---

U.S.SECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/A(Amendment)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________to
_______________

0-21777(Commission File Number)

GOLDEN QUEEN MINING CO.
LTD.(Name of registrant in its charter)

|British Columbia, Canada                                             | Not Applicable     
|-------------------------------------------------------------------- | -------------------
|(State or other jurisdiction                                         | (IRS Employer      
|of incorporation or organization)                                    | Identification No.)
|                                                                     |                    
|6411 Imperial Avenue, West Vancouver, British
      Columbia, Canada | V7W 2J5            
|(Address of principal executive offices)                             | (Zip Code)         

Issuers telephone number: (604) 921-7570

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under section 12(g) of the Exchange Act:
Common shares without par value

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [X]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-K
or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filed [ ] Smaller reporting company [X]

---

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter: $72,956,250 as at June 30, 2010.

Indicate the number of shares outstanding of each of the
registrants classes of common equity, as of the latest practicable date:
94,228,380 common shares as at December 31, 2010.

EXPLANATORY NOTE

This Amendment to the Annual Report on Form 10-K/A filed by
Golden Queen Mining Co. Ltd. (the Company), on January 14, 2011 corrects
certain typographical errors in the restated financial statements for the year
ended December 31, 2009, which were due to a technical error.

Except as specifically referenced herein, this Amendment to the
Annual Report on Form 10-K/A does not reflect any event occurring subsequent to
January 14, 2011, the filing date of the original report, and no other changes
have been made to the report.

2

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Item 8. Financial Statements and Supplementary Data.

The Consolidated Financial Statements of the Company and the
notes thereto are attached to this report following the signature page and
Certifications.

PART IV

Item 15. Exhibits

|Exhibit | Description
      of Exhibit             | Manner of Filing
|------- | ---------------------------------------- | ----------------
|No.     |                                          |                 
|23.1    | Consent of BDO Canada LLP                | Filed herewith  
|31.1    | Rule 13a-14(a)/15(d)-14(a) Certification | Filed herewith  
|32.1    | Section 1350 Certification               | Filed herewith  

3

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

GOLDEN QUEEN MINING CO. LTD.

|By: | /s/ H.
      Lutz Klingmann             | 
|--- | --------------------------------------- | 
|    | H. Lutz Klingmann                       | 
|    | President, Principal Executive Officer, | 
|    | and Principal Accounting
    Officer    | 
|    |                                         | 
|    | Date: January 26, 2011                  | 

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Signature                   |  | Title                                      | Date            
|--------------------------- |  | ------------------------------------------ | ----------------
|                            |  |                                            |                 
|                            |  |                                            |                 
|                            |  | President, Principal Executive Officer,    | January 26, 2011
|/s/ H. Lutz
      Klingmann |  | Principal Accounting Officer, and Director |                 
|H. Lutz Klingmann           |  |                                            |                 
|                            |  |                                            |                 
|                            |  |                                            |                 
|/s/ Edward
      Thompson   |  | Director                                   | January 26, 2011
|Edward Thompson             |  |                                            |                 
|                            |  |                                            |                 
|                            |  |                                            |                 
|/s/ Chester
      Shynkaryk |  | Director                                   | January 26, 2011
|Chester Shynkaryk           |  |                                            |                 
|                            |  |                                            |                 
|                            |  |                                            |                 
|/s/ Gordon Gutrath          |  | Director                                   | January 26, 2011
|Gordon Gutrath              |  |                                            |                 
|                            |  |                                            |                 
|                            |  |                                            |                 
|/s/ Thomas Clay             |  | Director                                   | January 26, 2011
|Thomas Clay                 |  |                                            |                 

4

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| | Tel: 604 688 5421 
      Fax: 604 688 5132 www.bdo.ca | BDO Canada LLP 
      600 Cathedral Place 
      925 West Georgia Street 
      Vancouver BC V6C 3L2 Canada
| | ----------------------------------------------------- | -----------------------------------------------------------------------------------------------------------

Report of Independent Registered Public Accounting Firm

To the Shareholders of 
  Golden Queen Mining Co. Ltd. 
  (An exploration stage company)

We have audited the accompanying consolidated balance sheets
  of Golden Queen Mining Co. Ltd. (an exploration stage company), as of December
  31, 2009 and 2008, and the consolidated statements of loss, changes in shareholders
  equity (capital deficit) and cash flows for the years then ended. We have also
  audited the statements of loss, changes in shareholders equity (capital
  deficit), and cash flows for the period from inception (November 21, 1985) through
  December 31, 2009, except that we did not audit these financial statements for
  the period from inception (November 21, 1985) through May 31, 1996; those statements
  were audited by other auditors whose report dated July 12, 1996, expressed an
  unqualified opinion on those statements. These financial statements are the
  responsibility of the Companys management. Our responsibility is to express
  an opinion on these consolidated financial statements based on our audits. Our
  opinion, insofar as it relates to the amounts for the period from inception
  (November 21, 1985) through May 31, 1996, is based solely on the report of the
  other auditors.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audits to obtain reasonable assurance about whether
  the consolidated financial statements are free of material misstatement. The
  Company is not required to have, nor were we engaged to perform, an audit of
  its internal control over financial reporting. Our audits included consideration
  of internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose
  of expressing an opinion on the effectiveness of the Companys internal
  control over financial reporting. Accordingly, we express no such opinion. An
  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, based on our audits and the report of other auditors,
  the consolidated financial statements referred to above present fairly, in all
  material respects the financial position of Golden Queen Mining Co. Ltd., as
  of December 31, 2009 and 2008, and the results of its operations and its cash
  flows for the years then ended and for the period from inception (November 21,
  1985) through December 31, 2009, in conformity with accounting principles generally
  accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the consolidated financial statements, the Company had a $53,468,071 deficit
  accumulated during the exploration stage as of December 31, 2009. These conditions
  raise substantial doubt about the Companys ability to continue as a going
  concern. Managements plans in regard to these matters are also described
  in Note 1. The financial statements do not include any adjustments that might
  result from the outcome of this uncertainty.

The consolidated financial statements as of December 31, 2009
  and for the year then ended have been restated to correct errors in the adoption
  of a new accounting pronouncement as described in Note 11 to the consolidated
  financial statements.

/s/ BDO Canada LLP

Chartered Accountants 
  Vancouver, Canada 
  December 14, 2010

---

|GOLDEN QUEEN MINING CO. LTD.  
|------------------------------
|(an exploration stage company)
|Consolidated Balance Sheets   
|(US dollars)                  

|                                                                                                                                                                                                  |   | December 31,     |   |   | December 31, |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------------- | - | - | ------------ | -
|                                                                                                                                                                                                  |   | 2009 (Restated  |   |   |              |  
|                                                                                                                                                                                                  |   | Note
      11)   |   |   | 2008         |  
|Assets                                                                                                                                                                                            |   |                  |   |   |              |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Current assets:                                                                                                                                                                                   |   |                  |   |   |              |  
|Cash and cash equivalents                                                                                                                                                                         | $ | 2,433,202        |   | $ | 3,033,771    |  
|Receivables                                                                                                                                                                                       |   | 24,604           |   |   | 20,051       |  
|Prepaid expenses and other
      current assets                                                                                                                                                   |   | 19,490           |   |   | 19,846       |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total current assets                                                                                                                                                                              |   | 2,477,296        |   |   | 3,073,668    |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Property and equipment, net (Note 2)                                                                                                                                                              |   | 205,916          |   |   | 211,940      |  
|Reclamation financial assurance
      (Note 3)                                                                                                                                                    |   | 286,653          |   |   | 271,808      |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total Assets                                                                                                                                                                                      | $ | 2,969,865        |   | $ | 3,557,416    |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Liabilities and Shareholders Equity                                                                                                                                                              |   |                  |   |   |              |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Current liabilities:                                                                                                                                                                              |   |                  |   |   |              |  
|Accounts payable                                                                                                                                                                                  | $ | 150,766          |   | $ | 172,702      |  
|Advance minimum
      royalties (Note 8)                                                                                                                                                          |   | -                |   |   | 48,034       |  
|Accrued liabilities                                                                                                                                                                               |   | 77,821           |   |   | 76,341       |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total current liabilities                                                                                                                                                                         |   | 228,587          |   |   | 297,077      |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Asset retirement obligations (Note 7)                                                                                                                                                             |   | 177,564          |   |   | 162,903      |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Derivative liability (Note 11)                                                                                                                                                                    |   | 2,695,602        |   |   | -            |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total liabilities                                                                                                                                                                                 |   | 3,101,753        |   |   | 459,980      |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Shareholders equity (capital deficit):                                                                                                                                                           |   |                  |   |   |              |  
|Preferred shares,
      no par value, 3,000,000 shares 
                     
      authorized; no shares outstanding                                                                             |   |                  |   |   |              |  
|Common shares,
      no par value, 100,000,000 shares 
                     
      authorized; 88,378,383 (2008  85,640,883) shares issued 
                     
      and outstanding (Note 6) |   | 50,205,634       |   |   | 48,677,903   |  
|Additional
      paid-in capital                                                                                                                                                                  |   | 3,130,549        |   |   | 3,837,117    |  
|Deficit accumulated during
      the exploration stage                                                                                                                                            |   | (53,468,071      | ) |   | (49,417,584  | )
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total shareholders equity (capital
      deficit)                                                                                                                                                |   | (131,888         | ) |   | 3,097,436    |  
|                                                                                                                                                                                                  |   |                  |   |   |              |  
|Total liabilities and shareholders equity (capital deficit)                                                                                                                                      | $ | 2,969,865        |   | $ | 3,557,416    |  

Financial Condition and Ability to Continue as a Going Concern
  (Note 1) 
  Commitments and Contingencies (Notes 4, 7 and 8) 
  Subsequent Event (Note 6)

Approved by the Directors:

|"H. Lutz Klingmann"         |  | "Chester Shynkaryk"        
|--------------------------- |  | ---------------------------
|H. Lutz Klingmann, Director |  | Chester Shynkaryk, Director

