ANNUAL
INFORMATION FORM



For
the year ended December 31, 2011

Dated
as of March 30, 2012



P.O.
Box 41, Axa Place

Suite
1660, 999 West Hastings Street

Vancouver,
B. C. V6C 2W2 Canada

Phone:
(604) 688-9592

Fax:
(604) 688-9532











TABLE OF CONTENTS



|                                                                        | Page
|----------------------------------------------------------------------- | ----
|                                                                        |     
|PRELIMINARY NOTES                                                       | 1   
|Date of Information                                                     | 1   
|Currency                                                                | 1   
|Conversion Table                                                        | 1   
|Cautionary Statements Regarding Forward Looking Statements              | 1   
|Cautionary Note to United States Investors Regarding Resource Estimates | 3   
|Glossary of Terms                                                       | 4   
|Mineral Application Process in Chile                                    | 7   
|CORPORATE STRUCTURE                                                     | 8   
|Name and Incorporation                                                  | 8   
|Intercorporate Relationships                                            | 8   
|GENERAL DEVELOPMENT OF THE BUSINESS                                     | 9   
|Three Year History                                                      | 9   
|DESCRIPTION OF THE BUSINESS                                             | 12  
|General                                                                 | 12  
|PRINCIPAL PROJECT                                                       | 22  
|CASPICHE                                                                | 22  
|Location                                                                | 22  
|Physiography                                                            | 22  
|Accessibility                                                           | 23  
|Climate                                                                 | 23  
|Current infrastructure                                                  | 23  
|History                                                                 | 24  
|DIVIDENDS                                                               | 29  
|DESCRIPTION OF CAPITAL STRUCTURE                                        | 29  
|MARKET FOR SECURITIES                                                   | 29  
|DIRECTORS AND EXECUTIVE OFFICERS                                        | 30  
|Name, Address and Occupation                                            | 30  
|LEGAL PROCEEDINGS                                                       | 32  
|INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS              | 32  
|TRANSFER AGENT                                                          | 32  
|MATERIAL CONTRACTS                                                      | 33  
|NAME AND INTEREST OF EXPERTS                                            | 33  
|AUDIT COMMITTEE                                                         | 33  
|ADDITIONAL INFORMATION                                                  | 34  

- i -





EXETER RESOURCE CORPORATION



PRELIMINARY NOTES



Date of Information

In this Annual Information Form (the “AIF”),
unless the content otherwise requires, references to “our”, “us”, “it”, “its”,
“the Company” or “Exeter” mean Exeter Resource Corporation and its subsidiaries. All the information contained
in this AIF is as at December 31, 2011, the last day of the Company’s most recently completed financial year, unless otherwise
indicated.





Currency



All dollar amounts referenced in this AIF
are expressed in Canadian dollars, unless otherwise indicated.



Conversion Table



For ease of reference in this AIF, the
following conversion factors from metric measurements into imperial equivalents are provided:



|To Convert from Metric | To Imperial           | Multiply by
|---------------------- | --------------------- | -----------
|                       |                       |            
|Hectares (ha)          | Acres                 | 2.471      
|Metres (m)             | Feet (ft)             | 3.281      
|Kilometres (km)        | Miles                 | 0.621      
|Tonnes                 | Tons (2000 pounds)    | 1.102      
|Grams/tonne (g/t)      | Ounces/ton (troy/ton) | 0.029      



Cautionary Statements Regarding Forward Looking Statements



This
AIF contains “forward looking information” and “forward-looking statements” (together, “forward-looking
statements”) within the meaning of securities legislation in Canada and the United States Private Securities Litigation Reform
Act of 1995, as amended. Such forward-looking statements concern the Company’s anticipated
results and developments in the Company’s operations in future periods, planned exploration and development of its properties,
plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information
that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.



- 1 -









Statements concerning mineral resource
estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization
that will be encountered if the property is developed, and such statements reflect the conclusion based on certain assumptions
that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using
words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates”
or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain
actions, events or results “may”, “could”, “would”, “might” or “will”
be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. While the Company
has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared,
the statements are not a guarantee of the Company’s future performance and are subject to risks, uncertainties, assumptions
and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking
statements. Such factors and assumptions include, amongst others, the effects of general economic conditions, changing foreign
exchange rates and actions by government authorities, uncertainties associated with negotiations and misjudgements in the course
of preparing forward-looking statements. In addition, there are also known and unknown risk factors which may cause actual events
or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:



| | · | risks related to the Company’s lack of revenues from operations and its continued ability
to fund ongoing and planned exploration and possible future mining operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s history of losses, which may continue to occur in the future;
| | - | --------------------------------------------------------------------------------------------

| | · | risks related to the on-going credit crisis centred in the United States and Europe and the Company’s
ability to raise money in the future to fund its operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the availability of power, water, equipment, supplies and other infrastructure
in sufficient supply, the risk that metallurgical testwork and pilot plant operations may not be reproducible in large scale operations
and risks associated with our ability to successfully establish mining operations or profitably produce precious or other metals;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to differences between U.S. and Canadian practices for reporting mineral resources;
| | - | -------------------------------------------------------------------------------------------------

| | · | uncertainty as to actual capital costs, operating costs, production and economic returns, and uncertainty
that any possible future development activities will result in profitable mining operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the highly speculative nature of resource exploration;
| | - | -----------------------------------------------------------------------

| | · | risks related to mineral resource and reserve figures being estimates based on interpretations
and assumptions which may result in less mineral production under actual conditions than is currently estimated;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | changes in the market price of gold, silver, copper, and other minerals which in the past has fluctuated
widely and which could affect the profitability of possible future operations and financial condition;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to currency fluctuations;
| | - | ---------------------------------------

| | · | risks related to the inherently dangerous activity of mining, including conditions or events beyond
the Company’s control;
| | - | --------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s primary property being located in Chile, including political,
economic, and regulatory instability;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



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| | · | uncertainty in the Company’s ability to obtain and maintain certain permits necessary for
current and anticipated operations;
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company being subject to environmental laws and regulations which may increase
the costs of doing business and/or restrict operations;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to land reclamation requirements which may be burdensome;
| | - | -----------------------------------------------------------------------

| | · | risks over the uncertainty in the Company’s ability to attract and maintain qualified management
to meet the needs of anticipated growth and risks relating to its ability to manage growth effectively;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s mineral properties being subject to prior unregistered agreements,
transfers, or claims and other defects in title and risks associated with our ability to meet commercial production timelines required
under the agreement to maintain title to the Company’s Caspiche property;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to increased competition that could adversely affect the Company’s ability
to attract necessary capital funding or acquire suitable producing properties for mineral exploration in the future;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to officers and directors becoming associated with other natural resource companies
which may give rise to conflicts of interests;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the volatility of the Company’s common share price and volume;
| | - | --------------------------------------------------------------

| | · | risks related to the Company being a foreign private issuer under U.S securities laws;
| | - | --------------------------------------------------------------------------------------

| | · | tax consequences to United States shareholders; and
| | - | ---------------------------------------------------

| | · | risks relating to potential claims by indigenous people over the Company’s mineral properties.
| | - | ----------------------------------------------------------------------------------------------



The above list is not exhaustive of the
factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking
statements are described further in this AIF. Should one or more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. Forward-looking
statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and the Company
undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should
change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.



Cautionary Note to United States Investors Regarding Mineral
Reserve and Resource Estimates



This AIF has been prepared in accordance
with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities
laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve”
are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
- CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions
differ from the definitions in the United States Securities and Exchange Commission’s (the “SEC”) Industry Guide
7 under the United States Securities Act of 1933, as amended (the “Securities Act”). Under SEC Industry Guide 7 standards,
a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average
price is used in any reserve or cash flow analysis to designate reserves and all necessary permits and governmental authorizations
must be filed with the appropriate governmental authority.



- 3 -





In addition, the terms “mineral resource”,
“measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are
defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and
are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to
assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral
resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies,
except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically
or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC
Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.



Accordingly, information contained in this
AIF and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable
to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States
federal securities laws and the rules and regulations thereunder.



Glossary of Terms



Ag -symbol used for silver in the
periodic table of elements.



Alteration-any change in
the mineral composition of a rock brought about by physical or chemical means.



Andesite- a dark-colored,
fine-grained extrusive rock that, when porphyritic, contains phenocrysts composed primarily of zoned sodic plagioclase and one
or more of the mafic minerals.



As - symbol used for arsenic in
the periodic table of elements.



Assaying- laboratory examination
that determines the content or proportion of a specific metal (e.g. silver) contained within a sample. Technique usually involves
firing/smelting.



Au- symbol used for gold in the
periodic table of elements.



Breccia - a rock in which angular
fragments are surrounded by a mass of fine-grained minerals.



Bulk Sample - a collection of representative
mineralized material whose location, geologic character and metal assay content can be determined, and then used for metallurgical
or geotechnical testing purposes.



Carbon In Leach-a recovery
processin which a slurry of gold ore, carbon granules and cyanide are mixed together. The cyanide dissolves the gold content
and the gold is absorbed in the carbon. The carbon is subsequently separated from the slurry for further gold removal.



Channel Sampling-cutting
a groove in a rock face or outcrop to obtain material for sampling.



Chip Sampling- taking of
small pieces of rock with a pick along a line, or at random, from the width or face of an exposure or outcrop for exploration sampling.



Clastic - fragments of minerals
and rocks that have been moved individually from their places of origin.

- 4 -







Cu - symbol used for copper in the
periodic table of elements.



Cut-off grade- the lowest
grade of mineralized material that qualifies as resource in a deposit. (i.e. contributing material of the lowest assay that is
included in a resource estimate.)



Diorite - an intrusive igneous rock.



Diamond Drilling - a type of rotary
drilling in which diamond bits are used as the rock-cutting tool to produce a recoverable drill core sample of rock for observation
and analysis.



Dip - the angle that a structural
surface, a bedding or fault plan, makes with the horizontal, measured perpendicular to the strike of the structure.



Disseminated- where minerals occur
as scattered particles in the rock.



Epithermal- low temperature hydrothermal
process or product.



Exploration- work involved in searching
for ore, usually by drilling or driving a drift.



Fault- a fracture or break in rock
along which there has been movement.



Feasibility Study- means
a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental
and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision
by a financial institution to finance the development of the deposit for mineral production.



Felsic-an adjective describing
an igneous rock having mostly light colored minerals and rich in silica, potassium and sodium.



Grade - the metal content of rock
with precious metals, grade can be expressed as troy ounces or grams per tonne of rock.



Hg-symbol used for mercury
in the periodic table of elements.



Hydrothermal- the products or the
actions of heated waters in a rock mass such as a mineral deposit precipitating from a hot solution.



Ignimbrite-a felsic volcanic
tuff in which the fragments were welded together as the tuff cooled.



Intrusion/ Intrusive- molten
rock that is intruded (injected) into spaces that are created by a combination of melting and displacement.



Magnetometer- an instrument
for detecting and measuring changes in the earth's magnetic field, including those in different rock formations which may indicate
the presence of specific minerals.



Metallurgy- the study of the extractive
processes which produce minerals from their host rocks.



Metallurgical Tests- are
scientific examinations of rock/material to determine the optimum extraction of metal contained. Core samples from diamond drill
holes are used as representative samples of the mineralization for this test work.

