----

|                                                                   |                                                                           |
|------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| Rudi P. FronkPresident & CEOMarch 31, 2011     | Roderick ChisholmChief Financial OfficerMarch 31, 2011     |

----

|   |                                                                                          |                           |                                          |
|--------|-----------------------------------------------------------------------------------------------|--------------------------------|-----------------------------------------------|
|   | KPMG LLPChartered AccountantsBay Adelaide Centre 333 Bay Street Suite 4600 Toronto ON M5H 2S5 |  Telephone  Fax |  (416) 777-8500(416) 777-8818www.kpmg.ca |

----

| Consolidated Balance SheetsDecember 31, 2010 and 2009(in Canadian dollars) |
|----------------------------------------------------------------------------|

|                                                      |   | 2010   |        |   | 2009   |   |
|-----------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| ASSETS                                                    |   |   |        |   |   |   |
| Current Assets                                            |   |   |        |   |   |   |
| Cash and cash equivalents (Note 3)                        |   | $      | 1,044,369   |   |   | $      | 285,280 |   |
| Short-term deposits (Note 3)                              |   |   | 29,711,963  |   |   |   | 9,002,158 |   |
| Amounts receivable and prepaid expenses                   |   |   | 3,130,442   |   |   |   | 465,579 |   |
| Marketable securities                                     |   |   | 1,929,266   |   |   |   | 797,368 |   |
|                                                      |   |   | 35,816,040  |   |   |   | 10,550,385 |   |
|                                                      |   |   |        |   |   |   |   |   |
| Long-term Guaranteed Investment (Note 3)                  |   |   | 11,000,000  |   |   |   | - |   |
| Convertible Debenture (Note 4(d))                         |   |   | 1,077,611   |   |   |   | - |   |
| Mineral Interests (Note 4)                                |   |   | 128,640,630 |   |   |   | 91,214,373 |   |
| Reclamation Deposits (Note 5)                             |   |   | 1,550,552   |   |   |   | 1,551,915 |   |
| Property and Equipment                                    |   |   | 47,621      |   |   |   | 84,597 |   |
|                                                      |   | $      | 178,132,454 |   |   | $      | 103,401,270 |   |
| LIABILITIES                                               |   |   |        |   |   |   |   |   |
| Current liabilities                                       |   |   |        |   |   |   |   |   |
| Accounts payable and accruals                             |   | $      | 3,725,301   |   |   | $      | 1,375,746 |   |
| Income taxes payable (Note 9 and 4(i))                    |   |   | 43,712      |   |   |   | 34,000 |   |
|                                                      |   |   | 3,769,013   |   |   |   | 1,409,746 |   |
|                                                      |   |   |        |   |   |   |   |   |
| Income taxes payable  (Note 9)                  |   |   | 78,218      |   |   |   | 137,000 |   |
| Provision for Reclamation Liabilities  (Note 5) |   |   | 1,343,069   |   |   |   | 2,256,293 |   |
|                                                      |   |   | 5,190,300   |   |   |   | 3,803,039 |   |
|                                                      |   |   |        |   |   |   |   |   |
| SHAREHOLDERS’ EQUITY                                |   |   |        |   |   |   |   |   |
| Share Capital (Note 6)                                    |   |   | 184,984,184 |   |   |   | 114,027,129 |   |
| Stock Options (Note 6)                                    |   |   | 5,027,828   |   |   |   | 7,012,025 |   |
| Contributed Surplus                                       |   |   | 283,455     |   |   |   | 126,015 |   |
|                                                      |   |   |        |   |   |   |   |   |
| Deficit                                                   |   |   | (18,200,051 | )      |   |   | (21,739,778 | ) |
| Accumulated Other Comprehensive Income                    |   |   | 846,738     |   |   |   | 172,840 |   |
|                                                      |   |   | 172,942,154 |   |   |   | 99,598,231 |   |
|                                                      |   | $      | 178,132,454 |   |   | $      | 103,401,270 |   |
| COMMITMENTS (Note 10)                                     |   |   |        |   |   |   |   |   |
| SUBSEQUENT EVENTS (Notes 4(e)and (f) and 11)              |   |   |        |   |   |   |   |   |

|                              |                     |
|-----------------------------------|--------------------------|
|                              |                     |
| Rudi P. FronkDirector   | James S. AnthonyDirector |

----

| Consolidated Statements of Operations and DeficitFor the Years Ended December 31, 2010, 2009 and 2008(in Canadian dollars) |
|----------------------------------------------------------------------------------------------------------------------------|