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

2

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|GOLDEN QUEEN MINING CO. LTD.   
|-------------------------------
|(an exploration stage company) 
|Consolidated Statements of Loss
|(US dollars)                   

|                                                                                           |   |                  |   |   |              |   |   | Cumulative        |  
|------------------------------------------------------------------------------------------ | - | ---------------- | - | - | ------------ | - | - | ----------------- | -
|                                                                                           |   |                  |   |   |              |   |   | Amounts From Date |  
|                                                                                           |   |                  |   |   |              |   |   | of Inception      |  
|                                                                                           |   | Year Ended       |   |   |              |   |   | (November 21,     |  
|                                                                                           |   | December 31,     |   |   |              |   |   | 1985) through     |  
|                                                                                           |   | 2009             |   |   | Year Ended   |   |   | December 31, 2009 |  
|                                                                                           |   | (Restated  Note |   |   | December 31, |   |   | (Restated  Note  |  
|                                                                                           |   | 11)              |   |   | 2008         |   |   | 11)               |  
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|General and administrative expenses                                                        | $ | (2,246,953       | ) | $ | (2,817,429   | ) | $ | (19,727,800       | )
|Asset impairment loss (Note 3)                                                             |   | (167,898         | ) |   | (1,270,366   | ) |   | (32,135,592       | )
|Adjustment to asset retirement obligation on
      changes in cash flow estimates (Note 7) |   | (6,882           | ) |   | 275          |   |   | 223,583           |  
|Accretion expense (Note 7)                                                                 |   | (7,779           | ) |   | (17,213      | ) |   | (55,381           | )
|Change in fair value of derivative liability
      (Note 11)                               |   | (2,095,300       | ) |   | -            |   |   | (2,095,300        | )
|Gain on settlement of debt                                                                 |   | -                |   |   | -            |   |   | 136,627           |  
|Abandoned mineral property interests                                                       |   | -                |   |   | -            |   |   | (277,251          | )
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|                                                                                           |   | (4,524,812       | ) |   | (4,104,733   | ) |   | (53,931,114       | )
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|Interest expense                                                                           |   | -                |   |   | -            |   |   | (913,098          | )
|Interest income                                                                            |   | 10,070           |   |   | 107,956      |   |   | 1,599,987         |  
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|Net loss                                                                                   | $ | (4,514,742       | ) | $ | (3,996,777   | ) | $ | (53,244,225       | )
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|Loss per share - basic and diluted                                                         | $ | (0.05            | ) | $ | (0.05        | ) |   |                   |  
|                                                                                           |   |                  |   |   |              |   |   |                   |  
|Weighted average number of common shares outstanding                                       |   | 86,738,897       |   |   | 85,539,184   |   |   |                   |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

3

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|GOLDEN QUEEN MINING CO. LTD.                                                      
|----------------------------------------------------------------------------------
|(an exploration stage company)                                                    
|Consolidated Statements of Changes in Shareholders
      Equity (Capital Deficit)
|(US dollars)                                                                      

|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   | Deficit           |   |   | Total           |  
|---------------------------------------------- |  | ---------- |  | - | ---------- |  | - | ------------ |  | - | ---------- |  | - | ----------------- | - | - | --------------- | -
|                                               |  |            |  |   |            |  |   |              |  |   | Additional |  |   | Accumulated       |   |   | Shareholders   |  
|From the Date of Inception (November           |  | Common     |  |   |            |  |   | Stock        |  |   | Paid-in    |  |   | During the        |   |   | Equity (Capital |  
|21, 1985)
      through December 31, 2009      |  | Shares     |  |   | Amount     |  |   | Subscription |  |   | Capital    |  |   | Exploration Stage |   |   | Deficit)        |  
|Balance, November 21, 1985                     |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 1,425,001  |  | $ | 141,313    |  | $ | -            |  | $ | -          |  | $ | -                 |   | $ | 141,313         |  
|Net loss for the period                        |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (15,032           | ) |   | (15,032         | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1986                          |  | 1,425,001  |  |   | 141,313    |  |   | -            |  |   | -          |  |   | (15,032           | ) |   | 126,281         |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 550,000    |  |   | 256,971    |  |   | -            |  |   | -          |  |   | -                 |   |   | 256,971         |  
|Issuance of common shares for mineral property |  | 25,000     |  |   | 13,742     |  |   | -            |  |   | -          |  |   | -                 |   |   | 13,742          |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (58,907           | ) |   | (58,907         | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1987                          |  | 2,000,001  |  |   | 412,026    |  |   | -            |  |   | -          |  |   | (73,939           | ) |   | 338,087         |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 1,858,748  |  |   | 1,753,413  |  |   | -            |  |   | -          |  |   | -                 |   |   | 1,753,413       |  
|Net income for the year                        |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | 38,739            |   |   | 38,739          |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1988                          |  | 3,858,749  |  |   | 2,165,439  |  |   | -            |  |   |            |  |   | (35,200           | ) |   | 2,130,239       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 1,328,750  |  |   | 1,814,133  |  |   | -            |  |   | -          |  |   | -                 |   |   | 1,814,133       |  
|Issuance of common shares for mineral property |  | 100,000    |  |   | 227,819    |  |   | -            |  |   | -          |  |   | -                 |   |   | 227,819         |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (202,160          | ) |   | (202,160        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1989                          |  | 5,287,499  |  |   | 4,207,391  |  |   | -            |  |   | -          |  |   | (237,360          | ) |   | 3,970,031       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 1,769,767  |  |   | 2,771,815  |  |   | -            |  |   | -          |  |   | -                 |   |   | 2,771,815       |  
|Issuance of common shares for mineral property |  | 8,875      |  |   | 14,855     |  |   | -            |  |   | -          |  |   | -                 |   |   | 14,855          |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (115,966          | ) |   | (115,966        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1990                          |  | 7,066,141  |  |   | 6,994,061  |  |   | -            |  |   | -          |  |   | (353,326          | ) |   | 6,640,735       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Net income for the year                        |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | 28,706            |   |   | 28,706          |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1991                          |  | 7,066,141  |  |   | 6,994,061  |  |   | -            |  |   | -          |  |   | (324,620          | ) |   | 6,669,441       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (157,931          | ) |   | (157,931        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1992                          |  | 7,066,141  |  |   | 6,994,061  |  |   | -            |  |   | -          |  |   | (482,551          | ) |   | 6,511,510       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (285,391          | ) |   | (285,391        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1993                          |  | 7,066,141  |  |   | 6,994,061  |  |   | -            |  |   | -          |  |   | (767,942          | ) |   | 6,226,119       |  
|Issuance of common shares for cash             |  | 5,834,491  |  |   | 1,536,260  |  |   | -            |  |   | -          |  |   | -                 |   |   | 1,536,260       |  
|Share issuance costs                           |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (18,160           | ) |   | (18,160         | )
|Issuance of common shares for mineral property |  | 128,493    |  |   | 23,795     |  |   | -            |  |   | -          |  |   | -                 |   |   | 23,795          |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (158,193          | ) |   | (158,193        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1994                          |  | 13,029,125 |  |   | 8,554,116  |  |   | -            |  |   | -          |  |   | (944,295          | ) |   | 7,609,821       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 648,900    |  |   | 182,866    |  |   | -            |  |   | -          |  |   | -                 |   |   | 182,866         |  
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (219,576          | ) |   | (219,576        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1995                          |  | 13,678,025 |  |   | 8,736,982  |  |   | -            |  |   | -          |  |   | (1,163,871        | ) |   | 7,573,111       |  
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Issuance of common shares for cash             |  | 2,349,160  |  |   | 2,023,268  |  |   | -            |  |   | -          |  |   | -                 |   |   | 2,023,268       |  
|Issuance of common shares for debt             |  | 506,215    |  |   | 662,282    |  |   | -            |  |   | -          |  |   | -                 |   |   | 662,282         |  
|Issuance of 5,500,000 special warrants         |  | -          |  |   | 9,453,437  |  |   | -            |  |   | -          |  |   | -                 |   |   | 9,453,437       |  
|Special warrants issuance costs                |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (100,726          | ) |   | (100,726        | )
|Net loss for the year                          |  | -          |  |   | -          |  |   | -            |  |   | -          |  |   | (426,380          | ) |   | (426,380        | )
|                                               |  |            |  |   |            |  |   |              |  |   |            |  |   |                   |   |   |                 |  
|Balance, May 31, 1996                          |  | 16,533,400 |  | $ | 20,875,969 |  | $ | -            |  | $ | -          |  | $ | (1,690,977        | ) | $ | 19,184,992      |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

4

---

|GOLDEN QUEEN MINING CO. LTD.                                                      
|----------------------------------------------------------------------------------
|(an exploration stage company)                                                    
|Consolidated Statements of Changes in Shareholders
      Equity (Capital Deficit)
|(US dollars)                                                                      

