----

| Exeter Resource Corporation       |
|-----------------------------------|
| Consolidated Financial Statements |

| Years Ended December 31, 2010 and 2009                 |   | Page        |
|--------------------------------------------------------|--------|-------------|
|                                                   |   |        |
| Auditors’ Report                                 |   | 3           |
|                                                   |   |        |
| Consolidated Balance Sheets                            |   | 6           |
|                                                   |   |        |
| Consolidated Statements of Loss and Comprehensive Loss |   | 7           |
|                                                   |   |        |
| Consolidated Statements of Cash Flows                  |   | 8           |
|                                                   |   |        |
| Consolidated Statements of Shareholders’ Equity  |   | 9           |
|                                                   |   |        |
| Notes to the Consolidated Financial Statements         |   | 10–31 |

----

|        |
|--------|
|   |
|   |   |
|   | PricewaterhouseCoopers LLP |
|   | Chartered Accountants |
|   | PricewaterhouseCoopers Place |
|   | 250 Howe Street, Suite 700 |
|   | Vancouver, British Columbia |
|   | Canada V6C 3S7 |
|   | Telephone +1 604 806 7000 |
|   | Facsimile +1 604 806 7806 |
|   | www.pwc.com/ca |

----

----

----

| Exeter Resource Corporation                                             |
|-------------------------------------------------------------------------|
| Consolidated Balance Sheets(Expressed in Thousands of Canadian Dollars) |

| December 31,                                           |   |            |   | 2010   |     |   | 2009   |   |
|--------------------------------------------------------|--------|-----------------|--------|--------|----------|--------|--------|--------|
|                                                   |   |            |   |   |     |   |   |   |
| Assets                                                 |   |            |   |   |     |   |   |   |
|                                                   |   |            |   |   |     |   |   |   |
| Current                                                |   |            |   |   |     |   |   |   |
| Cash and cash equivalents                              |   | (Note 7)        |   | $      | 90,608   |   |   | $      | 80,624 |   |
| Amounts receivable and prepaid expenses                |   |            |   |   | 520      |   |   |   | 410 |   |
| Due from related party                                 |   | (Note 14)       |   |   | 9        |   |   |   | 16 |   |
| Current assets related to discontinued operations      |   | (Note 2)        |   |   | -        |   |   |   | 592 |   |
|                                                   |   |            |   |   | 91,137   |   |   |   | 81,642 |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Property and equipment                                 |   | (Notes 2 and 8) |   |   | 234      |   |   |   | 278 |   |
| Long term assets related to discontinued operations    |   | (Note 2)        |   |   | -        |   |   |   | 3,442 |   |
|                                                   |   |            |   | $      | 91,371   |   |   | $      | 85,362 |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Liabilities                                            |   |            |   |   |     |   |   |   |   |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Current                                                |   |            |   |   |     |   |   |   |   |   |
| Accounts payable and accrued liabilities               |   |            |   | $      | 1,578    |   |   | $      | 2,659 |   |
| Due to related parties                                 |   | (Note 14)       |   |   | 118      |   |   |   | 67 |   |
| Current liabilities related to discontinued operations |   | (Note 2)        |   |   | -        |   |   |   | 1,435 |   |
|                                                   |   |            |   |   | 1,696    |   |   |   | 4,161 |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Shareholders’ Equity                             |   |            |   |   |     |   |   |   |   |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Share capital                                          |   | (Note 10)       |   |   | 238,454  |   |   |   | 174,418 |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Contributed surplus                                    |   | (Note 13)       |   |   | 26,467   |   |   |   | 18,265 |   |
|                                                   |   |            |   |   |     |   |   |   |   |   |
| Deficit                                                |   |            |   |   | (175,246 | )      |   |   | (111,482 | ) |
|                                                   |   |            |   |   | 89,675   |   |   |   | 81,201 |   |
|                                                   |   |            |   | $      | 91,371   |   |   | $      | 85,362 |   |

| “Bryce Roxburgh”   | Director |
|--------------------------------|----------|
|                           |     |
| “Douglas Scheving” | Director |

----

| Exeter Resource Corporation                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Loss and Comprehensive Loss(Expressed in Thousands of Canadian Dollars, Except Share Data) |

| For the years ended December 31,                                       |             |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------------------|------------------|--------|--------|------------|--------|--------|--------|
|                                                                   |             |   |   |       |   |   |   |
| Income                                                                 |             |   |   |       |   |   |   |
| Interest income                                                        |             |   | $      | 530        |   |   | $      | 499 |   |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Expenses                                                               |             |   |   |       |   |   |   |   |   |
| Accounting and audit                                                   |             |   |   | 169        |   |   |   | 98 |   |
| Administration salaries and consulting                                 | (Note 11)        |   |   | 2,466      |   |   |   | 825 |   |
| Directors’ fees                                                  | (Note 11)        |   |   | 3,725      |   |   |   | 886 |   |
| Foreign exchange loss                                                  |             |   |   | 34         |   |   |   | 359 |   |
| General and administration                                             |             |   |   | 638        |   |   |   | 452 |   |
| Legal fees                                                             |             |   |   | 145        |   |   |   | 197 |   |
| Management fees                                                        | (Note 11)        |   |   | 2,619      |   |   |   | 1,612 |   |
| Mineral property exploration expenditures                              | (Notes 9 and 11) |   |   | 19,758     |   |   |   | 11,823 |   |
| Shareholder communications                                             | (Note 11)        |   |   | 1,152      |   |   |   | 525 |   |
| Stock exchange listing and filing fees                                 |             |   |   | 135        |   |   |   | 179 |   |
|                                                                   |             |   |   | 30,841     |   |   |   | 16,956 |   |
| Loss from continuing operations                                        |             |   |   | 30,311     |   |   |   | 16,457 |   |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Loss from discontinued operations                                      | (Note 2)         |   |   | 5,506      |   |   |   | 14,521 |   |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Net loss and comprehensive loss for the year                           |             |   | $      | (35,817    | )      |   | $      | (30,978 | ) |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Basic & diluted loss per common share from continuing operations   |             |   | $      | (0.39      | )      |   | $      | (0.27 | ) |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Basic & diluted loss per common share from discontinued operations |             |   | $      | (0.07      | )      |   | $      | (0.24 | ) |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Total basic & diluted loss per share                               |             |   | $      | (0.46      | )      |   | $      | (0.51 | ) |
|                                                                   |             |   |   |       |   |   |   |   |   |
| Weighted average number of common shares outstanding                   |             |   |   | 76,808,345 |   |   |   | 61,322,833 |   |