|                                                      |   | 2010   |             |   | 2009   |   |             | 2008   |   |
|-----------------------------------------------------------|--------|--------|------------------|--------|--------|--------|------------------|--------|--------|
|                                                      |   |   |             |   |   |   |             |   |   |
| Expenditures                                              |   |   |             |   |   |   |             |   |   |
| Corporate and general expenses                            |   | $      | (5,975,360       | )      |   | $      | (5,049,583       | )      |   | $ | (5,594,818 | ) |
| Gain on sale of Noche Buena project (Note 4 (i))          |   |   | 10,179,708       |   |   |   | -                |   |   |   | 19,891,071 |   |
| Interest income                                           |   |   | 439,701          |   |   |   | 477,813          |   |   |   | 621,099 |   |
| Unrealized gain on convertible debenture (Note 4(d)) |   |   | 486,500          |   |   |   | -                |   |   |   | - |   |
| Gain on sale of marketable securities                     |   |   | -                |   |   |   | 163,625          |   |   |   | - |   |
| Write-down of marketable securities                       |   |   | -                |   |   |   | (81,830          | )      |   |   | - |   |
| Foreign exchange gains (losses)                           |   |   | 1,160,090        |   |   |   | (17,594          | )      |   |   | 378,325 |   |
|                                                      |   |   |             |   |   |   |             |   |   |   |   |   |
| Income (Loss) Before Income Taxes                         |   |   | 6,290,639        |   |   |   | (4,507,569       | )      |   |   | 15,295,677 |   |
| Income tax expense (Note 9)                               |   |   | (2,750,912       | )      |   |   | (171,000         | )      |   |   | (5,005,989 | ) |
|                                                      |   |   |             |   |   |   |             |   |   |   |   |   |
| Net Profit (Loss) for Year                                |   |   | 3,539,727        |   |   |   | (4,678,569       | )      |   |   | 10,289,688 |   |
| Deficit, Beginning of Year                                |   |   | (21,739,778      | )      |   |   | (17,061,209      | )      |   |   | (27,350,89 | ) |
|                                                      |   |   |             |   |   |   |             |   |   |   |   |   |
| Deficit, End of Year                                      |   | $      | (18,200,051      | )      |   | $      | (21,739,778      | )      |   | $ | (17,061,209 | ) |
|                                                      |   |   |             |   |   |   |             |   |   |   |   |   |
| Profit (Loss) per Share – basic                     |   | $      | 0.09             |   |   | $      | (0.12            | )      |   | $ | 0.28 |   |
| Profit (Loss) per Share – diluted (Note 2(j))       |   | $      | 0.09             |   |   | $      | (0.12            | )      |   | $ | 0.27 |   |
| Weighted Average Number of Shares Outstanding - Basic     |   |   |  40,130,184 |   |   |   |  37,485,977 |   |   |   |  37,327,201 |   |
| Weighted Average Number of Shares Outstanding - Diluted   |   |   |  41,083,647 |   |   |   |  37,485,977 |   |   |   |  37,867,620 |   |

| Consolidated Statements of Comprehensive IncomeFor the Years Ended December 31, 2010, 2009 and 2008(in Canadian dollars) |
|--------------------------------------------------------------------------------------------------------------------------|

|                                                                                                          |   | 2010   |      |   | 2009   |   |       | 2008   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|
| Net Profit (Loss) for Year                                                                                    |   | $      | 3,539,727 |   |   | $      | (4,678,569 | )      |   | $ | 10,289,688 |   |
| Other Comprehensive  Income (Loss)                                                                  |   |   |      |   |   |   |       |   |   |   |   |   |
| Reclassification of losses in net profit for year                                                             |   |   | -         |   |   |   | 106,130    |   |   |   | - |   |
| Unrecognized gains (losses) on financial assets - net of income taxes of $303,000 (2009 and 2008 – nil) |   |   | 673,898   |   |   |   | 172,003    |   |   |   | (164,112 | ) |
| Comprehensive Income (Loss)                                                                                   |   | $      | 4,213,625 |   |   | $      | (4,400,436 | )      |   | $ | 10,125,576 |   |

| Consolidated Statements of Accumulated Other Comprehensive IncomeFor the Years Ended December 31, 2010, 2009 and 2008(in Canadian dollars) |
|--------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                  |   | 2010   |    |   | 2009   |   |     | 2008   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|----------|--------|--------|
| Balance, Beginning of Year                                                                            |   | $      | 172,840 |   |   | $      | (105,293 | )      |   | $ | 58,819 |   |
| Other Comprehensive Income (Loss) – net of income taxes of $303,000 (2009 and 2008 – nil) |   |   | 673,898 |   |   |   | 278,133  |   |   |   | (164,112 | ) |
| Balance, End of Year                                                                                  |   | $      | 846,738 |   |   | $      | 172,840  |   |   | $ | (105,293 | ) |

----

| Consolidated Statements of Cash FlowsFor the Years Ended December, 2010, 2009 and 2008(in Canadian dollars) |
|-------------------------------------------------------------------------------------------------------------|

