbook Section 1506, "Accounting Changes", establishes
standards and new disclosure requirements for the reporting of changes in
accounting policies and estimates and the reporting of error corrections. It
also clarifies that a change in accounting policy can be made only if it is a
requirement under Canadian GAAP or if it provides reliable and more relevant
financial statement information. Voluntary changes in accounting policies
require retrospective application to prior period financial statements, unless
the retrospective effects of the changes are impracticable to determine, in
which case the retrospective application may be limited to the assets and
liabilities of the earliest period practicable with a corresponding adjustment
made to opening retained earnings. This Section is effective for fiscal years
beginning on or after January 1, 2007.

Recent Accounting Pronouncements Issued But Not Implemented

On December 1, 2006, the CICA issued three new accounting
standards: Handbook Section 1535, "Capital Disclosures", Handbook Section 3862
"Financial Instruments  Disclosures", and Handbook Section 3863, "Financial
Instruments  Presentation". These standards are effective for interim and
annual consolidated financial statements for the companys reporting periods
beginning on January 1, 2008.

Section 1535 establishes standards for the disclosure of (i)
an entitys objectives, policies and processes for managing capital; (ii)
quantitative data about what the entity regards as capital; (iii) whether the
entity has complied with any capital requirements and (iv) if it has not
complied, the consequences of such noncompliance.

Sections 3862 and 3863 replace Handbook Section 3861,
"Financial Instruments  Disclosure and Presentation", revising and enhancing
its disclosure requirements, and carrying forward unchanged its presentation
requirements. These new sections place increased emphasis on disclosures about
the nature and extent of risks arising from financial instruments and how the
entity manages those risks.

In March 2007, the CICA issued the new Handbook Section 3031,
"Inventories", which will replace Section 3030, "Inventories." The new Section
mentions that inventories shall be measured at the lower of cost and the net
realizable value. It provides guidelines on determining cost, prohibiting going
forward the use of the last-in, first-out method (LIFO), and requires the
reversal of a previous write-down when the value of inventories increases. The
new standard will apply to interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2008.

5

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

CICA Handbook Section 1400, "General Standards on Financial
Statement Presentation", has been amended to include requirements to assess and
disclose an entitys ability to continue as a going concern. The changes are
effective for interim and annual financial statements beginning on or after
January 1, 2008.

Effective January 1, 2009, Section 3064 replaces Handbook
Section 3062, "Goodwill and Intangible Assets" and establishes revised standards
for the recognition, measurement, presentation and disclosure of goodwill and
intangible assets. The new standard also provides guidance for the treatment of
pre-production and start-up costs and requires that these costs be expensed as
incurred.

The company is currently assessing the impact of these new
accounting standards on its consolidated financial statements.

3

Corriente Copper Belt, Ecuador

Under various agreements signed and completed with certain
Ecuadorian subsidiaries of BHP Billiton Plc ("BHP Billiton"), the company has
earned a 100% interest in BHP Billitons mineral properties located in the Rio
Zamora copper porphyry district (the Corriente Copper Belt) in Ecuador. This
required the issue of shares to BHP Billiton and the expenditure of exploration
funds under the terms of these agreements. Additionally, these mineral
properties are subject to a 2% Net Smelter Royalty ("NSR") payable to BHP
Billiton, though the company has options to reduce the NSR to 1% for the Mirador/Mirador
Norte, Panantza and San Carlos mineral properties upon the payment of US$2
million to BHP Billiton for each such option exercised.



6

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Following is a summary of the companys deferred mineral property
expenditures.