----

| Exeter Resource Corporation                                                                          |
|------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Cash Flows(Expressed in Thousands of Canadian Dollars, Except Share Data) |

| For the years ended December 31,                                    |            |   | 2010   |    |   | 2009   |   |
|---------------------------------------------------------------------|-----------------|--------|--------|---------|--------|--------|--------|
|                                                                |            |   |   |    |   |   |   |
| Operating activities                                                |            |   |   |    |   |   |   |
| Loss for the year from continuing operations                        |            |   | $      | (30,311 | )      |   | $      | (16,457 | ) |
|                                                                |            |   |   |    |   |   |   |   |   |
| Non cash items:                                                     |            |   |   |    |   |   |   |   |   |
| Amortization                                                        |            |   |   | 64      |   |   |   | 31 |   |
| Donation of shares                                                  |            |   |   | 86      |   |   |   | - |   |
| Total stock based compensation                                      | (Note 11)       |   |   | 10,780  |   |   |   | 4,055 |   |
|                                                                |            |   |   | (19,381 | )      |   |   | (12,371 | ) |
| Changes in non-cash working capital items:                          |            |   |   |    |   |   |   |   |   |
| Amounts receivable and prepaid expenses                             |            |   |   | (110    | )      |   |   | 179 |   |
| Due from related party                                              |            |   |   | 7       |   |   |   | - |   |
| Accounts payable and accrued liabilities                            |            |   |   | (1,081  | )      |   |   | 1,646 |   |
| Due to related parties                                              |            |   |   | 51      |   |   |   | (211 | ) |
| Cash flows from the operating activities of continuing operations   |            |   |   | (20,514 | )      |   |   | (10,757 | ) |
|                                                                |            |   |   |    |   |   |   |   |   |
| Loss for the year from discontinued operations                      |            |   |   | (5,506  | )      |   |   | (14,521 | ) |
| Non cash items:                                                     |            |   |   |    |   |   |   |   |   |
| Amortization                                                        |            |   |   | 4       |   |   |   | 106 |   |
| Gain on sale of property and equipment                              |            |   |   | -       |   |   |   | (11 | ) |
| Stock based compensation                                            | (Note 11)       |   |   | 826     |   |   |   | 3,039 |   |
| Changes in non-cash working capital items:                          |            |   |   |    |   |   |   |   |   |
| Amounts receivable and prepaid expenses                             |            |   |   | (56     | )      |   |   | (72 | ) |
| Accounts payable and accrued liabilities                            |            |   |   | 60      |   |   |   | (97 | ) |
| Due to related parties                                              |            |   |   | (238    | )      |   |   | - |   |
| Cash flows from the operating activities of discontinued operations |            |   |   | (4,910  | )      |   |   | (11,556 | ) |
| Cash flows from operating activities                                |            |   |   | (25,424 | )      |   |   | (22,313 | ) |
|                                                                |            |   |   |    |   |   |   |   |   |
| Financing activities                                                |            |   |   |    |   |   |   |   |   |
| Issue of share capital for cash                                     | (Note 10)       |   |   | 64,270  |   |   |   | 89,948 |   |
| Share issue costs                                                   | (Note 10)       |   |   | (3,724  | )      |   |   | (5,537 | ) |
|                                                                |            |   |   |    |   |   |   |   |   |
| Cash flows from financing activities                                |            |   |   | 60,546  |   |   |   | 84,411 |   |
|                                                                |            |   |   |    |   |   |   |   |   |
| Investing activities                                                |            |   |   |    |   |   |   |   |   |
| Acquisition of property and equipment                               |            |   |   | (20     | )      |   |   | (24 | ) |
| Cash flows from investing activities of continuing operations       |            |   |   | (20     | )      |   |   | (24 | ) |
| Acquisition of property and equipment                               |            |   |   | (85     | )      |   |   | (98 | ) |
| Cash flows from investing activities of discontinued operations     |            |   |   | (85     | )      |   |   | (98 | ) |
| Cash flows from investing activities                                |            |   |   | (105    | )      |   |   | (122 | ) |
| Cash transferred on Plan of Arrangement                             | (Note 2)        |   |   | (25,498 | )      |   |   | - |   |
| Net increase in cash and cash equivalents                           |            |   |   | 9,519   |   |   |   | 61,976 |   |
| Cash and cash equivalents, beginning of year                        |            |   |   | 81,089  |   |   |   | 19,113 |   |
| Cash and cash equivalents, end of year                              | (Notes 2 and 7) |   | $      | 90,608  |   |   | $      | 81,089 |   |
|                                                                |            |   |   |    |   |   |   |   |   |
| Supplemental Cash Flow Information                                  | (Note 15)       |   |   |    |   |   |   |   |   |

----

| Exeter Resource CorporationConsolidated Statements of Shareholders’ Equity(Expressed in Thousands of Canadian Dollars, Except Share Data) |
|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             |   | Issued Share Capital |       |   |   |   |    |                |   |   |    |   |
|-----------------------------------------------------------------------|--------|----------------------|------------|--------|--------|--------|---------|---------------------|--------|--------|---------|--------|
|                                                                  |   | Number of Shares     |       |   | Amount |   |    | Contributed Surplus |   |   | Deficit |   |   | TotalShareholders'Equity |   |
| Balance at December 31, 2008                                          |   |                 | 50,200,423 |   |   | $      | 89,356  |                |   | $      | 11,822  |   |   | $ | (80,504 | ) |   | $ | 20,674 |   |
| Additions during the year:                                            |   |                 |       |   |   |   |    |                |   |   |    |   |   |   |   |   |   |   |   |   |
| - Exercise of warrants                                                |   |                 | 304,679    |   |   |   | 731     |                |   |   | -       |   |   |   | - |   |   |   | 731 |   |
| - Exercise of stock options                                           |   |                 | 1,485,100  |   |   |   | 2,717   |                |   |   | -       |   |   |   | - |   |   |   | 2,717 |   |
| - Equity financing net of share issue costs                           |   |                 | 21,907,500 |   |   |   | 80,963  |                |   |   | -       |   |   |   | - |   |   |   | 80,963 |   |
| - Agent’s warrants                                              |   |                 | -          |   |   |   | (1,511  | )                   |   |   | 1,511   |   |   |   | - |   |   |   | - |   |
| - Contributed surplus allocated on exercise of agent’s Warrants |   |                 | -          |   |   |   | 376     |                |   |   | (376    | )      |   |   | - |   |   |   | - |   |
| - Contributed surplus allocated on exercise of stock options          |   |                 | -          |   |   |   | 1,786   |                |   |   | (1,786  | )      |   |   | - |   |   |   | - |   |
| - Stock based compensation                                            |   |                 | -          |   |   |   | -       |                |   |   | 7,094   |   |   |   | - |   |   |   | 7,094 |   |
| - Net loss for the year                                               |   |                 | -          |   |   |   | -       |                |   |   | -       |   |   |   | (30,978 | ) |   |   | (30,978 | ) |
| Balance at December 31, 2009                                          |   |                 | 73,897,702 |   |   | $      | 174,418 |                |   | $      | 18,265  |   |   | $ | (111,482 | ) |   | $ | 81,201 |   |
| Additions during the year:                                            |   |                 |       |   |   |   |    |                |   |   |    |   |   |   |   |   |   |   |   |   |
| - Exercise of warrants                                                |   |                 | 723,551    |   |   |   | 2,306   |                |   |   | -       |   |   |   | - |   |   |   | 2,306 |   |
| - Exercise of stock options                                           |   |                 | 2,401,500  |   |   |   | 4,461   |                |   |   | -       |   |   |   | - |   |   |   | 4,461 |   |
| - Donation                                                            |   |                 | 10,000     |   |   |   | 86      |                |   |   | -       |   |   |   | - |   |   |   | 86 |   |
| - Equity financing net of share issue costs                           |   |                 | 9,274,750  |   |   |   | 53,779  |                |   |   | -       |   |   |   | - |   |   |   | 53,779 |   |
| - Contributed surplus allocated on exercise of agent’s Warrants |   |                 | -          |   |   |   | 818     |                |   |   | (818    | )      |   |   | - |   |   |   | - |   |
| - Contributed surplus allocated on exercise of stock options          |   |                 | -          |   |   |   | 2,586   |                |   |   | (2,586  | )      |   |   | - |   |   |   | - |   |
| - Stock based compensation                                            |   |                 | -          |   |   |   | -       |                |   |   | 11,606  |   |   |   | - |   |   |   | 11,606 |   |
| - Transfer of Argentine Business net assets to Extorre (Note 2)       |   |                 | -          |   |   |   | -       |                |   |   | -       |   |   |   | (27,947 | ) |   |   | (27,947 | ) |
| - Net loss for the year                                               |   |                 | -          |   |   |   | -       |                |   |   | -       |   |   |   | (35,817 | ) |   |   | (35,817 | ) |
| Balance at December 31, 2010                                          |   |                 | 86,307,503 |   |   | $      | 238,454 |                |   | $      | 26,467  |   |   | $ | (175,246 | ) |   | $ | 89,675 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 1. | Nature of Business and Continuing Operations |
|----|----------------------------------------------|