- 5 -







Mineral- a naturally formed chemical
element or compound having a definitive chemical composition and usually a characteristic crystal form.



Mineralization- a natural concentration
in rocks or soil of one or more metalliferous minerals.



Mineral Resource- is a concentration
or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious
metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality
that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity
of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.



Net Smelter Return Royalty / NSR Royalty-a phrase used to describe a royalty payment made by a producer of metals based on gross metal production from the property,
less deduction of certain limited costs including smelting, refining, transportation and insurance costs.



Open Pit - a mining method whereby
the mineral reserves are accessed from surface by the successive removal of layers of material usually creating a large pit at
the surface of the earth.



Outcrop- the part of a rock
formation that appears at the surface of the ground.



Oxide- a compound of oxygen
with another element.



Phyllic Alteration-
a hydrothermal alteration common in porphyry base-metal systems.



Porphyry - any igneous rock in which
relatively large crystals are set in a fine-grained matrix of rock.



Pre-feasibility Study -a comprehensive
study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining,
or the pit configuration, in the case of an open pit, has been established and an effective method of mineral processing has been
determined, and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic,
social, and environmental factors and the evaluation of other relevant factors.



Pyroclastic - produced by explosive
or aerial ejection of ash, fragments, and glassy material from a volcanic vent; applied to the rocks and rock layers as well as
to the textures so formed.



Quartz- crystalline silica; often
forming veins in fractures and faults within older rocks.



Reverse Circulation (RC) Drilling
- a type of percussion drilling where hammer force is transmitted down a length of steel drill rods to a rotating bit that breaks
the rock into chips. The rock chips are forced to the surface using air or water forced down the outer chamber of a twin-walled
drill rod and driven back to the surface through the inner chamber. The rock chips are then collected for analysis.



Rhyolite - a group of extrusive
igneous rocks, typically porphyritic and commonly exhibiting flow texture, with phenocrysts of quartz and alkali feldspar in a
glassy to cryptocrystalline groundmass; also, any rock in that group; the extrusive equivalent of granite.



Sampling- taking a sample
of rock or material in order to test and assay its mineral composition.



Sediments/Sedimentary - rocks formed
by the deposition of sediment or pertaining to the process of sedimentation.

- 6 -







Shear Zone - a zone in which shearing
has occurred on a large scale so that the rock is crushed and brecciated.



Silification - the in situ alteration
of a rock, which involves an increase in the proportion of silica minerals.



Tuff -a general term for
all consolidated pyroclastic rocks.



Stockwork - a mineral deposit consisting
of a three-dimensional network of planar to irregular veinlets closely enough spaced that the whole mass can potentially be mined.



Vein - a thin, sheet-like, crosscutting
body of hydrothermal mineralization, principally quartz.



Volcanics -those originally
molten rocks, generally fine grained, that have reached or nearly reached the Earth’s surface before solidifying.



Mineral Application Process in Chile



There are two types of mining concessions
in Chile: exploration concessions and exploitation concessions, subject to it acquiring the necessary permits to conduct such mining
exploration activities. The principal characteristics of each are the following:



Exploration Concessions



The titleholder of an exploration concession
has the right to carry out all types of mining exploration activities within the area of the concession. Exploration concessions
can overlap or be granted over the same area of land; however, the rights granted by an exploration concession can only be exercised
by the titleholder with the earliest dated exploration concession over a particular area as indicated by their ROL number. The
ROL is a number used to identify a concession, it is not an acronym.



For each exploration concession the titleholder
must pay an annual fee per ha to the Chilean Treasury and exploration concessions have a duration of two years. At the end of this
period, they may (i) be renewed as an exploration concession for two further years in which case at least 50% of the surface area
must be renounced, or (ii) be converted, totally or partially, into exploitation concessions.



A titleholder with the earliest dated exploration
concession has a preferential right to an exploitation concession in the area covered by the exploration concession, over any third
parties with a later dated exploration concession for that area or without an exploration concession at all and must oppose any
applications made by third parties for exploitation concessions within the area for the exploration concession to remain valid.



Exploitation Concessions



The titleholder of an exploitation concession
is granted the right to explore and exploit the minerals located within the area of the concession and to take ownership of the
minerals that are extracted. Exploitation concessions can overlap or be granted over the same area of land; however, the rights
granted by an exploitation concession can only be exercised by the titleholder with the earliest dated exploitation concession
over a particular area.



- 7 -







Exploitation concessions are of indefinite
duration and an annual fee is payable to the Chilean Treasury in relation to each exploitation concession of a fixed amount.



Where a titleholder of an exploration concession
has applied to convert the exploration concession into an exploitation concession, the application for the exploitation concession
and the exploitation concession itself is back dated to the date of the exploration concession. A titleholder to an exploitation
concession must apply to annul or cancel any exploitation concessions which overlap with the area covered by its exploitation concession
within a certain time period in order for the exploitation concession to remain valid.



In accordance with Chilean law, from the
date that an application for a mining concession is made to the court, the applicant has the right to transfer or grant an option
to purchase the mining concession in the process of being constituted and the court has no discretion to refuse the final grant
of the concession.



CORPORATE STRUCTURE



Name and Incorporation



The Company was incorporated under the
name of Square Gold Explorations Inc. on February 10, 1984 under the Company Act of the Province of British Columbia (subsequently
replaced by theBusiness Corporations Act (British Columbia)) with an authorized capital of 20,000,000 common shares without
par value. On July 13, 1987, the Company changed its name to Glacier Resources Inc. and on August 19, 1988 changed its name to
Golden Glacier Resources Inc.



On June 10, 2002 shareholders approved
(i) a share consolidation on the basis of ten (10) old shares for one (1) new share (the "Consolidation"), (ii) an increase
in the authorized share capital post-consolidation from 2,000,000 to 100,000,000 common shares, and (iii) a name change to Exeter
Resource Corporation. The Consolidation and name change were made effective October 11, 2002.



On March 11, 2010, shareholders of the
Company approved a plan of arrangement to create two independent companies independently focussed on mineral exploration and development
in Argentina and Chile, respectively (the “Plan of Arrangement”). Under the Plan of Arrangement, which was approved
by a final order of the British Columbia Supreme Court on March 12, 2010, Exeter retained all assets relating to the Caspiche gold-copper
discovery, together with approximately $45.0 million in working capital, and will focus on the advancement of Caspiche. On March
22, 2010 Exeter transferred to Extorre Gold Mines Limited (“Extorre”), its Cerro Moro and other exploration properties
in Argentina and approximately $25.0 million in working capital.



The head office of the Company is located
at Suite 1660, 999 West Hastings Street, Vancouver, British Columbia, V6C 2W2. The address for service and the registered and records
office of the Company is located at Suite 2900, 550 Burrard Street, Vancouver, British Columbia V6C 0A3.



Intercorporate Relationships



As of the effective date of this report,
the Company has three wholly-owned subsidiaries: Sociedad Contractual Minera Eton Chile (“Eton Chile”), Sociedad Contractual
Minera Retexe Chile (“Retexe Chile”), and Eton Mining Corp. (“Eton”). Eton Chile and Retexe Chile are Chilean
corporations, registered to conduct the Company’s business in Chile. Eton is a British Columbia corporation, and is not currently
active.

- 8 -







GENERAL DEVELOPMENT OF THE BUSINESS



Three Year History



The Company is engaged in the business
of acquisition, exploration and development of mineral properties located in the Maricunga Region, Chile; its business development
over the last three years is described in the following paragraphs. Unless otherwise noted, Justin Tolman, the Project Manager
of Caspiche and Jerry Perkins, Vice President Development and Operations of the Company, are qualified persons (“QP’s”)
under NI 43-101, are responsible for the preparation of scientific or technical information in this AIF.



2009



During 2009, the Company continued its
drilling programs at both Caspiche and its former Cerro Moro project and with the exception of the annual suspension of drilling
during the South American winter months at Caspiche, activities were maintained throughout the year. By mid 2009, results from
drilling were such that management decided to increase the number of drill rigs so that it could more aggressively advance both
Caspiche and Cerro Moro.



On February 26, the Company completed a
bought deal equity financing in which it sold 12,075,000 common shares (including an over-allotment option of 15%) at a price of
$2.40 per share to raise gross proceeds of $29.0 million. The net proceeds of the offering were used for the exploration and development
of the Company’s properties in Chile and former properties in Argentina, with specific focus on Caspiche and Cerro Moro,
and for general corporate purposes.



In July, the Company announced the results
of its first NI 43-101 compliant inferred resources estimate on its former Cerro Moro project. Subsequent to year end, the Company
disposed of all of its interest in the Argentine properties, which included its Cerro Moro project, pursuant to its shareholder
and court approved Plan of Arrangement with Extorre, which now owns those properties. For further information on the Company’s
former interest in the Argentine properties, readers are referred to documents filed by the Company and by Extorre, respectively
on www.sedar.com.



In September, the Company announced the
results of its second NI 43-101 compliant inferred resources estimate on its Caspiche project. Highlights included 19.6 million
ounces of gold and 4.84 billion pounds of copper as an inferred resources estimate at Caspiche (see Principal Project – Caspiche
for summary).



In October, drilling resumed after the
close of the 2008/2009 season in May 2009, with a multi rig drilling program designed to expand and increase confidence in the
Caspiche resource.



On November 26, 2009, the Company completed
an overnight marketed public offering in which it sold 9,832,500 common shares (including an overallotment option of 15%) at a
price of $5.85 per share to raise gross proceeds of $57.5 million.



The net proceeds of the offering were used
for exploration and development of the Company’s Caspiche property and former Argentine properties and for general corporate
purposes.



- 9 -





2010



In March 2010, the Company transferred
all of its interest in the Cerro Moro project and the balance of its Argentine properties to Extorre, together with approximately
$25.0 million in working capital pursuant to the Plan of Arrangement. The Company’s activities are now exclusively devoted
to the further exploration and development of its Caspiche project located in the Maricunga region of Chile.



Key exploration milestones during 2010
included an interim resource update announced in April 2010 and a further resource update in September 2010 based on all available
drill data at Caspiche including almost 30 km of new drilling completed during the 2009/2010 program.



The September 2010 resource update reported
that 80% of the total Caspiche resource fell within the Measured and Indicated (M&I) resource categories. Specifically, the
update reported M&I resources of 21.3M (million) ounces of gold, 48.4M ounces of silver and 5.3B (billion) pounds of copper.
This resource is based on 1,316Mt (million metric tons) at a grade of 0.50 g/t gold (grams per metric ton) and 1.14 g/t silver,
including 1,217Mt at a grade of 0.20% copper from the sulphide zone. In addition to the M&I mineral resources, the Company
reported an Inferred mineral resource of 5.1M ounces of gold, 14.5M ounces of silver and 1.4B pounds of copper, based on 458Mt
at a grade of 0.35 g/t gold and 0.98 g/t silver, including 449Mt at a grade of 0.15% copper. These tons and grades are based on
marginal cutoffs of 0.2ppm gold for the oxide zone and 0.3ppm gold equivalent for the sulphide zone.



The Company continued an extensive program
of long lead time metallurgical testing including column leaching tests on the oxide and locked cycle and pilot plant flotation
programs on the sulphide portions of the deposit over the course of the year.