|                                                                           | (1)        |                | (2)       | Total     
|-------------------------------------------------------------------------- | ---------- | -------------- | --------- | ----------
|                                                                           |            |                |           |           
|                                                                           | Mirador/   | Panantza/      | Other     |           
|                                                                           | Mirador    | San
    Carlos |           |           
|                                                                           | Norte      |                |           |           
|                                                                           |            |                |           |           
|Balance December 31, 2004                                                  | 19,884,240 | 3,544,096      | 1,791,875 | 25,220,211
|                                                                           |            |                |           |           
|Property acquisition                                                       | 386,955    |               |          | 386,955   
|                                                                           |            |                |           |           
|Deferred exploration and
    development costs                             | 8,412,692  | 160,627        | 25,470    | 8,598,789 
|                                                                           |            |                |           |           
|Balance December 31, 2005                                                  | 28,683,887 | 3,704,723      | 1,817,345 | 34,205,955
|                                                                           |            |                |           |           
|Property acquisition                                                       | 2,313,836  | 59,260         | 1,588,160 | 3,961,256 
|                                                                           |            |                |           |           
|Deferred exploration and
    development costs                             | 20,417,923 | 2,478,768      | 185,158   | 23,081,849
|                                                                           |            |                |           |           
|Balance December 31, 2006                                                  | 51,415,646 | 6,242,751      | 3,590,663 | 61,249,060
|                                                                           |            |                |           |           
|Property acquisition                                                       | 50,106     | 25,185         |          | 75,291    
|                                                                           |            |                |           |           
|Deferred exploration and
    development costs  net of tax and recoveries | 14,962,299 | 1,180,939      | 583,570   | 16,726,808
|                                                                           |            |                |           |           
|Plan of Arrangement  spin-off
    of gold exploration targets             |           |               | (272,474) | (272,474) 
|                                                                           |            |                |           |           
|Balance December 31, 2007                                                  | 66,428,051 | 7,448,875      | 3,901,759 | 77,778,685

(1) on January 25, 2007, the company announced that it was
extending the Mirador/Mirador Norte Project development timeline as key permits
and government agreements had not been received consistent with the accelerated
project plan. This decision also resulted in the termination clauses of certain
agreements with suppliers of key long lead-time components to the Mirador
project to be invoked, for which charges for work incurred of $2,951,000
($US2,532,000) were accrued at December 31, 2006. The company was able to sell
the related partially completed assets to third parties in the first quarter of
2007 for net proceeds of $2,750,257 ($US2,382,000), which was received on April
13, 2007 and reflected as a recovery in mineral properties.

7

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

(2) At December 31, 2007, the balance is comprised of the
Dolorosa, La Florida, San Luis, San Marcos, San Miguel and Sutzu copper
exploration targets in the Corriente Copper Belt, and expenditures to develop
the companys concentrate shipping port facility in Machala, Ecuador.

Other

In 2003, the company sold the shares of its wholly-owned
subsidiaries, Corriente Argentina Inc. (Cayman) and Corriente Argentina S.A.
(Argentina), including its 100% interest in the Taca-Taca property in Argentina.
Pursuant to the original and subsequently amended sale agreement, the company
received a total of US$50,000 and 400,000 equivalent shares of the purchaser.
Should the Taca-Taca property achieve commercial production, the purchaser is
obligated to pay the company a further US$1,000,000. During the course of 2004
to 2006, the company sold the shares received (note 11 (c)).

Plan of arrangement spin-off of gold exploration
targets

On April 3, 2007, the company announced that its Board of
Directors had approved the spin-off of the companys Caya 36 (Tundayme) and
Piedra Liza gold assets into a new company, by means of a Plan of Arrangement
(the "Arrangement").

The Arrangement was approved by shareholders at the companys
May 24, 2007 Annual and Special General Meeting and closed on June 18, 2007.
Under the Arrangement, which was also approved by the British Columbia Supreme
Court, the companys shareholders received shares of a new private company, Q2
Gold Resources Inc. ("Q2 Gold") which holds the gold assets, on the basis of one
(1) Q2 Gold share for every three (3) common shares of Corriente held by them at
the close of business on June 15, 2007. The company believes the Arrangement and
spin-off is not material to the company, therefore note disclosure on
discontinued operations is not being presented.

The Arrangement was accounted for by the company at the time
of the transaction by showing a recovery of mineral property costs of $272,474,
a reduction of cash of $93,460 and the creation of a Convertible Loan of
$365,934.

Advances to Q2 Gold

In connection with the Arrangement and to assist Q2 Gold with
its business objectives, Corriente and Q2 Gold entered into a collaterzalized,
interest-bearing convertible loan agreement dated April 23, 2007 pursuant to
which Corriente agreed to lend Q2 Gold up to $750,000 to be advanced in
instalments (the "Loan").