| 2. | Discontinued Operations and Transfer of Argentine Assets |
|----|----------------------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 2. | Discontinued Operations and Transfer of Argentine Assets (Continued) |
|----|----------------------------------------------------------------------|

| Consolidated Statement of Loss andComprehensive Loss |   | For the yearendedDecember 31,2010 |    |   | Discontinuedoperations |   |   | Continuingoperations |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|------------------------|--------|--------|----------------------|--------|
| Interest income                                                               |   | $                                                | 530     |   |                   | $      | -      |                 |   | $ | 530 |   |
|                                                                          |   |                                             |    |   |                   |   |   |                 |   |   |   |   |
| Accounting and audit                                                          |   |                                             | 218     |   |                   |   | 49     |                 |   |   | 169 |   |
| Administration salaries and consulting                                        |   |                                             | 2,747   |   |                   |   | 281    | *                    |   |   | 2,466 |   |
| Directors’ fees                                                         |   |                                             | 3,725   |   |                   |   | -      |                 |   |   | 3,725 |   |
| Foreign exchange loss                                                         |   |                                             | 104     |   |                   |   | 70     |                 |   |   | 34 |   |
| General and administration                                                    |   |                                             | 675     |   |                   |   | 65     |                 |   |   | 610 |   |
| Legal fees                                                                    |   |                                             | 221     |   |                   |   | 76     |                 |   |   | 145 |   |
| Management fees                                                               |   |                                             | 2,977   |   |                   |   | 358    | *                    |   |   | 2,619 |   |
| Mineral property exploration expenditures                                     |   |                                             | 24,211  |   |                   |   | 4,453  | *                    |   |   | 19,758 |   |
| Shareholder communications                                                    |   |                                             | 1,311   |   |                   |   | 131    | *                    |   |   | 1,180 |   |
| Stock exchange listing and filing fees                                        |   |                                             | 158     |   |                   |   | 23     |                 |   |   | 135 |   |
|                                                                          |   |                                             | 36,347  |   |                   |   | 5,506  |                 |   |   | 30,841 |   |
| Net loss and comprehensive loss for the year                                  |   | $                                                | (35,817 | )      |                   | $      | (5,506 | )                    |   | $ | (30,311 | ) |
| Basic and diluted loss per share                                              |   | $                                                | (0.46   | )      |                   | $      | (0.07  | )                    |   | $ | (0.39 | ) |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 2. | Discontinued Operations and Transfer of Argentine Assets (Continued) |
|----|----------------------------------------------------------------------|

| Consolidated Balance Sheet     |   | As atDecember 31,2009 |   |   | Discontinuedoperations |   |   | Continuingoperations |   |
|------------------------------------------|--------|---------------------------------|--------|--------|------------------------|--------|--------|----------------------|--------|
| Cash and cash equivalents                |   | $                               | 81,089 |   |                   | $      | 465    |                 |   | $ | 80,624 |   |
| Amounts receivable and prepaid expenses  |   |                            | 537    |   |                   |   | 127    |                 |   |   | 410 |   |
| Due from related party                   |   |                            | 16     |   |                   |   | -      |                 |   |   | 16 |   |
| Property and equipment                   |   |                            | 366    |   |                   |   | 88     |                 |   |   | 278 |   |
| Mineral properties                       |   |                            | 3,354  |   |                   |   | 3,354  |                 |   |   | - |   |
|                                     |   | $                               | 85,362 |   |                   | $      | 4,034  |                 |   | $ | 81,328 |   |
|                                     |   |                            |   |   |                   |   |   |                 |   |   |   |   |
| Accounts payable and accrued liabilities |   | $                               | 4,094  |   |                   | $      | 1,435  |                 |   | $ | 2,659 |   |
| Due to related parties                   |   |                            | 67     |   |                   |   | -      |                 |   |   | 67 |   |
| Shareholders’ equity               |   |                            | 81,201 |   |                   |   | 2,599  |                 |   |   | 78,602 |   |
|                                     |   | $                               | 85,362 |   |                   | $      | 4,034  |                 |   | $ | 81,328 |   |

| Consolidated Statement of Loss andComprehensive Loss |   | For the yearendedDecember 31,2009 |    |   | Discontinuedoperations |   |    | Continuingoperations |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|--------|------------------------|--------|---------|----------------------|--------|
| Interest income                                                               |   | $                                                | 499     |   |                   | $      | -       |                 |   | $ | 499 |   |
|                                                                          |   |                                             |    |   |                   |   |    |                 |   |   |   |   |
| Accounting and audit                                                          |   |                                             | 336     |   |                   |   | 238     |                 |   |   | 98 |   |
| Administration salaries and consulting                                        |   |                                             | 1,560   |   |                   |   | 735     | *                    |   |   | 825 |   |
| Amortization                                                                  |   |                                             | 95      |   |                   |   | 64      |                 |   |   | 31 |   |
| Directors’ fees                                                         |   |                                             | 1,675   |   |                   |   | 789     | *                    |   |   | 886 |   |
| Foreign exchange (gain)/loss                                                  |   |                                             | (59     | )      |                   |   | (418    | )                    |   |   | 359 |   |
| General and administration                                                    |   |                                             | 762     |   |                   |   | 341     |                 |   |   | 421 |   |
| Legal fees                                                                    |   |                                             | 372     |   |                   |   | 175     |                 |   |   | 197 |   |
| Management fees                                                               |   |                                             | 3,048   |   |                   |   | 1,436   |                 |   |   | 1,612 |   |
| Mineral property exploration expenditures                                     |   |                                             | 22,355  |   |                   |   | 10,532  | *                    |   |   | 11,823 |   |
| Shareholder communications                                                    |   |                                             | 993     |   |                   |   | 468     | *                    |   |   | 525 |   |
| Stock exchange listing and filing fees                                        |   |                                             | 340     |   |                   |   | 161     |                 |   |   | 179 |   |
|                                                                          |   |                                             | 31,477  |   |                   |   | 14,521  |                 |   |   | 16,956 |   |
| Net loss and comprehensive loss for the year                                  |   | $                                                | (30,978 | )      |                   | $      | (14,521 | )                    |   | $ | (16,457 | ) |
| Basic and diluted loss per share                                              |   | $                                                | (0.51   | )      |                   | $      | (0.24   | )                    |   | $ | (0.27 | ) |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 2. | Discontinued Operations and Transfer of Argentine Assets (Continued) |
|----|----------------------------------------------------------------------|

