----

| /s/ Rudi P. Fronk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | /s/ Christopher J. Reynolds                                                              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                     |
| Rudi P. FronkChairman & CEO                                                                           March 11, 2015  | Christopher J. ReynoldsVice President, Finance and Chief Financial OfficerMarch 11, 2015 |

----

|   | KPMG LLPBay Adelaide Centre 333 Bay Street Suite 4600 Toronto ON  M5H 2S5Canada | Telephone (416) 777-8500Fax(416) 777-8818Internetwww.kpmg.ca |
|--------|-------------------------------------------------------------------------------------------|-------------------------------------------------------------------|

----

----

|   | KPMG LLPBay Adelaide Centre 333 Bay Street Suite 4600 Toronto ON  M5H 2S5Canada | Telephone (416) 777-8500Fax(416) 777-8818Internetwww.kpmg.ca |
|--------|-------------------------------------------------------------------------------------------|-------------------------------------------------------------------|

----

----

| SEABRIDGE GOLD INC.                           |   |
|-----------------------------------------------|--------|
| Consolidated Statements of Financial Position |
| (Expressed in thousands of Canadian dollars)  |

|                                             | Note   |  December 31, 2014                                                                                                                                                                                                                | December 31, 2013                                                                                                                                                                                           |
|--------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Assets                                           |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Current assets                                   |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Cash and cash equivalents                        | 4      |                                     256            |                                  1,063 |
| Short-term deposits                              | 4      |                                  6,037                            | 20,096                                                                                                                                                                                                      |
| Amounts receivable and prepaid expenses          | 5      |                                  5,092                            | 5,128                                                                                                                                                                                                       |
| Investments                                      | 6      |                                  4,897                            | 7,103                                                                                                                                                                                                       |
|                                             |   |                               16,282                                             |                               33,390                  |
| Non-current assets                               |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Mineral interests                                | 7      |                             260,521                                                        | 235,434                                                                                                                                                                                                     |
| Reclamation deposits                             | 9      |                                  1,553                            | 1,553                                                                                                                                                                                                       |
| Total non-current assets                         |   |                             262,074                                                        | 236,987                                                                                                                                                                                                     |
| Total assets                                     |   |                             278,356                                                        | 270,377                                                                                                                                                                                                     |
|                                             |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Liabilities and shareholders’ equity       |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Current liabilities                              |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Accounts payable and accrued liabilities         | 8      |                                  3,737                            | 2,060                                                                                                                                                                                                       |
| Taxes payable                                    |   |                                       65 | 1,096                                                                                                                                                                                                       |
| Flow-through share premium                       | 10     |                                     941            | 5,325                                                                                                                                                                                                       |
|                                             |   |                                  4,743                            |                                  8,481 |
| Non-current liabilities                          |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Deferred income tax liabilities                  | 14     |                               12,430                                             | 6,792                                                                                                                                                                                                       |
| Provision for reclamation liabilities            | 9      |                                  1,349                            | 1,349                                                                                                                                                                                                       |
| Total non-current liabilities                    |   |                               13,779                                             | 8,141                                                                                                                                                                                                       |
| Total liabilities                                |   |                               18,522                                             | 16,622                                                                                                                                                                                                      |
|                                             |   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                        |
| Shareholders’ equity                       | 10     |                             259,834                                                        | 253,755                                                                                                                                                                                                     |
| Total liabilities and shareholders’ equity |   |                             278,356                                                        | 270,377                                                                                                                                                                                                     |

| /s/ Rudi P. Fronk     | /s/ Jay S. Layman     |
|-----------------------|-----------------------|
|                  |                  |
| Rudi P. FronkDirector | Jay S. LaymanDirector |

----

| SEABRIDGE GOLD INC.                                                                           |
|-----------------------------------------------------------------------------------------------|
| Consolidated Statements of Operations and Comprehensive Loss                                  |
| (Expressed in thousands of Canadian dollars except common share and per common share amounts) |