In October, the Company resumed drilling
at Caspiche with a multi rig program designed to run through to 2011 and complete additional infill drilling on the orebody. The
Company also 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.



In November, the syndicate of underwriters
exercised the 15% over-allotment option related to the financing completed in October and the Company issued 1,209,750 common shares
at a price of $6.20 per share for gross proceeds of $7.5 million.



The Company also announced it had commissioned
and engaged Aker Solutions (now Jacobs Engineering) of Santiago, Chile, an internationally recognized engineering group, to carry
out two prefeasibility studies for its Caspiche gold-copper project. The first study considered a stand-alone “oxide gold”
project to mine the upper part of the deposit. The second study, which ran concurrently with the oxide study, considered mining
both the oxide and sulphide deposits.



2011



During 2011 the Company continued work
on the pre-feasibility studies referred to above.



In February, the company announced that
it had exercised the option to acquire 100% of the Caspiche properties from Anglo American. The Company also acquired an exclusive
2.5 year option over 300 litres per second (“l/s”) of water within the northern Maricunga basin and has been working
during the year with specialised consultants to establish a water balance over the granted water rights.



In June, results from the study on the
stand alone “oxide gold” project were released. The PFS for the potential mining of this outcropping +100 metre thick
oxide “blanket” provided encouraging first pass economics with an NPV(5) of US$329.5 million and net operating costs
of US$524/ounce gold. Average annual production over the five year mine life would be 210,000 ounces gold and 364,000 ounces silver.

- 10 -







The second study, which considered both
the oxide and sulphide portions of the deposit was extended through to January 2012 to allow for incorporation of an updated resources
estimate and to incorporate additional engineering completed to a prefeasibility level of an in pit crushing and conveying (IPCC)
system within the proposed mine plan to assist with waste material movement.



To support the calculations of an updated
resources estimate on the Caspiche porphyry, drilling from the 2010/2011 drill season was incorporated with the existing information
and models and a mineral resource update was completed by AMEC International in August 2011 and validated by Cube Consulting Pty
Ltd. (“Cube”) in November 2011. The inclusion of IPCC within the Pre-Feasibility Study (“PFS”) was considered
important as it has the potential to reduce waste haulage and mine operating costs.



The new mineral resource contains 1.36B
tonnes in the M&I resource categories containing 22M ounces of gold, 49M ounces of silver and 6.1B pounds copper. A further
286M tonnes is in the Inferred category containing 2.85M ounces of gold, 8.18M ounces silver and 1.3B pounds copper. The mineral
resource is inclusive of the project’s mineral reserves. This updated resource provided the basis, along with appropriate
modifying factors, for the classification of mineral reserves by the engineers during the pre-feasibility study.



Additional drilling was also undertaken
in 2011 to test regional exploration targets and to provide material for ongoing metallurgical testwork, process and flowsheet
design and optimisation at Caspiche.



2012



In January 2012, the Company announced
results of the second PFS which studied the potential for continued development of the oxide and sulphide portions of the Caspiche
deposit following 14 months of detailed metallurgy, engineering and infrastructure studies.



The key highlights of this study were a
pre-tax Net Present Value (5% discount), calculated from the time of potential commencement of the project, of US$ 2.8 billion
and average operating costs of US$ 606 per ounce gold equivalent1. The gold production cost drops to US$ 18 per ounce
when copper and silver by-product credits are considered. The project considers a 19 year mine life and average annual production
of 696,000 ounces of gold and 244 million pounds of copper per year.



The PFS used proven and probable ore reserves
in the development of the mine plan and financial evaluation (based on M&I resources). Total proven and probable ore reserves,
generated from an updated resource estimate for the Super Pit are 1.091B tonnes containing 19.3M ounces gold, 4.62B pounds copper,
41.5M ounces silver.



The PFS has considered a conventional concentrator
process route for the sulphide ore but includes a roaster to reduce arsenic levels in the final copper concentrate to commercially
acceptable levels and a flotation tailings leach process to maximise gold recovery from the sulphide ore. In parallel with the
concentrator, a valley fill heapleach would be operated to recover gold from the near surface heap leachable material which would
be extracted as part of the overall mine development and operation.



As of January 2012 (and in some cases earlier)
the Company was working on:



| | · | Ongoing metallurgical programs designed to improve metal recoveries,
| | - | --------------------------------------------------------------------



| | · | Geotechnical studies to support the infrastructure placement
| | - | ------------------------------------------------------------



1 Gold Equivalent was calculated
by simple mathematical proportion. Gold, silver and copper revenues were calculated using estimated production multiplied by relevant
metal price used in the study, these values were totalled and the total revenue was divided by the gold price used in the study.
This was repeated for each year of operation and then averaged over the life of project.

- 11 -







| | · | Hydrology and hydrogeological studies both at Caspiche and other locations with potential to act
as viable water sources for the operations
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | · | Environmental base line programs to support an eventual
EIA
| | - | -----------------------------------------------------------



These programs are designed to feed into
a full feasibility study for the oxide stand alone portion of the project and an updated PFS on the larger Caspiche project.



DESCRIPTION
OF THE BUSINESS



General



The Company is a mineral resource exploration
and development company. The Company’s principal property is the Caspiche property in northern Chile.



The Company is in the exploration and development
stage of its corporate development; it owns no producing properties and, consequently has no current operating income or cash flow
from the properties it holds, nor has it had any income from operations in the past three financial years. As a consequence, operations
of the Company are primarily funded by equity subscriptions.



The progress on and results of work programs
on the Company’s principal property is set out in the Principal Project section of this AIF. At this time, based on the exploration
results to-date, the Company cannot project significant mineral production from any of its existing properties.



Specialized Skills



The Company’s business requires specialized
skills and knowledge in the areas of geology, drilling, planning, implementation of exploration programs, and compliance. To date,
the Company has been able to locate and retain such professionals in Canada and Chile, and believes it will be able to continue
to do so.



Competitive Conditions



The Company operates in a very competitive
industry, and competes with other companies, many of which have greater technical and financial facilities for the acquisition
and development of mineral properties, as well as for the recruitment and retention of qualified employees and consultants.



Business Cycles



Late in 2008 the credit crisis in the United
States sent many economies, including the Canadian economy, into a recession. Since then, some of the markets have recovered, however
the economies of certain States within the European Economic Union have declined and the commodity market has remained volatile.
The gold market, late in 2010, made significant gains in terms of US Dollars but remained volatile throughout 2011 and suffered
declines through the latter part of the year. In addition to commodity price cycles and recessionary periods, exploration activity
may also be affected by seasonal and irregular weather conditions in Chile. In particular, exploration on the Company’s Caspiche
property at higher altitude is not possible in winter.



- 12 -







Environmental Protection Requirements



The Company’s operations are subject
to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions
and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations,
such as seepage from tailings disposal areas, and the use of cyanide which would result in environmental pollution. A breach of
such legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission
and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards,
and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry
a heightened degree of responsibility for companies including its directors, officers and employees. The cost of compliance with
changes in governmental regulations has a potential to reduce the profitability of operations.



Employees



As of December 31, 2011, and the date hereof,
the Company has 7 employees in Canada, and approximately 26 employees in Chile. The Company relies on and engages consultants on
a contract basis to provide services, management and personnel who assist the Company, to carry on its administrative or exploration
activities either in Canada or Chile.



Foreign Operations



Mineral exploration and mining activities
in Chile may be affected in varying degrees by political instability and government regulations relating to the mining industry.
Any changes in regulations or shifts in political conditions may adversely affect the Company’s business. Operations may
be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls,
income taxes, expropriation of property, environmental legislation and mine safety.



Social or Environmental Policies



In March 2008, the Company adopted its
“Environment and Corporate Social Responsibility Principles and Policies”. The Company’s “Environment and
Corporate Social Responsibility Principles and Policies” sets out the principles that all directors, management and employees
are required to adhere to while conducting Company business. The principles are (i) environmental stewardship, which sets the objective
of minimizing negative impacts on the environment; (ii) the commitment to conduct due diligence before undertaking material activities
on the ground to ensure proper management of issues surrounding these activities; (iii) a commitment to engage host communities
and other affected and interested parties by including all parties and providing clear and accurate information; (iv) contribute
to community development; (v) upholding Human Rights; (vi) safeguarding the health and safety of workers and local populations
by implementing sound health and safety policies; (vii) a commitment to accurate and transparent reporting; and (viii) the commitment
to ethical business practices.



Risk Factors



Properties in which the Company has or
is acquiring an interest in, are all currently at the exploration or development stage. The activities of the Company are speculative
due to the high risk nature of its business which is the acquisition, financing, exploration and development of mining properties.
The following risk factors, which are not exhaustive, could materially affect the Company’s business, financial condition
or results of operations and could cause actual events to differ materially from those described in forward-looking statements
relating to the Company. These risks include but are not limited to the following:

- 13 -







Operations and Mineral Exploration Risks



The Company operates in the resource
industry, which is highly speculative, and has certain inherent exploration risks which could have a negative affect on the Company’s
operations. Resource exploration is a speculative business, characterized by a number of significant risks including, among
other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits
which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals
acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which
cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets
and processing equipment, and such other factors such as government regulations, including regulations relating to royalties, allowable
production, importing and exporting of minerals, and environment protection. Any one or a combination of these factors may result
in the Company not receiving an adequate return on its investment capital.



The Company has limited mineral reserves.
The Company is at the exploration or development stage on all of its properties and is engaged in advanced engineering work in
order to determine if any economic deposits exist on its properties. The Company may expend substantial funds in exploring certain
of its properties only to abandon them and lose its entire expenditure on the properties if no commercial or economically viable
quantities of minerals are found. Even in the event that commercial quantities of minerals are discovered, the exploration properties
might not be brought into commercial production. Finding commercially viable mineral deposits is dependent on a number of factors,
not the least of which is the technical skill of exploration personnel involved. The commercial viability of a mineral deposit
once discovered is also dependent on a number of factors, some of which are the particular attributes of the deposit, such as size,
grade, amenability to metallurgical processing, and proximity to infrastructure, availability of power and water, as well as metal
prices. While the Company has optioned registered surface water rights of 300 l/s, which is considered sufficient for an oxide
only production project, (the ability to extract and use such water is subject to further permitting appraisal from the authorities
and there is no guarantee that such permits will be received) the availability of additional water for the larger sulphide production
project is not certain. The Company is continuing to aggressively pursue avenues for acquisition of this additional water. The
Company is a development stage company with no history of pre-tax profit and no income from its operations. There can be no assurance
that the Company’s operations will be profitable in the future. There is no certainty that the prefeasibility studies being
conducted by the Company will result in a commercially viable mining operation. No assurance can be given that any particular level
of recovery of mineral reserves will in fact be realized or that the identified mineral deposit will ever qualify as a commercially
mineable (or viable) mineral deposit which can be legally and economically exploited. There can be no assurance that minerals recovered
in small scale tests or the results of pilot plant operations and metallurgical testwork will be duplicated in large scale tests
under on-site conditions or in production. If the Company is unsuccessful in its development efforts, the Company may be forced
to acquire additional projects or cease operations.