As at December 31, 2007, a total of $460,994 was owed by Q2
Gold to the company, consisting of $436,139 of principal and $24,855 of accrued
interest. The Loan principal and unpaid interest are due on the earlier of
December 31, 2008 and the first date on which Q2 Gold obtains a prospectus
filing receipt with respect to any of its securities in any province of Canada.
At any time prior to maturity, Corriente can require Q2 Gold to convert, in
whole or in part, the principal amount outstanding and accrued interest of the
Loan into Q2 Gold Shares at a conversion price equal to $0.10 per share. Q2 Gold
can repay any or all of the outstanding Loan at any time prior to maturity or
conversion. The company believes the conversion feature of the Loan is not
material, therefore note disclosure on the embedded derivative is not being
presented.

8

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

4

|                                              |   |           |   |              |   | 2007      |   |           |   |              |   | 2006     
|--------------------------------------------- | - | --------- | - | ------------ | - | --------- | - | --------- | - | ------------ | - | ---------
|                                              |   |           |   | Accumulated  |   |           |   |           |   | Accumulated  |   |          
|                                              |   | Cost      |   | Depreciation |   | Net       |   | Cost      |   | Depreciation |   | Net      
|Computer equipment                            | $ | 891,032   | $ | 477,166      | $ | 413,866   | $ | 792,580   | $ | 262,782      | $ | 529,798  
|Construction barge and related
    facilities |   | 640,128   |   | 28,275       |   | 611,853   |   | 1,401,529 |   |             |   | 1,401,529
|Software fees and licences                    |   | 406,317   |   | 299,588      |   | 106,729   |   |          |   |             |   |         
|Office furniture and equipment                |   | 394,684   |   | 111,548      |   | 283,136   |   | 253,473   |   | 74,519       |   | 178,954  
|Vehicles                                      |   | 382,724   |   | 127,054      |   | 255,670   |   | 290,950   |   | 69,634       |   | 221,316  
|Communications equipment                      |   | 252,583   |   | 60,795       |   | 191,788   |   | 117,471   |   | 18,853       |   | 98,618   
|Field equipment                               |   | 91,288    |   | 40,109       |   | 51,179    |   | 88,041    |   | 27,799       |   | 60,242   
|                                              | $ | 3,058,756 | $ | 1,144,535    | $ | 1,914,221 | $ | 2,944,044 | $ | 453,587      | $ | 2,490,457

5

The following table summarizes information about other assets as at December
31:

|                                                   |   | 2007      |   | 2006     
|-------------------------------------------------- | - | --------- | - | ---------
|                                                   |   |           |   |          
|EIA security deposits                              | $ | 3,278,763 | $ | 3,518,971
|Insurance proceeds
    receivable on loss of barge |   | 723,547   |   |         
|Advances on mineral property
    expenditures      |   | 258,087   |   | 1,414,413
|                                                   |   |           |   |          
|                                                   | $ | 4,260,397 | $ | 4,933,384

As a requirement of the Ministry of Mines and Petroleum ("MMP",
formerly called the Ministry of Energy and Mines) of Ecuador to approve the
Mirador projects Environmental Impact Assessment ("EIA"), the company was
required to post a deposit of US$3,019,539 ($2,993,269) in favour of the MMP as
security against the companys obligations under the Mirador EIA. A similar EIA
security deposit in favour of the MMP of US$288,000 ($285,494) was required as
security against the companys obligations under the Machala Port EIA.

In November 2007, the company experienced an accidental loss
of its construction barge. The company has received confirmation from its
insurance company that the insurance claim made will be paid in full to the
company in March 2008. The carrying value of the barge has been written down
from $1,401,529 to $611,853 as at December 31, 2007. Costs associated with the
reconstruction of the barge will be added to the barges carrying value after
reconstruction is completed. The related shoreline and barge facilities remain
intact.

Advances on mineral property expenditures include payments to
contractors and suppliers made pursuant to supply agreements prior to the
contracted goods and services being provided.

9

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

6

a)

Authorized

Unlimited (2006  100,000,000) common
shares, without par value

b)

Issued

See Consolidated Statements of
Changes in Shareholders Equity.

On December 29, 2005, the company
completed a public offering of 7,605,000 common shares at $3.95 per share
pursuant to a short form prospectus dated December 19, 2005 to raise gross
proceeds of $30,039,750 before issue costs of $2,186,386.