|                                                                            | Note                                                                            | 2014                                                                                                                            | 2013                                                                                                                                  |
|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| Corporate and administrative expenses                                           | 12                                                                              |           (14,091)                                                            |           (11,831)                                                                  |
| Other income - flow-through shares                                              | 10                                                                              |               7,489                                       |               6,256                                             |
| Gain on disposition of mineral properties                                       | 7                                                                               |               2,489                                       |               2,006                                             |
| Impairment of mineral properties                                                | 7                                                                               |             (2,437)                                                 |                      -       |
| Impairment of investments                                                       | 6                                                                               |             (1,236)                                                 |             (4,579)                                                       |
| Other gain on investments                                                       | 6                                                                               |                  517                       |                  135                             |
| Interest income                                                                 |                                                                            |                  190                       |                  336                             |
| Finance expense and depreciation                                                |                                                                            |                   (20)                |                   (21)                      |
| Foreign exchange gain (loss)                                                    |                                                                            |                   (25)                |                       9 |
| Loss before income taxes                                                        |                                                                            | (7,124)                                                                                                                         |             (7,689)                                                       |
| Income tax expense                                                              | 14                                                                              |             (5,899)                                                 |             (5,960)                                                       |
| Loss for the year                                                               |                                                                            | (13,023)                                                                                                                        |           (13,649)                                                                  |
|                                                                            |                                                                            |                                                                                                                            |                                                                                                                                  |
| Other comprehensive income (loss), net of income taxes:                         |                                                                            |                                                                                                                            |                                                                                                                                  |
| Reclassification of previously deferred gains on available for sale investments |             (1,272) |                      - |
| Items that may subsequently be reclassified to profit or loss:                  |                                                                            |                                                                                                                            |                                                                                                                                  |
| Unrealized gain on available for sale investments                               |                                                                            |                  166                       |                  976                             |
| Comprehensive loss for the year                                                 |                                                                            | (14,129)                                                                                                                        |           (12,673)                                                                  |
|                                                                            |                                                                            |                                                                                                                            |                                                                                                                                  |
| Basic and diluted net loss per Common Share                                     |                                                                            | (0.27)                                                                                                                          |                (0.30)                                      |
|                                                                            |                                                                            |                                                                                                                            |                                                                                                                                  |
| Basic weighted average number of common shares outstanding                      |                                                                            | 47,655,513                                                                                                                      | 45,651,239                                                                                                                            |

----

| SEABRIDGE GOLD INC.                                                  |
|----------------------------------------------------------------------|
| Consolidated Statements of Changes in Shareholders’ Equity     |
| (Expressed in thousands of Canadian dollars except number of shares) |