The Company is required to make advance
royalty payments and perform certain other obligations to maintain its interest. If the Company is unable to fulfill the requirements
of these agreements, including the requirement to commence commercial production within a fixed period, its interest in its projects
could be lost.



- 14 -





The Company’s operations contain
significant uninsured risks which could negatively impact future profitability as the Company maintains no insurance against its
operations. The Company’s development of its mineral properties contain certain risks, including unexpected or unusual
operating conditions including rock bursts, cave-ins, flooding, fire and earthquakes. It is not always possible to insure against
such risks. The Company currently maintains general liability and director and officer insurance but no insurance against its properties
or operations. The Company may decide to take out such insurance in the future if such insurance is available at economically viable
rates.



The Company has not surveyed any of
its properties, has no guarantee of clear title to its mineral properties and the Company could lose title and ownership of its
properties which would have a negative affect on the Company’s operations and valuation. The Company has only done a
preliminary legal survey of the boundaries of some of its properties, and therefore, in accordance with the laws of the jurisdictions
in which these properties are situated, their existence and area could be in doubt. If title is disputed, the Company will have
to defend its ownership through the courts. In the event of an adverse judgment, the Company would lose its property rights. Some
of the Company’s exploration concessions associated with its Caspiche project overlap exploration concessions held by other
parties and entitlement to such concessions has not yet been determined and is not assured. Some of the land over which the Company
holds exploration concessions may be subject to claims of indigenous populations which have not been resolved. In addition the
Company will be required to apply for surface rights for the potential development of Caspiche, there is no guarantee that the
Company will be able to secure such surface rights.



A shortage of equipment and supplies
could adversely affect the Company’s ability to operate its business.The Company is dependent on various supplies
and equipment to carry out its mining exploration and, if warranted, development operations. The shortage of such supplies, equipment
and parts could have a material adverse effect on the Company’s ability to carry out its operations and therefore limit or
increase the cost of production.



Changes in the market price of gold,
silver, copper and other metals, which in the past has fluctuated widely, would affect the future profitability of the Company’s
planned operations and financial condition.The Company’s long-term viability and future profitability depend, in large
part, upon the market price of gold, silver, copper and other metals and minerals produced from its mineral properties. The market
price of gold, silver, copper and other metals is volatile and is impacted by numerous factors beyond the Company’s control,
including:



| | § | expectations with respect to the rate of inflation;
| | - | ---------------------------------------------------

| | § | the relative strength of the U.S. dollar and certain other currencies;
| | - | ----------------------------------------------------------------------

| | § | interest rates;
| | - | ---------------

| | § | global or regional political or economic conditions;
| | - | ----------------------------------------------------

| | § | supply and demand for jewelry and industrial products containing metals;
| | - | ------------------------------------------------------------------------

| | § | sales by central banks and other holders, speculators and producers of gold, silver, copper and
other metals in response to any of the above factors; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | § | any executive order curtailing the production or sale of gold, silver or copper.
| | - | --------------------------------------------------------------------------------



We cannot predict the effect of these factors
on metal prices. A decrease in the market price of gold, silver, copper and other metals could affect the commercial viability
of the Company’s properties and its anticipated development of such properties in the future. Lower gold prices could also
adversely affect The Company’s ability to finance exploration and development of its properties.



Land reclamation requirements for the
Company’s properties may be burdensome and expensive.Although variable depending on location and the governing authority,
land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations)
in order to minimize long term effects of land disturbance.



- 15 -







Reclamation may include requirements to:



| | § | control dispersion of potentially deleterious effluents;
| | - | --------------------------------------------------------

| | § | treat ground and surface water to drinking water standards; and
| | - | ---------------------------------------------------------------

| | § | reasonably re-establish pre-disturbance land forms and vegetation.
| | - | ------------------------------------------------------------------



In order to carry out reclamation obligations
imposed on the Company in connection with its potential development activities, the Company must allocate financial resources that
might otherwise be spent on further exploration and development programs. If the Company is required to carry out unanticipated
reclamation work, its financial position could be adversely affected.



Regulations and pending legislation
governing issues involving climate change could result in increased operating costs, which could have a material adverse effect
on the Company’s business.A number of governments or governmental bodies have introduced or are contemplating regulatory
changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased
regulation regarding climate change could impose significant costs on the Company, and its suppliers, including costs related to
increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations.
Any adopted future climate change regulations could also negatively impact the Company’s ability to compete with companies
situated in areas not subject to such limitations. Given the emotion, political significance and uncertainty around the impact
of climate change and how it should be dealt with, the Company cannot predict how legislation and regulation will affect our financial
condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any
adverse publicity in the global marketplace about potential impacts on climate change by the Company or other companies in its
industry could harm its reputation. The potential physical impacts of climate change on the Company’s operations are highly
uncertain, and would be particular to the geographic circumstances in areas in which it operates. These may include changes in
rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may
adversely impact the cost, production and financial performance of the Company’s operations.



The natural resource industry is highly
competitive, which could restrict the Company’s growth.The Company competes with other exploration resource companies,
which have similar operations, and many competitors have operations, financial resources and industry experience greater than those
of the Company. This may place the Company at a disadvantage in acquiring, exploring and developing properties. Such companies
could outbid the Company for potential projects or produce minerals at lower costs which would have a negative effect on the Company’s
operations.



Mineral operations are subject to market
forces outside of the Company’s control which could negatively impact the Company’s operations. The marketability
of minerals is affected by numerous factors beyond the control of the entity involved in their mining and processing. These factors
include market fluctuations, government regulations relating to prices, taxes, royalties, allowable production, imports, exports
and supply and demand. One or more of these risk elements could have an impact on costs of an operation and if significant enough,
reduce the profitability of the operation and threaten its continuation.



- 16 -





The Company is subject to substantial
environmental requirements which could cause a restriction or suspension of Company operations. The current and anticipated
future operations of the Company require permits from various governmental authorities and such operations are and will be governed
by laws and regulations governing various elements of the mining industry. The Company’s development activities in Chile
are subject to various federal and local laws governing land use, the protection of the environment, prospecting, development,
production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, and other matters. Such operations
and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require
that the Company obtain permits from various governmental agencies.



Exploration generally requires one form
of permit while development and production operations require additional permits. There can be no assurance that all permits which
the Company may require for future exploration or possible future development will be obtainable on reasonable terms. In addition,
future changes in applicable laws or regulations could result in changes in legal requirements or in the terms of existing permits
applicable to the Company or its properties. This could have a negative effect on the Company’s exploration activities or
its ability to develop its properties.



The Company is also subject to environmental
regulations, which require the Company to minimize impacts upon air, water, soils, vegetation and wildlife, as well as historical
and cultural resources, if present. In Chile, exploration activities require an environmental declaration, while mining activities
require an environmental evaluation. These documents are presented to the government entity (Conama or Corena) before activities
begin. As the Company is at the exploration stage, the disturbance of the environment is limited. However, if operations result
in negative effects upon the environment, government agencies will usually require the Company to provide remedial actions to correct
the negative effects.



Failure to comply with applicable laws,
regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities
causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of
additional equipment or other remedial actions.



The Company's property interests in
foreign countries are subject to risks from political and economic instability in those countries.Exploration in foreign jurisdictions
exposes the Company to risks that may not otherwise be experienced if all operations were domestic. The risks include, but are
not limited to: military repression, extreme fluctuations in currency exchange rates, labour instability or militancy, mineral
title irregularities and high rates of inflation. In addition, changes in mining or investment policies or shifts in political
attitude in foreign countries in which we operate may adversely affect our business. We may be affected in varying degrees by government
regulation with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property,
maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety. The effect
of these factors cannot be accurately predicted. Political risks may adversely affect the Company’s existing assets and operations.
The Company does not maintain and does not intend to purchase political risk insurance at this time. Real and perceived political
risk in some countries may also affect the Company’s ability to finance exploration programs and attract joint venture partners,
and future mine development opportunities.

- 17 -







Financing Risks



The Company has a history of losses
and expects losses to continue for the foreseeable future and will require additional equity financings, which will cause dilution
to existing shareholders. The Company has limited financial resources and has no operating cash flow. As of December 31, 2011,
the end of the last financial year, the Company had incurred accumulated losses totalling approximately $206 million. Continued
development efforts will require additional capital to maintain and advance the studies on the Company’s Caspiche project.
Additionally, development of the Company’s Caspiche project would require significant additional capital which the Company
may be unable to access. The Company has been required to raise funds through the sale of its common shares and has no current
plans to obtain financing through means other than equity financing. However, the Company may not be able to obtain additional
equity financing on reasonable terms, or at all. If the Company is unable to obtain sufficient financing in the future, it might
have to dramatically slow development efforts and/or lose control of its Caspiche project. If equity financing is required, then
such financings could result in significant dilution to existing or prospective shareholders. These financings may be on terms
less favourable to the Company than those obtained previously.



The Company may be subject to risks
relating to the global economy. Global financial conditions have been subject to volatility and access to public financing
has been negatively impacted. These conditions could, among other things, make it more difficult for the Company to obtain, or
increase its cost of obtaining, capital and financing for its operations. Access to additional capital may not be available to
the Company on terms acceptable to it, or at all.



The Company is also exposed to liquidity
risks in meeting its operating and capital expenditure requirements in instances where cash positions are unable to be maintained
or appropriate financing is unavailable. These factors may impact the ability of the Company to obtain loans and other credit facilities
in the future and, if obtained, on terms favourable to the Company. If these increased levels of volatility and market turmoil
continue, the Company’s operations could be adversely impacted and the trading price of the common shares could be adversely
affected.



The Company has a lack of cash flow
sufficient to sustain operations and does not expect to begin receiving operating revenue in the foreseeable future. The Company’s
properties have not advanced to the commercial production stage and the Company has no history of earnings or cash flow from operations.
The Company has paid no dividends on its common shares since incorporation and does not anticipate doing so in the foreseeable
future. Historically, the only source of funds available to the Company has been through the sale of its common shares. Any future
additional equity financing would cause dilution to current shareholders. If the Company does not have sufficient capital for its
operations, management would be forced to reduce or discontinue its activities, which would have a negative effect on the value
of its securities.



The Company operates in foreign countries
and is subject to currency fluctuations which could have a negative effect on the Company’s operating results. The Company’s
operations are located in Chile which makes it subject to foreign currency fluctuation as the Company’s accounts are maintained
in Canadian dollars while certain expenses are numerated in U.S. Dollars, Australian Dollars, and Chilean Pesos. Such fluctuations
may adversely affect the Company’s financial position and results. Management may not take any steps to address foreign currency
fluctuations that will eliminate all adverse effects and, accordingly, the Company may suffer losses due to adverse foreign currency
fluctuations.