|                                                |   | 2010   |        |   | 2009   |   |        | 2008   |   |
|-----------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
|                                                |   |   |        |   |   |   |        |   |   |
| Cash Used for Operations                            |   |   |        |   |   |   |        |   |   |
| Net profit (loss) for year                          |   | $      | 3,539,727   |   |   | $      | (4,678,569  | )      |   | $ | 10,289,688 |   |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Items not involving cash                            |   |   |        |   |   |   |        |   |   |   |   |   |
| Gain on sale of Noche Buena project (Note 4(i))     |   |   | (10,179,708 | )      |   |   | -           |   |   |   | (19,891,071 | ) |
| Gain on sale of marketable securities               |   |   | -           |   |   |   | (163,625    | )      |   |   | - |   |
| Unrealized gain on convertible debenture (Note4(d)) |   |   | (486,500    | )      |   |   | -           |   |   |   | - |   |
| Write-down of marketable securities                 |   |   | -           |   |   |   | 81,830      |   |   |   | - |   |
| Stock option compensation                           |   |   | 452,829     |   |   |   | 1,481,466   |   |   |   | 1,852,004 |   |
| Unrealized foreign exchange gains                   |   |   | -           |   |   |   | -           |   |   |   | (266,524 | ) |
| Accretion of convertible debenture (Note 4 (d))     |   |   | (66,111     | )      |   |   | -           |   |   |   | - |   |
| Accretion on reclamation liabilities(Note 5)        |   |   | 195,272     |   |   |   | 172,105     |   |   |   | 158,713 |   |
| Amortization                                        |   |   | 35,989      |   |   |   | 39,349      |   |   |   | 40,754 |   |
| Future income taxes (recoveries)                    |   |   | (303,000    | )      |   |   | 171,000     |   |   |   | (586,562 | ) |
| Changes in non-cash working capital items           |   |   |        |   |   |   |        |   |   |   |   |   |
| Amounts receivable and prepaid expenses             |   |   | (2,738,500  | )      |   |   | (127,685    | )      |   |   | 182,175 |   |
| Accounts payable and accruals                       |   |   | 973,806     |   |   |   | (182,549    | )      |   |   | 76,063 |   |
| Income taxes payable                                |   |   | (49,070     | )      |   |   | (5,326,034  | )      |   |   | 5,592,558 |   |
|                                                |   |   | (8,625,266  | )      |   |   | (8,532,712  | )      |   |   | (2,552,202 | ) |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Investing Activities                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Mineral interests                                   |   |   | (37,763,017 | )      |   |   | (21,666,928 | )      |   |   | (14,706,219 | ) |
| Net proceeds on sale of Noche Buena project         |   |   | 10,179,708  |   |   |   | -           |   |   |   | 30,842,488 |   |
| Short-term deposits                                 |   |   | (20,709,805 | )      |   |   | 21,893,464  |   |   |   | (19,338,129 | ) |
| Marketable securities                               |   |   | -           |   |   |   | (224,932    | )      |   |   | - |   |
| Long-term guaranteed investment                     |   |   | (11,000,000 | )      |   |   | -           |   |   |   | - |   |
| Reclamation deposits                                |   |   | -           |   |   |   | (249,470    | )      |   |   | (19,229 | ) |
| Property and equipment                              |   |   | -           |   |   |   | -           |   |   |   | 9,000 |   |
|                                                |   |   | (59,293,114 | )      |   |   | (247,866    | )      |   |   | (3,212,089 | ) |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Financing Activities                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Issue of share capital                              |   |   | 68,677,469  |   |   |   | 966,876     |   |   |   | 383,126 |   |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Net Cash Provided (Used for)                        |   |   | 759,089     |   |   |   | (7,813,702  | )      |   |   | (5,381,165 | ) |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash and Cash Equivalents, Beginning of Year        |   |   | 285,280     |   |   |   | 8,098,982   |   |   |   | 13,480,147 |   |
|                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Cash and Cash Equivalents, End of Year              |   | $      | 1,044,369   |   |   | $      | 285,280     |   |   | $ | 8,098,982 |   |
| Supplementary Non-cash Investing Activities         |   |   |        |   |   |   |        |   |   |   |   |   |
| Shares issued for mineral property acquisition      |   | $      | -           |   |   | $      | 2,442,749   |   |   | $ | - |   |
| Changes in Liabilities in Mineral Interests         |   | $      | 1,375,749   |   |   | $      | 1,910,668   |   |   | $ | 94,251 |   |
| Unpaid Commissions on Sale of Noche Buena           |   | $      | -           |   |   | $      | -           |   |   | $ | 2,505,647 |   |

----

----

| 1. | NATURE OF OPERATIONS |
|----|----------------------|

|   | The Company is engaged in the acquisition, exploration and development of mineral properties. To date, the Company has not earned significant revenues and is considered to be in the exploration and development stage. The ability of the Company to carry out its business plan rests with its ability to continue to secure equity financings and/or the sale or joint venture of its properties. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

|   | The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) in Canada. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The consolidated financial statements have, in management’s opinion, been properly prepared within the framework of the significant accounting policies summarized below: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a)  | Principles of Consolidation |
|--------|----------|-----------------------------|

|   | b)  | Mineral Interests |
|--------|----------|-------------------|

|   | c)  | Asset Retirement Obligations |
|--------|----------|------------------------------|

|   | d)  | Stock-based Compensation |
|--------|----------|--------------------------|

|   | The Company applies the fair value method for stock-based compensation and other stock-based payments.  Options are valued using the Black Scholes option-pricing model and other models for the two-tiered options as may be appropriate. The resulting value is charged against income over the anticipated vesting period of the option (see Note 6(b)). The Company reviews estimated forfeitures of options on an ongoing basis. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e)  | Property and Equipment |
|--------|----------|------------------------|

|   | Property and Equipment are carried at cost less accumulated amortization. Amortization is provided using the straight-line method at an annual rate of 20% from the date of acquisition. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | f) | Cash, Short-term Deposits and Long-term Guaranteed Investment |
|--------|----|---------------------------------------------------------------|

|   | g) | Marketable Securities |
|--------|----|-----------------------|

|   | h) | Translation of Foreign Currencies |
|--------|----|-----------------------------------|

|   | i)  | Income Taxes |
|--------|----------|--------------|

|   | j)  | Profit (Loss) Per Share |
|--------|----------|-------------------------|

|                                                                       |   | 2010   |       |   | 2008   |   |
|----------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Basic weighted average number of common shares outstanding                 |   |   | 40,130,184 |   |   |   | 37,327,201 |   |
| Incremental number of common shares on assumed exercise of stock options   |   |   | 953,463    |   |   |   | 540,419 |   |
| Weighted average number of common shares used for diluted profit per share |   |   | 41,083,647 |   |   |   | 37,867,620 |   |

|   | k)  | Use of Estimates |
|--------|----------|------------------|

|   | l)     | International Financial Reporting Standards (“IFRS”) |
|--------|----------------------------|------------------------------------------------------------------|