|                        | Shares                                                                                                                                | Share Capital                                                                                                                                     | Stock-based Compensation                                                                                                                          | Contributed Surplus                                                                                                                         | Deficit                                                                                                                                     | Accumulated Other Comprehensive Income                                                                                                                        | Total Equity                                                                                                                                |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| As at January 1, 2014       | 47,081,376                                                                                                                            | 283,544                                                                                                                                           | 26,818                                                                                                                                            | 9,233                                                                                                                                       | (66,986)                                                                                                                                    | 1,146                                                                                                                                                         | 253,755                                                                                                                                     |
| Share issuance              |        1,205,000                                                                                   |               11,205                                                        |                         - |                        - |                        - |                           - | 11,205                                                                                                                                      |
| Share issuance costs        |                       - |                   (919)                                 |                         - |                        - |  -                                                                                                                                     |  -                                                                                                                                                       | (919)                                                                                                                                       |
| Stock-based compensation    |                       - |                         - |                  9,679                                       |                        - |  -                                                                                                                                     |  -                                                                                                                                                       | 9,679                                                                                                                                       |
| Shares - RSUs               |           152,500                                                                   |                  1,472                                       |                (1,472)                                                 |                        - |  -                                                                                                                                     |  -                                                                                                                                                       |                        - |
| Expired options             |                       - |                         - |                   (455)                                 |                     455                 |                        - |                           - |                        - |
| Cancelled options           |                       - |                         - |                (5,373)                                                 |                 5,373                                       |                        - |                           - |                        - |
| Deferred tax                |                       - |                     243                       |                         - |                        - |                        - |                           - | 243                                                                                                                                         |
| Other comprehensive loss    |                       - |  -                                                                                                                                           |  -                                                                                                                                           |  -                                                                                                                                     |  -                                                                                                                                     |                   (1,106)                                           | (1,106)                                                                                                                                     |
| Net loss for the year       |                       - |                         - | -                                                                                                                                                 | -                                                                                                                                           |             (13,023)                                                            |                           - | (13,023)                                                                                                                                    |
| As at December 31, 2014     | 48,438,876                                                                                                                            | 295,545                                                                                                                                           | 29,197                                                                                                                                            | 15,061                                                                                                                                      |             (80,009)                                                            | 40                                                                                                                                                            | 259,834                                                                                                                                     |
|                        |                                                                                                                                  |                                                                                                                                              |                                                                                                                                              |                                                                                                                                        |                                                                                                                                        |                                                                                                                                                          |                                                                                                                                        |
| As at January 1, 2013       | 45,556,376                                                                                                                            | 272,536                                                                                                                                           | 23,351                                                                                                                                            | 5,810                                                                                                                                       | (53,337)                                                                                                                                    | 170                                                                                                                                                           | 248,530                                                                                                                                     |
| Stock-based compensation    |                       - | -                                                                                                                                                 | 7,038                                                                                                                                             | -                                                                                                                                           | -                                                                                                                                           | -                                                                                                                                                             | 7,038                                                                                                                                       |
| Share - exercise of options | 25,000                                                                                                                                | 411                                                                                                                                               | (148)                                                                                                                                             |                        - |                        - |                           - | 263                                                                                                                                         |
| Expired options             |                       - |                         - |                (3,423)                                                 |                 3,423                                       |                        - |                           - |                        - |
| Issuance of shares          |        1,500,000                                                                                   |               11,430                                                        |                         - |                        - |                        - |                           - | 11,430                                                                                                                                      |
| Share issuance costs        |                       - |                (1,131)                                                 |                         - |                        - |                        - |                           - | (1,131)                                                                                                                                     |
| Deferred tax                |                       - |                     298                       |                         - |                        - |                        - |                           - | 298                                                                                                                                         |
| Other comprehensive gain    |                       - | -                                                                                                                                                 |  -                                                                                                                                           |                        - |                        - |                        976                 |                     976                 |
| Net loss for the year       |                       - | -                                                                                                                                                 |  -                                                                                                                                           |  -                                                                                                                                     |             (13,649)                                                            | -                                                                                                                                                             |             (13,649)                                                            |
| As at December 31, 2013     | 47,081,376                                                                                                                            | 283,544                                                                                                                                           | 26,818                                                                                                                                            | 9,233                                                                                                                                       |             (66,986)                                                            | 1,146                                                                                                                                                         | 253,755                                                                                                                                     |

----

| SEABRIDGE GOLD INC.                          |
|----------------------------------------------|
| Consolidated Statements of Cash Flows        |
| (Expressed in thousands of Canadian dollars) |

|                                                               | 2014                                                                                                                                   | 2013                                                                                                                                        |
|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| Operating Activities                                               |                                                                                                                                   |                                                                                                                                        |
| Net loss                                                           |             (13,023)                                                       |             (13,649)                                                            |
|     Items not affecting cash:                  |                                                                                                                                   |                                                                                                                                        |
| Impairment of mineral properties                                   |                 2,437                                  |                        - |
| Gain on disposition of mineral properties                          |                (2,489)                                      |                (2,006)                                           |
| Stock-based compensation                                           |                 9,679                                  |                 7,038                                       |
| Other income - flow-though shares                                  |                (7,489)                                      |                (6,256)                                           |
| Impairment of investments                                          |                 1,236                                  |                 4,579                                       |
| Other gain on investments                                          |                   (517)                      |                   (135)                           |
| Income tax expense                                                 |                 5,899                                  |                 5,960                                       |
| Finance expense and depreciation                                   |                       20 |                       21      |
| Taxes paid                                                         |                (1,219)                                      |                   (324)                           |
|     Changes in non-cash working capital items: |                                                                                                                                   |                                                                                                                                        |
| Amounts receivable and prepaid expenses                            |                   (253)                      |                 1,218                                       |
| Accounts payable and accrued liabilities                           |                 1,465                                  |                (2,150)                                           |
| Net cash used in operating activities                              |                (4,254)                                      |                (5,704)                                           |
|                                                               |                                                                                                                                   |                                                                                                                                        |
| Investing Activities                                               |                                                                                                                                   |                                                                                                                                        |
| Mineral interests                                                  |             (30,988)                                                       |             (34,556)                                                            |
| Mineral exploration tax credits                                    |                 4,435                                  |                        - |
| Investment of short-term deposit                                   |             (12,000)                                                       |             (14,000)                                                            |
| Redemption of short-term deposits                                  |               26,054                                             |               35,003                                                  |
| Disposition of mineral properties                                  |                 1,000                                  |                 2,000                                       |
| Cash proceeds from sale of investments                             |                 2,065                                  |                     150                 |
| Net cash used in investing activities                              | (9,434)                                                                                                                                |             (11,403)                                                            |
|                                                               |                                                                                                                                   |                                                                                                                                        |
| Financing Activities                                               |                                                                                                                                   |                                                                                                                                        |
| Issue of share capital (net of transaction costs)                  |               12,881                                             |               15,886                                                  |
| Net decrease in cash during the year                               | (807)                                                                                                                                  |                (1,221)                                           |
|                                                               |                                                                                                                                   |                                                                                                                                        |
| Cash and cash equivalents, beginning of the year                   | 1,063                                                                                                                                  | 2,284                                                                                                                                       |
| Cash and cash equivalents end of the year                          | 256                                                                                                                                    | 1,063                                                                                                                                       |