|                                                 |   | March 24,2010 |   |
|------------------------------------------------------|--------|--------------------|--------|
|                                                 |   |               |   |
| Cash and cash equivalents                            |   | $                  | 25,498 |   |
| Amounts receivable and prepaid expenses              |   |               | 183    |   |
| Due from related party                               |   |               | 238    |   |
| Long term assets related to discontinued operations: |   |               |   |   |
| Property and equipment                               |   |               | 169    |   |
| Mineral properties                                   |   |               | 3,354  |   |
| Accounts payable and accrued liabilities             |   |               | (1,495 | ) |
|                                                 |   |               |   |   |
| Net assets transferred to Extorre                    |   | $                  | 27,947 |   |

| 3. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

|   | a) | Basis of presentation |
|--------|----|-----------------------|

|                                                        | Incorporation |   | Percentage ofOwnership |   |
|-------------------------------------------------------------|---------------|--------|------------------------|--------|
| Sociedad Contractual Minera Eton Chile (“Eton”) | Chile         |   |                   | 100    | % |

|   | b) | Mineral property acquisition costs |
|--------|----|------------------------------------|

|   | c) | Mineral property exploration expenditures |
|--------|----|-------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 3. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | d) | Impairment of mineral property |
|--------|----|--------------------------------|

|   | e) | Asset retirement obligations |
|--------|----|------------------------------|

|   | f) | Cash and cash equivalents |
|--------|----|---------------------------|

|   | g) | Translation of foreign currencies |
|--------|----|-----------------------------------|

|   | i) | Monetary items, at the rate of exchange prevailing at the consolidated balance sheet date; |
|--------|----|--------------------------------------------------------------------------------------------|

|   | ii) | Non-monetary items, at the historical rate of exchange; and |
|--------|-----|-------------------------------------------------------------|

|   | iii) | Exploration and administration costs, at the average rate during the period in which the transaction occurred. |
|--------|------|----------------------------------------------------------------------------------------------------------------|

|   | h) | Loss per share |
|--------|----|----------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 3. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | i) | Property and equipment |
|--------|----|------------------------|

| Canada                       |              |   |       |   |
|------------------------------|-------------------|--------|------------|--------|
| Computer equipment           | Declining balance |   | -30%       |   |
| Computer software            | Declining balance |   | -50%       |   |
| Equipment                    | Declining balance |   | -20%       |   |
| Office equipment             | Declining balance |   | -20%       |   |
| Chile                        |              |   |       |   |
| Computer equipment           | Straight-line     |   | -3-6 years |   |
| Equipment including vehicles | Straight-line     |   | -3-7 years |   |
| Office equipment             | Straight-line     |   | -5-7 years |   |

|   | j) | Share issue costs |
|--------|----|-------------------|

|   | k) | Share capital issued for other than cash |
|--------|----|------------------------------------------|

|   | l) | Stock-based compensation |
|--------|----|--------------------------|

|   | m) | Income taxes |
|--------|----|--------------|

|   | n) | Use of estimates |
|--------|----|------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 3. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | o) | Financial instruments |
|--------|----|-----------------------|

|   | p) | Discontinued operations |
|--------|----|-------------------------|

| 4. | Changes in Accounting Policies and New Accounting Developments |
|----|----------------------------------------------------------------|

|   | a) | Business Combinations, Consolidated Financial Statements and Non-Controlling Interests , Sections 1582, 1601 and 1602 |
|--------|----|-----------------------------------------------------------------------------------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 4. | Changes in Accounting Policies and New Accounting Developments (Continued) |
|----|----------------------------------------------------------------------------|

|   | b) | Conforming amendments |
|--------|----|-----------------------|

| 5. | Management of Capital |
|----|-----------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 6. | Financial Instruments |
|----|-----------------------|

|   | a) | Fair Value |
|--------|----|------------|

|                                            |   | 2010           |   |   | 2009            |   |
|-------------------------------------------------|--------|----------------|--------|--------|-----------------|--------|
|                                            |   | Carryingamount |   |   | Fair value |   |   | Carryingamount |   |   | Fair value |   |
| Continuing Operations                           |   |           |   |   |            |   |   |   |   |   |   |   |
| Financial Assets                                |   |           |   |   |            |   |   |   |   |   |   |   |
| Held for trading                                |   |           |   |   |            |   |   |   |   |   |   |   |
| Cash and cash equivalents                       |   | $              | 90,608 |   |            | $      | 90,608 | (i) |   | $ | 80,624 |   |   | $ | 80,624 |   |
| Amounts receivable – at amortized cost    |   | $              | 221    |   |            | $      | 221 | (ii) |   | $ | 300 |   |   | $ | 300 |   |
| Due from related party                          |   | $              | 9      |   |            | $      | 9 | (ii) |   | $ | 16 |   |   | $ | 16 |   |
| Financial Liabilities – at amortized cost |   |           |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities        |   | $              | 1,578  |   |            | $      | 1,578 | (ii) |   | $ | 2,659 |   |   | $ | 2,659 |   |
| Due to related parties                          |   | $              | 118    |   |            | $      | 118 | (ii) |   | $ | 67 |   |   | $ | 67 |   |
| Discontinued Operations (Note 2)                |   |           |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Financial Assets                                |   |           |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Held for trading                                |   |           |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                       |   | $              | -      |   |            | $      | - | (i) |   | $ | 465 |   |   | $ | 465 |   |
| Amounts receivable – at amortized cost    |   | $              | -      |   |            | $      | - | (ii) |   | $ | 127 |   |   | $ | 127 |   |
| Financial Liabilities – at amortized cost |   |           |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities        |   | $              | -      |   |            | $      | - | (ii) |   | $ | 1,435 |   |   | $ | 1,435 |   |

|   | (i) | The Company’s cash and cash equivalents are classified within Level 2 of the fair value hierarchy because they are valued using quoted market prices. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | The carrying amount of amounts receivable, accounts payable and accrued liabilities and due to related parties approximates fair value due to their short term to maturity. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Financial Risk Management |
|--------|----|---------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 6. | Financial Instruments (Continued) |
|----|-----------------------------------|

|                                     |   | 2010(in thousands) |     |
|------------------------------------------|--------|-------------------------|----------|
|                                     |   | ChileanPesos            |     |   | US Dollars |   |   | AustralianDollars |   |
| Cash and cash equivalents                |   |                    | 353,252  |   |   |   | 298 |   |   |   | - |   |
| Amounts receivable                       |   |                    | 52,047   |   |   |   | - |   |   |   | - |   |
| Accounts payable and accrued liabilities |   |                    | (435,008 | ) |   |   | (173 | ) |   |   | (111 | ) |
| Net balance                              |   |                    | (29,709  | ) |   |   | 125 |   |   |   | (111 | ) |
| Equivalent in Canadian Dollars           |   |                    | (63      | ) |   |   | 124 |   |   |   | (113 | ) |
| Rate to convert to $1.00 CDN             |   |                    | 0.002125 |   |   |   | 0.9946 |   |   |   | 1.0180 |   |