On May 25, 2006, the company
completed a public offering of 19,231,000 common shares at $6.50 per share
pursuant to a short form prospectus dated May 18, 2006 to raise gross proceeds
of $125,001,500 before issue costs of $7,338,765.

c)

Stock options

The company has in place an incentive
stock option plan dated November 1996, last amended April 18, 2006 (the "Option
Plan") for directors, officers, employees and consultants to the company and its
subsidiaries. The Option Plan provides that the directors of the company may
grant options to purchase common shares on terms that the directors may
determine, within the limitations of the Option Plan. The number of common
shares available for the grant of options under the Option Plan and all other
share compensation arrangements of the company is set at a rolling maximum
number that shall not be greater than 10% of the companys current outstanding
share capital at any given time. The exercise price of each option cannot be
lower than the closing market price of the shares on the trading day immediately
prior to the date of grant of the option. As at December 31, 2007, options to
purchase a total of 2,702,500 (2006  2,435,000; 2005  2,855,000) shares were
outstanding, 1,322,966 (2006  1,208,436; 2005  2,855,000) of which were
vested.

Effective February 1, 2006, stock
options granted have the following vesting provisions:

- 



For the year ended December 31, 2007,
the estimated fair value of the granted options which vested during the year
totalled $1,829,296 (2006  $1,192,942; 2005 - $1,224,274), of which $699,251
(2006  $567,734; 2005  $1,224,274) is included in management fees, wages,
benefits & stock-based compensation and $1,130,045 (2006  $625,208; 2005 
$Nil) is included in mineral properties.

10

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Non-cash stock-based compensation
expense for options is determined based on estimated fair values of the options
at the time of grant, the cost of which is recognized over the vesting period,
which ranges from two years to four years, of the respective options and grants.
The fair value of the stock options is estimated using the Black-Scholes Option
Pricing Model with the following assumptions:

|                                | 2007       | 2006       | 2005      
|------------------------------- | ---------- | ---------- | ----------
|Risk-free interest rate         | 3.954.66% | 3.874.16% | 2.953.19%
|Expected dividend yield         | -          | -          | -         
|Expected stock price volatility | 60 62%    | 62 67%    | 68 71%   
|Expected option life in years   | 3          | 3          | 3         

Option pricing models require the
input of highly subjective assumptions including expected price volatility.
Changes in the subjective input assumptions can materially affect the fair value
estimate.

The estimated fair value assigned to
the stock options exercised during the years ended December 31, 2007, 2006 and
2005 was recorded to share capital and the estimated fair value assigned to the
stock options that expired or were forfeited during the years ended December 31,
2007 and 2006 was recorded to contributed surplus. The estimated fair value
assigned to the stock options that were both vested and forfeited during the
years ended December 31, 2007, 2006 and 2005 were included in management fees,
wages, benefits & stock-based compensation or mineral properties.

The following table summarizes
information about options granted during the twelve months ended December 31,
2007:

Number
      of
      Exercise PriceExpiry dates
      Optionees
      options
      $January 1, 2012
      Executive officers
      290,000
      4.10June 1, 2012
      Directors
      125,000
      3.66July 12, 2012
      Employees
      447,500
      4.90Total granted
      
      862,500


11

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

A summary of changes to stock options
outstanding and exercisable is as follows:

|                                                 |           |   | 2007     |             |   | 2006     |           |   | 2005    
|------------------------------------------------ | --------- | - | -------- | ----------- | - | -------- | --------- | - | --------
|                                                 |           |   | Weighted | Weighted    |   |          |           |   | Weighted
|                                                 |           |   | average  |             |   | average  |           |   | average 
|                                                 | Number of |   | exercise | Number of   |   | exercise | Number of |   | exercise
|                                                 | options   |   | price    | options     |   | price    | options   |   | price   
|                                                 |           |   |          |             |   |          |           |   |         
|Options outstanding  beginning
    of year      | 2,435,000 | $ | 4.05     | 2,855,000   | $ | 1.89     | 2,390,000 | $ | 1.46    
|Granted                                          | 862,500   |   | 4.45     | 1,375,000   |   | 5.05     | 940,000   |   | 2.49    
|Exercised                                        | (175,000) |   | 3.38     | (1,770,000) |   | 1.33     | (475,000) |   | 0.92    
|Expired                                          | (175,000) |   | 3.32     |            |   |         |          |   |        
|Forfeited/cancelled                              | (245,000) |   | 4.91     | (25,000)    |   | 5.35     |          |   |        
|Options outstanding  end of
    year            | 2,702,500 | $ | 4.19     | 2,435,000   | $ | 4.05     | 2,855,000 | $ | 1.89    
|                                                 |           |   |          |             |   |          |           |   |         
|Options outstanding and vested
     end of year | 1,322,966 | $ | 3.60     | 1,208,436   | $ | 3.05     | 2,855,000 | $ | 1.89    