----

| 3. | CASH AND CASH EQUIVALENTS, SHORT-TERM DEPOSITS AND LONG-TERM GUARANTEED INVESTMENT |
|----|------------------------------------------------------------------------------------|

|                            |   | 2010   |        |   | 2009   |   |
|---------------------------------|--------|--------|-------------|--------|--------|--------|
| Cash                            |   | $      | 1,044,369   |   |   | $      | 285,280 |   |
| Canadian bank guaranteed notes  |   |   | 29,711,963  |   |   |   | 9,002,158 |   |
| Long-term guaranteed investment |   |   | 11,000,000  |   |   |   | - |   |
|                            |   |   | 41,756,332  |   |   |   | 9,287,438 |   |
| Short-term deposits             |   |   | (29,711,963 | )      |   |   | (9,002,158 | ) |
| Long-term guaranteed investment |   |   | (11,000,000 | )      |   |   | - |   |
| Cash and cash equivalents       |   | $      | 1,044,369   |   |   | $      | 285,280 |   |

| 4. | MINERAL INTERESTS |
|----|-------------------|

|                             |   |                       |       |   | 2010    |   |       |       |   |
|----------------------------------|--------|----------------------------|------------|--------|--------------|--------|------------|------------|--------|
|   Property and Expense      |   | Balance, December 31, 2009 |       |   | Expenditures |   |       | Recoveries |   |   | Balance,December 31, 2010 |   |
| Courageous Lake                  |   |                       |       |   |         |   |       |       |   |   |   |   |
| Acquisition costs                |   | $                          | 8,602,305  |   |         | $      | 670,188    |       |   | $ | - |   |   | $ | 9,272,493 |   |
| Deferred exploration             |   |                       | 13,801,955 |   |         |   | 8,953,605  |       |   |   | - |   |   |   | 22,755,560 |   |
|                             |   |                       | 22,404,260 |   |         |   | 9,623,793  |       |   |   | - |   |   |   | 32,028,053 |   |
| Castle Black Rock                |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | -          |   |         |   | -          |       |   |   | - |   |   |   | - |   |
| Deferred exploration             |   |                       | 241,641    |   |         |   | 40,253     |       |   |   | - |   |   |   | 281,894 |   |
|                             |   |                       | 241,641    |   |         |   | 40,253     |       |   |   | - |   |   |   | 281,894 |   |
| Grassy Mountain                  |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 2,261,299  |   |         |   | -          |       |   |   | - |   |   |   | 2,261,299 |   |
| Deferred exploration             |   |                       | 1,344,918  |   |         |   | 129,280    |       |   |   | - |   |   |   | 1,474,198 |   |
|                             |   |                       | 3,606,217  |   |         |   | 129,280    |       |   |   | - |   |   |   | 3,735,497 |   |
| Hog Ranch                        |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | -          |   |         |   | -          |       |   |   | - |   |   |   | - |   |
| Deferred exploration             |   |                       | 679,797    |   |         |   | -          |       |   |   | (679,797 | ) |   |   | - |   |
|                             |   |                       | 679,797    |   |         |   | -          |       |   |   | (679,797 | ) |   |   | - |   |
| KSM                              |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 18,749,296 |   |         |   | -          |       |   |   | - |   |   |   | 18,749,296 |   |
| Deferred exploration             |   |                       | 39,102,299 |   |         |   | 28,904,858 |       |   |   | - |   |   |   | 68,007,157 |   |
|                             |   |                       | 57,851,595 |   |         |   | 28,904,858 |       |   |   | - |   |   |   | 86,756,453 |   |
| Quartz Mountain                  |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 335,389    |   |         |   | -          |       |   |   | - |   |   |   | 335,389 |   |
| Deferred exploration             |   |                       | 108,410    |   |         |   | 36,100     |       |   |   | - |   |   |   | 144,510 |   |
|                             |   |                       | 443,799    |   |         |   | 36,100     |       |   |   | - |   |   |   | 479,899 |   |
| Red Mountain                     |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 32,090     |   |         |   | -          |       |   |   | - |   |   |   | 32,090 |   |
| Deferred exploration             |   |                       | 1,510,674  |   |         |   | 204,958    |       |   |   | (1,108,496 | ) |   |   | 607,136 |   |
|                             |   |                       | 1,542,764  |   |         |   | 204,958    |       |   |   | (1,108,496 | ) |   |   | 639,226 |   |
| Pacific Intermountain Gold Corp. |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | -          |   |         |   | -          |       |   |   | - |   |   |   | - |   |
| Deferred exploration             |   |                       | 3,959,823  |   |         |   | 222,420    |       |   |   | - |   |   |   | 4,182,243 |   |
|                             |   |                       | 3,959,823  |   |         |   | 222,420    |       |   |   | - |   |   |   | 4,182,243 |   |
| Other Nevada Projects            |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 20,000     |   |         |   | -          |       |   |   | - |   |   |   | 20,000 |   |
| Deferred exploration             |   |                       | 464,477    |   |         |   | 52,888     |       |   |   | - |   |   |   | 517,365 |   |
|                             |   |                       | 484,477    |   |         |   | 52,888     |       |   |   | - |   |   |   | 537,365 |   |
| Total                            |   |                       |       |   |         |   |       |       |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 30,000,379 |   |         |   | 670,188    |       |   |   | - |   |   |   | 30,670,567 |   |
| Deferred exploration             |   |                       | 61,213,994 |   |         |   | 38,544,362 |       |   |   | (1,788,293 | ) |   |   | 97,970,063 |   |
| Total Mineral Interests          |   | $                          | 91,214,373 |   |         | $      | 39,214,550 |       |   | $ | (1,788,293 | ) |   | $ | 128,640,630 |   |