|                                     |   | 2009(in thousands) |     |
|------------------------------------------|--------|-------------------------|----------|
|                                     |   | ChileanPesos            |     |   | US Dollars |   |   | AustralianDollars |   |   | ArgentinePesos(Note 2) |   |
| Cash and cash equivalents |   |                    | 114,894  |   |   |   | 37 |   |   |   | - |   |   |   | 1,714 |   |
| Amounts receivable                       |   |                    | 35,230   |   |   |   | - |   |   |   | - |   |   |   | 468 |   |
| Accounts payable and accrued liabilities |   |                    | (623,585 | ) |   |   | (317 | ) |   |   | (348 | ) |   |   | (5,401 | ) |
| Net balance                              |   |                    | (473,461 | ) |   |   | (280 | ) |   |   | (348 | ) |   |   | (3,219 | ) |
| Equivalent in Canadian Dollars           |   |                    | (976     | ) |   |   | (294 | ) |   |   | (327 | ) |   |   | (873 | ) |
| Rate to convert to $1.00 CDN             |   |                    | 0.002062 |   |   |   | 1.0510 |   |   |   | 0.9395 |   |   |   | 0.2713 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 7. | Cash and Cash Equivalents |
|----|---------------------------|

|                                 |   | 2010   |   |   | 2009   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash                                 |   | $      | 5,983  |   |   | $      | 1,622 |   |
| Investment Savings Accounts          |   |   | 52,563 |   |   |   | 45,000 |   |
| Guaranteed Investment Certificates   |   |   | 32,062 |   |   |   | 34,002 |   |
| Cash – continuing operations   |   |   | 90,608 |   |   |   | 80,624 |   |
| Cash – discontinued operations |   |   | -      |   |   |   | 465 |   |
| Total                                |   | $      | 90,608 |   |   | $      | 81,089 |   |

| 8. | Property and Equipment |
|----|------------------------|

|                         |   | 2010   |   |   | 2009                    |   |
|------------------------------|--------|--------|--------|--------|-------------------------|--------|
|                         |   | Cost   |   |   | AccumulatedAmortization |   |   | Net BookValue |   |   | Cost |   |   | AccumulatedAmortization |   |   | Net Book Value |   |
| Canada                       |   |   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Computer equipment           |   | $      | 106    |   |                    | $      | 75 |   |   | $ | 31 |   |   | $ | 103 |   |   | $ | 62 |   |   | $ | 41 |   |
| Computer software            |   |   | 15     |   |                    |   | 15 |   |   |   | - |   |   |   | 15 |   |   |   | 14 |   |   |   | 1 |   |
| Equipment                    |   |   | 44     |   |                    |   | 29 |   |   |   | 15 |   |   |   | 44 |   |   |   | 25 |   |   |   | 19 |   |
| Office equipment             |   |   | 45     |   |                    |   | 18 |   |   |   | 27 |   |   |   | 28 |   |   |   | 12 |   |   |   | 16 |   |
|                         |   |   | 210    |   |                    |   | 137 |   |   |   | 73 |   |   |   | 190 |   |   |   | 113 |   |   |   | 77 |   |
| Chile                        |   |   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Computer equipment           |   |   | 5      |   |                    |   | 3 |   |   |   | 2 |   |   |   | 5 |   |   |   | 2 |   |   |   | 3 |   |
| Equipment including vehicles |   |   | 283    |   |                    |   | 126 |   |   |   | 157 |   |   |   | 283 |   |   |   | 88 |   |   |   | 195 |   |
| Office equipment             |   |   | 5      |   |                    |   | 3 |   |   |   | 2 |   |   |   | 5 |   |   |   | 2 |   |   |   | 3 |   |
|                         |   |   | 293    |   |                    |   | 132 |   |   |   | 161 |   |   |   | 293 |   |   |   | 92 |   |   |   | 201 |   |
| Continuing operations        |   |   | 503    |   |                    |   | 269 |   |   |   | 234 |   |   |   | 483 |   |   |   | 205 |   |   |   | 278 |   |
| Argentina (Note 2)           |   |   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Computer equipment           |   |   | -      |   |                    |   | - |   |   |   | - |   |   |   | 30 |   |   |   | 28 |   |   |   | 2 |   |
| Computer software            |   |   | -      |   |                    |   | - |   |   |   | - |   |   |   | 43 |   |   |   | 40 |   |   |   | 3 |   |
| Equipment including vehicles |   |   | -      |   |                    |   | - |   |   |   | - |   |   |   | 296 |   |   |   | 213 |   |   |   | 83 |   |
| Discontinued operations      |   |   | -      |   |                    |   | - |   |   |   | - |   |   |   | 369 |   |   |   | 281 |   |   |   | 88 |   |
|                         |   | $      | 503    |   |                    | $      | 269 |   |   | $ | 234 |   |   | $ | 852 |   |   | $ | 486 |   |   | $ | 366 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 9. | Mineral Properties -Exploration Costs |
|----|---------------------------------------|

|   | a) | Exploration Costs |
|--------|----|-------------------|

| 2010                         |   |
|------------------------------|--------|
|                         |   | DiscontinuedOperations(Note 2) |   |   | ChileanProperties |   |   | Total |   |
| Assays                       |   | $ | 437 |   |   | $ | 348 |   |   | $ | 785 |   |
| Consultants and contractors  |   |   | 20 |   |   |   | 993 |   |   |   | 1,013 |   |
| Drilling                     |   |   | 1,321 |   |   |   | 6,776 |   |   |   | 8,097 |   |
| Engineering                  |   |   | 123 |   |   |   | 233 |   |   |   | 356 |   |
| Environmental                |   |   | 146 |   |   |   | 59 |   |   |   | 205 |   |
| Field camp                   |   |   | 312 |   |   |   | 2,026 |   |   |   | 2,338 |   |
| Geological *                 |   |   | 494 |   |   |   | 2,304 |   |   |   | 2,798 |   |
| IVA tax                      |   |   | 491 |   |   |   | 1,842 |   |   |   | 2,333 |   |
| Legal and title              |   |   | 76 |   |   |   | 260 |   |   |   | 336 |   |
| Metallurgical *              |   |   | 116 |   |   |   | 1,607 |   |   |   | 1,723 |   |
| Office operations            |   |   | 179 |   |   |   | 239 |   |   |   | 418 |   |
| Resource development         |   |   | 50 |   |   |   | 123 |   |   |   | 173 |   |
| Travel                       |   |   | 221 |   |   |   | 796 |   |   |   | 1,017 |   |
| Wages and benefits *         |   |   | 467 |   |   |   | 2,152 |   |   |   | 2,619 |   |
| Exploration costs            |   | $ | 4,453 |   |   | $ | 19,758 |   |   | $ | 24,211 |   |
| Cumulative Exploration Costs |   | $ | 57,190 |   |   | $ | 43,210 |   |   | $ | 100,400 |   |