- 18 -







Risks Relating to an Investment in the Common
Shares of the Company



The market for the Company’s common
shares has been subject to volume and price volatility which could negatively affect a shareholder’s ability to buy or sell
the Company’s common shares. The market for the common shares of the Company may be highly volatile for reasons both
related to the performance of the Company, or events pertaining to the industry (i.e. mineral price fluctuation/high production
costs/accidents) as well as factors unrelated to the Company or its industry such as economic recessions and changes to legislation
in the countries in which it operates. In particular, market demand for products incorporating minerals in their manufacture fluctuates
from one business cycle to the next, resulting in change in demand for the mineral and an attendant change in the price for the
mineral. In the last five financial years, the price of the Company’s common shares has fluctuated between $2.49 and $9.32.
The Company’s common shares can be expected to continue to be subject to volatility in both price and volume arising from
market expectations, announcements and press releases regarding the Company’s business, and changes in estimates and evaluations
by securities analysts or other events or factors. In recent years the securities markets in the U.S. and Canada have experienced
a high level of price and volume volatility, and the market price of securities of many companies, particularly small-capitalization
companies such as the Company, have experienced wide fluctuations that have not necessarily been related to the operations, performances,
underlying asset values, or prospects of such companies. For these reasons, the Company’s common shares can also be subject
to volatility resulting from purely market forces over which the Company will have no control such as that experienced recently
resulting from the fallout of the economy due to the on-going credit crisis centred in the United States. Further, despite the
existence of a market for trading the Company’s common shares in Canada, the U.S. and Germany, shareholders of the Company
may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in
the price of the common shares.



The Company is dependent upon key management,
the absence of which would have a negative affect on the Company’s operations. The Company depends on the business and
technical expertise of its management and key personnel, including Bryce Roxburgh, President and Chief Executive Officer, Yale
Simpson, Chairman and Cecil Bond, Chief Financial Officer. There is little possibility that this dependence will decrease in the
near term. As the Company’s operations expand, additional general management resources will be required. The Company may
not be able to attract and retain additional qualified personnel and this would have a negative effect on the Company’s operations.
The Company has entered into formal services agreements with Bryce Roxburgh, Yale Simpson and Cecil Bond and some of its other
officers. The Company maintains no “key man” life insurance on any members of its management or directors.



Certain officers and directors may have
conflicts of interest, which could have a negative affect on the Company’s operations. Certain of the directors and officers
of the Company are also directors and/or officers and/or shareholders of other natural resource companies. While the Company is
engaged in the business of exploiting mineral properties, such associations may give rise to conflicts of interest from time to
time. The directors of the Company are required by law to act honestly and in good faith with a view to uphold the best interests
of the Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest
arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on
such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily
consider the degree of risk to which the Company may be exposed and its financial position at the time.



The Company could be deemed a passive
foreign investment company which could have negative consequences for U.S. investors. The Company could be classified as a
Passive Foreign Investment Company (“PFIC”) under the U.S. tax code. If the Company is declared a PFIC, then owners
of the Company’s common shares who are U.S. taxpayers generally will be required to treat any so-called “excess distribution”
received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest
charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election
or a mark-to-market election with respect to the Company’s common shares. A U.S. taxpayer who makes a QEF election generally
must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the
Company is classified as a PFIC, whether or not the Company distributes any amounts to its shareholders.



- 19 -







The Company does not intend to pay dividends.The Company has not paid out any cash dividends to date and has no plans to do so in the immediate future. As a result, an
investor’s return on investment will be solely determined by his or her ability to sell common shares in the secondary market.



Increased costs and compliance risks
as a result of being a public company.Legal, accounting and other expenses associated with public company reporting requirements
have increased significantly in the past few years. The Company anticipates that general and administrative costs associated with
regulatory compliance will continue to increase with ongoing compliance requirements under the Sarbanes-Oxley Act of 2002,
as amended (“Sarbanes-Oxley”), the Dodd-Frank Wall Street Reform and Consumer Protection Act,as well as any
new rules implemented by the SEC, Canadian Securities Administrators, the NYSE Amex Equities and the TSX in the future. These rules
and regulations have significantly increased the Company’s legal and financial compliance costs and made some activities
more time-consuming and costly. There can be no assurance that the Company will continue to effectively meet all of the requirements
of these regulations, including Sarbanes-Oxley Section 404andNational Instrument 52-109 of the Canadian Securities
Administrators(“NI 52-109”).Any failure to effectively implement internal controls, or to resolve difficulties
encountered in their implementation, could harm the Company’s operating results, cause the Company to fail to meet reporting
obligations or result in management being required to give a qualified assessment of the Company’s internal controls over
financial reporting or the Company’s independent auditors providing an adverse opinion regarding management’s assessment.
Any such result could cause investors to lose confidence in the Company’s reported financial information, which could have
a material adverse effect on the trading price of the common shares. These rules and regulations have made it more difficult and
more expensive for it to obtain director and officer liability insurance, and the Company may be required to accept reduced policy
limits and coverage or incur substantially higher costs to obtain the same or similar coverage in the future. As a result, it may
be more difficult for the Company to attract and retain qualified individuals to serve on its board of directors or as executive
officers. If the Company fails to maintain the adequacy of its internal control over financial reporting, the Company’s ability
to provide accurate financial statements and comply with the requirements of Sarbanes-Oxleyand/or NI 52-109could
be impaired, which could cause the Company’s stock price to decrease.



Differences in United States and Canadian
reporting of reserves and resources.The disclosure in this AIF, including the documents incorporated herein by reference,
uses terms that comply with reporting standards in Canada. The terms “mineral resource”, “measured mineral resource”,
“indicated mineral resource” and “inferred mineral resource” are defined in and required to be used by
the Company pursuant to NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted
to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all
of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great
amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any
part of the measured mineral resources, indicated mineral resources, or inferred mineral resources will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility, pre-feasibility
studies or other economic studies, except in rare cases.



Investors are cautioned not to assume that
all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces”
in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization
that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference
to unit measures.



- 20 -





Further, the terms “mineral reserve”,
“proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance
with NI 43-101 and the CIM Standards. These definitions differ from the definitions in SEC Industry Guide 7. Under SEC Industry
Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year
historical average price is used in any reserve or cash flow analysis to designate reserves and all necessary permits or governmental
authorizations must be filed with the appropriate governmental authority.



Accordingly, information contained in this
AIF and the documents incorporated by reference herein containing descriptions of the Company’s mineral deposits may not
be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements
under the United States federal securities laws and the rules and regulations thereunder.



U.S. investors may not be able to enforce
their civil liabilities against the Company or its directors, controlling persons and officers. It may be difficult to bring
and enforce suits against the Company in the United States. The Company is a corporation incorporated in British Columbia under
the Business Corporations Act. A majority of the Company’s directors and officers are residents of Canada and all
of the Company’s assets and its subsidiaries are located outside of the U.S. Consequently, it may be difficult for U.S. investors
to effect service of process in the U.S. upon those directors or officers who are not residents of the U.S., or to realize in the
U.S. upon judgments of U.S. courts predicated upon civil liabilities under U.S. securities laws. There is substantial doubt whether
an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such
civil liabilities under the United States Securities Act of 1933, as amended.



As a “foreign private issuer”,
the Company is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934. The Company
is a “foreign private issuer” as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934,
as amended (the “U.S. Exchange Act”). Equity securities of the Company are accordingly exempt from Sections 14(a),
14(b), 14(c), 14(f) and 16 of the U.S. Exchange Act pursuant to Rule 3a12-3 of the U.S. Exchange Act. Therefore, the Company
is not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders. The submission of
proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information
in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and
purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders
having less data and there being fewer restrictions on insiders’ activities in our securities.



- 21 -





PRINCIPAL PROJECT



CASPICHE



By an agreement with Minera Anglo American
Chile Limitada and its affiliate Empresa Minera Mantos Blancos S.A. (together “Anglo American”) dated October 11, 2005
and subsequently amended, the Company acquired the right to review a number of properties in the Maricunga region of Chile. Under
the terms of the agreement, the Company had the right to acquire a 100% interest in the properties by incurring aggregate expenditures
of US$2,550,000 over five years including conducting 15,500 m of drilling.



Exeter fulfilled the expenditure and drilling
requirements and in 2011 exercised the option to purchase 100% ownership of the Caspiche property. The Company must make advance
annual royalty payments of US$250,000 per year to March 2021 and thence US$1 million per year to March 2026 are payable and terminate
upon commencement of commercial production. In the event that Caspiche is not put into commercial production by 2026, Anglo American
has the option to repurchase the property by paying the Company the expenses incurred on the project. Anglo American retains a
3% NSR in the properties. The property is also subject to a further 0.08% NSR pursuant to an agreement with a private entity.



The following is based on the Summary
section of an independent technical report on the Caspiche property titled, “Caspiche Project, Copiapó, Chile, NI
43-101 Technical Report Caspiche Pre-feasibility Study”, with an effective date of January 16, 2012. The NI 43-101 compliant
report was prepared by Graham Holmes, P. Eng.; Alex Duggan, BSc. M. Sc. P. Eng.; Carlos Guzmán, Mining Eng., MAusIMM and
registered member of the Chilean Mining Commision; David Coupland, BSc., CFSG, MAusIMM (CP); John Wells, BSc, MBA, FSAIMM; Louis
Nguyen, P. Eng. all of whom are QPs under NI 43-101. The report is available for viewing on SEDAR at www.sedar.com.



The reader is cautioned that the following
is an abridged summary only and is directed to view the full technical report on SEDAR at www.sedar.com.



Location



The Caspiche project is located high in
the central Chilean Andes, within the 3rd Region of Chile and has a population of approximately 130,000 people. The
property is located 120 km ESE of Copiapó in northern Chile and is situated at the southern end of the Maricunga metallogenic
belt, between the undeveloped Cerro Casale gold-copper project 12 km to the south, and the Maricunga Gold Mine (formerly Refugio),
15 km to the north.



Physiography



The topography within the property is almost
entirely volcanic in nature and consists of broad open areas of moderate relief and prominent ridges with limited cliff zones of
exposed bedrock. The Caspiche property itself lies within the catchment of the Copiapó river tributary system, however a
little further to the north-west an intermediate ridgeline and valley system closes the high Andean drainage resulting in a chain
of endorheic saline lakes stretching considerable distances within the high Atacama region.



Vegetation is limited to grasses and small
thorny bushes and small marsh areas at the junction of creeks. Wildlife includes guanaco, vicuña, foxes, rabbits, ground
squirrels, hawks, condors and small reptiles.



- 22 -









Accessibility



Access to the project is by 183 km of paved
and gravel road from Copiapó. The initial 22 km of road running south from Copiapó through the town of Tierra Amarilla
is paved highway which connects to a 161 km treated gravel road that runs east-southeast to the project site. Currently, total
driving time from Copiapó to site is approximately 3 hours. The main gravel road serves as a regional transportation route
to Argentina and is gradually being upgraded. This route also serves the nearby Maricunga Gold Mine (Kinross Gold Corp.) and Cerro
Casale gold-copper project (Kinross Gold Corp. and Barrick Gold Corp.). From this road, several access alternatives exist to the
project and other additional access options have been identified if required.



Climate



The climate at Caspiche is typical for
the central Andean Cordillera: windy, cold at night with limited precipitation, usually in the form of snow. Day-time temperatures
in summer months approach 23 °C, with night-time lows of 5 °C. Day-time temperatures in winter are around freezing, with
night-time temperatures dropping to -15 °C. Exploration field seasons generally run from late October through mid-May. Operating
mines in the area, such as the nearby Maricunga Gold Mine, are operated year-round at elevations of 4,200 to 4,500 m above sea
level. Upon development, it is expected that the mine will be operated year-round. Exeter operates three automatic weather stations
to monitor detailed climatic variations.