----

| 1.   | Reporting entity |
|----------------|------------------|

| 2.   | Statement of compliance and basis of presentation |
|----------------|---------------------------------------------------|

| 3.   | Significant accounting policies |
|----------------|---------------------------------|

| (a)   | Basis of measurement |
|-----------------|----------------------|

| (b)   | Basis of consolidation |
|-----------------|------------------------|

----

| (c)   | Associates |
|-----------------|------------|

| (d)   | Translation of foreign currencies |
|-----------------|-----------------------------------|

| (e)   | Critical accounting judgments and estimation uncertainty |
|-----------------|----------------------------------------------------------|

| (i)   | Critical accounting judgments |
|-----------------|-------------------------------|

| (a)   | Mineral reserves and resources |
|-----------------|--------------------------------|

----

| (b)   | Impairment of assets |
|-----------------|----------------------|

| (ii)   | Key sources of estimation uncertainty |
|------------------|---------------------------------------|

| (a)   | Mineral properties |
|-----------------|--------------------|

| (b)   | Asset retirement obligations |
|-----------------|------------------------------|

| (c)   | Share based payments |
|-----------------|----------------------|

| (d)   | Deferred Income taxes |
|-----------------|-----------------------|

| (f)   | Cash and cash equivalents and short-term deposits |
|-----------------|---------------------------------------------------|

----

| (g)   | Investments |
|-----------------|-------------|

| (h)   | Mineral interests |
|-----------------|-------------------|

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

| (j)   | Impairment of non-financial assets |
|-----------------|------------------------------------|

----

| (k)   | Reclamation liabilities |
|-----------------|-------------------------|

----

| (l)   | Income taxes |
|-----------------|--------------|

| (m)   | Stock-based compensation (options and restricted share units) |
|-----------------|---------------------------------------------------------------|

| (n)   | Flow-through shares |
|-----------------|---------------------|

----

| (o)  | Net profit (loss) per common share |
|-----------|------------------------------------|

| (p)   | Financial assets and liabilities |
|-----------------|----------------------------------|

| Financial assets:Cash and cash equivalents Short-term depositsAmounts receivableInvestments  Financial liabilities:Accounts payable and other liabilities | Classification: Fair value through profit or lossFair value through profit or lossLoans and receivablesAvailable for saleClassification:Other financial liabilities |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | Financial assets at fair value through profit or loss: |
|-----------------|--------------------------------------------------------|

| (ii)   | Loans and receivables: |
|------------------|------------------------|

| (iii)   | Available for sale investments |
|-------------------|--------------------------------|

----

| (iv)   | Fair value: |
|------------------|-------------|

| (v)   | Impairment of financial assets: |
|-----------------|---------------------------------|

| · | significant financial difficulty of the issuer or counterparty; or |
|--------|--------------------------------------------------------------------|

| · | default or delinquency in interest or principal payments; or |
|--------|--------------------------------------------------------------|

| · | it becoming probable that the borrower will enter bankruptcy or financial re-organization. |
|--------|--------------------------------------------------------------------------------------------|

| (q)   | Recent accounting standards issued and applied |
|-----------------|------------------------------------------------|

| (r)   | New accounting standards and interpretations not yet adopted |
|-----------------|--------------------------------------------------------------|