| 2009                         |   |
|------------------------------|--------|
|                         |   | DiscontinuedOperations(Note 2) |   |   | ChileanProperties |   |   | Total |   |
| Assays                       |   | $ | 490 |   |   | $ | 285 |   |   | $ | 775 |   |
| Consultants and contractors  |   |   | 82 |   |   |   | 176 |   |   |   | 258 |   |
| Drilling                     |   |   | 3,571 |   |   |   | 4,072 |   |   |   | 7,643 |   |
| Engineering                  |   |   | 173 |   |   |   | 374 |   |   |   | 547 |   |
| Environmental                |   |   | 208 |   |   |   | 107 |   |   |   | 315 |   |
| Field camp                   |   |   | 735 |   |   |   | 1,598 |   |   |   | 2,333 |   |
| Geological *                 |   |   | 916 |   |   |   | 1,664 |   |   |   | 2,580 |   |
| IVA tax                      |   |   | 767 | ** |   |   | 987 |   |   |   | 1,754 |   |
| Legal and title              |   |   | 170 |   |   |   | 200 |   |   |   | 370 |   |
| Metallurgical *              |   |   | 72 |   |   |   | 486 |   |   |   | 558 |   |
| Office operations            |   |   | 551 |   |   |   | 211 |   |   |   | 762 |   |
| Resource development         |   |   | 460 |   |   |   | 9 |   |   |   | 469 |   |
| Travel                       |   |   | 821 |   |   |   | 496 |   |   |   | 1,317 |   |
| Wages and benefits *         |   |   | 1,516 |   |   |   | 1,158 |   |   |   | 2,674 |   |
| Exploration costs            |   | $ | 10,532 |   |   | $ | 11,823 |   |   | $ | 22,355 |   |
| Cumulative Exploration Costs |   | $ | 52,737 |   |   | $ | 23,452 |   |   | $ | 76,189 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 9. | Mineral Properties - Exploration Costs(Continued) |
|----|---------------------------------------------------|

|               |   | DiscontinuedOperations(Note 2) |   |   | ChileanProperties |   |   | 2010   |   |   | 2009  |   |
|--------------------|--------|-------------------------------------|--------|--------|-------------------|--------|--------|--------|--------|--------|-------|--------|
| Geological         |   | $                                   | 181    |   |              | $      | 1,412  |   |   | $      | 1,593 |   |   | $ | 1,205 |   |
| Metallurgical      |   |                                | 66     |   |              |   | 668    |   |   |   | 734   |   |   |   | 135 |   |
| Wages and benefits |   |                                | 58     |   |              |   | 806    |   |   |   | 864   |   |   |   | 437 |   |
| Total              |   | $                                   | 305    |   |              | $      | 2,886  |   |   | $      | 3,191 |   |   | $ | 1,777 |   |

|   | b) | Caspiche |
|--------|----|----------|

| 10. | Share Capital |
|-----|---------------|

|                                |   | 2010                 |       |   | 2009   |   |
|-------------------------------------|--------|----------------------|------------|--------|--------|--------|
|                                |   | Number ofShares |       |   | Amount |   |   | Number ofShares |   |   | Amount |   |
| Balance, beginning of year          |   |                 | 73,897,702 |   |   | $      | 174,418 |   |   |   | 50,200,423 |   |   | $ | 89,356 |   |
| Issued during the year for:         |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity financing                    |   |                 | 9,274,750  |   |   |   | 57,503 |   |   |   | 21,907,500 |   |   |   | 86,500 |   |
| Exercise of options                 |   |                 | 2,401,500  |   |   |   | 4,461 |   |   |   | 1,485,100 |   |   |   | 2,717 |   |
| Exercise of warrants                |   |                 | 723,551    |   |   |   | 2,306 |   |   |   | 304,679 |   |   |   | 731 |   |
|  Donation                      |   |                 | 10,000     |   |   |   | 86 |   |   |   | - |   |   |   | - |   |
|  Contributed surplus allocated |   |                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of options                 |   |                 | -          |   |   |   | 2,586 |   |   |   | - |   |   |   | 1,786 |   |
| Exercise of agent’s warrants  |   |                 | -          |   |   |   | 818 |   |   |   | - |   |   |   | 376 |   |
| Share issue costs                   |   |                 | -          |   |   |   | (3,724 | ) |   |   | - |   |   |   | (7,048 | ) |
| Balance, end of year                |   |                 | 86,307,503 |   |   | $      | 238,454 |   |   |   | 73,897,702 |   |   | $ | 174,418 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 10. | Share Capital(Continued) |
|-----|--------------------------|

|   | a) | In October 2010, the Company completed an equity financing and issued 8,065,000 common shares at a price of $6.20 per share for gross proceeds of $50.0 million. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | The Company issued 480,196 shares at a price of $2.40 per share for proceeds of $1,152 and 243,355 shares at a price of $4.74 per share for proceeds of $1,154 upon the exercise of warrants.  The fair value of these warrants of $818 was allocated to share capital. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | The Company issued 2,401,500 shares for proceeds of $4,461 upon the exercise of stock options. |
|--------|----|------------------------------------------------------------------------------------------------|

|   | a) | In February 2009 the Company completed an equity financing and issued 12,075,000 common shares at a price of $2.40 per share for gross proceeds of $29.0 million. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | In November 2009 the Company completed an equity financing and issued 9,832,500 common shares at a price of $5.85 per share for gross proceeds of $57.5 million. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | The Company issued 304,679 shares at a price of $2.40 per share for proceeds of $731 upon the exercise of warrants.  The fair value of these warrants, of $377 was allocated to share capital. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | The Company issued 1,485,100 shares for proceeds of $2,717 upon the exercise of stock options. |
|--------|----|------------------------------------------------------------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 11. | Stock Option Plan |
|-----|-------------------|

|                                   |   | 2010   |       |   | 2009                               |   |
|----------------------------------------|--------|--------|------------|--------|------------------------------------|--------|
|                                   |   | Shares |       |   | WeightedAverageExercise Price |   |   | Shares |   |   | WeightedAverage ExercisePrice |   |
| Options outstanding, beginning of year |   |   | 9,008,900  |   |                               | $      | 1.98 | * |   |   | 8,885,000 |   |   | $ | 2.50 |   |
| Forfeited/cancelled/expired            |   |   | (317,500   | )      |                               |   | 4.96 | * |   |   | (3,716,000 | ) |   |   | 3.31 |   |
| Granted                                |   |   | 6,038,000  |   |                               |   | 6.36 | * |   |   | 5,325,000 |   |   |   | 2.95 |   |
| Exercised                              |   |   | (2,401,500 | )      |                               |   | 1.86 |   |   |   | (1,485,100 | ) |   |   | 1.83 |   |
| Options outstanding, end of year       |   |   | 12,327,900 |   |                               | $      | 4.10 |   |   |   | 9,008,900 |   |   | $ | 2.50 |   |

| Outstanding Options     |   |   | Exercisable Options |   |
|------------------------------|--------|--------|--------------------------|--------|
| Range ofPrices ($) |   | Number |                     |   | WeightedAverageRemaining Life(Years) |   |   | WeightedAverageExercise Price |   |   | Number |   |   | WeightedAverageExercise Price |   |
| 1.01 - 2.00                  |   |   | 2,662,400                |   |   |   | 1.95 |   |   | $ | 1.50 | * |   |   | 2,662,400 |   |   | $ | 1.50 | * |
| 2.01 - 3.00                  |   |   | 3,580,000                |   |   |   | 2.62 |   |   |   | 2.35 | * |   |   | 3,580,000 |   |   |   | 2.35 | * |
| 3.01 - 4.00                  |   |   | 257,500                  |   |   |   | 3.74 |   |   |   | 3.99 | * |   |   | 257,500 |   |   |   | 3.99 | * |
| 5.01 - 6.00                  |   |   | 765,000                  |   |   |   | 4.09 |   |   |   | 5.46 | * |   |   | 257,500 |   |   |   | 5.46 | * |
| 6.01 - 7.00                  |   |   | 5,063,000                |   |   |   | 4.66 |   |   |   | 6.48 |   |   |   | 1,357,500 |   |   |   | 6.64 |   |
|                         |   |   | 12,327,900               |   |   |   | 3.43 |   |   | $ | 4.10 |   |   |   | 8,114,900 |   |   | $ | 2.94 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 11. | Stock Option Plan(Continued) |
|-----|------------------------------|