The following table summarizes
information about stock options outstanding and exercisable at December 31,
2007:

|      |                 | Outstanding |   | Exercisable
|----- | --------------- | ----------- | - | -----------
|      |                 | Number of   |   |            
|      |                 | options     |   | Weighted   
|Year  | Range of        | outstanding |   | average    
|of    | exercise        | at          |   | exercise   
|Grant | prices          | December    |   | price      
|      |                 | 31, 2007    |   |            
|2005  | $ 2.15  2.99   | 735,000     | $ | 2.55       
|2006  | 4.50 
    5.50 | 1,120,000   |   | 5.07       
|2007  | 3.66  4.90     | 847,500     |   | 4.44       
|      |                 | 2,702,500   | $ | 4.19       

12

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

7

Included in management fees and interest income are $60,000
(2006  $Nil; 2005  $Nil) and $24,855 (2006  $Nil; 2005  $Nil), respectively,
for the year ended December 31, 2007 in respect of administrative services
provided by Corriente to Q2 Gold, which has a common Board of Directors and
common Officers.

The foregoing related party transactions are recorded at the
exchange amount which is the amount of consideration paid or received as
established and agreed to between the parties.

At December 31, 2007,  a convertible loan in
the amount of $460,994 (2006  $Nil) was due from Q2 Gold.

8

The reconciliation of income taxes attributable to continuing
operations computed at statutory rates to the income tax expense/(recovery) is
as follows:

|                                                                         |   | 2007        | 2006        | 2005       
|------------------------------------------------------------------------ | - | ----------- | ----------- | -----------
|                                                                         |   |             |             |            
|Canadian statutory tax rates                                             |   | 34.12%      | 34.12%      | 34.12%     
|                                                                         |   |             |             |            
|Income tax expense / (recovery)
    computed at Canadian statutory rates | $ | (5,122,085) | 478,713     | (1,141,020)
|Difference in foreign tax rates                                          |   | 509,582     | (113,278)   | (438,922)  
|Permanent differences                                                    |   | 239,756     | 197,838     | 420,027    
|Non-taxable portion of capital
    gains                                 |   | 2,613,752   |            |           
|Change in valuation allowance                                            |   | (346,188)   | 1,478,665   | 963,386    
|Items deductible for tax not
    recognized in earnings                  |   |            | (2,503,987) | (745,995)  
|Impact of change in tax rates
    applied to opening future tax assets   |   | 1,024,405   |            |           
|Expired tax losses                                                       |   | 255,758     |            |           
|Differences in prior year tax
    returns filed                          |   | 825,020     | 462,049     | 942,524    
|                                                                         |   |             |             |            
|Income tax expense (recovery)                                            | $ |            |            |           

13

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

The significant components of the companys future income tax assets and
liabilities are as follows:

|                                  |   | 2007        |   | 2006        |   | 2005       
|--------------------------------- | - | ----------- | - | ----------- | - | -----------
|                                  |   |             |   |             |   |            
|Future income tax
    assets      |   |             |   |             |   |            
|Losses carried forward            | $ | 1,665,797   | $ | 2,244,769   | $ | 2,348,685  
|Mineral properties                |   | 1,282,933   |   | 2,529,734   |   | 2,730,220  
|Share issuance costs              |   | 1,638,309   |   | 2,506,445   |   | 726,515    
|Plant and equipment
    and other |   | 2,425,563   |   | 77,842      |   | 74,705     
|                                  |   | 7,012,602   |   | 7,358,790   |   | 5,880,125  
|Valuation allowance               |   | (7,012,602) |   | (7,358,790) |   | (5,880,125)
|                                  | $ |            | $ |            |   |           

At December 31, 2007, the company has Canadian losses for tax
purposes of approximately $5.8 million which expire on various dates to 2027.