----

| 4.   | Cash and cash equivalents and short-term deposits |
|----------------|---------------------------------------------------|

| ($000’s)            | December 31, 2014                                                                                                                                         | December 31, 2013                                                                                                                         |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| Cash and cash equivalents |                          256 |                       1,063 |
| Short-term deposits       | 6,037                                                                                                                                                     | 20,096                                                                                                                                    |
|                      |                       6,293                 | 21,159                                                                                                                                    |

| 5.   | Amounts receivable and prepaid expenses |
|----------------|-----------------------------------------|

| ($000’s)         | December 31, 2014                                                                                                                                         | December 31, 2013                                                                                                                                         |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Provincial tax credits |                       4,246                 |                       4,435                 |
| HST                    |                          389 |                          398 |
| Prepaid expenses       |                          229 |                          154 |
| Other receivables      |                          228 |                          141 |
|                   | 5,092                                                                                                                                                     |                       5,128                 |

| 6.   | Investments |
|----------------|-------------|

| ($000’s)                 | December 31, 2014                                                                                                                         | December 31, 2013                                                                                                                                         |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Available-for-sale investments |                       3,246 |                       6,795                 |
| Investments in associates      |                       1,651 |                          308 |
|                           | 4,897                                                                                                                                     | 7,103                                                                                                                                                     |

----

| 7.   | Mineral interests |
|----------------|-------------------|

| ($000’s)  | Balance,        | Expenditures                                                                                                              | Recoveries                                                                                                                                        | Impairment                                                                                                                | Balance,                                                                                                                                          |
|-----------------|-----------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|            | January 1, 2014 | 2014                                                                                                                      | 2014                                                                                                                                              | 2014                                                                                                                      | December 31, 2014                                                                                                                                 |
| KSM             | 165,196         | 30,852                                                                                                                    |                   (4,119)                               |                     - | 191,929                                                                                                                                           |
| Courageous Lake | 66,585          | 886                                                                                                                       |                         - |                     - | 67,471                                                                                                                                            |
| Nevada Projects | 2,882           |                  -                   | (95)                                                                                                                                              | (2,437)                                                                                                                   | 350                                                                                                                                               |
| Grassy Mountain | 771             |                     - |                         - |                     - | 771                                                                                                                                               |
|            | 235,434         | 31,738                                                                                                                    |                   (4,214)                               |               (2,437)                               | 260,521                                                                                                                                           |
|            |            |                                                                                                                      |                                                                                                                                              |                                                                                                                      |                                                                                                                                              |
| ($000’s)  | Balance,        | Expenditures                                                                                                              | Recoveries                                                                                                                                        | Impairment                                                                                                                | Balance,                                                                                                                                          |
|            | January 1, 2013 | 2013                                                                                                                      | 2013                                                                                                                                              | 2013                                                                                                                      | December 31, 2013                                                                                                                                 |
| KSM             | 140,858         | 28,773                                                                                                                    | (4,435)                                                                                                                                           |                  -                   | 165,196                                                                                                                                           |
| Courageous Lake | 60,830          | 5,755                                                                                                                     |                      -                   |                  -                   | 66,585                                                                                                                                            |
| Nevada Projects | 2,882           |                  -                   |                      -                   |                  -                   | 2,882                                                                                                                                             |
| Grassy Mountain | 3,382           |                     - | (2,611)                                                                                                                                           |                  -                   | 771                                                                                                                                               |
| Quartz Mountain | 144             |                  -                   | (144)                                                                                                                                             |                  -                   |                         - |
|            | 208,096         | 34,528                                                                                                                    |                   (7,190)                               |                  -                   | 235,434                                                                                                                                           |

----

----

| c)   | Nevada Projects |
|----------------|-----------------|

| d) | Grassy Mountain |
|----|-----------------|

----

| e)   | Other mineral properties |
|----------------|--------------------------|

----

| 8.   | Accounts payable and accrued liabilities |
|----------------|------------------------------------------|

| ($000’s)                                  | December 31, 2014                                                                                                                                              | December 31, 2013                                                                                                                                              |
|-------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Trade payables                                  |                       3,545                      |                       1,819                      |
| Trade and other payables due to related parties |                           56 |                           71 |
| Non-trade payables and accrued expenses         |                          136      |                          170      |
|                                            |                       3,737                      |                       2,060                      |

| 9.   | Provision for reclamation liabilities |
|----------------|---------------------------------------|

| ($000’s)          | December 31, 2014                                                                                                                                                | December 31, 2013 |
|-------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|
| Beginning of the year   | 1,349                                                                                                                                                            | 2,059             |
| Accretion               | 17                                                                                                                                                               | 19                |
| Current year adjustment |                           (17) | (729)             |
| End of the year         | 1,349                                                                                                                                                            | 1,349             |