|   | The fair value of options and agent’s warrants granted during the years ended December 31, 2010 and 2009 were estimated at the grant date, using the Black-Scholes option pricing model with the following assumptions: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | 2010      |                |   | 2009          |   |
|----------------------------|--------|-----------|---------------------|--------|---------------|--------|
| Expected annual volatility |   |      | 79.26 – 84.58 | %      |          |   | 71.00 - 100.37 | % |
| Risk-free interest rate    |   |      | 1.85 – 2.11   | %      |          |   | 0.54 – 3.21 | % |
| Expected life              |   | 3.0 years |                |   | 1.0-3.5 years |   |
| Expected dividend yield    |   |      | 0.00                | %      |          |   | 0.00 | % |

|   | Stock-based compensation expense of $11,606 (2009: $7,094) was recognized in the year and was allocated to contributed surplus. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | 2010   |   |   | 2009   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
| Administration salaries and consulting    |   | $      | 2,054  |   |   | $      | 446 |   |
| Director’s fees                     |   |   | 3,725  |   |   |   | 878 |   |
| Management fees                           |   |   | 1,897  |   |   |   | 1,365 |   |
| Mineral property exploration expenditures |   |   | 2,886  |   |   |   | 1,243 |   |
| Shareholder communications                |   |   | 218    |   |   |   | 123 |   |
| Total continuing operations               |   | $      | 10,780 |   |   | $      | 4,055 |   |
| Total discontinued operations             |   | $      | 826    |   |   | $      | 3,039 |   |
|                                      |   | $      | 11,606 |   |   | $      | 7,094 |   |

|   | Option pricing models require the input of highly subjective assumptions including the expected price volatility of the Company’s shares. Changes in the input assumptions can materially affect the fair value estimate, and therefore, these models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12. | Warrants |
|-----|----------|

|   | At December 31, 2010the Company had no outstanding share purchase warrants exercisable to acquire shares. |
|--------|-----------------------------------------------------------------------------------------------------------|

|   | During the year 480,196 warrants exercisable at a price of $2.40 were exercised for proceeds of $1,152 and 243,355 warrants exercisable at a price of $4.74* were exercised for proceeds of $1,154. 51,620 warrants exercisable at $4.74* expired unexercised. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Under the Arrangement, each warrant holder received one new warrant in the Company at a new exercise price but with the same expiry date as the existing warrant and one warrant in Extorre at a new exercise price but with the same expiry date as the existing warrant in the Company for each warrant held at the Arrangement date. The exercise price was determined on the basis of the relative volume weighted average trading price of Extorre and the Company during the first five trading days after the completion of the Arrangement applied to the original warrant price. As such, the adjustment to the warrant pricing is not a re-pricing. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 12. | Warrants (Continued) |
|-----|----------------------|

|   | At December 31, 2009 the Company had outstanding share purchase warrants exercisable to acquire 775,171 shares as follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------|

| 2009    |
|---------|
| Number  |   | Exercise Price |   | Expiry Date |
| 480,196 |   | $ | 2.40 |   | February 26, 2010 |
| 294,975 |   | $ | 6.00 |   | November 26, 2010 |
| 775,171 |   |   |   |   |   |

| 13. | Contributed Surplus |
|-----|---------------------|

|                                                                |   | 2010   |   |   | 2009   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Balance, beginning of the year                                      |   | $      | 18,265 |   |   | $      | 11,822 |   |
| Stock based compensation expense                                    |   |   | 11,606 |   |   |   | 7,094 |   |
| Agent’s warrants                                              |   |   | -      |   |   |   | 1,511 |   |
| Contributed surplus allocated on exercise of agent’s warrants |   |   | (818   | )      |   |   | (376 | ) |
| Contributed surplus allocated on exercise of stock options          |   |   | (2,586 | )      |   |   | (1,786 | ) |
| Balance, end of the year                                            |   | $      | 26,467 |   |   | $      | 18,265 |   |

| 14. | Related Party Transactions |
|-----|----------------------------|

|   | a) | Exploration and consulting fees of $460, which included a bonus of $100 (2009 - $460) were paid or accrued to a corporation of which the President and CEO of the Company is a principal. Of this amount, $51 was allocated to Extorre. As at December 31, 2010, the Company had amounts owing of $12 (2009 - $nil). |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Exploration fees of $241, which included a bonus of $50 (2009 - $267) were paid or accrued to a corporation controlled by the Vice-President, Exploration and Development. Of this amount, $35 was allocated to Extorre. As at December 31, 2010, the Company had amounts owing of $62 (2009 - $50). |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Management fees of $277 which included a bonus of $50 (2009 - $310) were paid to a corporation controlled by the Chairman of the Company. Of this amount, $13 was allocated to and $48 was recovered from Extorre based upon an agreed allocation for services rendered. As at December 31, 2010, the Company had net amounts owing of $22 (2009 - $17). |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Management fees of $328 which included a bonus of $75 (2009 - $330) were paid or accrued to a corporation controlled by the Chief Financial Officer of the Company. Of this amount, $25 was allocated to Extorre. As at December 31, 2010, the Company had amounts owing of $nil (2009 - $nil). |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 14. | Related Party Transactions  (Continued) |
|-----|---------------------------------------------------|

|   | e) | Management fees of $271 (2009 - $nil) were paid or accrued to a corporation controlled by the Vice-President, Corporate Development and Legal Counsel. Of this amount, $21 was allocated to and $58 was recovered from Extorre based upon an agreed allocation for services rendered. As at December 31, 2010, the Company had amounts payable of $nil (2009 - $nil). |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f) | The Company and Extorre incur certain expenditures for staff and exploration expenditures on behalf of each other.  The net amount provided or incurred by Extorre on behalf of the Company during the year ended December 31, 2010 was $58.  As at December 31, 2010, the Company had $22 owing to Extorre (2009 - $nil). |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g) | The Company paid or accrued rent expense of $21 (2009 - $nil) to a company controlled by a director of the Company. Of this amount, $10 was recovered from a corporation with common directors. As at December 31, 2010, the Company had amounts owing of $nil (2009 – $nil) to this company. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h) | Fees of $31 (2009 - $nil) were paid or accrued to a company of which one of the officers of the Company is a partner for legal services. As at December 31, 2010, the Company had amounts owing of $nil (2009 – $nil) to this company. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15. | Supplemental Cash Flow Information |
|-----|------------------------------------|

|   | The Company incurred non-cash financing activities during the years ended December 31, 2010 and 2009 as follows: |
|--------|------------------------------------------------------------------------------------------------------------------|

|                                           |   | 2010   |   |   | 2009   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Non-cash financing activities:                 |   |   |   |   |   |   |
| Issue of warrants for agent’s commission |   | $      | -      |   |   | $      | 1,511 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 16. | Segmented Information |
|-----|-----------------------|