----

|                             |   |                       | 2009       |   |         |   |       |
|----------------------------------|--------|----------------------------|------------|--------|--------------|--------|------------|
|   Property and Expense      |   | Balance, December 31, 2008 |       |   | Expenditures |   |       | Recoveries |   |   | Balance,December 31, 2009 |   |
| Courageous Lake                  |   |                       |       |   |         |   |       |   |   |   |   |   |
| Acquisition costs                |   | $                          | 8,502,305  |   |         | $      | 100,000    |   |   | $ | - |   |   | $ | 8,602,305 |   |
| Deferred exploration             |   |                       | 13,405,841 |   |         |   | 396,114    |   |   |   | - |   |   |   | 13,801,955 |   |
|                             |   |                       | 21,908,146 |   |         |   | 496,114    |   |   |   | - |   |   |   | 22,404,260 |   |
| Castle Black Rock                |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 140,426    |   |         |   | -          |   |   |   | (140,426 | ) |   |   | - |   |
| Deferred exploration             |   |                       | 375,669    |   |         |   | 45,988     |   |   |   | (180,016 | ) |   |   | 241,641 |   |
|                             |   |                       | 516,095    |   |         |   | 45,988     |   |   |   | (320,442 | ) |   |   | 241,641 |   |
| Grassy Mountain                  |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 2,261,299  |   |         |   | -          |   |   |   | - |   |   |   | 2,261,299 |   |
| Deferred exploration             |   |                       | 1,207,500  |   |         |   | 137,418    |   |   |   | - |   |   |   | 1,344,918 |   |
|                             |   |                       | 3,468,799  |   |         |   | 137,418    |   |   |   | - |   |   |   | 3,606,217 |   |
| Hog Ranch                        |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 443,838    |   |         |   | -          |   |   |   | (443,838 | ) |   |   | - |   |
| Deferred exploration             |   |                       | 833,480    |   |         |   | 2,479      |   |   |   | (156,162 | ) |   |   | 679,797 |   |
|                             |   |                       | 1,277,318  |   |         |   | 2,479      |   |   |   | (600,000 | ) |   |   | 679,797 |   |
| KSM                              |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 15,306,546 |   |         |   | 3,442,750  |   |   |   | - |   |   |   | 18,749,296 |   |
| Deferred exploration             |   |                       | 20,833,703 |   |         |   | 18,268,596 |   |   |   | - |   |   |   | 39,102,299 |   |
|                             |   |                       | 36,140,249 |   |         |   | 21,711,346 |   |   |   | - |   |   |   | 57,851,595 |   |
| Quartz Mountain                  |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 357,139    |   |         |   | -          |   |   |   | (21,750 | ) |   |   | 335,389 |   |
| Deferred exploration             |   |                       | 94,258     |   |         |   | 14,152     |   |   |   | - |   |   |   | 108,410 |   |
|                             |   |                       | 451,397    |   |         |   | 14,152     |   |   |   | (21,750 | ) |   |   | 443,799 |   |
| Red Mountain                     |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 82,090     |   |         |   | -          |   |   |   | (50,000 | ) |   |   | 32,090 |   |
| Deferred exploration             |   |                       | 1,324,690  |   |         |   | 185,984    |   |   |   | - |   |   |   | 1,510,674 |   |
|                             |   |                       | 1,406,780  |   |         |   | 185,984    |   |   |   | (50,000 | ) |   |   | 1,542,764 |   |
| Pacific Intermountain Gold Corp. |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | -          |   |         |   | -          |   |   |   | - |   |   |   | - |   |
| Deferred exploration             |   |                       | 3,448,080  |   |         |   | 511,743    |   |   |   | - |   |   |   | 3,959,823 |   |
|                             |   |                       | 3,448,080  |   |         |   | 511,743    |   |   |   | - |   |   |   | 3,959,823 |   |
| Other Nevada Projects            |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 20,000     |   |         |   | -          |   |   |   | - |   |   |   | 20,000 |   |
| Deferred exploration             |   |                       | 392,110    |   |         |   | 72,367     |   |   |   | - |   |   |   | 464,477 |   |
|                             |   |                       | 412,110    |   |         |   | 72,367     |   |   |   | - |   |   |   | 484,477 |   |
| Total                            |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 27,113,643 |   |         |   | 3,542,750  |   |   |   | (650,014 | ) |   |   | 30,000,379 |   |
| Deferred exploration             |   |                       | 41,915,331 |   |         |   | 19,634,841 |   |   |   | (336,178 | ) |   |   | 61,213,994 |   |
| Total Mineral Interests          |   | $                          | 69,028,974 |   |         | $      | 23,177,591 |   |   | $ | (992,192 | ) |   | $ | 91,214,373 |   |

