UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 20-F



[]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X]

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

For the fiscal year ended December 31, 2010

OR

[   ]

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

For the transition period from ____________ to __________

OR

[   ]

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report



Commission File Number:

001-32556





RADIUS GOLD INC.

(Exact name of Registrant as specified in its charter)



British Columbia, Canada

(Jurisdiction of incorporation or organization)



355 Burrard Street, Suite 830, Vancouver, British Columbia, Canada V6C 2G8

(Address of principal executive offices)



Securities to be registered pursuant to Section 12(b) of the Act:



Title of each class                      Name on each exchange on which registered



None                                                               None





Securities to be registered pursuant to Section 12(g) of the Act:



Common Shares, without par value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None



Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.

80,191,101 Common Shares, no par value



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



If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   Yes ___   No  X



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.            Yes XNo ____



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  _X_     No  ___



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



Large accelerated filer ___  Accelerated filer  ___ Non-accelerated filer  X



Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



U.S. GAAP [  ]

International Financial Reporting Standards as issued

Other [ X]

by the International Accounting Standards Board [  ]



Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 X Item 18 ___



If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes     No X   N/A





Index to Exhibits on Page 60









|          | TABLE OF CONTENTS                                                            |   
|--------- | ---------------------------------------------------------------------------- | --
|          |                                                                              |   
|PART I    |                                                                              |   
|Item 1.   | Identity of Directors, Senior Management and Advisors                        | 1 
|Item 2.   | Offer Statistics and Expected Timetable                                      | 1 
|Item 3.   | Key Information                                                              | 1 
|Item 4.   | Information on the Company                                                   | 7 
|Item 5.   | Operating and Financial Review and Prospects                                 | 30
|Item 6.   | Directors, Senior Management and Employees                                   | 38
|Item 7.   | Major Shareholders and Related Party Transactions                            | 45
|Item 8.   | Financial Information                                                        | 46
|Item 9.   | The Offer and Listing                                                        | 47
|Item 10.  | Additional Information                                                       | 49
|Item 11.  | Quantitative and Qualitative Disclosures about Market Risk                   | 56
|Item 12.  | Description of Other Securities Other Than Equity Securities                 | 56
|PART II   |                                                                              |   
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | 57
|Item 14.  | Material Modifications to the Rights of Security Holders and Use of Proceeds | 57
|Item 15.  | Controls and Procedures                                                      | 57
|Item 16.  | Reserved                                                                     | 58
|Item 16A. | Audit Committee Financial Expert                                             | 58
|Item 16B. | Code of Ethics                                                               | 58
|Item 16C. | Principal Accountant Fees and Services                                       | 58
|Item 16D. | Exemptions from Listing Standards for Audit Committees                       | 59
|Item 16E. | Purchase of Equity Securities by the Issuer and Affiliated Purchasers        | 59
|PART III  |                                                                              |   
|Item 17.  | Financial Statements                                                         | 59
|Item 18.  | Financial Statements                                                         | 59
|Item 19.  | Exhibits                                                                     | 59







GLOSSARY OF TECHNICAL TERMS



In this Annual Report, the following technical terms have the following meanings:

|Vein, Veinlet (small) |  | A tabular mineral deposit formed within or adjacent to faults or fractures by the deposition of minerals from hydrothermal fluids.                                                                                                                                                                                                        
|------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Adit                      |  | A passage driven horizontally into a mountainside providing access to a mineral deposit from the surface of the working of a mine.                                                                                                                                                                                                        
|Ag                        |  | The elemental symbol for silver.                                                                                                                                                                                                                                                                                                          
|Alteration                |  | The chemical and mineralogical changes in a rock mass resulting from the passage of hydrothermal fluids.                                                                                                                                                                                                                                  
|Anomalous or anomalies    |  | A sample or location in which either (i) the concentration of an element(s) or (ii) geophysical response is significantly different from the average background values that typify an area.                                                                                                                                               
|Anomaly                   |  | The geographical area corresponding to anomalous geochemical or geophysical values.                                                                                                                                                                                                                                                       
|Arsenopyrite              |  | A sulphide of arsenic and iron.                                                                                                                                                                                                                                                                                                           
|As                        |  | The elemental symbol for arsenic.                                                                                                                                                                                                                                                                                                         
|Assay                     |  | An analysis to determine the presence, absence or quantity of one or more elemental components.                                                                                                                                                                                                                                           
|Au                        |  | The elemental symbol for gold.                                                                                                                                                                                                                                                                                                            
|Au Eq. g/t                |  | Denotes gold equivalent grades: gold grade plus silver grades which have been converted to gold grades by using a ratio generally based on the prevailing spot prices of gold and silver.                                                                                                                                                 
|Background                |  | The average concentration of an element or typical geophysical response in an area.                                                                                                                                                                                                                                                       
|Breccia                   |  | A rock consisting of sharp fragments in fine grained material.                                                                                                                                                                                                                                                                            
|Cretaceous                |  | The geologic period extending from 135 million to 63 million years ago.                                                                                                                                                                                                                                                                   
|Development               |  | Preparation of a mineral deposit for commercial production including installations of plant and machinery and the construction of all related facilities.                                                                                                                                                                                 
|Diamond drill             |  | A type of rotary drill in which the cutting is done by abrasion rather than percussion. The cutting bit is set with diamonds and is attached to the end of long hollow rods through which water is pumped to the cutting face. The drill cuts a core of rock which is recovered in long cylindrical sections, an inch or more in diameter.