9

The company operates within a single operating segment, which
is the exploration and development of copper-gold mineral properties. The
companys mineral property interests are in Ecuador, South America, as set out
in note 3.

Geographic segmentation of the companys assets is as
follows:

|                                        | 2007         | 2006        
|--------------------------------------- | ------------ | ------------
|                                        | Canada       | Ecuador     
|                                        |              |             
|Cash and cash equivalents               | $ 93,028,030 | $ 244,052 $ 
|Accounts receivable and
    prepayments | 338,859      |            
|Convertible loan                        | 460,994      |            
|Mineral properties                      |             | 77,778,685  
|Plant and equipment                     | 122,528      | 1,791,693   
|Other assets                            |             | 4,260,397   
|                                        | $ 93,950,411 | $ 84,074,827

With the exception of severance costs in relation to
restructuring of $1,256,626 (2006  $Nil; 2005  $Nil) and general exploration
costs of $Nil (2006  $37,034; 2005  $Nil) incurred by the companys Ecuador
operations, the consolidated statements of loss for the years ended December 31,
2007, 2006 and 2005 reflect the Canadian operations.

14

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

10

Cash and cash equivalents at December 31 comprise the following:

|                                                                                 |   | 2007       |   | 2006       
|-------------------------------------------------------------------------------- | - | ---------- | - | -----------
|Cash on hand and balances with banks                                             | $ | 334,770    | $ | 1,778,235  
|Short-term investments, with maturity
    dates less than 90 days at acquisition |   | 92,937,312 |   | 125,332,444
|                                                                                 | $ | 93,272,082 | $ | 127,110,679

At December 31, 2007, the companys short-term investments
are invested in overnight bank deposits with R1-High investment ratings (DBRS)
that are easily liquidated, as they mature daily. The company has no investments
in asset-backed commercial paper.

During the years ended December 31, 2007, 2006 and 2005, the
company conducted non-cash operating, investing and financing activities as
follows:

|                                                                                                       |   | 2007        |   | 2006      |   | 2005     
|------------------------------------------------------------------------------------------------------ | - | ----------- | - | --------- | - | ---------
|Depreciation included in mineral properties                                                            | $ | 710,299     | $ | 152,455   | $ | 54,658   
|Loss on disposal of plant and equipment capitalized to
    mineral properties                          | $ | 40,247      | $ | 33,897    | $ | 86,038   
|Insurance claim related to plant and equipment                                                         | $ | (723,547)   | $ |          | $ |         
|Stock-based compensation included in mineral properties                                                | $ | 1,130,045   | $ | 625,208   | $ |         
|Change in other assets and accounts payable and accrued
    liabilities relating to mineral properties | $ | (3,636,023) | $ | 4,678,479 | $ | 202,303  
|Change (decrease) in accounts payable and accrued liabilities
    relating to plant and equipment      | $ | (1,271,185) | $ | 547,638   | $ |         
|Recovery of mineral property costs from the Arrangement                                                | $ | (272,474)   | $ |          | $ |         
|Marketable securities received from sale of subsidiary
    company                                     | $ |            | $ |          | $ | 1,882,000

15

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

11

(a)

Fair Values

Canadian GAAP requires that the
company disclose information about the fair value of its financial assets and
liabilities. Fair value estimates are made at the balance sheet date, based on
relevant market information and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties in
significant matters of judgment and therefore cannot be determined with
precision. Cash balances are recorded at fair value and cash equivalents, which
consist of overnight term deposits, are carried at amortized cost, which
approximates fair value. The carrying amounts for accounts receivable,
convertible loan, accounts payable relating to mineral properties, accounts
payable relating to plant and equipment and other accounts payable and accrued
liabilities on the balance sheet approximate fair value because of the
short-term nature of these instruments. Management believes the carrying value
of the EIA security deposits and insurance claim receivable (note 5) approximate fair value due to
their
short-term nature.

The company does not have any
material derivative financial instruments at December 31, 2007 or 2006.