----

|                             |   |                       | 2008       |   |         |   |       |
|----------------------------------|--------|----------------------------|------------|--------|--------------|--------|------------|
|   Property and Expense      |   | Balance, December 31, 2007 |       |   | Expenditures |   |       | Recoveries |   |   | Balance,December 31, 2008 |   |
| Courageous Lake                  |   |                       |       |   |         |   |       |   |   |   |   |   |
| Acquisition costs                |   | $                          | 8,402,305  |   |         | $      | 100,000    |   |   | $ | - |   |   | $ | 8,502,305 |   |
| Deferred exploration             |   |                       | 12,688,309 |   |         |   | 717,532    |   |   |   | - |   |   |   | 13,405,841 |   |
|                             |   |                       | 21,090,614 |   |         |   | 817,532    |   |   |   | - |   |   |   | 21,908,146 |   |
| Castle Black Rock                |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 140,426    |   |         |   | -          |   |   |   | - |   |   |   | 140,426 |   |
| Deferred exploration             |   |                       | 332,135    |   |         |   | 43,534     |   |   |   | - |   |   |   | 375,669 |   |
|                             |   |                       | 472,561    |   |         |   | 43,534     |   |   |   | - |   |   |   | 516,095 |   |
| Grassy Mountain                  |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 2,261,299  |   |         |   | -          |   |   |   | - |   |   |   | 2,261,299 |   |
| Deferred exploration             |   |                       | 1,100,279  |   |         |   | 107,221    |   |   |   | - |   |   |   | 1,207,500 |   |
|                             |   |                       | 3,361,578  |   |         |   | 107,221    |   |   |   | - |   |   |   | 3,468,799 |   |
| Hog Ranch                        |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 443,838    |   |         |   | -          |   |   |   | - |   |   |   | 443,838 |   |
| Deferred exploration             |   |                       | 762,498    |   |         |   | 70,982     |   |   |   | - |   |   |   | 833,480 |   |
|                             |   |                       | 1,206,336  |   |         |   | 70,982     |   |   |   | - |   |   |   | 1,277,318 |   |
| KSM                              |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 15,306,546 |   |         |   | -          |   |   |   | - |   |   |   | 15,306,546 |   |
| Deferred exploration             |   |                       | 10,008,860 |   |         |   | 10,824,843 |   |   |   | - |   |   |   | 20,833,703 |   |
|                             |   |                       | 25,315,406 |   |         |   | 10,824,843 |   |   |   | - |   |   |   | 36,140,249 |   |
| Quartz Mountain                  |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 357,139    |   |         |   | -          |   |   |   | - |   |   |   | 357,139 |   |
| Deferred exploration             |   |                       | 94,258     |   |         |   | -          |   |   |   | - |   |   |   | 94,258 |   |
|                             |   |                       | 451,397    |   |         |   | -          |   |   |   | - |   |   |   | 451,397 |   |
| Red Mountain                     |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 82,090     |   |         |   | -          |   |   |   | - |   |   |   | 82,090 |   |
| Deferred exploration             |   |                       | 1,028,530  |   |         |   | 296,160    |   |   |   | - |   |   |   | 1,324,690 |   |
|                             |   |                       | 1,110,620  |   |         |   | 296,160    |   |   |   | - |   |   |   | 1,406,780 |   |
| Pacific Intermountain Gold Corp. |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | -          |   |         |   | -          |   |   |   | - |   |   |   | - |   |
| Deferred exploration             |   |                       | 3,000,032  |   |         |   | 462,223    |   |   |   | (14,175 | ) |   |   | 3,448,080 |   |
|                             |   |                       | 3,000,032  |   |         |   | 462,223    |   |   |   | (14,175 | ) |   |   | 3,448,080 |   |
| Other Nevada Projects            |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 20,000     |   |         |   | -          |   |   |   | - |   |   |   | 20,000 |   |
| Deferred exploration             |   |                       | 322,925    |   |         |   | 69,185     |   |   |   | - |   |   |   | 392,110 |   |
|                             |   |                       | 342,925    |   |         |   | 69,185     |   |   |   | - |   |   |   | 412,110 |   |
| Noche Buena, Mexico              |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 4,888,270  |   |         |   | 1,820,609  |   |   |   | (6,708,879 | ) |   |   | - |   |
| Deferred exploration             |   |                       | 1,428,111  |   |         |   | 276,482    |   |   |   | (1,704,593 | ) |   |   | - |   |
|                             |   |                       | 6,316,381  |   |         |   | 2,097,091  |   |   |   | (8,413,472 | ) |   |   | - |   |
| Total                            |   |                       |       |   |         |   |       |   |   |   |   |   |   |   |   |   |
| Acquisition costs                |   |                       | 31,901,913 |   |         |   | 1,920,609  |   |   |   | (6,708,879 | ) |   |   | 27,113,643 |   |
| Deferred exploration             |   |                       | 30,765,937 |   |         |   | 12,868,162 |   |   |   | (1,718,768 | ) |   |   | 41,915,331 |   |
| Total Mineral Interests          |   | $                          | 62,667,850 |   |         | $      | 14,788,771 |   |   | $ | (8,427,647 | ) |   | $ | 69,028,974 |   |

|   | a) | Courageous Lake |
|--------|----|-----------------|

----

|   | b) | Castle Black Rock |
|--------|----|-------------------|

|   | The Company entered into a mining lease agreement dated August 15, 2000, and amended on August 1, 2001, with respect to mineral claims located in Esmeralda County, Nevada, USA. In 2002, the Company paid US$17,500 and in 2003, US$25,000 in advance royalties and is required to pay further advance royalties of US$25,000 each August 15 thereafter and to pay a production royalty, varying with the price of gold, of 3% to 5%, and a 3.5% royalty on gross proceeds from other metals produced. The Company has the right to purchase 50% of the production royalty for US$1.8 million. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Grassy Mountain |
|--------|----|-----------------|

|   | d) | Hog Ranch |
|--------|----|-----------|

|   | e) | KSM (Kerr-Sulphurets-Mitchell) |
|--------|----|--------------------------------|

----

|   | f) | Quartz Mountain |
|--------|----|-----------------|

|   | g) | Red Mountain |
|--------|----|--------------|

|   | h) | Pacific Intermountain Gold Corporation |
|--------|----|----------------------------------------|

|   | i)  | Noche Buena, Mexico |
|--------|----------|---------------------|

|   | In December 2010, the Company sold its residual interests in the Noche Buena project for an amount of US$10.12 million ($10,179,708) and paid Mexican withholding taxes of $3,053,912. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | RECLAMATION DEPOSITS AND PROVISIONS FOR RECLAMATION LIABILITIES |
|----|-----------------------------------------------------------------|

|                               |   | Amount |       |
|------------------------------------|--------|--------|------------|
| Balance at December 31, 2008       |   | $      | 1,998,988  |   |
| Increase in reclamation liability  |   |   | 85,200     |   |
| Accretion                          |   |   | 172,105    |   |
| Balance at December 31, 2009       |   |   | 2,256,293  |   |
| Accretion                          |   |   | 195,272    |   |
| Reduction of reclamation liability |   |   | (1,108,496 | ) |
| Balance at December 31, 2010       |   | $      | 1,343,069  |   |