----

| ($000’s)                         | December 31, 2014 | December 31, 2013 |
|----------------------------------------|-------------------|-------------------|
| Share capital                          | 295,545           | 283,544           |
| Stock options                          | 29,197            | 26,818            |
| Contributed surplus                    | 15,061            | 9,233             |
| Deficit                                | (80,009)          | (66,986)          |
| Accumulated other comprehensive income | 40                | 1,146             |
|                                   | 259,834           | 253,755           |

----

|                                        | Options                                                                                                                               | Weighted Average Exercise Price                                                                                                                                                       |   | Amortized Value of options ($000’s)                                                                                                                                             | RSUs                                                                                              |   | Amortized Value of RSUs ($000’s)                                                                                                                                    | Stock-based Compensation ($000’s) |
|---------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
| Outstanding January 1, 2014                 | 2,925,000                                                                                                                             | 21.11                                                                                                                                                                                 |   | 26,734                                                                                                                                                                                | 235,000                                                                                           |   | 84                                                                                                                                                                        | 26,818                                  |
| Granted                                     | 750,000                                                                                                                               | 10.32                                                                                                                                                                                 |   | 3,181                                                                                                                                                                                 | 272,500                                                                                           |   | 1,099                                                                                                                                                                     | 4,280                                   |
| Exercised option or vested RSU              |                       - |                               - |   |                               - | (152,500)                                                                                         |   | (1,472)                                                                                                                                                                   | (1,472)                                 |
| Cancelled                                   | (400,000)                                                                                                                             | 28.98                                                                                                                                                                                 |   | (5,373)                                                                                                                                                                               |                 - |   |                             - | (5,373)                                 |
| Expired                                     | (35,000)                                                                                                                              | 23.02                                                                                                                                                                                 |   | (455)                                                                                                                                                                                 |                 - |   |                             - | (455)                                   |
| Amortized value of stock based compensation |                                                                                                                                  |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                                                                                              |   |                                                                                                                                                                      |                                    |
|    granted in prior years    |                       - |                               - |   |                        3,340                                       |                 - |   | 2,059                                                                                                                                                                     | 5,399                                   |
| Outstanding December 31, 2014               | 3,240,000                                                                                                                             | 17.62                                                                                                                                                                                 |   | 27,427                                                                                                                                                                                | 355,000                                                                                           |   | 1,770                                                                                                                                                                     | 29,197                                  |
|                                        |                                                                                                                                  |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                                                                                              |   |                                                                                                                                                                      |                                    |
| Exercisable at December 31, 2014            | 3,046,666                                                                                                                             |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                 - |   |                                                                                                                                                                      |                                    |
|                                        |                                                                                                                                  |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                                                                                              |   |                                                                                                                                                                      |                                    |
|                                        | Options                                                                                                                               | Weighted Average Exercise Price                                                                                                                                                  |   | Amortized Value of options ($000’s)                                                                                                                                             | RSUs                                                                                              |   | Amortized Value of RSUs ($000’s)                                                                                                                                    | Stock-based Compensation ($000’s) |
| Outstanding January 1, 2013                 | 2,648,300                                                                                                                             | 21.90                                                                                                                                                                                 |   | 23,351                                                                                                                                                                                |                 - |   |                             - | 23,351                                  |
| Granted                                     | 855,000                                                                                                                               | 12.37                                                                                                                                                                                 |   | 1,492                                                                                                                                                                                 | 235,000                                                                                           |   | 84                                                                                                                                                                        | 1,576                                   |
| Exercised                                   | (25,000)                                                                                                                              | 10.54                                                                                                                                                                                 |   | (148)                                                                                                                                                                                 |                 - |   |                             - | (148)                                   |
| Expired                                     | (553,300)                                                                                                                             | 11.84                                                                                                                                                                                 |   | (3,423)                                                                                                                                                                               |                 - |   |                             - | (3,423)                                 |
| Amortized value of stock based compensation |                                                                                                                                  |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                                                                                              |   |                                                                                                                                                                      |                                    |
|    granted in prior years    |                       - |                               - |   |                        5,462                                       |                 - |   |                             - | 5,462                                   |
| Outstanding December 31, 2013               | 2,925,000                                                                                                                             | 21.11                                                                                                                                                                                 |   | 26,734                                                                                                                                                                                | 235,000                                                                                           |   | 84                                                                                                                                                                        | 26,818                                  |
|                                        |                                                                                                                                  |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                                                                                              |   |                                                                                                                                                                      |                                    |
| Exercisable at December 31, 2013            | 1,480,000                                                                                                                             |                                                                                                                                                                                  |   |                                                                                                                                                                                  |                 - |   |                                                                                                                                                                      |                                    |