Current Infrastructure



Caspiche is a green field site, and thus
existing site infrastructure is limited to an exploration camp and roads. The property is large enough to host an open pit or underground
mining operation, although optimum locations for infrastructure may overlie third party mining claims. Concession owners have the
right to establish an occupation easement over the surface as required for the comfortable exploration or exploitation of the concession.
The majority of the area required by Exeter is owned by the Chilean government. The process for obtaining permits for easements
and water rights is straightforward in Chile.



On March 15, 2011, Exeter was granted an
occupation easement over an area of 1.77 ha where the project camp is located. In addition, the Ministry of Public Land of the
Chilean government (Bienes Nacionales) granted Exeter a surface rights lease over an area of 1,313.24 ha in the area of the Caspiche
project. The duration of the initial occupation easement and surface rights contract is three and five years respectively with
both being renewable thereafter.



Power for the existing projects in the
Maricunga region is normally sourced from near Copiapó and carried to the mines by private power lines owned by the operating
companies. Copiapó and the surrounding areas are serviced by an extensive power grid known as the Central Interconnected
System, which also services the main population centres around Santiago and further south. Plans are currently being implemented
to considerably strengthen the power generation and distribution system in the region by the development of a new port and coal-fired
power station on the coast to the east of Copiapó. The current schedule for start up of this development is the second half
of the decade which should be ideal timing for Caspiche project development.



- 23 -





History



Anglo was the first to explore the Caspiche
area. Between 1986 and 1990, Anglo conducted three field campaigns on the property. The first campaign consisted of rock-chip and
grid-soil geochemical surveys, where a total of 842 rock-chip samples and 431 soil samples were collected. These surveys identified
a 650 m by 300 m zone of the Caspiche Porphyry area that was strongly anomalous at surface in gold, silver, copper, and arsenic.
Eighty rock samples returned values greater than 1 g/t gold, with a high value of 5.45 g/t gold.



During the 1988 field season, Anglo drilled
568 m in 12 shallow air rotary holes in the Caspiche Porphyry sector. These drill holes targeted near-surface gold mineralization
identified in hydrothermally altered volcanic rocks, and delineated by geochemical surveys. Drilling from this campaign intersected
significant widths of mineralization in several holes, including 32 m grading 1.10 g/t gold in SHC-4 and 48 m grading 1.03 g/t
gold in SHC-5.



During the 1990 season, Anglo drilled 950
m in six reverse circulation (RC) holes, exploring the Caspiche Porphyry gold system to greater depths. Results from this program
yielded narrow intersections of gold mineralization, including 10 m grading 1.09 g/t gold in SPC-02 and 34 m grading 0.63 g/t gold
in SPC-05.



During the 1997-1998 field season, Newcrest
conducted soil geochemical surveys, geological investigations and drilled 4,123 m in 22 RC drill holes at the Caspiche Porphyry
and Caspiche Epithermals prospect areas. Porphyry-style gold-copper mineralization was encountered in several of the drill holes
at Caspiche Porphyry.



Exeter optioned the property in October
2005. No significant exploration work was reportedly conducted on the property from the end of the Newcrest drill campaign until
Exeter began work.



In 2006 and 2007, Exeter compiled historic
exploration data into a geographic information system (GIS), reprocessed existing geophysical data, completed geological mapping
of the property area, collected rock-chip samples and conducted controlled source audio-frequency magnetotellurics (CSAMT), pole-dipole
induced polarization (PDIP), and natural source magnetotellurics geophysical surveys. In 2008 and 2009, Exeter completed property-scale
geological mapping, a PIMATM (field portable, infrared spectrometer useful for mineral identification) study of drill
core samples, a soil orientation survey over the Caspiche Porphyry area, a reinterpretation of the regional geophysical data and
age dating work.



From 2006 through September 2011, Exeter
completed over 66,000 m of drilling in 99 drill holes, mostly as deep diamond drill holes in the Caspiche Porphyry area. Other
work conducted during this period included geological mapping of the surface of the property, geochemical and geophysical surveying
to help guide exploration for additional intrusive centres, geotechnical logging and geomechanical testing of a significant number
of oriented drill cores and metallurgical testwork to determine expected metallurgical recoveries and guide process design.



Sampling and Analysis



Reverse Circulation (RC) and Core sampling
by the Company has been consistently applied throughout the Exeter drill campaigns. Exeter has documented their RC and Core sampling
procedures in a document, written in Spanish, which is used to train drill sampling staff.



RC drill cuttings are sampled using a tricone
or hammer bit via a cyclone at 1 m intervals. Sample material is collected at the drill rig in a large plastic bag, weighed, labelled
and then transported to the Caspiche camp, located about 8 km from Caspiche Porphyry. At Caspiche camp, the entire sample is manually
split to one-eighth and seven-eighth fractions using a single pass through a triple stage riffle splitter. The one-eighth split
is then weighed and set aside for compositing, while the seven-eighth reject sample is bagged. The one-eighth splits from each
consecutive 1 m samples are combined to form the 2 m field composite for assaying.



- 24 -







Diamond drilling by Exeter at Caspiche
has employed HQ (6.35 cm), HQ3 (6.11 cm), NQ (4.76 cm), and NQ3 (4.50 cm) diameter core tools. PQ (8.50 cm) diameter core was employed
during the confirmation / metallurgical drill programme of the 2009-2010 drill campaign.



HQ3 and NQ3 triple-tube core tools are
used with oriented core. The triple-tube splits are removed from the core barrel and rolled into a spare split, where Exeter’s
trained field technicians fit the core together, measure the length of the recovered sample and continue the oriented line. The
angle between the pin and ball mark is transferred to the core from the ring using specifically-designed protractors and marked
as a red pencil line. The oriented core is then placed in a wooden core tray, where the end of the run is marked with a core block
marked with hole depth. There is always a trained field technician at the rig to perform core orientation and to record the preliminary
core run recovery.



Exeter personnel transport the drill core
from the drill site to Exeter’s offices in Copiapó where the core is logged and photographed by digital camera. To
maintain the integrity of the core, the boxes are packed and fastened with belts in the back of the trucks.



Following logging and photographing, core
is sawn in half in uniform 2 m intervals using a diamond saw. One half of the core interval is bagged for assay, and the other
half is stored for future reference. Core samples for assay are placed in marked plastic bags, sealed and transported to the assay
laboratory by Exeter personnel.



To preserve as much of the core as possible
for metallurgical testing, the core was divided so that the portion retained for assaying was approximately one-quarter NQ core.
In practice, a 1.7 cm split of the 8.5 cm core was used for assaying, and the remainder was retained in the core box for use in
later metallurgical testwork.



Average core recovery for the 2007-2008,
2008-2009, 2009-2010 and 2010-2011 drill programmes was approximately 98 %.



The various steps taken by Exeter to ensure
the integrity of analytical data are consistent with standard industry practice. The sampling procedures are appropriate for the
style of mineralization and structural controls for the Caspiche Project. Cube’s examination of drill cores, particularly
in regard to the recognition of mineralized intervals, verified the soundness of the core sampling procedure.



Cube has undertaken reasonable endeavours
to assess the veracity of drilling data for the Caspiche project. It can be concluded that all logging, sampling and data QA/QC
procedures between January 2007 and September 2011 have been carried out to a high industry standard and record keeping and database
management is excellent.



Cube believes that the current database
provides an accurate and robust representation of the Caspiche project and is appropriate for use in mineral resource estimation.



Exeter signed a contract with Aker Solutions
and other consultants, with Aker Solutions the project author, to conduct a pre-feasibility study on the viability of mining the
deposit and processing ore to produce a gold and copper concentrate and precious metal doré.



The Caspiche Gold / Copper Prefeasibility
project study was completed by Aker Solutions considering a type 1 magnitude study level, equivalent to the AACE level 4 study
recommendations. This level of study is classified to have a level of accuracy of -15/+20 %.



- 25 -









The study developed three options for the
Caspiche deposit including both the oxide and sulphide portions of the property.



Super Pit Option:

| | · | The total endowment of the deposits mineral reserves is 19.3M ounces of gold, 41.5M ounces of silver
and 2.1M tonnes of copper.
| | - | -------------------------------------------------------------------------------------------------------------------------------



|Proven and Probable Tonnage and Grades |    
|-------------------------------------- | ---
|Oxide Ore                              |    
|Mt                                     |    
|                                       | 124



| | · | Production rate: 150,000 t/d.
| | - | -----------------------------



Hybrid Option (Open Pit and Underground):

| | · | The total endowment of the deposits mineral reserves is 16M ounces of gold, 33.8M ounces of silver
and 1.7M tonnes of copper.
| | - | -----------------------------------------------------------------------------------------------------------------------------



|Proven and Probable Tonnage and Grades |    
|-------------------------------------- | ---
|Oxide Ore                              |    
|Mt                                     |    
|                                       | 124



| | · | Production rate: 95,000 t/d.
| | - | ----------------------------



Full Underground Option:

| | · | The total endowment of the deposits mineral reserves is 11.6M ounces of gold, 24.6M ounces of silver
and 1.2M tonnes of copper.
| | - | -------------------------------------------------------------------------------------------------------------------------------



|Proven and Probable Tonnage and Grades |    
|-------------------------------------- | ---
|Oxide Ore                              |    
|Mt                                     |    
|                                       | 112



| | · | Production rate: 90,000 t/d.
| | - | ----------------------------



Each of the above options additionally
considers heap leaching of oxide and heap leachable sulphide material.



An economic evaluation was completed on
the three options, with the Super Pit option generating the most favourable project economics. As such it is the option recommended
to be developed to feasibility level.



- 26 -





Stockwork-hosted, gold-copper porphyry,
high-sulphidation epithermal gold mineralization and intermediate-sulphidation gold mineralization styles have been recognized
within the Caspiche property. Mineralization at Caspiche Porphyry is interpreted to be a high-sulphidation epithermal gold deposit
above a gold-rich, gold-copper porphyry deposit.