|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   | Deficit           |   |   | Total           |  
|----------------------------------------------------------------- |  | ---------- |  | - | ---------- |  | - | ------------ | - | - | --------------- | - | - | ----------------- | - | - | --------------- | -
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   | Accumulated       |   |   | Shareholders   |  
|From the Date of Inception (November                              |  | Common     |  |   |            |  |   | Stock        |   |   | Additional      |   |   | During the        |   |   | Equity (Capital |  
|21, 1985)
      through December 31, 2009                         |  | Shares     |  |   | Amount     |  |   | Subscription |   |   | Paid-in Capital |   |   | Exploration Stage |   |   | Deficit)        |  
|Balance, carried forward from previous page                       |  | 16,533,400 |  | $ | 20,875,969 |  | $ | -            |   | $ | -               |   | $ | (1,690,977        | ) | $ | 19,184,992      |  
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares for cash                                |  | 18,000     |  |   | 10,060     |  |   | -            |   |   | -               |   |   | -                 |   |   | 10,060          |  
|Issuance of common shares for special warrants                    |  | 5,500,000  |  |   | -          |  |   | -            |   |   | -               |   |   | -                 |   |   | -               |  
|Special warrants issuance costs                                   |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (123,806          | ) |   | (123,806        | )
|Net loss for the period                                           |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (348,948          | ) |   | (348,948        | )
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 1996                                        |  | 22,051,400 |  |   | 20,886,029 |  |   | -            |   |   | -               |   |   | (2,163,731        | ) |   | 18,722,298      |  
|Issuance of common shares for cash                                |  | 157,000    |  |   | 157,050    |  |   | -            |   |   | -               |   |   | -                 |   |   | 157,050         |  
|Issuance of 3,500,000 special warrants                            |  | -          |  |   | 5,287,315  |  |   | -            |   |   | -               |   |   | -                 |   |   | 5,287,315       |  
|Issuance of common shares for special warrants                    |  | 3,500,000  |  |   | -          |  |   | -            |   |   | -               |   |   | -                 |   |   | -               |  
|Options to non-employee directors                                 |  | -          |  |   | -          |  |   | -            |   |   | 70,200          |   |   | -                 |   |   | 70,200          |  
|Special warrants issuance costs                                   |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (163,313          | ) |   | (163,313        | )
|Net loss for the year                                             |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (1,047,869        | ) |   | (1,047,869      | )
|Balance, December 31, 1997                                        |  | 25,708,400 |  |   | 26,330,394 |  |   | -            |   |   | 70,200          |   |   | (3,374,913        | ) |   | 23,025,681      |  
|Issuance of common shares upon exercise of warrants               |  | 1,834,300  |  |   | 857,283    |  |   | -            |   |   | -               |   |   | -                 |   |   | 857,283         |  
|Issuance of common shares through conversion
      of debt        |  | 2,017,941  |  |   | 1,000,000  |  |   | -            |   |   | -               |   |   | -                 |   |   | 1,000,000       |  
|Share issuance costs                                              |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (6,060            | ) |   | (6,060          | )
|Issuance of common shares for cash                                |  | 5,236,000  |  |   | 2,439,753  |  |   | -            |   |   | -               |   |   | -                 |   |   | 2,439,753       |  
|Options and re-priced options to non- employee directors          |  | -          |  |   | -          |  |   | -            |   |   | 107,444         |   |   | -                 |   |   | 107,444         |  
|Net loss for the year                                             |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (971,595          | ) |   | (971,595        | )
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 1998                                        |  | 34,796,641 |  |   | 30,627,430 |  |   | -            |   |   | 177,644         |   |   | (4,352,568        | ) |   | 26,452,506      |  
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Issuance of 13,250,000 special warrants                           |  | -          |  |   | 3,350,915  |  |   | -            |   |   | -               |   |   | -                 |   |   | 3,350,915       |  
|Special warrants issuance costs                                   |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (166,620          | ) |   | (166,620        | )
|Issuance of common shares for                                     |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|special warrants                                                  |  | 13,250,000 |  |   | -          |  |   | -            |   |   | -               |   |   | -                 |   |   | -               |  
|Net loss for the year                                             |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (564,657          | ) |   | (564,657        | )
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 1999                                        |  | 48,046,641 |  |   | 33,978,345 |  |   | -            |   |   | 177,644         |   |   | (5,083,845        | ) |   | 29,072,144      |  
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Cumulative effect of change in accounting for
      stock options |  | -          |  |   | -          |  |   | -            |   |   | (177,644        | ) |   | -                 |   |   | (177,644        | )
|Stock subscription                                                |  | -          |  |   | -          |  |   | 200,000      |   |   | -               |   |   | -                 |   |   | 200,000         |  
|Net loss for the year                                             |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (28,708,276       | ) |   | (28,708,276     | )
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2000                                        |  | 48,046,641 |  |   | 33,978,345 |  |   | 200,000      |   |   | -               |   |   | (33,792,121       | ) |   | 386,224         |  
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares through conversion
      of debt        |  | 406,250    |  |   | 65,000     |  |   | -            |   |   | -               |   |   | -                 |   |   | 65,000          |  
|Issuance of common shares for conversion of stock subscription    |  | 1,538,462  |  |   | 200,000    |  |   | (200,000     | ) |   | -               |   |   | -                 |   |   | -               |  
|Share issuance costs                                              |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (3,337            | ) |   | (3,337          | )
|Net loss for the year                                             |  | -          |  |   | -          |  |   | -            |   |   | -               |   |   | (262,059          | ) |   | (262,059        | )
|                                                                  |  |            |  |   |            |  |   |              |   |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2001                                        |  | 49,991,353 |  | $ | 34,243,345 |  | $ | -            |   | $ | -               |   | $ | (34,057,517       | ) | $ | 185,828         |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements.

5

---

|GOLDEN QUEEN MINING CO. LTD.                                                      
|----------------------------------------------------------------------------------
|(an exploration stage company)                                                    
|Consolidated Statements of Changes in Shareholders
      Equity (Capital Deficit)
|(US dollars)                                                                      

|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   | Deficit           |   |   | Total           |  
|----------------------------------------------------------------------------------------- |  | ---------- |  | - | ---------- |  | - | ------------ |  | - | --------------- | - | - | ----------------- | - | - | --------------- | -
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   | Accumulated       |   |   | Shareholders   |  
|From the Date of Inception (November 21,                                                  |  | Common     |  |   |            |  |   | Stock        |  |   | Additional      |   |   | During the        |   |   | Equity (Capital |  
|1985) through December
      31, 2009                                                     |  | Shares     |  |   | Amount     |  |   | Subscription |  |   | Paid-in Capital |   |   | Exploration Stage |   |   | Deficit)        |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, carried forward from previous page                                               |  | 49,991,353 |  | $ | 34,243,345 |  | $ | -            |  | $ | -               |   | $ | (34,057,517       | ) | $ | 185,828         |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares through exercise
      of options                               |  | 290,000    |  |   | 37,234     |  |   | -            |  |   | -               |   |   | -                 |   |   | 37,234          |  
|Issuance of common shares through exercise of warrants                                    |  | 1,520,836  |  |   | 243,334    |  |   | -            |  |   | -               |   |   | -                 |   |   | 243,334         |  
|Stock option compensation                                                                 |  | -          |  |   | -          |  |   | -            |  |   | 21,456          |   |   | -                 |   |   | 21,456          |  
|Share issuance costs                                                                      |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (4,216            | ) |   | (4,216          | )
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (347,603          | ) |   | (347,603        | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2002                                                                |  | 51,802,189 |  |   | 34,523,913 |  |   | -            |  |   | 21,456          |   |   | (34,409,336       | ) |   | 136,033         |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares through exercise
      of options                               |  | 100,000    |  |   | 24,379     |  |   | -            |  |   | -               |   |   | -                 |   |   | 24,379          |  
|Equity component of convertible notes                                                     |  | -          |  |   | -          |  |   | -            |  |   | 375,000         |   |   | -                 |   |   | 375,000         |  
|Stock option compensation                                                                 |  | -          |  |   | -          |  |   | -            |  |   | 127,326         |   |   | -                 |   |   | 127,326         |  
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (744,516          | ) |   | (744,516        | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2003                                                                |  | 51,902,189 |  |   | 34,548,292 |  |   | -            |  |   | 523,782         |   |   | (35,153,852       | ) |   | (81,778         | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares for cash                                                        |  | 8,000,000  |  |   | 3,036,282  |  |   | -            |  |   | -               |   |   | -                 |   |   | 3,036,282       |  
|Issuance of common shares for convertible notes                                           |  | 978,260    |  |   | 225,000    |  |   | -            |  |   | -               |   |   | -                 |   |   | 225,000         |  
|Issuance of common shares through exercise of options                                     |  | 200,000    |  |   | 55,861     |  |   | -            |  |   | -               |   |   | -                 |   |   | 55,861          |  
|Share issuance costs                                                                      |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (38,975           | ) |   | (38,975         | )
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (1,772,250        | ) |   | (1,772,250      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2004                                                                |  | 61,080,449 |  |   | 37,865,435 |  |   | -            |  |   | 523,782         |   |   | (36,965,077       | ) |   | 1,424,140       |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares through exercise of options                                     |  | 110,000    |  |   | 21,049     |  |   | -            |  |   | -               |   |   | -                 |   |   | 21,049          |  
|Stock option compensation                                                                 |  | -          |  |   | -          |  |   | -            |  |   | 48,592          |   |   | -                 |   |   | 48,592          |  
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (1,476,324        | ) |   | (1,476,324      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2005                                                                |  | 61,190,449 |  |   | 37,886,484 |  |   | -            |  |   | 572,374         |   |   | (38,441,401       | ) |   | 17,457          |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares through private placement                                       |  | 7,200,000  |  |   | 1,614,716  |  |   | -            |  |   | 1,520,899       |   |   | -                 |   |   | 3,135,615       |  
|Issuance of common shares through exercise
      of options                               |  | 100,000    |  |   | 30,853     |  |   | -            |  |   | -               |   |   | -                 |   |   | 30,853          |  
|Issuance of common shares through exercise of warrants                                    |  | 8,978,260  |  |   | 4,659,173  |  |   | -            |  |   | -               |   |   | -                 |   |   | 4,659,173       |  
|Issuance of common shares for convertible notes                                           |  | 652,174    |  |   | 150,000    |  |   | -            |  |   | 39,917          |   |   | -                 |   |   | 189,917         |  
|Stock option compensation                                                                 |  | -          |  |   | -          |  |   | -            |  |   | 814,810         |   |   | -                 |   |   | 814,810         |  
|Modification of warrants                                                                  |  | -          |  |   | -          |  |   | -            |  |   | 889,117         |   |   | -                 |   |   | 889,117         |  
|Share issuance costs                                                                      |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (62,888           | ) |   | (62,888         | )
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (4,910,036        | ) |   | (4,910,036      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2006                                                                |  | 78,120,883 |  |   | 44,341,226 |  |   | -            |  |   | 3,837,117       |   |   | (43,414,325       | ) |   | 4,764,018       |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Issuance of common shares for exercise of options                                         |  | 290,000    |  |   | 127,652    |  |   | -            |  |   | -               |   |   | -                 |   |   | 127,652         |  
|Issuance of common shares for property                                                    |  | 30,000     |  |   | 24,600     |  |   | -            |  |   | -               |   |   | -                 |   |   | 24,600          |  
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (2,006,482        | ) |   | (2,006,482      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2007                                                                |  | 78,440,883 |  |   | 44,493,478 |  |   | -            |  |   | 3,837,117       |   |   | (45,420,807       | ) |   | 2,909,788       |  
|Issuance of common shares through exercise of warrants                                    |  | 7,200,000  |  |   | 4,184,425  |  |   | -            |  |   | -               |   |   | -                 |   |   | 4,184,425       |  
|Net loss for the year                                                                     |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (3,996,777        | ) |   | (3,996,777      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2008                                                                |  | 85,640,883 |  |   | 48,677,903 |  |   | -            |  |   | 3,837,117       |   |   | (49,417,584       | ) |   | 3,097,436       |  
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Cumulative effect of change in accounting principle
      (Note 11)                       |  | -          |  |   | -          |  |   | -            |  |   | (863,402        | ) |   | 464,255           |   |   | (399,147        | )
|Issuance of common shares through private placement (Note 6)                              |  | 2,337,500  |  |   | 1,396,646  |  |   | -            |  |   | -               |   |   | -                 |   |   | 1,396,646       |  
|Issuance of common shares through exercise
      of options (Note 6)                      |  | 400,000    |  |   | 131,085    |  |   | -            |  |   | -               |   |   | -                 |   |   | 131,085         |  
|Reclassification of derivative liability on the exercise of
      stock options (Note 11) |  | -          |  |   | -          |  |   | -            |  |   | 156,834         |   |   | -                 |   |   | 156,834         |  
|Net loss for the year, restated (Note 11)                                                 |  | -          |  |   | -          |  |   | -            |  |   | -               |   |   | (4,514,742        | ) |   | (4,514,742      | )
|                                                                                          |  |            |  |   |            |  |   |              |  |   |                 |   |   |                   |   |   |                 |  
|Balance, December 31, 2009 (restated)                                                     |  | 88,378,383 |  | $ | 50,205,634 |  | $ | -            |  | $ | 3,130,549       |   | $ | (53,468,071       | ) | $ | (131,888        | )