----

| 6. | SHAREHOLDERS’ EQUITY |
|----|----------------------------|

| a) Share Capital                                                                                       |   |   |       |   |   |   |
|--------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                   |   | Shares |       |   | Amount |   |
| Authorized                                                                                             |   |   |       |   |   |   |
| Unlimited number of common shares without par valueUnlimited number of preference shares (none issued) |   |   |       |   |   |   |
|                                                                                                   |   |   |       |   |   |   |
| Issued – Common shares                                                                           |   |   |       |   |   |   |
| Balance, December 31, 2007                                                                             |   |   | 37,297,885 |   |   | $      | 109,736,473 |   |
| Issued during year                                                                                     |   |   |       |   |   |   |   |   |
| For cash, exercise of stock options                                                                    |   |   | 50,800     |   |   |   | 383,126 |   |
| Value of  warrants and stock options exercised                                               |   |   | -          |   |   |   | 101,173 |   |
|                                                                                                   |   |   | 50,800     |   |   |   | 484,299 |   |
| Balance, December 31, 2008                                                                             |   |   | 37,348,685 |   |   |   | 110,220,772 |   |
| Issued during year                                                                                     |   |   |       |   |   |   |   |   |
| For cash, exercise of stock options                                                                    |   |   | 175,000    |   |   |   | 966,876 |   |
| Purchase of mineral property (Note 4 e))                                                               |   |   | 75,000     |   |   |   | 2,442,749 |   |
| Value of stock options exercised                                                                       |   |   | -          |   |   |   | 396,732 |   |
|                                                                                                   |   |   | 250,000    |   |   |   | 3,806,357 |   |
| Balance, December 31, 2009                                                                             |   |   | 37,598,685 |   |   |   | 114,027,129 |   |
| Issued during year                                                                                     |   |   |       |   |   |   |   |   |
| For cash, prospectus financing (see below)                                                             |   |   | 2,875,000  |   |   |   | 62,708,409 |   |
| For cash, exercise of stock options                                                                    |   |   | 581,500    |   |   |   | 5,969,060 |   |
| Value of stock options exercised                                                                       |   |   | -          |   |   |   | 2,279,586 |   |
|                                                                                                   |   |   | 3,456,500  |   |   |   | 70,957,055 |   |
| Balance, December 31, 2010                                                                             |   |   | 41,055,185 |   |   | $      | 184,984,184 |   |

|   | b) Stock Options Outstanding |
|--------|------------------------------|

| Date of Grant | Number             | Exercise Price    | Share Price Vesting |   | Year Vested    |
|---------------|--------------------|-------------------|---------------------|--------|----------------|
| January 2005  |   50,000 | $  4.00 | $6, $9, $12         |   | 2005 and 2006  |
| January 2006  | 875,000            | $10.56            | $15, $18, $21       |   | 2006 and 2007  |
| August 2007   | 120,000            | $29.60            | $34, $37, $40       |   | 40,000 in 2008 |

----

|                     | 2010    | 2009      | 2008      |
|--------------------------|---------|-----------|-----------|
| Dividend yield           | Nil     | Nil       | Nil       |
| Expected volatility      | 66%     | 76%       | 64%       |
| Risk free rate of return | 2.45%   | 1.5%      | 2.2%      |
| Expected life of options | 5 years | 2.8 years | 4.1 years |

| Dividend yield           | Nil       |   |   |
|--------------------------|-----------|--------|--------|
| Expected volatility      | 61%       |   |   |
| Risk free rate of return | 3.4%      |   |   |
| Expected life of options | 4.1 years |   |   |

|                                  |   | Shares |      |   | Weighted Average Exercise Price |   |   | Value of Options |   |
|---------------------------------------|--------|--------|-----------|--------|---------------------------------|--------|--------|------------------|--------|
| Outstanding, December 31, 2007        |   |   | 1,178,300 |   |                            | $      | 11.62  |             |   | $ | 4,282,974 |   |
| Granted to employees and consultants  |   |   | 190,000   |   |                            |   | 15.05  |             |   |   | 436,463 |   |
| Granted to directors and management   |   |   | 635,000   |   |                            |   | 14.14  |             |   |   | 418,084 |   |
| Exercised                             |   |   | (50,800   | )      |                            |   | (7.54  | )                |   |   | (101,173 | ) |
| Value of 2006 options vested          |   |   | -         |   |                            |   | -      |             |   |   | 997,457 |   |
| Outstanding, December 31, 2008        |   |   | 1,952,500 |   |                            |   | 12.88  |             |   |   | 6,033,805 |   |
| Granted to employees and consultants  |   |   | 55,000    |   |                            |   | 24.78  |             |   |   | 614,143 |   |
| Exercised                             |   |   | (175,000  | )      |                            |   | (5.53  | )                |   |   | (396,732 | ) |
| Expired                               |   |   | (20,000   | )      |                            |   | (25.10 | )                |   |   | (106,515 | ) |
| Value of 2007 options vested          |   |   | -         |   |                            |   | -      |             |   |   | 867,324 |   |
| Outstanding, December 31, 2009        |   |   | 1,812,500 |   |                            |   | 13.60  |             |   |   | 7,012,025 |   |
| Granted to employees and consultants  |   |   | 405,000   |   |                            |   | 29.75  |             |   |   | 205,015 |   |
| Granted to directors                  |   |   | 550,000   |   |                            |   | 29.75  |             |   |   | - |   |
| Exercised                             |   |   | (581,500  | )      |                            |   | (10.26 | )                |   |   | (2,279,586 | ) |
| Expired                               |   |   | (15,000   | )      |                            |   | (28.70 | )                |   |   | (157,440 | ) |
| Value of 2008 and 2009 options vested |   |   | -         |   |                            |   | -      |             |   |   | 247,814 |   |
| Outstanding, December 31, 2010        |   |   | 2,171,000 |   |                            | $      | 21.67  |             |   | $ | 5,027,828 |   |