Table-1 summarizes the mineral resources
estimated by AMEC for the Caspiche property 18 August 2011.



| | Table-1: | Single Open Pit Option for Mineral Resource for Caspiche
18 August 2011
| | -------- | -----------------------------------------------------------------------





|         |  |           |  | Cut-off     |  | Volume |     |  | Tonnes |  |     | Au    |  |  | Cu   |  |  | Ag    |      |  | AuEq  |  |      | AuEq  | 
|-------- |  | --------- |  | ----------- |  | ------ | --- |  | ------ |  | --- | ----- |  |  | ---- |  |  | ----- | ---- |  | ----- |  | ---- | ----- | 
|Material |  | Category  |  | (ppm)       |  | (Mm3)  |     |  | (Mt)   |  |     | (g/t) |  |  | (%)  |  |  | (g/t) |      |  | (g/t) |  |      | (Moz) | 
|OXIDE    |  | Measured  |  | Au Eq > 0.2 |  |        | 23  |  |        |  | 56  |       |  |  | 0.45 |  |  |       | 0.01 |  |       |  | 1.72 |       | 
|OXIDE    |  | Indicated |  | Au Eq > 0.2 |  |        | 21  |  |        |  | 50  |       |  |  | 0.37 |  |  |       | 0.01 |  |       |  | 1.57 |       | 
|OXIDE    |  | Inferred  |  | Au Eq > 0.2 |  |        | 4   |  |        |  | 9   |       |  |  | 0.27 |  |  |       | 0.01 |  |       |  | 1.54 |       | 
|SULPHIDE |  | Measured  |  | Au Eq > 0.3 |  |        | 163 |  |        |  | 402 |       |  |  | 0.56 |  |  |       | 0.22 |  |       |  | 1.08 |       | 
|SULPHIDE |  | Indicated |  | Au Eq > 0.3 |  |        | 346 |  |        |  | 853 |       |  |  | 0.49 |  |  |       | 0.19 |  |       |  | 1.10 |       | 
|SULPHIDE |  | Inferred  |  | Au Eq > 0.3 |  |        | 114 |  |        |  | 277 |       |  |  | 0.31 |  |  |       | 0.13 |  |       |  | 0.88 |       | 
|ALL      |  | Measured  |  | Combined    |  |        | 186 |  |        |  | 457 |       |  |  | 0.55 |  |  |       | 0.20 |  |       |  | 1.15 |       | 
|ALL      |  | Indicated |  | Combined    |  |        | 367 |  |        |  | 903 |       |  |  | 0.48 |  |  |       | 0.18 |  |       |  | 1.12 |       | 
|ALL      |  | Inferred  |  | Combined    |  |        | 117 |  |        |  | 286 |       |  |  | 0.31 |  |  |       | 0.12 |  |       |  | 0.89 |       | 





The mining section of the project was developed
in parallel with the other aspects of the study.



The open
pit option, designated ‘Super Pit case’, has been modelled as extracting an average of 150,000 t/d sulphide ore over
a project life of 19 years. As a result of stripping and ongoing operations there will be an additional heap leach
operation treating both oxide and leachable material, which would operate for the first 9 years of operation, processing a maximum
of 72,000 t/d.



Table-2 summarizes the Super Pit case for
mineral reserves estimated by AMEC for the Caspiche property in October 2011.



| | Table-2: | Super Pit Case for Mineral Reserves for Caspiche October
2011
| | -------- | -------------------------------------------------------------





|         |  | Super Pit |     | 
|-------- |  | --------- | --- | 
|Option   |  | Oxide Ore |     | 
|         |  | Mt        |     | 
|         |  |           |     | 
|Proven   |  |           | 62  | 
|         |  |           |     | 
|Probable |  |           | 62  | 
|         |  |           |     | 
|Total    |  |           | 124 | 





The concentrator plant design used both the
metallurgical test results obtained for expected recoveries and physical characterization testwork which defined ore hardness
and abrasivity among other characteristics.



The sulphide material would be treated
through a conventional SAG concentrator plant at throughputs ranging from 90,000 t/d to 150,000 t/d. Due to mineral characteristics,
the Caspiche process route incorporates a number of considerations to maximize production or ensure a saleable product, these include:



- 27 -









| | · | Treatment of the copper concentrates by partial atmosphere roasting to eliminate arsenic
| | - | ----------------------------------------------------------------------------------------

| | · | Leaching of the cleaner flotation tails to recover additional gold
| | - | ------------------------------------------------------------------

| | · | Use of a SART plant to recover copper contained in the gold rich leachate and recycle cyanide.
| | - | ----------------------------------------------------------------------------------------------

The Super Pit Case, processes 150,000 t/d
sulphide ore.



Mine trucks would discharge run of mine
(ROM) oxide material into a conventional two stage crushing operation consisting of static and vibrating grizzlies, classification
screens and primary jaw and secondary cone crushers, at an annual production rate of 26 MT/yr. The final crushed material would
then be transported to a valley heap leach by trucks and distributed by bulldozers and graders. Gold rich, pregnant leach solution
(PLS), would be discharged into a PLS pond and then pumped to the adsorption, desorption, recovery (ADR) plant where gold would
be recovered via carbon adsorption.



Ore from the MacNeill zone would be processed
through the same heap leach and ADR circuit as the oxide but would have the following changes to the circuit to that of the oxide
process route. The MacNeill ore would be crushed through the same crushing circuit but at a throughput of 12 Mt per annum due to
greater rock competency. Primary and secondary crushers would be upgraded to process the MacNeill ore.



The pregnant solution would be pumped to
the ADR plant as per the oxide process but with the addition of a SART plant in the pregnant solution line prior to the ADR circuit
and close to the heap leach barren solution pond. The SART plant would recover any copper in solution and recycle cyanide which
would be reused in the heap leach operation.



The economic evaluation was developed for
all alternatives considering Net Present Value discounted at 5% (NPV5), Internal Rate of Return (IRR) and Payback Period. A summary
of these indicators for all alternatives is presented in the table below. The economic analysis excludes taxes but includes Anglo
American royalty of 3 %. Sensitivities based on commodity price, metals recovery, operating cost and capital expenditure variation
are highlighted in the table below.



| | Table-3: | Economic Evaluation
| | -------- | -------------------





|ECONOMIC EVALUATION – INDICATORS
|--------------------------------
|Indicator                       
|NPV@5                           
|IRR                             
|                                
|PAYBACK(*)                      

(*) from initial investment





The economic analysis indicated that the
Super Pit case provides the best return under the considerations used in this type 1 study.



It was recommended in the NI 43-101 that
a definitive feasibility study (DFS) be completed to confirm the economics of the Super Pit project at a higher level of accuracy
(±10-15%).



It was noted that significant new information
needs to be developed in most areas, including: metallurgy, geotechnical, topography, PAG nature of waste rock, hydrogeology, engineering
design, environmental, community relations and project implementation. The budget for these activities was estimated at $32 million.



- 28 -





DIVIDENDS and Distributions



The Company has not paid any dividends
since incorporation and it has no plans to pay dividends for the foreseeable future, although there are no restrictions that could
prevent the Company from paying dividends.



DESCRIPTION OF CAPITAL STRUCTURE



The Company’s capital structure consists
of an unlimited authorized share capital. As of December 31, 2011, the Company had 87,325,753 common shares issued and outstanding.
As of the date hereof the Company has 88,225,753 common shares issued and outstanding.



As of December 31, 2011, the Company also
had outstanding stock options to purchase common shares with a weighted average exercise price of $4.32 per share. As of the date
hereof the Company has 11,548,400 outstanding stock options to purchase common shares with a weighted average exercise price of
$3.90 per share.



All of the common shares of the Company
rank equally as to voting rights, participation in a distribution of the assets of the Company on liquidation, dissolution or winding-up
and the entitlement to dividends. The holders of the common shares are entitled to receive notice of all meetings of shareholders
and to attend and vote the shares at the meetings. Each common share carries with it the right to one vote.



In the event of the liquidation, dissolution
or winding-up of the Company or other distribution of assets of the Company, the holders of the common shares will be entitled
to receive, on a pro rata basis, all of the assets remaining after the Company has paid its liabilities. There is no set dividend
rate or dividend schedule for the common shares. The board of directors of the Company will decide if and when dividends should
be declared and paid.



The Company's common shares are not subject
to any future call or assessment and there are no provisions for exchange, conversion, exercise, redemption or retraction.



MARKET FOR SECURITIES



The Company was incorporated on February
10, 1984 and its common shares are listed for trading on the TSX under the symbol “XRC”.



On November 9, 2006, the Company began
trading its common stock on the NYSE Amex under the symbol “XRA”.



The Company’s common shares were
also listed for trading on the Deutsche Börse AG Regulated Unofficial Market of the Frankfurt Stock Exchange under the symbol
“EXB” effective May 3, 2004.



On October 27, 2009, the Company’s
common shares commenced trading on the TSX. Prior to trading on the TSX, the Company’s common shares were listed for trading
on the TSX-V. The following table shows the price ranges and volume traded of the Company’s common shares on the TSX on a
monthly basis for the most recently completed financial year ended December 31, 2011:



- 29 -







|Year |  | Month     |  | Open |       |  | High |  |       | Low |  |  | Close |  |  | Volume |      
|---- |  | --------- |  | ---- | ----- |  | ---- |  | ----- | --- |  |  | ----- |  |  | ------ | -----
|     |  |           |  |      |       |  |      |  |       |     |  |  |       |  |  |        |      
|2011 |  | January   |  |      | 6.200 |  |      |  | 6.200 |     |  |  | 5.000 |  |  |        | 5.050
|     |  | February  |  |      | 5.030 |  |      |  | 5.700 |     |  |  | 4.980 |  |  |        | 5.200
|     |  | March     |  |      | 5.250 |  |      |  | 5.690 |     |  |  | 4.820 |  |  |        | 5.160
|     |  | April     |  |      | 5.210 |  |      |  | 5.400 |     |  |  | 4.860 |  |  |        | 4.940
|     |  | May       |  |      | 4.920 |  |      |  | 5.030 |     |  |  | 4.350 |  |  |        | 4.780
|     |  | June      |  |      | 4.860 |  |      |  | 4.880 |     |  |  | 3.990 |  |  |        | 4.010
|     |  | July      |  |      | 4.050 |  |      |  | 4.550 |     |  |  | 3.990 |  |  |        | 4.040
|     |  | August    |  |      | 4.280 |  |      |  | 4.790 |     |  |  | 3.820 |  |  |        | 4.410
|     |  | September |  |      | 4.420 |  |      |  | 5.690 |     |  |  | 3.690 |  |  |        | 3.840
|     |  | October   |  |      | 3.920 |  |      |  | 4.360 |     |  |  | 3.450 |  |  |        | 3.600
|     |  | November  |  |      | 3.580 |  |      |  | 4.220 |     |  |  | 3.030 |  |  |        | 3.180
|     |  | December  |  |      | 3.200 |  |      |  | 3.430 |     |  |  | 2.490 |  |  |        | 2.670



During the year ended December 31, 2011,
the Company issued stock options as follows: on January 21, 200,000 stock options with a strike price of $5.27 per share; and on
May 2, 1,185,000 stock options with a strike price of $5.00 per share.