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

6

---

|GOLDEN QUEEN MINING CO. LTD.         
|-------------------------------------
|(an exploration stage company)       
|Consolidated Statements of Cash Flows
|(US dollars)                         

|                                                                                                  |   |                |   |   |              |   |   | Cumulative        |  
|------------------------------------------------------------------------------------------------- | - | -------------- | - | - | ------------ | - | - | ----------------- | -
|                                                                                                  |   |                |   |   |              |   |   | Amounts From Date |  
|                                                                                                  |   |                |   |   |              |   |   | of Inception      |  
|                                                                                                  |   | Year Ended     |   |   |              |   |   | (November 21,     |  
|                                                                                                  |   | December 31,   |   |   |              |   |   | 1985) through     |  
|                                                                                                  |   | 2009           |   |   | Year Ended   |   |   | December 31, 2009 |  
|                                                                                                  |   | (Restated     |   |   | December 31, |   |   | (Restated  Note  |  
|                                                                                                  |   | Note
      11) |   |   | 2008         |   |   | 11)               |  
|Operating activities:                                                                             |   |                |   |   |              |   |   |                   |  
|Net loss                                                                                          | $ | (4,514,742     | ) | $ | (3,996,777   | ) | $ | (53,244,225       | )
|Adjustments to reconcile net loss to non- cash
      items and cash used in operating activities: |   |                |   |   |              |   |   |                   |  
|Asset impairment loss                                                                             |   | 167,898        |   |   | 1,270,366    |   |   | 32,135,592        |  
|Abandoned mineral property interests                                                              |   | -              |   |   | -            |   |   | 277,251           |  
|Amortization and depreciation                                                                     |   | 6,024          |   |   | 6,127        |   |   | 461,801           |  
|Amortization of debt discount                                                                     |   | -              |   |   | -            |   |   | 375,000           |  
|Adjustment to asset retirement obligation based
      on changes in cash flow estimates           |   | 6,882          |   |   | (275         | ) |   | (223,583          | )
|Accretion expense                                                                                 |   | 7,779          |   |   | 17,213       |   |   | 55,381            |  
|Change in fair value of derivative liability                                                      |   | 2,095,300      |   |   | -            |   |   | 2,095,300         |  
|Gain on disposition of property
      and equipment                                               |   | -              |   |   | -            |   |   | (10,032           | )
|Stock option compensation                                                                         |   | 357,989        |   |   | -            |   |   | 1,370,173         |  
|Financing charges related to modification
      of warrants                                       |   | -              |   |   | -            |   |   | 889,117           |  
|Mineral property expenditures                                                                     |   | -              |   |   | -            |   |   | (22,395,449       | )
|Changes in assets and liabilities:                                                                |   |                |   |   |              |   |   |                   |  
|Receivables                                                                                       |   | (4,553         | ) |   | 23,492       |   |   | (24,604           | )
|Prepaid expenses and other current
      assets                                                   |   | 356            |   |   | 1,599        |   |   | (106,400          | )
|Accounts payable and accrued liabilities                                                          |   | (20,456        | ) |   | 31,343       |   |   | 268,504           |  
|Royalty and mining rights payable                                                                 |   | (48,034        | ) |   | (24,450      | ) |   | -                 |  
|                                                                                                  |   |                |   |   |              |   |   |                   |  
|Cash used in operating activities                                                                 |   | (1,945,557     | ) |   | (2,671,362   | ) |   | (38,076,174       | )
|                                                                                                  |   |                |   |   |              |   |   |                   |  
|Investing activities:                                                                             |   |                |   |   |              |   |   |                   |  
|Purchase of mineral properties                                                                    |   | (167,898       | ) |   | (1,270,366   | ) |   | (7,803,356        | )
|Deposits on mineral properties                                                                    |   | -              |   |   | -            |   |   | (1,017,551        | )
|Purchase of reclamation financial assurance                                                       |   | (14,845        | ) |   | (5,116       | ) |   | (286,653          | )
|Purchase of property and equipment                                                                |   | -              |   |   | -            |   |   | (1,313,838        | )
|Proceeds from sale of property and equipment                                                      |   | -              |   |   | -            |   |   | 47,153            |  
|                                                                                                  |   |                |   |   |              |   |   |                   |  
|Cash used in investing activities                                                                 |   | (182,743       | ) |   | (1,275,482   | ) |   | (10,374,245       | )

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

7

---

|GOLDEN QUEEN MINING CO. LTD.                     
|-------------------------------------------------
|(an exploration stage company)                   
|Consolidated Statements of Cash Flows (Continued)
|(US dollars)                                     

|                                                               |   |                |   |   |              |  |   | Cumulative        |  
|-------------------------------------------------------------- | - | -------------- | - | - | ------------ |  | - | ----------------- | -
|                                                               |   |                |   |   |              |  |   | Amounts From Date |  
|                                                               |   |                |   |   |              |  |   | of Inception      |  
|                                                               |   | Year Ended     |   |   |              |  |   | (November 21,     |  
|                                                               |   | December 31,   |   |   |              |  |   | 1985) through     |  
|                                                               |   | 2009           |   |   | Year Ended   |  |   | December 31, 2009 |  
|                                                               |   | (Restated     |   |   | December 31, |  |   | (Restated  Note  |  
|                                                               |   | Note
      11) |   |   | 2008         |  |   | 11)               |  
|                                                               |   |                |   |   |              |  |   |                   |  
|Financing activities:                                          |   |                |   |   |              |  |   |                   |  
|Borrowing under long-term debt                                 |   | -              |   |   | -            |  |   | 3,918,187         |  
|Payment of long-term debt                                      |   | -              |   |   | -            |  |   | (2,105,905        | )
|Proceeds from convertible debt                                 |   | -              |   |   | -            |  |   | 440,000           |  
|Issuance of common shares for
      cash                       |   | 1,396,646      |   |   | -            |  |   | 21,237,302        |  
|Share issuance costs                                           |   | -              |   |   | -            |  |   | (688,101          | )
|Issuance of special warrants                                   |   | -              |   |   | -            |  |   | 18,091,667        |  
|Issuance of common shares upon exercise of
      stock options |   | 131,085        |   |   | -            |  |   | 289,590           |  
|Issuance of common shares upon
      exercise of warrants      |   | -              |   |   | 4,184,425    |  |   | 9,700,881         |  
|                                                               |   |                |   |   |              |  |   |                   |  
|Cash provided by financing activities                          |   | 1,527,731      |   |   | 4,184,425    |  |   | 50,883,621        |  
|                                                               |   |                |   |   |              |  |   |                   |  
|Net change in cash and cash equivalents                        |   | (600,569       | ) |   | 237,581      |  |   | 2,433,202         |  
|                                                               |   |                |   |   |              |  |   |                   |  
|Cash and cash equivalents, beginning balance                   |   | 3,033,771      |   |   | 2,796,190    |  |   | -                 |  
|                                                               |   |                |   |   |              |  |   |                   |  
|Cash and cash equivalents, ending balance                      | $ | 2,433,202      |   | $ | 3,033,771    |  | $ | 2,433,202         |  

Supplementary Disclosures of Cash Flows Information (Note 10)

See Accompanying Summary of Accounting Policies and Notes to Consolidated
  Financial Statements

8

---

|GOLDEN QUEEN MINING CO. LTD.  
|------------------------------
|(an exploration stage company)
|Summary of Accounting Policies
|(US dollars)                  

Nature of BusinessGolden Queen Mining Co. Ltd.
  ( Company) is engaged in acquiring and maintaining gold and silver
  mining properties for exploration, future development and production. The Company
  was formed on November 21, 1985. Since its inception, the Company has been in
  the exploration stage. Planned activities involve bringing to production a precious
  metals mine located in the Mojave Mining District, Kern County, California.

Principles of Consolidation.These consolidated
  financial statements include the accounts of Golden Queen Mining Co. Ltd., a
  British Columbia corporation, and its wholly-owned subsidiary, Golden Queen
  Mining Co., Inc. (the Subsidiary), a US (State of California) corporation
  and, until its dissolution on August 27, 2007, the Karma Wegmann Corporation
  (see Note 4).

Generally Accepted Accounting Principles (GAAP).
  The consolidated financial statement has been prepared in accordance with accounting
  principles generally accepted in the US.

In June 2009, The FASB Accounting Standards Codification
  and the Hierarchy of Generally Accepted Accounting Principles was issued.
  The FASB Accounting Standards Codification (Codification) will become
  the source of authoritative US GAAP to be applied by nongovernmental entities.
  Rules and interpretive releases of the Securities and Exchange Commission SEC
  under authority of federal securities laws are also sources of authoritative
  GAAP for SEC registrants. On the effective date of this statement, the Codification
  will supersede all then-existing non-SEC accounting and reporting standards.
  All other non-grandfathered non-SEC accounting literature not included in the
  Codification will become non-authoritative. This statement is effective for
  financial statements issued for interim and annual periods ending after September
  30, 2009. Effective January 1, 2009, references made to FASB guidance throughout
  this consolidated financial statements have been updated for the Codification.