(b)

Currency Risk

As at December 31, 2007, the
companys expenditures are predominantly in U.S. dollars and any future equity
raised is expected to be predominantly in Canadian dollars. The company conducts
the majority of its business in Ecuador, which uses the U.S. dollar as its
primary economic currency. Future project development expenditures are expected
to be paid in U.S. dollars.

As such, the company is subject to
risk due to fluctuations in the exchange rates for the U.S. and Canadian dollar.
The company has a practice of not entering into foreign currency hedging.
Beginning in 2007, the company began maintaining balances in Canadian and U.S.
dollars in a proportion related to the magnitude of future mineral property,
plant and equipment, and administrative expenditures, and the jurisdictions in
which they will likely be made.

A breakdown by currency of the
companys cash and cash equivalents, at year-end was as follows:

|                                                |     | 2007       |     | 2006       
|----------------------------------------------- | --- | ---------- | --- | -----------
|Canadian dollar                                 | $   | 15,210,692 | $   | 125,063,312
|U.S. dollar                                     | US$ | 78,746,484 | US$ | 1,756,794  
|December 31 closing exchange rate (Cdn$ to US$) |     | 0.9913     |     | 1.1654     

(c)

Other

The company held no marketable
securities during 2007. During 2006, the company sold all of its remaining
marketable securities for net proceeds of $336,253 (2005 - $2,339,123),
realizing a gain of $336,253 (2005 - loss of $96,877).

16

---



|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

12

The consolidated financial statements have been prepared in
accordance with Canadian GAAP, which differs in certain respects from those
applicable in the United States ("U.S. GAAP") and from practices prescribed by
the United States Securities and Exchange Commission ("SEC"). Significant
measurement differences that materially affect the companys consolidated
financial statements for the years ended December 31, 2007, 2006 and 2005 are as
follows:

a)

Mineral
exploration expenditures

As described in note 2, Canadian GAAP
allows for the deferral of mineral exploration expenditures. Under U.S. GAAP,
the company capitalizes acquisition costs and expenses exploration costs as
incurred for unproven mineral properties. When proven and probable reserves are
determined for a property and a positive feasibility study has been prepared,
subsequent development costs of the property would be capitalized.

During the year ended December 31,
2007, mineral exploration expenditures under Canadian GAAP of $272,474 were
transferred to Q2 Gold in exchange for a convertible loan receivable recorded by
the company on completion of the Arrangement described in note 3. For U.S. GAAP
purposes, the mineral exploration expenditures transferred to Q2 Gold were
previously expensed and the company therefore recognized a recovery of mineral
exploration expenditures during the year ended December 31, 2007 of $272,474.

b)

Available-for-sale securities

Prior to the adoption of CICA
Sections 3855 and 1530 on January 1, 2007, marketable securities under Canadian
GAAP were carried at the lower of cost and quoted market value. Under U.S. GAAP,
these investments would be categorized as available-for-sale securities carried
at fair value with unrealized gains and losses temporarily recorded in a
separate component of shareholders equity until the investment was sold,
abandoned or impaired. Effective January 1, 2007, this difference in accounting
treatment has been eliminated due to the companys adoption of CICA Section 3855
and CICA Section 1530.

c)

Uncertainty
in Income Taxes

Effective January 1, 2007, the
company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes ("FIN 48"). FIN 48 prescribes a recognition and measurement model for tax
positions taken or expected to be taken in a tax return, and provides guidance
on the de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. The adoption of FIN 48 had no
impact on the companys consolidated financial statements.

17

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

Had the company followed U.S. GAAP,
certain items in the financial statements would have been reported as follows:

Statements of Loss and Deficit

|                                                                    |   | Years ended December 31,
|------------------------------------------------------------------- | - | ------------------------
|                                                                    |   | 2007                    
|Loss (income) under Canadian GAAP                                   |   | 15,011,973              
|Adjustment to reconcile to U.S. GAAP:                               |   |                         
|Mineral exploration costs (a)                                       |   | 14,866,174              
|Loss under U.S. GAAP                                                |   | 29,878,147              
|Change in unrealized gain on available-for-sale
    securities (b)  |   |                        
|Comprehensive loss under U.S. GAAP                                  |   | 29,878,147              
|Basic and diluted loss per share under U.S. GAAP                    |   | 0.40                    
|Weighted average number of shares outstanding                       |   | 74,844,105              
|                                                                    |   |                         
|Balance Sheets                                                      |   |                         
|                                                                    |   | December 31,            
|Total assets under Canadian GAAP                                    | $ | 178,025,238             
|Adjustment to reconcile to U.S. GAAP:                               |   |                         
|Mineral exploration costs (a)                                       |   | (67,690,426)            
|Total assets under U.S. GAAP                                        | $ | 110,334,812             
|                                                                    |   |                         
|                                                                    |   |                         
|Shareholders equity under Canadian GAAP                            | $ | 176,146,742             
|Adjustment to reconcile to U.S. GAAP:                               |   |                         
|Mineral exploration costs (a)                                       |   | (67,690,426)            
|Total shareholders equity under U.S. GAAP                          | $ | 108,456,316             
|                                                                    |   |                         
|Statements of Cash Flows                                            |   |                         
|                                                                    |   | Years ended December 31 
|                                                                    |   | 2007                    
|Cash from (applied to) operating activities under
    Canadian GAAP |   | (14,123,131)            
|Adjustment to reconcile to U.S. GAAP:                               |   |                         
|Mineral exploration costs (a)                                       |   | (16,881,376)            
|Cash from (applied to) operating activities under
    U.S. GAAP     |   | (31,004,507)            
|                                                                    |   |                         
|Cash from (applied to) investing activities under
    Canadian GAAP |   | (20,307,466)            
|Adjustment to reconcile to U.S. GAAP:                               |   |                         
|Mineral exploration costs (a)                                       |   | 16,881,376              
|Cash from (applied to) investing activities under
    U.S. GAAP     |   | (3,426,090)             

18

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|Corriente Resources Inc.                      
|----------------------------------------------
|(a development stage enterprise)              
|Notes to Consolidated Financial
    Statements
|December 31, 2007, 2006 and 2005              
|(expressed in Canadian dollars)               

13

a)

Recent Canadian Accounting Pronouncements

i)

International
Financial Reporting Standards ("IFRS")

In January 2006, the CICA Accounting
Standards Board ("AcSB") published a new strategic plan for the direction of
accounting standards in Canada and the expected convergence with IFRS by the end
of 2011. On February 13, 2008, the AcSB confirmed 2011 as the official
changeover date for publicly listed Canadian companies to start using IFRS. The
transition will affect interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2011. The impact of the transition
to IFRS on the company's consolidated financial statements has not yet been
determined.

b)

Recent U.S.
Accounting Pronouncements

i)

SFAS No. 157 -
Fair Value Measurements ("SFAS 157")

In September 2006, the FASB issued
SFAS No. 157 "Fair Value Measurements", which defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. FAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years, and is applicable to the company beginning in the first quarter of 2008.
Earlier application is encouraged, provided that the reporting entity has not
yet issued financial statements for that fiscal year or an interim period within
that fiscal year. Prospective application is required for the company. The
company is currently evaluating the impact of FAS 157.

ii)

SFAS No. 159 -
The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS
159")

SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value. Most of the provisions of SFAS 159 apply only to entities that elect the
fair value option. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. Management is analyzing the requirements of this new standard
and believes that its adoption will not have any significant impact on the
company's financial statements.

iii)

SFAS No. 141R,
Business Combinations ("SFAS 141R")

In November 2007, the FASB issued
SFAS 141R which establishes principles and requirements for how the acquirer of
a business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree. SFAS 141R also provides guidance for recognizing and measuring the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS 141R is effective for fiscal
years beginning on or after December 15, 2008. Management is analyzing the
requirements of this new standard and believes that its adoption will not have
an impact on the company's financial statements.

iv)

SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160")

In November 2007, the FASB issued
SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an
amendment of ARB No. 51. SFAS 160 will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests
and classified as a component of equity. SFAS 160 is effective for fiscal years
beginning on or after December 15, 2008. SFAS 160 requires retroactive adoption
of the presentation and disclosure requirements for existing minority interests.
All other requirements of SFAS 160 will be applied prospectively. Management is
currently evaluating the requirements of FAS No. 160 and believes that its
adoption will not have any impact on the company's financial statements.

19

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