DIRECTORS AND EXECUTIVE OFFICERS



Name, Address and Occupation



The names and municipalities of residence,
present positions with the Company and principal occupations during the past five years of the directors and executive officers
of the Company as at December 31, 2011 are as follows:



|Name, Position(s) with the
Company (1) and
Municipality of
Residence(2)                     |  | Principal Occupation (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Period (s) Served as a Director
|------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------
|Bryce G. Roxburgh
        President, CEO and 
Director
        Philippines                  |  | President and CEO of the Company since September 4, 2003; Co-Chairman of Extorre Gold Mines Limited since March 2010; Chairman of Rugby Mining Limited since January 2007 and Geological consultant from 2000-2003.                                                                                                                                                                                                                                                                                                     |  | March 20, 2003 to date         
|                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                
|Yale R. Simpson Chairman of the Board
        Director
        West Vancouver, B.C. 
Canada |  | Chairman of the Company since September 11, 2003; Co-Chairman of Extorre Gold Mines Limited since March 2010; President of Canaust Resource Consultants Ltd. since 1992; Director of Diamonds North Resources Ltd. since March 2002; Dynasty Metals & Mining Inc. from September 2003 to October 2011; Maudore Minerals Ltd. since November 2010; Silver Quest Resources Ltd. from December 2009 to December 2011; Director of Independence Gold Corp. since December 2011 and Rugby Mining Limited since January 2007. |  | June 10, 2003 to date          

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|Name, Position(s) with the
Company (1) and
Municipality of
Residence(2)              |  | Principal Occupation (2)                                                                                                                                                                                                                                                                                                                                                                                                   |  | Period (s) Served as a Director
|------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------
|Douglas W. Scheving (3)
        Director
        Vancouver, B.C. Canada              |  | Served as Corporate Secretary of the Company from July 1993 until June 16, 2004; Executive consultant for companies in the resource sector since 1993.                                                                                                                                                                                                                                                                     |  | July 16, 1993 to date          
|                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                
|Robert G. Reynolds (3)(4)
        Director
        Sydney, Australia                 |  | Chartered Accountant; Director of Extorre Gold Mines Limited since March 2010, Rugby Mining Limited since January 24, 2007; Alacer Gold Corp.  March 2002 to August 2011 and Global Geoscience Limited since December 2007.                                                                                                                                                                                                |  | June 12, 2007 to date          
|                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                
|Louis Montpellier
        Director
        Vancouver, B.C. Canada                    |  | Vice President Corporate Development since February 2010; Senior Vice President Extorre Gold Mines Limited since March 2010; Mining lawyer; Partner Gowling Lafleur Henderson LLP April 2001 to February 2011.                                                                                                                                                                                                             |  | January 21, 2008 to date       
|                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                
|Julian Bavin (4)
        Director
        Santiago, Chile                            |  | Director of Pan Global Resources since June 2010; CEO of Pan Global Resources since December 2010 and served as Rio Tinto’s Exploration Director for South America between 2001 and 2009.                                                                                                                                                                                                                                  |  | March 25, 2010 to date         
|                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                
|John Simmons (3)(4)
        Director
        Sydney, Australia                       |  | Fellow of the Institute of Chartered Accountants in Australia. Established a chartered accountancy practice during 1978, subsequently renamed Simmons Johnson & Co, which has now merged with a larger firm with international affiliations known as Nexia Court & Co.                                                                                                                                                     |  | August 18, 2010 to date        
|                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                
|S. R. Jeremy Perkins
        VP Development and Operations
        Sydney, Australia |  | Appointed as Vice President Development and Operations on February
        1, 2005; Professional engineer, since 1989 Director and Principal, J Perkins & Associates Pty Ltd, an industry consultant firm.                                                                                                                                                                                                                 |  | N/A                            
|Cecil Bond
        Chief Financial Officer
        Langley, B.C. Canada              |  | Appointed as Chief Financial Officer on April 13, 2005; Chartered
        Accountant. CFO of Rugby Mining Limited (formerly Carlyle Mining Corp.) from February 2007 to March 2009; Director of Rugby Mining
        Limited since March 2009; Director of Extorre Gold Mines Limited from December 2009 to March 2010; VP Finance of Extorre since
        March 2010; Director and officer of various private companies. |  | N/A                            

| | (1) | For the purposes of disclosing positions held in the Company, "Company" includes the
Company and any parent or subsidiary thereof.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

| | (2) | The information as to province or state and country of residence, principal occupation and number
of shares beneficially owned by (directly or indirectly or over which control or direction is exercised) has been furnished by
the respective individuals.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Member of the Audit Committee
| | --- | -----------------------------

| | (4) | Member of the Compensation Committee
| | --- | ------------------------------------



- 31 -







At December 31, 2011, the Company's directors
and executive officers, as a group, beneficially own, control or direct, directly or indirectly, a total of 5,942,552 shares, representing
6.8% of the Company’s common shares. As at the date of this AIF, the Company’s directors and executive officers, as
a group, beneficially owned, controlled or directed, directly or indirectly, a total of 6,432,552 shares, representing 7.3% of
the Company’s common shares.



CONFLICT OF INTEREST



Certain of the directors and officers of
the Company are also directors and/or officers and/or shareholders of other natural resource companies. While the Company is engaged
in the business of exploiting mineral properties, such associations may give rise to conflicts of interest from time to time. The
directors of the Company are required by law to act honestly and in good faith with a view to uphold the best interests of the
Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest
arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on
such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily
consider the degree of risk to which the Company may be exposed and its financial position at the time.



LEGAL PROCEEDINGS



The Company is not a party to any legal
proceedings, nor to the knowledge of management, are there any legal proceedings pending which may materially affect the business
and affairs of the Company.



INTEREST OF MANAGEMENT AND OTHERS
IN MATERIAL TRANSACTIONS



The directors and officers of the Company
are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests
which they may have in any project or opportunity of the Company. The directors and officers of the Company are aware of the existence
of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors and
officers of conflicts of interest and the Company will rely upon such laws in respect of any directors' and officers' conflicts
of interest or in respect of any breaches of duty by any of its directors and officers. Such directors or officers in accordance
with applicable laws will disclose all such conflicts and they will govern themselves in respect thereof to the best of their ability
in accordance with the obligations imposed upon them by law.



During the current financial year and the
three most recently completed financial years, no director, executive officer or person or company that beneficially owns, controls
or directs, directly or indirectly more than 10% of the shares of the Company or any associate or affiliate of such persons or
companies had any material interest, direct or indirect, in any transaction which has materially affected or is reasonably expected
to materially affect the Company or its subsidiaries.



TRANSFER AGENT



The Company’s transfer agent for
its common shares is Computershare Investor Services Inc., at its Vancouver, B.C. office. Computershare Investor Services United
States acts as the co-transfer agent for U.S. purposes.



- 32 -







MATERIAL CONTRACTS



The Company has the following material contracts:



| | 1. | Purchase Agreement dated April 13, 2011 between Sociedad Contractual Minera Eton Chile (Exeter
Resource Corporation) and Anglo American Norte S.A. (formerly Minera Anglo American Chile Limitada and Empresa Mantos Blancos S.A.)
 regarding the Caspiche project – see “Principal Project – Caspiche” above.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Water Option Agreement dated February 04, 2011 between Sociedad Contractual Minera Eton Chile (Exeter
Resource Corporation) and Inversiones Isabel de Zárate S.A. regarding the Caspiche project –see “Principal Project
- Caspiche” above.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Easement Agreement dated March 15, 2011 between Sociedad Contractual Minera Eton (Exeter Resource
Corporation) and Comunidad Indígena Colla del Río Jorquera y sus Afluentes regarding the Caspiche project –see
“Principal Project - Caspiche” above.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



NAME AND INTEREST OF EXPERTS



The following persons or companies have
been named as having prepared or certified a report described or included in a filing, or referred to in a filing made under National
Instrument 51-102 during or relating to the most recently completed financial year:



| | · | Mr. Justin Tolman, B.Sc (Hons), MBA, M.AusImm, M.SEG, MAIG and Mr. Jerry Perkins, B.Sc (Hons Chem.
Eng.), C.P., FAusIMM are the authors of the Caspiche technical report entitled “Caspiche Property Region III, Chile”.
As of the date hereof, Mr. Tolman has stock options to purchase up to 550,000 common shares of the Company; and Mr. Perkins owns
270,652 common shares of the Company and has stock options to purchase up to 570,000 common shares of the Company.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Mr. Alex Duggan, P.Eng., Mr. Graham Holmes, P.Eng., Mr. Rodrigo Alves Marinho, CPG-AIPG, Mr. Eduardo
Rosselot, C.Eng., MIMMM, Mr. Ricardo P. Sepulveda S., CPG-AIPG, and Mr. Armando Simon, Ph.D., P.Geo., AIG, APGO are the authors
of a report entitled “Technical Report (NI 43-101) of the Prefeasibility Study for the Caspiche Project, Region III, Chile”
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | PricewaterhouseCoopers
LLP are the auditors who issued the auditor’s report for the Company’s annual financial statements for the financial
years ended December 31, 2011 and 2010. PricewaterhouseCoopers
LLP is independent with respect to the Company within the meaning of the Rules of Professional Conduct of the Institute
of Chartered Accountants of British Columbia. PricewaterhouseCoopers
LLP is registered with the Public Company Accounting Oversight Board.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



AUDIT COMMITTEE



The Audit Committee is appointed by the
board of directors of the Company to oversee the accounting and financial reporting process of the Company, the system of internal
accounting and financial controls and procedures and the audit procedures and audit plans. The Audit Committee also reviews and
recommends to the Board for approval the annual financial statements, the annual report and certain other documents required by
regulatory authorities.



- 33 -









The Company’s Audit Committee Charter
(the “Charter”) is attached as Appendix 1 hereto.



As at the date hereof, the Audit Committee
is composed of: John Simmons, Robert G. Reynolds and Douglas W. Scheving, all of whom are “financially literate” and
“independent” within the meaning of National Instrument 52-110 – Audit Committees(“MI 52-110”).



Mr. Simmons, Chairman of the Audit Committee
qualified as a Chartered Accountant, with over 40 years’ experience, has a clear understanding of the accounting principles
used by the Company to prepare its financial statements; has the ability to assess the general application of such accounting principles
in connection with the accounting for estimates, accruals and reserves; has experience preparing, auditing, analyzing or evaluating
financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth
and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements; and has an understanding
of internal controls and procedures for financial reporting.



Mr. Reynolds is a Chartered Accountant
with over 35 years’ experience in commerce and practice, and with over 25 years in the mining industry, which provides him
with an understanding of the accounting principles used by the Company to prepare its financial statements, the ability to assess
the general application of such accounting principles and analyze or evaluate financial statements, and an understanding of internal
controls and procedures for financial reporting.



Mr. Scheving’s industry experience
in the management and administration of publicly traded mining exploration companies provides him with an understanding of the
accounting principles used by the Company to prepare its financial statements, the ability to assess the general application of
such accounting principles and analyze or evaluate financial statements, and an understanding of internal controls and procedures
for financial reporting.



Audit Fees, Audit-Related Tax and
All Other Fees



The following table sets out the aggregate
fees billed by the Company’s external auditor for the two most recently completed financial years.



|PricewaterhouseCoopers LLP
|--------------------------
|Financial Year Ending     
|2011                      
|2010                      



| | (1) | The aggregate fees billed by the Company’s external auditor for audit services.
| | --- | -------------------------------------------------------------------------------

| | (2) | The aggregate fees billed by the Company’s external auditor for assurance and related services
such as engagements relating to specific procedures.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The aggregate fees billed for tax compliance, tax advice and tax planning services.
| | --- | -----------------------------------------------------------------------------------

| | (4) | Other than as disclosed above, the Company’s external auditor has not billed the Company
for any products or services during the last two financial years. Fees relate to services relating to short form prospectus filings
and information circulars.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ADDITIONAL INFORMATION



Additional financial and other information
is provided in the following documents which can be found on SEDAR at www.sedar.com and
on EDGAR website at www.sec.gov:

- 34 -







| | · | the Company’s audited consolidated financial statements and management’s discussion
and analysis for the financial year ended December 31, 2011 ; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the Company’s information circular dated May 3, 2011, which includes directors’ and
officers’ remuneration and indebtness, principal holders of the Company's securities and securities authorized for issuance
under equity compensation plans
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Copies of the above documents and this
AIF are also available upon request to the Financial Manager of the Company at its corporate head office.



- 35 -