Cash and Cash Equivalents. For purposes
  of balance sheet classification and the statements of cash flows, the Company
  considers all highly liquid investments purchased with an original maturity
  of three months or less to be cash equivalents. In response to the global financial
  crisis of 2008, the Emergency Economic Stabilization Act of 2008 (Act)
  was created in the US. The Act temporarily increased the federal deposit insurance
  coverage (FDIC) from $100,000 to $250,000 per depositor until December
  31, 2013.

The Company places its cash and cash equivalents with high quality
  financial institutions and, by policy, limits the amount of credit exposure
  to any one financial institution. At times, such investments may be in excess
  of FDIC insurance limits. To date, the Company has not experienced a loss or
  lack of access to its invested cash and cash equivalents. However, no assurance
  can be provided that access to the Companys invested cash and cash equivalents
  will not be impacted by adverse economic conditions in the financial markets.

Property and Equipment. Property and equipment
  are stated at the lower of cost or net realizable value less accumulated depreciation.
  Depreciation is provided by the straight-line method over the estimated service
  lives of the respective assets, which range from 5 to 30 years, as follows:

| | Buildings              | 20 years    
| | ---------------------- | ------------
| | Furniture and Fixtures | 5 years     
| | Automobiles            | 3 to 5 years
| | Rental Properties      | 30 years    

Mineral Properties. Mineral properties includes
  the cost of advance minimum royalty payments, the cost of capitalized mineral
  property leases, and the cost of property acquired either by cash payment, the
  issuance of term debt or common shares. Expenditures for exploration on specific
  properties with no proven reserves are written off as incurred. Mineral property
  costs will be amortized against future revenues or charged to operations at
  the time the related property is determined to have an impairment in value.

9

---

|GOLDEN QUEEN MINING CO. LTD   
|------------------------------
|(an exploration stage company)
|Summary of Accounting Policies
|(US dollars)                  

Carrying Value of Mineral Property Interests.The cost of acquiring mineral property interests is capitalized. Capitalized
  acquisition costs are expensed in the period in which it is determined that
  the mineral property has no future economic value. Capitalized amounts may also
  be written down if future cash flows, including potential sales proceeds related
  to the property, are estimated to be less than the carrying value of the property.
  The Company reviews the carrying value of mineral property interests periodically,
  and whenever events or changes in circumstances indicate that the carrying value
  may not be recoverable, reductions in the carrying value of each property would
  be recorded to the extent the carrying value of the investment exceeds the propertys
  estimated fair value (Note 3).

Exploration and Development Expenditures.
  Exploration and development expenditures are expensed as incurred. Once a mineral
  reserve has been established, all future development costs will be capitalized
  and charged to operations on a unit-of-production method based on estimated
  recoverable reserves.

Valuation of Long-lived Assets. Accounting standard
  requires recognition of impairment of long-lived assets in the event the net
  book value of such assets exceeds the estimated undiscounted future cash flows
  attributable to such assets. It requires that those long-lived assets to be
  disposed of by sale are to be measured at the lower of carrying amount or fair
  value less cost of sale whether reported in continuing operations or in discontinued
  operations. In accordance with the provisions of the accounting standard, the
  Company reviews the carrying value of its mineral properties on a regular basis.
  Estimated undiscounted future cash flow from the mineral properties is compared
  with the current carrying value in order to determine if an impairment exists.
  Reductions to the carrying value, if necessary, are recorded to the extent the
  net book value of the property exceeds the estimate of future discounted cash
  flow or liquidation value.

Foreign Currency Translation.The Company
  has adopted the US dollar as its reporting currency for its financial statements
  prepared after May 21, 1996 as the US dollar is the currency of the primary
  economic environment in which Golden Queen and the Subsidiary conduct business
  and is considered the appropriate functional currency for the Companys
  operations. Balances held in Canadian dollars are re-measured into the functional
  currency in accordance with accounting standard, Foreign Currency Translation.
  Assets and liabilities in foreign currencies are generally translated into US
  dollars at the rates ruling at the balance sheet date. Revenues and expenses
  are translated at average rates for the year. Where amounts denominated in a
  foreign currency are converted into dollars by remittance or repayment, the
  realized exchange differences are included in other income. The exchange rates
  prevailing at December 31, 2009 and December 31, 2008 were $1.05 and $1.22 stated
  in Canadian dollars per one US dollar respectively. The average rates of exchange
  during the years ended December 31, 2009 and December 31, 2008 were $1.14 and
  $1.07 stated in Canadian dollars per one US dollar, respectively.

Loss per Share. The Company computes and
  discloses loss per share in accordance with accounting standard, Earnings
  per Share, which requires dual presentation of basic loss per share and
  diluted loss per share on the face of all income statements presented for all
  entities with complex capital structures. Basic loss per share is computed as
  net loss divided by the weighted average number of common shares outstanding
  for the period. Diluted loss per share reflects the potential dilution that
  could occur from common shares issuable through stock options and warrants.
  Since the Companys stock options and warrants are anti-dilutive for all
  periods presented, there is no difference between basic and diluted loss per
  share as presented. A total of 3,850,000 (2008  2,300,000) and nil (2008
   nil) common shares were issuable pursuant to such stock options and warrants
  at December 31, 2009 and 2008, respectively.

Asset Retirement Obligations. The Company
  follows the requirements of accounting standard, Accounting for Asset
  Retirement Obligations. The Company records the fair value of an asset
  retirement obligation as a liability in the period in which it incurs a legal
  obligation associated with the retirement of tangible long-lived assets that
  result from the acquisition, construction, development, and/or normal use of
  the assets. The obligation is measured initially at fair value using present
  value methodology, and the resulting costs capitalized into the carrying amount
  of the related asset. In subsequent periods, the liability will be adjusted
  for any changes in the amount or timing of the underlying future cash flows.
  Capitalized asset retirement costs are depreciated on the same basis as the
  related asset and the discount accretion of the liability is included in determining
  the results of operations.

10

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

Estimates.The preparation of financial
  statements in conformity with GAAP 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 have been made by management in several areas including
  the recoverability of mineral properties, reclamation reserves and valuation
  of stock options. Actual results could differ from those estimates.

Fair Value of Financial Instruments. The
  carrying amounts reported in the balance sheets for cash and cash equivalents,
  receivables, accounts payable and accrued liabilities approximates fair value
  because of the immediate or short-term maturity of these financial instruments.
  The fair value of the reclamation financial assurance approximates the carrying
  value because the stated interest rates reflect recent market conditions or
  because the rates are variable in nature.

Income Taxes.The Company follows the asset and
  liability method of accounting for income taxes whereby deferred tax assets
  and liabilities are recognized for the future tax consequences of differences
  between the financial statement carrying amounts of existing assets and liabilities
  and their respective tax bases. If it is determined that the realization of
  the future tax benefit is not more likely than not, the Company establishes
  a valuation allowance.

Stock Option Plan.In 1996,
  the Company adopted the 1996 stock option plan (the 1996 Plan) reserving
  3,300,000 shares for issuance on exercise of options granted under that plan.
  The exercise price of stock options granted under the 1996 Plan is determined
  by the Board of Directors of the Company (the Board), or a committee
  established by the Board in accordance with the 1996 Plan, but shall not be
  less than the closing price on the day immediately preceding the award date.
  Options issued to directors who are not employees can vest immediately. For
  all other options granted under the 1996 Plan, the right to exercise vests over
  a two year period in equal increments on the date of grant and on each of the
  first two anniversaries of such date. All stock options granted under the 1996
  Plan and outstanding as at December 31, 2009 expire at a date determined by
  the Board, not exceeding five years from the date of grant, or after 39 months
  from the date of grant if not specified.

In 2009, the Company adopted a second stock option plan referred
  to as the 2008 stock option plan (the 2008 Plan). Pursuant to the
  2008 stock option plan, a further 7,200,000 shares were reserved for issuance
  on exercise of options granted under the new plan. The exercise price of stock
  options granted under the 2008 Plan is determined by the Board, but shall not
  be less than the volume weighted average price for the five trading days immediately
  prior to the award date. All options granted under the 2008 Plan will be subject
  to such vesting requirements as may be prescribed by the Exchange, if applicable,
  or as may be imposed by the Board. All stock options granted under the 2008
  Plan and outstanding as at December 31, 2009 expire at a date determined by
  the Board, not exceeding five years from the date of grant.

11

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

Derivative Financial Instruments.The Company reviews
  the terms of its equity instruments and other financing arrangements to determine
  whether there are embedded derivative instruments that are required to be accounted
  for separately as a derivative financial instrument. Also, in connection with
  the issuance of financing instruments, the Company may issue freestanding options
  or warrants that may, depending on their terms, be accounted for as derivative
  instrument liabilities, rather than as equity. The Company may also issue options
  or warrants to non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their
  fair value. For derivative financial instruments that are accounted for as liabilities,
  the derivative instrument is initially recorded at its fair value and is then
  re-valued at each reporting date, with changes in the fair value reported as
  charges or credits to income. For warrant-based derivative financial instruments,
  the Company uses the Black-Scholes option pricing model to value the derivative
  instruments. To the extent that the initial fair values of the freestanding
  and/or bifurcated derivative instrument liabilities exceed the total proceeds
  received, an immediate charge to income is recognized, in order to initially
  record the derivative instrument liabilities at their fair value.

The classification of derivative instruments, including whether
  such instruments should be recorded as liabilities or as equity, is reassessed
  at the end of each reporting period. If reclassification is required, the fair
  value of the derivative instrument, as of the determination date, is reclassified.
  Any previous charges or credits to income for changes in the fair value of the
  derivative instrument are not reversed. Derivative instrument liabilities are
  classified in the balance sheet as current or non-current based on whether or
  not net-cash settlement of the derivative instrument could be required within
  12 months of the balance sheet date.