----

|           | Options Outstanding | Options Exercisable        |
|----------------|---------------------|----------------------------|
| Exercise price | Number              | Remaining                  | Number | Exercise price |
|           | outstanding         | contractual life           | Exercisable |   |
| $29.75         | 495,000             | 1 year  0 months | 395,000 | $29.75 |
| $30.42         | 150,000             | 1 year 3 months            | 150,000 | $30.42 |
| $21.98         | 545,000             | 1 years 11 months          | 545,000 | $21.98 |
| $21.54         | 10,000              | 2 years 2 months           | 10,000 | $21.54 |
| $14.70         | 100,000             | 2 years 6 months           | 100,000 | $14.70 |
| $17.32         | 180,000             | 2 years 8 months           | 180,000 | $17.32 |
| $17.52         | 155,000             | 2 years 11 months          | 155,000 | $17.52 |
| $12.60         | 705,000             | 3 years 2 months           | 678,333 | $12.60 |
| $12.91         | 100,000             | 3 years 5 months           | 33,333 | $12.91 |
| $8.00          | 50,000              | 4 years                    | 50,000 | $8.00 |
| $10.36         | 700,000             | 4 years 3 months           | 700,000 | $10.36 |
| $9.72          | 50,000              | 4 years 6 months           | 50,000 | $9.72 |
|           | 3,240,000           |                       | 3,046,666 |   |

|                     | 2014         | 2013          |
|--------------------------|--------------|---------------|
| Dividend yield           | Nil          | Nil           |
| Expected volatility      | 52%          | 52% -67%      |
| Risk free rate of return | 1.58%-1.72%  | 1.3%-1.8%     |
| Expected life of options | 4.75-5 years | 4.7 - 5 years |

----

| 11.   | Fair value of financial assets and liabilities |
|-----------------|------------------------------------------------|

----

| 12.   | Corporate and administrative expenses |
|-----------------|---------------------------------------|

| ($000’s)             | December 31, 2014 | December 31, 2013                                                                                                                         |
|----------------------------|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| Employee compensation      | 2,509             | 3,072                                                                                                                                     |
| Stock-based compensation   | 9,679             |                       7,038 |
| Professional fees          | 734               | 393                                                                                                                                       |
| General and administrative | 1,169             | 1,328                                                                                                                                     |
|                       | 14,091            | 11,831                                                                                                                                    |

| 13.   | Related party disclosures |
|-----------------|---------------------------|

| ($000’s)                                               | December 31, 2014 | December 31, 2013 |
|--------------------------------------------------------------|-------------------|-------------------|
| Compensation of directors:                                   |              |              |
| Directors fees                                               | 316               | 290               |
| Services                                                     | 86                | 97                |
| Stock-based compensation                                     | 2,375             | 1,240             |
|                                                         | 2,777             | 1,627             |
|                                                         |              |              |
| Compensation of key management personnel:                    |              |              |
| Salaries and consulting fees                                 | 2,170             | 2,372             |
| Stock-based compensation                                     | 4,816             | 3,659             |
|                                                         | 6,986             | 6,031             |
| Total remuneration of directors and key management personnel | 9,763             | 7,658             |