| Shares    |   | Options Vested |   | Exercise PricePer Share |   | Expiry Date              |
|-----------|--------|----------------|--------|-------------------------|--------|--------------------------|
| 250,000   |   | 250,000        |   | $  10.56      |   | January 4, 2011          |
| 30,000    |   | 30,000         |   | $  13.77      |   | January 17, 2012         |
| 260,000   |   | 180,000        |   | $  29.60      |   | August 8, 2012           |
| 30,000    |   | 30,000         |   | $  26.64      |   | March 3,  2013 |
| 621,000   |   | 106,000        |   | $  10.54      |   | December 4, 2013         |
| 25,000    |   | 25,000         |   | $  21.88      |   | March 4, 2014            |
| 955,000   |   | -              |   | $  29.75      |   | December 20, 2015        |
| 2,171,000 |   | 621,000        |   | $  21.67      |   |                     |

----

| 7. | RELATED PARTY TRANSACTIONS |
|----|----------------------------|

|   | a)   | During the year, a private company controlled by a director of the Company was paid $38,100 (2009 - $39,000, 2008 - $14,800) for technical services provided by his company related to the mineral properties. |
|--------|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | During the year, a private company controlled by a second director was paid $440,000 (2009 - $200,000, 2008 - $250,000) for consulting services rendered. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | During the year, a third director was paid $16,300 (2009 - $18,200, 2008 - $16,600) for geological consulting services. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------|

| 8. | FINANCIAL INSTRUMENTS |
|----|-----------------------|

----

| 9. | INCOME TAXES |
|----|--------------|

|   | Income taxes vary from the amounts that would be computed by applying the basic federal and provincial income tax rates aggregating to 31% (2009 – 33%, 2008 – 33.5%) as follows: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | 2010   |      |   | 2009   |   |       | 2008   |   |
|---------------------------------------------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|
|                                              |   |   |      |   |   |   |       |   |   |
| Statutory rate applied to profit (loss) for year  |   | $      | 1,950,098 |   |   | $      | (1,487,498 | )      |   | $ | 5,124,052 |   |
| Non deductible items                              |   |   | 143,477   |   |   |   | 492,000    |   |   |   | 700,000 |   |
| Tax on harmonization of federal/Ontario tax pools |   |   | -         |   |   |   | 171,000    |   |   |   | - |   |
| Non taxable portion of capital gains              |   |   | (179,814  | )      |   |   | -          |   |   |   | (3,331,754 | ) |
| Difference in foreign tax rate                    |   |   | 1,330,457 |   |   |   | -          |   |   |   | 2,260,445 |   |
| Loss not tax benefited                            |   |   | -         |   |   |   | -          |   |   |   | 253,246 |   |
| Valuation allowance                               |   |   | (493,306  | )      |   |   | 995,498    |   |   |   | - |   |
| Reduction in valuation allowance                  |   |   | -         |   |   |   | -          |   |   |   | - |   |
|                                              |   | $      | 2,750,912 |   |   | $      | 171,000    |   |   | $ | 5,005,989 |   |

|   | Significant components of the Company’s future tax assets and liabilities are as follows: |
|--------|-------------------------------------------------------------------------------------------------|

|                                              |   | 2010   |       |   | 2009   |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Future income tax assets (liabilities)            |   |   |       |   |   |   |
| Mineral interests                                 |   | $      | (1,709,000 | )      |   | $      | (3,785,000 | ) |
| Accrued gain in other comprehensive income        |   |   | (303,000   | )      |   |   | - |   |
| Property and equipment                            |   |   | 39,000     |   |   |   | 47,000 |   |
| Share issue costs                                 |   |   | 1,047,000  |   |   |   | 9,000 |   |
| Non capital losses                                |   |   | 4,553,000  |   |   |   | 4,209,000 |   |
| Provision for reclamation liabilities             |   |   | 370,000    |   |   |   | 602,000 |   |
| Tax on harmonization of federal/Ontario tax pools |   |   | -          |   |   |   | 171,000 |   |
|                                              |   |   | 3,997,000  |   |   |   | 1,253,000 |   |
| Valuation allowance                               |   |   | (3,997,000 | )      |   |   | (1,253,000 | ) |
| Future income tax liabilities, net                |   | $      | -          |   |   | $      | - |   |

| 2014   |   | $      | 1,110,000  |   |
|--------|--------|--------|------------|--------|
| 2015   |   |   | 1,091,000  |   |
| 2026   |   |   | 2,140,000  |   |
| 2027   |   |   | 3,160,000  |   |
| 2028   |   |   | 2,746,000  |   |
| 2029   |   |   | 2,873,000  |   |
| 2030   |   |   | 5,093,000  |   |
|   |   | $      | 18,213,000 |   |

----

| 10. | COMMITMENTS |
|-----|-------------|

| 2011 | $ 113,000 |
|------|-----------|
| 2012 | $ 38,000  |

| 11. | SUBSEQUENT EVENTS |
|-----|-------------------|

|   | a) | Subsequent to December 31, 2010, 300,000 stock options were exercised for proceeds to the Company of $3,263,900 and 200,000 five year stock options were granted to an officer at a price of $28.80, with 50,000 of the options vesting March 1, 2012 and the balance on March 1, 2013. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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