New Accounting Pronouncements.In
  January 2010, an accounting standard update on codification, Fair value Measurements
  and Disclosures, improving disclosures about fair value measurements was issued.
  This update provides amendments that will provide more robust disclosures about
  (1) the different classes of assets and liabilities measured at fair value,
  (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair
  value measurements, and (4) the transfers between Levels 1, 2, and 3. The standard
  adds new disclosure and clarifies existing disclosure requirements. The new
  standard requires disclosures of the fair value of financial instruments for
  interim reporting periods of publicly traded companies in addition to the annual
  disclosure required at year-end. The provisions of the new standard are effective
  for the interim periods ending after June 15, 2009. The adoption of this standard
  did not have a material effect on the Companys consolidated financial
  statements.

In June 2008, the Financial Accounting Standards Board (FASB)
  issued Emerging Issues Task Force (EITF) Issue 07-5 (EITF 07-5),
  Determining Whether an Instrument (or Embedded Feature) is Indexed to
  an Entitys Own Stock which is now included in the FASB Accounting
  Standards Codification at ASC 815-40-15. This guidance requires entities to
  evaluate whether an equity-linked financial instrument (or embedded feature)
  is indexed to its own stock by assessing the instruments contingent exercise
  provisions and settlement provisions. Instruments not indexed to their own stock
  fail to meet the scope exception of Statement of Financial Accounting Standards
  No. 133, Accounting for Derivative Instruments and Hedging Activities, paragraph
  11(a), now included in the FASB Codification at ASC 815-10-15-74(a), and should
  be classified as a liability and marked-to-market. ASC 815-40-15 was effective
  for fiscal years beginning after December 15, 2008 and thus, upon its adoption
  on January 1, 2009, was applied to the Companys outstanding stock options
  and warrants. (Note 11).

In January 2010, an accounting standard update on stock compensation
  was issued. This accounting standards update codifies Escrowed Share Arrangements
  and the Presumption of Compensation. When evaluating whether presumption of
  compensation has been overcome, registrants should consider the substance of
  the arrangement, including whether the arrangement was entered into for purposes
  unrelated to, and not contingent upon, continued employment. An escrowed share
  arrangement in which the shares are automatically forfeited if employment terminates
  is compensation. The adoption of this standard is not expected to have a material
  effect on the Companys consolidated financial statements.

12

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

New Accounting Pronouncements (continued).In
  September 2009, an accounting standard update, Fair Value Measurement
  and Disclosures was issued. This amendments to Fair Value Measurements
  and DisclosuresOverall for the fair value measurement of investments in
  certain entities that calculate net asset value per share (or its equivalent).
  The amendments in this Update also require disclosures by major category of
  investment about the attributes of investments within the scope of the amendments
  in this Update. The amendments in this Update are effective for interim and
  annual periods ending after December 15, 2009. Early application is permitted
  in financial statements for earlier interim and annual periods that have not
  been issued. If an entity elects to early adopt the measurement amendments in
  this Update, the entity is permitted to defer the adoption of the disclosure
  provisions until periods ending after December 15, 2009. The adoption of this
  standard did not have a material effect on the Companys consolidated financial
  statements.

In August 2009, Fair Value of Measurements and Disclosure
   Measuring Liabilities at Fair Value was issued. The new guidance
  provides clarification that in certain circumstances in which a quoted price
  in an active market for the identical liability is not available, a company
  is required to measure fair value using one or more of the following valuation
  techniques: the quoted price of the identical liability when traded as an asset,
  the quoted prices for similar liabilities or similar liabilities when traded
  as assets, or another valuation technique that is consistent with the principles
  of fair value measurements. The new guidance clarifies that a company is not
  required to include an adjustment for restrictions that prevent the transfer
  of the liability and if an adjustment is applied to the quoted price used in
  a valuation technique, the result is a Level 2 or 3 fair value measurement.
  The new guidance is effective for interim and annual periods beginning after
  August 27, 2009. The adoption of this standard is not expected to have a material
  effect on the Companys consolidated financial statements.

In May 2009, Subsequent Events was issued, which
  establishes general standards of accounting for and disclosure of events that
  occur after the balance sheet date but before financial statements are issued
  or are available to be issued. The standard sets forth (1) The period after
  the balance sheet date during which management of a reporting entity should
  evaluate events or transactions that may occur for potential recognition or
  disclosure in the financial statements, (2) The circumstances under which an
  entity should recognize events or transactions occurring after the balance sheet
  date in its financial statements and (3) The disclosures that an entity should
  make about events or transactions that occurred after the balance sheet date.
  The standard was effective for interim or annual financial periods ending after
  June 15, 2009. The Company has evaluated subsequent events through December
  14, 2010 which represents the date on which the financial statements were issued.

In April 2009, an accounting standard was issued, which extends
  the previous disclosure requirements about fair value of financial instruments
  to interim financial statements of publicly traded companies. This standard
  requires that disclosures provide quantitative and qualitative information on
  fair value estimates for all financial instruments not measured on the balance
  sheet at fair value, when practicable, with the exception of certain financial
  instruments. This standard is effective prospectively for interim reporting
  periods ending after June 15, 2009. The adoption of this standard did not have
  a material effect on the Companys consolidated financial statements.

Accounting Standards Not Yet Effective

In June 2009, new guidance relating to the accounting for transfers
  of financial assets was issued. The new guidance, which was issued as, Accounting
  for Transfers of Financial Assets, has not yet been adopted into Codification.
  The new standard eliminates the concept of a qualifying special-purpose
  entity, changes the requirements for derecognizing financial assets, and
  requires additional disclosures in order to enhance information reported to
  users of financial statements by providing greater transparency about transfers
  of financial assets, including securitization transactions, and an entitys
  continuing involvement in and exposure to the risks related to transferred financial
  assets. The new guidance is effective for fiscal years beginning after November
  15, 2009. The Company is evaluating the impact it would have to the Companys
  consolidated financial statements.

13

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

1. Financial Condition and Ability to Continue as a Going
  Concern

These financial statements have been prepared on a going concern
  basis, which assumes the Company will continue to realize its assets and discharge
  its liabilities and commitments in the normal course of business. The Company
  has not generated revenues and has an accumulated deficit of $53,468,071 at
  December 31, 2009 and is unlikely to generate earnings in the immediate or foreseeable
  future. The continuation of the Company as a going concern is dependent upon
  the continued financial support from its shareholders, the ability of the Company
  to obtain necessary equity and/or debt or joint venture financing to fund construction
  of the operating facility on its Soledad Mountain Property (the Property)
  in the Mojave Mining District, Kern County, California once a production decision
  has been made.

Management cannot provide assurances that such plans will occur.
  These factors raise substantial doubt regarding the Companys ability to
  continue as a going concern. These financial statements do not include any adjustments
  to the recoverability and classification of recorded asset amounts and classification
  of liabilities that might be necessary should the Company be unable to continue
  as a going concern.

2. Property and Equipment

Property and equipment consists of:

|                              |   | 2009     |   |   | 2008     |  
|----------------------------- | - | -------- | - | - | -------- | -
|Buildings                     | $ | 26,360   |   | $ | 26,360   |  
|Furniture and fixtures        |   | 56,090   |   |   | 56,090   |  
|Automobiles                   |   | 21,401   |   |   | 21,401   |  
|Rental properties             |   | 313,635  |   |   | 313,635  |  
|Property and equipment, cost  |   | 417,486  |   |   | 417,486  |  
|Less accumulated depreciation |   | (211,570 | ) |   | (205,546 | )
|Property and equipment, net   | $ | 205,916  |   | $ | 211,940  |  

3. Mineral Properties

The Company formerly capitalized amounts which were paid to acquire
  mineral property rights and for professional services rendered in the exploration,
  drilling, sampling, engineering and other related technical, managerial and
  professional services toward the evaluation and development of its Property
  until the fiscal year 2000. The Companys investment in mineral properties
  in the amount of $30,616,348 (2008 - $30,267,372) was fully provided for by
  the year ended December 31, 2009.

|                                         |   | 2009        |   |   | 2008        |  
|---------------------------------------- | - | ----------- | - | - | ----------- | -
|Exploration and development expenditures | $ | 21,015,506  |   | $ | 21,015,506  |  
|Mineral Properties                       |   | 5,937,952   |   |   | 5,770,054   |  
|Advance minimum royalty                  |   | 3,297,103   |   |   | 3,122,907   |  
|Asset retirement obligations             |   | 365,787     |   |   | 358,905     |  
|Asset impairment loss                    |   | (30,616,348 | ) |   | (30,267,372 | )
|Total                                    | $ | -           |   | $ | -           |  

14

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

3. Mineral Properties - Continued

As at December 31, 2009, the Company had provided reclamation
  financial assurance to the Bureau of Land Management, the State and Kern County
  totaling $286,653 (2008 - $271,808). This deposit earns interest at 0.4% per
  annum and is not available for working capital purposes.

4. Other Assets

In July 2006 the Company acquired, through the purchase of the
  Karma Wegmann Corporation a tract of land contiguous to the Property in consideration
  of $875,000 paid to the vendors. The mineral properties owned by Karma Wegmann
  Corporation were transferred to Golden Queen Mining Co. Inc. and management
  determined that a write down of $875,000 was necessary in 2006. The Karma Wegmann
  Corporation was wound-up on August 27, 2007.

The Company is required to pay a royalty of 1% of gross smelter
  returns for a period of up to 60 years, not to exceed $60,000,000, upon commencement
  of commercial production from the property formerly owned by Karma Wegmann Corporation.
  As of December 31, 2009, the Company has not incurred any royalty as the property
  has not been in production.