|   | The Company operates in one business segment, being the acquisition and exploration of mineral properties. |
|--------|------------------------------------------------------------------------------------------------------------|

| December 31, 2010 |   | Canada |   |   | Chile  |   |   | DiscontinuedOperations(Note 2) |   |   | Total  |   |
|-----------------------------|--------|--------|--------|--------|-------------|--------|--------|-------------------------------------|--------|--------|--------|--------|
| Cash and cash equivalents   |   | $      | 89,857 |   |        | $      | 751    |                                |   | $      | -      |   |   | $ | 90,608 |   |
| Other current assets        |   |   | 418    |   |        |   | 111    |                                |   |   | -      |   |   |   | 529 |   |
| Property and equipment      |   |   | 73     |   |        |   | 161    |                                |   |   | -      |   |   |   | 234 |   |
|                        |   |   | 90,348 |   |        |   | 1,023  |                                |   |   | -      |   |   |   | 91,371 |   |
| Current Liabilities         |   |   | (772   | )      |        |   | (924   | )                                   |   |   | -      |   |   |   | (1,696 | ) |
|                        |   | $      | 89,576 |   |        | $      | 99     |                                |   | $      | -      |   |   | $ | 89,675 |   |
|                        |   |   |   |   |        |   |   |                                |   |   |   |   |   |   |   |   |
| Net Loss                    |   | $      | 10,469 |   |        | $      | 19,842 |                                |   | $      | 5,506  |   |   | $ | 35,817 |   |

| December 31, 2009 |   | Canada |   |   | Chile  |   |   | DiscontinuedOperations(Note 2) |   |   | Total  |   |
|-----------------------------|--------|--------|--------|--------|-------------|--------|--------|-------------------------------------|--------|--------|--------|--------|
| Cash and cash equivalents   |   | $      | 80,387 |   |        | $      | 237    |                                |   | $      | 465    |   |   | $ | 81,089 |   |
| Other current assets        |   |   | 353    |   |        |   | 73     |                                |   |   | 127    |   |   |   | 553 |   |
| Property and equipment      |   |   | 77     |   |        |   | 201    |                                |   |   | 88     |   |   |   | 366 |   |
| Mineral properties          |   |   | -      |   |        |   | -      |                                |   |   | 3,354  |   |   |   | 3,354 |   |
|                        |   |   | 80,817 |   |        |   | 511    |                                |   |   | 4,034  |   |   |   | 85,362 |   |
| Current Liabilities         |   |   | (1,440 | )      |        |   | (1,286 | )                                   |   |   | (1,435 | )      |   |   | (4,161 | ) |
|                        |   | $      | 79,377 |   |        | $      | (775   | )                                   |   | $      | 2,599  |   |   | $ | 81,201 |   |
|                        |   |   |   |   |        |   |   |                                |   |   |   |   |   |   |   |   |
| Net Loss                    |   | $      | 4,592  |   |        | $      | 11,865 |                                |   | $      | 14,521 |   |   | $ | 30,978 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 17. | Income Taxes |
|-----|--------------|

|                                                                 |   | 2010   |    |   | 2009   |   |
|----------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Net loss for the year before income tax                              |   | $      | 35,817  |   |   | $      | 30,978 |   |
| Combined federal and provincial tax rate                             |   |   | 28.50   | %      |   |   | 30.00 | % |
| Income tax recovery at statutory rates                               |   | $      | (10,208 | )      |   | $      | (9,294 | ) |
| Losses and other deductions for which no benefit has been recognized |   |   | 7,030   |   |   |   | 5,525 |   |
| Non-deductible stock-based compensation                              |   |   | 3,308   |   |   |   | 2,128 |   |
| Non-deductible mineral property exploration costs                    |   |   | 802     |   |   |   | 1,566 |   |
| Foreign exchange rate and tax rate differences                       |   |   | (926    | )      |   |   | 84 |   |
| Expiry of losses                                                     |   |   | 57      |   |   |   | 89 |   |
| Impact of tax rate reductions                                        |   |   | (63     | )      |   |   | (98 | ) |
| Income tax provision                                                 |   | $      | Nil     |   |   | $      | Nil |   |

|                                                       |   | 2010   |    |   | 2009   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Non-capital loss carry forwards – Canada             |   | $      | 3,685   |   |   | $      | 3,130 |   |
| Non-capital loss carry forwards – Argentina (Note 2) |   |   | -       |   |   |   | 2,127 |   |
| Non-capital loss carry forwards – Chile              |   |   | 136     |   |   |   | 100 |   |
| Exploration and development deductions                     |   |   | 11,405  |   |   |   | 17,334 |   |
| Property and equipment – Canada                      |   |   | 14      |   |   |   | 20 |   |
| Share issue costs                                          |   |   | 1,187   |   |   |   | 1,520 |   |
|                                                       |   |   | 16,427  |   |   |   | 24,231 |   |
| Valuation allowance                                        |   |   | (16,427 | )      |   |   | (24,231 | ) |
|                                                       |   | $      | Nil     |   |   | $      | Nil |   |

| 2014   |   |   | 882    |   |
|--------|--------|--------|--------|--------|
| 2015   |   |   | 1,578  |   |
| 2026   |   |   | 2,242  |   |
| 2027   |   |   | 2,001  |   |
| 2028   |   |   | 2,424  |   |
| 2029   |   |   | 3,109  |   |
| 2030   |   |   | 1,489  |   |
|   |   | $      | 13,725 |   |

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 18. | Contractual Obligations |
|-----|-------------------------|

| Payments Due by Year         |   |
|------------------------------|--------|
|                         |   |
|                         |   | Total |   |   | 2011 |   |   |   | 2012 - 2013 |   |   |   | 2014 - 2016 |   |
| Office and equipment leases* |   | $ | 549 |   |   | $ | 169 |   |   | $ | 176 |   |   | $ | 204 |   |
| Property access agreements   |   |   | 241 |   |   |   | 123 |   |   |   | 118 |   |   |   | - |   |
| Total                        |   | $ | 790 |   |   | $ | 292 |   |   | $ | 294 |   |   | $ | 204 |   |

| 19. | Subsequent events |
|-----|-------------------|

|   | a) | Water rights option |
|--------|----|---------------------|

|   | b) | Caspiche |
|--------|----|----------|

| Payments Due by Year     |   |
|--------------------------|--------|
|                     |   |
|                     |   | Total |   |   | 2011 |   |   |   | 2012 - 2013 |   |   |   | 2014 - 2015 |   |   | 2016 & After |   |
| Advance royalty payments |   | $ | 2,487 |   |   | $ | 249 | * |   | $ | 497 |   |   | $ | 497 |   |   | $ | 1,244 |   |
| Total                    |   | $ | 2,487 |   |   | $ | 249 |   |   | $ | 497 |   |   | $ | 497 |   |   | $ | 1,244 |   |

|   | c) | Sideral project |
|--------|----|-----------------|

----

| Exeter Resource Corporation                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------|
| Notes to the Consolidated Financial Statements(Expressed in Thousands of Canadian Dollars, Except Share Data)December 31, 2010 |

| 20. | Differences between Canadian and US Generally Accepted Accounting Principles |
|-----|------------------------------------------------------------------------------|

----