----

| 14.   | Income taxes |
|-----------------|--------------|

| ('000s')                                   | December 31, 2014                                                                                                                                                                                                          | December 31, 2013                                                                                                                                                                         |
|--------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current tax expense                        |                                     18 |                               1,322 |
| Deferred tax expense                       |                               5,881                                  |                               4,638 |
|                                       |                               5,899                                  |                               5,960 |
|                                       |                                                                                                                                                                                                                       |                                                                                                                                                                                      |
| Tax recovery recognized directly in equity |                                                                                                                                                                                                                       |                                                                                                                                                                                      |
| ('000s')                                   |  December 31, 2014                                                                                                                                                                                                    |  December 31, 2013                                                                                                                                                                   |
| Financing costs                            | 243                                                                                                                                                                                                                        | 298                                                                                                                                                                                       |

| ('000s')                                                              | December 31, 2014                                                                                                                                                                                                                 | December 31, 2013                                                                                                                                                                                                               |
|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Loss before income taxes                                              |                              (6,748)                                             |                              (7,689)                                           |
|                                                                  | 26.44%                                                                                                                                                                                                                            | 26.50%                                                                                                                                                                                                                          |
| Tax recovery calculated                                               |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
|    using statutory rates                               |                              (1,784)                                             |                              (2,037)                                           |
| Non-deductible items                                                  |                                   470                   |                               1,794                                       |
| Non-taxable items                                                     |                                      -   |                                 (120)                           |
| Difference in foreign tax rates                                       |                                 (303)                             |                                 (210)                           |
| Rate differential                                                     |                                   (33)                  |                                      - |
| Movement in tax benefits not recognized                               |                                   527                   |                                   225                 |
| Branch tax                                                            |                                     16        |                                      - |
| Renouncement of flow-through expenditures                             |                               6,972                                         |                               5,898                                       |
| Prior period adjustment                                               |                                     37        |                                   160                 |
| Other                                                                 |                                      (3) |                                   250                 |
| Income tax expense                                                    |                               5,899                                         |                               5,960                                       |
|                                                                  |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| Deferred Income Tax                                              |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| The following table summarizes the components of deferred income tax: |                                                                                                                                                                                                                              |
|                                                                  |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| ('000s')                                                              | December 31, 2014                                                                                                                                                                                                                 | December 31, 2013                                                                                                                                                                                                               |
| Deferred tax assets                                                   |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| Property and equipment                                                |                                     63        |                                     58      |
| Provision for reclamation liabilities                                 |                                   362                   |                                   355                 |
| Financing costs                                                       |                                   664                   |                               1,003                                       |
| Non-capital loss carryforwards                                        |                             10,728                                                    |                               9,095                                       |
|                                                                  |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| Deferred tax liabilities                                              |                                                                                                                                                                                                                              |                                                                                                                                                                                                                            |
| Mineral interests                                                     |                           (24,247)                                                              |                           (17,303)                                                            |
|                                                                  |                           (12,430)                                                              |                              (6,792)                                           |

----

| ('000s')                    | December 31, 2014                                                                                                                                                                                                          | December 31, 2013                                                                                                                                                                                                               |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Investments in subsidiaries |                               4,847                                  |                               8,512                                       |
| Marketable securities       |                               1,598                                  |                               3,621                                       |
| Loss carry forwards         |                                   451            |                               2,277                                       |
| Investment tax credits      |                               1,898                                  |                               1,898                                       |
| Foreign tax credits         |                                     16 |                                      - |
| Mineral properties          |                                   357            |                                      - |

|                                   | Amount ('000s')                                                                                                                                                                                                 | Expiry date |
|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
| Canadian non-capital losses            |                             41,713                                  | 2034        |
| Canadian capital losses                |                                   885 | Indefinite  |
| Canadian tax basis of mineral interest |                           168,488                                             | Indefinite  |
|                                   |                                                                                                                                                                                                            |        |
| US non-capital losses                  |                                   100 | 2034        |
| US tax basis of mineral interest       |                               1,446                       | Indefinite  |

| 15.   | Commitments |
|-----------------|-------------|

| ($000's)                          |   | Payments due by period |   |
|-----------------------------------|--------|------------------------|--------|
|                              |   | Total                  |   |   | 2015 |   |   |   | 2016-17 |   |   |   | 2018-19 |   |   | After 2019 |   |
| Mineral interests                 |   |                   | 10,132 |   |   |   | 1,076 |   |   |   | 2,612 |   |   |   | 2,981 |   |   |   | 3,463 |   |
| Flow-through expenditures         |   |                   | 4,183  |   |   |   | 4,183 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Business premises operating lease |   |                   | 308    |   |   |   | 132 |   |   |   | 176 |   |   |   | - |   |   |   | - |   |
|                              |   |                   | 14,623 |   |   |   | 5,391 |   |   |   | 2,788 |   |   |   | 2,981 |   |   |   | 3,463 |   |

| 16.   | Subsequent event |
|-----------------|------------------|