5.Income Taxes

The tax effects of the temporary differences that give rise to
  the Company's deferred tax assets and liabilities are as follows:

| |                                                         |   | 2009        |   |   | 2008        |  
| | ------------------------------------------------------- | - | ----------- | - | - | ----------- | -
| |                                                         |   |             |   |   |             |  
| | Net operating and capital losses                        | $ | 8,848,000   |   | $ | 8,777,000   |  
| | Property, plant and equipment                           |   | 317,000     |   |   | 321,000     |  
| | Mineral properties and deferred exploration
      costs |   | 1,456,000   |   |   | 1,539,000   |  
| | Asset retirement obligations                            |   | 58,000      |   |   | 60,000      |  
| | Undeducted financing costs                              |   | 4,000       |   |   | 9,000       |  
| | Valuation allowance                                     |   | (10,683,000 | ) |   | (10,706,000 | )
| |                                                         |   |             |   |   |             |  
| | Deferred tax assets (liabilities)                       | $ | -           |   | $ | -           |  

The provision for income taxes differs from the amount established
  using the statutory income tax rate as follows:

| |                                                            |   | 2009       |   |   | 2008       |  
| | ---------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                            |   |            |   |   |            |  
| | Income benefit at Canadian statutory rate                  | $ | (1,354,000 | ) | $ | (1,239,000 | )
| | Foreign income taxes at other than Canadian statutory rate |   | (64,000    | ) |   | (92,000    | )
| | Change in fair value of derivative liability               |   | 681,000    |   |   | -          |  
| | Expiry of losses carried forward                           |   | 699,000    |   |   | -          |  
| | Effect of reduction in statutory rate                      |   | 61,000     |   |   | 163,000    |  
| | Increase (decrease) in valuation allowance                 |   | (23,000    | ) |   | 1,168,000  |  
| |                                                            |   |            |   |   |            |  
| | Deferred tax recovery                                      | $ | -          |   | $ | -          |  

15

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

5.Income Taxes - Continued

The Companys deferred tax assets include approximately
  $14,000 (2008 - $29,000) related to deductions for share issue costs in excess
  of amounts deducted for financial reporting purposes. If and when the valuation
  allowance related to these amounts is reversed, the Company will recognize this
  benefit as an adjustment to share capital as opposed to income tax expense in
  the Statements of Loss.

The Company evaluates its valuation allowance requirements based
  on projected future operations. When circumstances change and this causes a
  change in managements judgment about the recoverability of future tax
  assets, the impact of the change on the valuation allowance is reflected in
  current income. As management of the Company does not currently believe that
  it is more likely than not that the Company will receive the benefit of this
  asset, a valuation allowance equal to the future tax asset has been established
  at both December 31, 2009 and December 31, 2008.

As at December 31, 2009, the Company had net operating loss carry-forwards
  available to reduce taxable income in future years as follows:

|Country      | Amount      | Expiration Dates
|------------ | ----------- | ----------------
|             |             |                 
|US  Federal | $22,309,000 | 2010  2029     
|Canada (C$)  | $ 5,505,000 | 2010  2029     

These financial statements do not reflect the potential effect
  on future income taxes of the application of these losses.

Accounting for Uncertainty in Income Taxes was issued,
  which clarifies the accounting for uncertainty in income taxes recognized in
  an enterprises financial statements, and prescribes a recognition threshold
  and measurement attribute for the financial statement recognition and measurement
  of a tax position taken or expected to be taken in a tax return. The Company
  has evaluated its tax positions for the years ended December 31, 2009 and 2008
  and determined that it has no uncertain tax positions requiring financial statement
  recognition.

The impact of an uncertain income tax position on income tax
  expense must be recognized at the largest amount that is more likely than not
  to be sustained. An uncertain income tax position will not be recognized if
  it has less than a 50% likelihood of being sustained. Because the Companys
  recent history of operating losses, management believes that recognition of
  the deferred tax assets arising from the above-mentioned future tax benefits
  is currently not likely to be realized and, accordingly, has provided a 100%
  valuation allowance against its net deferred tax assets due to the uncertainty
  surrounding the realization of such assets.

6. Share capital

Common shares

In January 2008, warrants were exercised and the Company issued
  7,200,000 common shares at C$0.60 per share for proceeds of $4,184,425 (C$4,320,000).

In July 2009, the Company issued 2,337,500 common shares at C$0.65
  per share for proceeds of $1,396,646 (C$1,519,375).

During the three-month period from September to November of 2009,
  400,000 stock options were exercised and the Company issued 400,000 common shares
  at C$0.35 per share for cash proceeds of $131,085 (C$140,000).

16

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

6. Share capital - Continued

Stock options

The Company has elected to use the Black-Scholes option pricing
  model to determine the fair value of stock options granted. In accordance with
  the accounting standard for employees, the compensation expense is amortized
  on a straight-line basis over the requisite service period which approximates
  the vesting period. Compensation expense for stock options granted to non-employees
  is amortized over the contract services period or, if none exists, from the
  date of grant until the options vest. Compensation associated with unvested
  options granted to non-employees is re-measured on each balance sheet date using
  the Black-Scholes option pricing model.

The expected volatility of options granted has been determined
  using the method described under the accounting standard using the historical
  stock price. The Company uses historical data to estimate option exercise, forfeiture
  and employee termination within the valuation model. For non-employees, the
  expected term of the options approximates the full term of the options. The
  risk-free interest rate is based on a treasury instrument whose term is consistent
  with the expected term of the stock options. The Company has not paid and does
  not anticipate paying dividends on its common stock; therefore, the expected
  dividend yield is assumed to be zero. In addition, accounting standard requires
  companies to utilize an estimated forfeiture rate when calculating the expense
  for the reporting period. Based on its best estimate, management applied the
  estimated forfeiture rate of nil in determining the expense recorded in the
  accompanying Consolidated Statements of Loss.

The following is a summary of stock option activity during the
  year ended December 31, 2009:

Weighted AverageShares
      
      
      Exercise Price per ShareOptions outstanding and exercisable, January
        1, 2008 and December 31, 2008
      
      2,300,000
      
      
      C$0.57Granted
      
      1,950,000
      
      
      C$0.26Exercised
      
      (400,000
      )
      
      C$0.35Options outstanding and exercisable, December 31, 2009
      
      3,850,000
      
      
      C$0.44


The Company applies the fair value method in accounting for its
  stock options granted to directors, officers and consultants using the Black-Scholes
  option pricing model. The stock-based compensation expense recognized on the
  grant date was $357,989 (2008 - $nil). Subsequent to the grant date, such options
  are revalued to fair value at each period end. (Note 11)

The fair value of stock options granted as above was calculated
  using the following weighted average assumptions:

2009
      
      
      2008Expected life (years)
      
      5
      
      
      -Interest rate
      
      2.04%
      
      
      -Volatility
      
      112.3%
      
      
      -Dividend yield
      
      0%
      
      
      -


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

As at December 31, 2009, the aggregate intrinsic value of the
  outstanding exercisable options was $1,921,979 (2008 - $nil). The total intrinsic
  value of 400,000 options exercised during 2009 was approximately $232,160 (2008
  - $nil).

17

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

6. Share capital - Continued

Stock options- Continued

There is no unamortized compensation expense as at December 31,
  2009 and 2008 as all the outstanding options vested at the grant date.

The following table summarizes information about stock options
  outstanding and exercisable at December 31, 2009:

Weighted
      WeightedNumber
      Average
      AverageExpiry
      Outstanding and
      Contractual Life
      ExerciseDate
      Exercisable
      (Years)
      PriceFebruary 1, 2010
      700,000
      0.09
      C$0.35April 20, 2011
      1,200,000
      1.30
      C$0.77January 28, 2014
      1,950,000
      4.08
      C$0.263,850,000
      2.49
      C$0.44


In January 2010, the Company issued 700,000 common shares for
  proceeds of $233,111 (C$245,000) pursuant to the exercise of stock options.

In April 2010, the Company granted 50,000 stock options to a
  consultant, which are exercisable at C$1.24 per share and expire on April 18,
  2015.

In September 2010, 50,000 stock options were exercised and the
  Company issued 50,000 common shares at C$0.26 per share for proceeds of $12,487
  (C$13,000).

Warrants

|                                                                      |  |            |   |  |                          |  |  | Average          | 
|--------------------------------------------------------------------- |  | ---------- | - |  | ------------------------ |  |  | ---------------- | 
|                                                                      |  |            |   |  | Weighted Average         |  |  | Contractual Life | 
|                                                                      |  | Shares     |   |  | Exercise Price per Share |  |  | (Years)          | 
|                                                                      |  |            |   |  |                          |  |  |                  | 
|                                                                      |  |            |   |  |                          |  |  |                  | 
|Outstanding and exercisable, January 1, 2008                          |  | 7,200,000  |   |  | C$0.60                   |  |  | 1.07             | 
|Granted                                                               |  | -          |   |  | -                        |  |  |                  | 
|Exercised                                                             |  | (7,200,000 | ) |  | C$0.60                   |  |  | 1.07             | 
|Options outstanding and exercisable, December 31, 2008 and
      2009 |  | -          |   |  | -                        |  |  |                  | 

On June 1, 2010, the Company issued 5,000,000 units at C$1.60
  per unit for gross proceeds of $7,634,316 (C$8,000,000). Each unit consisted
  of one common share, one-quarter of one Class A purchase warrant and one-quarter
  of one Class B purchase warrant. Each whole Class A warrant is exercisable to
  acquire one additional common share of the Company at a price of C$1.75. Each
  Class B warrant is exercisable to acquire one additional common share of the
  Company at a price of C$2.00. Both Class A and Class B warrants expire December
  1, 2011.

18

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

7. Asset Retirement Obligations

The Company is required to provide the Bureau of Land Management,
  the State Office of Mine Reclamation and Kern County with a revised reclamation
  cost estimate once per year. The financial assurance is adjusted once the cost
  estimate is approved (Note 3).

The Company estimated its asset retirement obligation based on
  its understanding of the requirements to reclaim, and clean up its Property.
  The Company estimated that total payments of approximately $370,414 over three
  years commencing in 2017 would be required to complete the retirement obligations.
  In determining the estimated initial present value of the obligation, a discount
  factor of 9.0% (the credit-adjusted risk-free rate), and an inflation rate of
  3.0% were used. The asset portion of the retirement obligation was written off
  in 2004. The asset retirement obligation accrual required management to make
  significant estimates and assumptions. Actual results could materially differ
  from these estimates. The liability for accrued asset retirement obligations
  is comprised as follows:

| |                               |   | 2009    |  |   | 2008    |  
| | ----------------------------- | - | ------- |  | - | ------- | -
| | Beginning of the year         | $ | 162,903 |  | $ | 145,965 |  
| | Change in cash flow estimates |   | 6,882   |  |   | (275    | )
| | Accretion expense             |   | 7,779   |  |   | 17,213  |  
| | End of the year               | $ | 177,564 |  | $ | 162,903 |  

19

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US dollars)                              

8. Commitments and Contingencies

The Company has acquired a number of mineral properties outright
  and has acquired exclusive rights to explore, develop and mine the Property
  under various agreements with landowners.

Agreements are typically subject to sliding scale royalties on
  either gross or net smelter returns ranging from 1% to 7.5% .

The Company ceased making property payments and advance minimum
  royalty payments after successfully concluding moratorium agreements with a
  number of the landowners in 2000. The moratorium agreements expired toward the
  end of 2003. The total advance minimum royalty owing from 2003 to the end of
  2008 was $714,137. The Company contacted all landholders and has paid a total
  of $714,137 during 2008. During the year ended December 31, 2009, the Company
  paid $174,196 to the remaining rightful landholders (2008 - $48,034). The total
  advance minimum royalty owing for 2010 is expected to be approximately $153,000.

In 2007, the Company reached an agreement with a landowner to
  amend the terms of the lease agreement. Under the terms of the amendment, the
  Company was granted an extension of twenty years and had to pay $100,000 owing
  from 2005. In addition, the Company was not required to pay any further advance
  royalty until April 23, 2008. Furthermore, the Company will receive a credit
  representing 50% of all advance minimum royalty paid to date, to be used it
  against the future production royalty payments. The Company made advance minimum
  royalty payment, and paid the landowner $100,000 in 2008 and $100,000 in 2009.

A mining lease agreement with a group of landholders expired
  in 2004. The Company is currently in discussions with this group of landholders
  in an effort to reach a new agreement.

The Company has agreed to issue 100,000 common shares as a finders
  fee upon commencement of commercial production on the Property in connection
  with certain property acquisitions. As of December 31, 2009, commercial production
  has not commenced and no shares have been issued.

In a prior year, the Company entered into an agreement with the
  President of the Company to issue 300,000 bonus shares upon the completion of
  certain milestones. Upon receipt by the Company of a bankable feasibility study
  and the decision to place the Property into commercial production, a bonus of
  150,000 common shares is to be issued. Upon commencement of commercial production
  on the Property, a bonus of 150,000 common shares is to be issued. As at December
  31, 2009, the milestones had not been reached and no common shares were issued
  in connection with this agreement.

9. Related Party Transactions

Except as noted elsewhere in these consolidated financial statements,
  related party transactions are disclosed as follows:

For the year ended December 31, 2009, the Company paid $116,776
  (2008 - $136,500) to the President of the Company for his services, and paid
  $18,620 (2008 - $17,996) to the Director of the Company for his consulting services
  to the Company.

For the year ended December 31, 2009, the Company paid $1,752
  (2008 - 1,861) to each of the four directors and $2,000 (2008 - $2,000) to two
  directors as directors fees.

The above noted transactions were in the normal course of operations,
  and were measured at the exchange amount, which is the amount of consideration
  established and agreed to by the related parties.

20

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

10. Supplementary Disclosures of Cash Flow Information

|                                                                           |   |              |  |   |              |  |   | Cumulative        | 
|-------------------------------------------------------------------------- | - | ------------ |  | - | ------------ |  | - | ----------------- | 
|                                                                           |   |              |  |   |              |  |   | Amounts From Date | 
|                                                                           |   |              |  |   |              |  |   | of Inception      | 
|                                                                           |   | Year ended   |  |   | Year ended   |  |   | (November 21,     | 
|                                                                           |   | December 31, |  |   | December 31, |  |   | 1985) through     | 
|                                                                           |   | 2009         |  |   | 2008         |  |   | December 31, 2009 | 
|                                                                           |   |              |  |   |              |  |   |                   | 
|Cash paid during year for:                                                 |   |              |  |   |              |  |   |                   | 
|Interest                                                                   | $ | -            |  | $ | -            |  | $ | 1,192,911         | 
|Income taxes                                                               | $ | -            |  | $ | -            |  | $ | -                 | 
|                                                                           |   |              |  |   |              |  |   |                   | 
|Non-cash financing and investing activities:                               |   |              |  |   | -            |  |   |                   | 
|Reclassification of derivative
      liability for exercised stock options | $ | 156,834      |  | $ | -            |  | $ | 156,834           | 
|Stock option compensation                                                  | $ | 357,989      |  | $ | -            |  | $ | 1,370,173         | 
|Financing charges related
      to modification of warrants term           | $ | -            |  | $ | -            |  | $ | 889,117           | 
|Exchange
      of notes for common shares                                  | $ | -            |  | $ | -            |  | $ | 1,727,282         | 
|Exchange of note for future
      royalty payments                         | $ | -            |  | $ | -            |  | $ | 150,000           | 
|Common
      shares issued for mineral property                            | $ | -            |  | $ | -            |  | $ | 304,811           | 
|Mineral property acquired
      through the issuance of long-term debt     | $ | -            |  | $ | -            |  | $ | 1,084,833         | 
|Common
      shares issued upon conversion of convertible debt             | $ | -            |  | $ | -            |  | $ | 414,917           | 
|Asset retirement obligations                                               | $ | 14,661       |  | $ | 16,938       |  | $ | 177,564           | 

21

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

11. Restatement of Prior Financial Statements

Subsequent to the issuance of the Companys December 31,
  2009 consolidated financial statements, management discovered an error in connection
  with the guidance of ASC 815-40-15 in respect of the Companys outstanding
  stock options. As at January 1, 2009, the date on which the guidance of ASC
  815-40-15 became effective for the Company, these stock options met the criteria
  of a derivative instrument liability because they were exercisable in a currency
  other than the functional currency of the Company and thus do not meet the fixed-for-fixed
  criteria of that guidance. As a result, the Company was required to separately
  account for the stock options as a derivative instrument liability recorded
  at fair value and marked-to-market each period with the changes in the fair
  value each period charged or credited to income.

The transition provisions of ASC 815-40-15 require cumulative
  effect adjustments as of January 1, 2009 to reflect the amounts that would have
  been recognized if derivative fair value accounting had been applied from the
  original issuance date of an equity-linked financial instrument through the
  implementation date of the revised guidance. Thus, the Company calculated the
  value of the derivative liability associated with the stock options at the date
  of their issuances and recorded the change in the fair value of the derivative
  liability from the date of the grant of the options up to January 1, 2009. Additionally,
  in conjunction with the foregoing, the previously calculated amounts in respect
  of the additional paid-in capital were reversed.

The cumulative effect of this change in accounting principle
  of $399,147 has been recognized as a decrease of the opening balance of the
  accumulated deficit of $464,255 and a decrease in the opening balance of additional
  paid-in capital of $863,402 as of January 1, 2009, with corresponding adjustments
  at January 1, 2009 to recognize a derivative liability of $399,147.

Stock-based compensation of $357,989 in respect of stock options
  granted in 2009, previously recorded as additional paid-in capital, was reclassified
  as derivative liability in connection with the adoption of these pronouncements.

During the year ended December 31, 2009, a total of 400,000 stock
  options included the derivative liability were exercised. Upon exercise of these
  options, the portion of the derivative liability that pertained to these options
  was re-measured and recorded at its fair value of $156,834, subsequent to which
  it was reclassified to additional paid-in capital. The Company measured the
  fair value of the derivative liability pertaining to the options exercised using
  the Black-Scholes pricing model with the following range of assumptions: expected
  volatility  100.45% - 108.23%, expected life  0.28  0.44 years,
  risk-free discount rate  1.23% - 1.52%, dividend yield  0.00% .

As of December 31, 2009, the Company had re-measured the remaining
  outstanding options and determined the fair value of the derivative liability
  to be $2,695,602.

22

---

|GOLDEN QUEEN MINING CO. LTD.              
|------------------------------------------
|(an exploration stage company)            
|Notes to Consolidated Financial Statements
|(US Dollars)                              

11. Restatement (continued)

The Consolidated Balance Sheet of the Company as at December
  31, 2009 has been restated for the effect of this change as follows:

|                           |   | As previously |   |   |            |   |   |             |  
|-------------------------- | - | ------------- | - | - | ---------- | - | - | ----------- | -
|                           |   | reported      |   |   | Adjustment |   |   | Restated    |  
|Derivative liability       | $ | -             |   | $ | 2,695,602  |   | $ | 2,695,602   |  
|                           |   |               |   |   |            |   |   |             |  
|Additional paid in capital | $ | 4,195,106     |   | $ | (1,064,557 | ) | $ | 3,130,549   |  
|                           |   |               |   |   |            |   |   |             |  
|Ending accumulated deficit | $ | (51,837,026   | ) | $ | (1,631,045 | ) | $ | (53,468,071 | )

The Consolidated Statement of Loss for the year ended December
  31, 2009 has been restated for the effect of this change as follows:

|                                                                                                        |   | As previously |   |   |            |   |   |             |  
|------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ---------- | - | - | ----------- | -
|                                                                                                        |   | reported      |   |   | Adjustment |   |   | Restated    |  
|Change in fair value of derivative liability                                                            | $ | -             |   | $ | (2,095,300 | ) | $ | (2,095,300  | )
|Net loss for the year                                                                                   | $ | (2,419,442    | ) | $ | (2,095,300 | ) | $ | (4,514,742  | )
|Net loss, cumulative amounts from date of inception
      (November 21, 1985) through December 31, 2009 | $ | (51,148,925   | ) | $ | (2,095,300 | ) | $ | (53,244,225 | )
|Loss per share                                                                                          | $ | (0.03         | ) | $ | (0.02      | ) | $ | (0.05       | )

The impact of the adoption of ASC 815-40-15 is of a non-cash
  nature. Therefore, there is no change in total operating, investing, and financing
  activities on the Consolidated Statement of Cash Flows.

The fair value of the derivative liability has been determined
  using the Black-Scholes option pricing model using the following assumptions:

| |                                       | December 31,  | January 1,      
| | ------------------------------------- | ------------- | ----------------
| |                                       | 2009          | 2009            
| |                                       |               |                 
| | Risk-free interest rate               | 1.47 to 2.77% | 1.09%           
| | Expected life of derivative liability | 1 to 4.1years | 1.1 to 2.3 years
| | Expected volatility                   | 60% to 148%   | 116% to 152%    
| | Dividend rate                         | 0.00%         | 0.00%           

23

---