- i -







|Dip              |  | The angle which a geological structure forms with a horizontal surface, measured perpendicular to the strike of the structure.                                                                                                                                                                                                                                                                        
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Epithermal       |  | A term applied to high-level hydrothermal systems which form at depths of ~1 km to surficial hotspring settings.                                                                                                                                                                                                                                                                                      
|Exploration      |  | The prospecting, mapping, sampling, remote sensing, geophysical surveying, diamond drilling and other work involved in the searching for ore bodies.                                                                                                                                                                                                                                                  
|Fault            |  | A fracture in a rock across which there has been displacement.                                                                                                                                                                                                                                                                                                                                        
|Fracture         |  | Breaks in a rock, usually planar.                                                                                                                                                                                                                                                                                                                                                                     
|GPS              |  | Global Positioning System  a space based satellite positioning system whereby receiver units on the ground or in the air use triangulation from known satellite signals to derive a location in three dimensional space.                                                                                                                                                                             
|Grade            |  | The concentration of an ore metal in a rock sample, given either as weight percent for base metals (e.g. Cu, Zn, Pb) or in grams per tonne (g/t) or ounces per short ton (oz/t) for precious metals. The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from throughout the deposit.
|g/t              |  | Grams of per metric tonne. Usually used in association with gold or silver.                                                                                                                                                                                                                                                                                                                           
|Heap leach       |  | A process used for the recovery of metals from crushed ore in heaps using a suitable leaching solution.                                                                                                                                                                                                                                                                                               
|Hectare or ha    |  | An area totaling 10,000 square metres.                                                                                                                                                                                                                                                                                                                                                                
|Highly anomalous |  | An anomaly which is 50 to 100 times average background.                                                                                                                                                                                                                                                                                                                                               
|Host rock        |  | The body of rock in which mineralization of economic interest occurs.                                                                                                                                                                                                                                                                                                                                 
|Hydrothermal     |  | Pertaining to hot fluids, dominantly water, in the earths crust which may carry metals and other compounds in solution to the site of ore deposition or wall rock alteration.                                                                                                                                                                                                                        
|ICP              |  | A type of assay technique.                                                                                                                                                                                                                                                                                                                                                                            
|Intrusive        |  | A rock mass formed below earths surface from magma which has intruded into a preexisting rock mass                                                                                                                                                                                                                                                                                                   





- ii -







|Mesothermal                                                                                         |  | A hydrothermal ore deposit typically a vein system- formed at intermediate temperatures (200-300oC) and pressures/depths.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mineral resource,
measured mineral  resource,
indicated mineral resource,
inferred mineral resource |  | Under CIM standards, a mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earths crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.

The terms mineral resource, measured mineral resource, indicated mineral resource, and inferred mineral resource used in this Joint Information Circular are mining terms defined under CIM standards and used in accordance with Canadian National Instrument 43-101  Standards of Disclosure for Mineral Projects. They are not defined terms under United States standards and generally may not be used in documents filed with the SEC by U.S. companies. See Joint Information Circular  Notice to United States Securityholders.

A mineral resource estimate is based on information on the geology of the deposit and the continuity of mineralization. Assumptions concerning economic and operating parameters,including cut-off grades and economic mining widths, based on factors typical for the type of deposit, may be used if these factors have not been specifically established for the deposit at the time of the mineral resource estimate. A mineral resource is categorized on the basis of the degree of confidence in the estimate of quantity and grade or quality of the deposit, as follows:

Inferred mineral resource:Under CIM standards, an inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated mineral resource:Under CIM standards, an indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured mineral resource:Under CIM standards, a measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

- iii -





|Mineralization              |  | Minerals of value occurring in rocks.                                                                                                                                              
|--------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mt                          |  | A million tonnes.                                                                                                                                                                  
|Ore                         |  | A natural aggregate of one or more minerals which, at a specified time and place may be mined, processed and sold at a profit, or from which some part may profitably be separated.
|Ounce / oz                  |  | Troy ounce, equal to approximately 31.103 grams.                                                                                                                                   
|Outcrop                     |  | An exposure of rock at the earths surface.                                                                                                                                        
|Quartz                      |  | A common rock-forming mineral (SiO2) that is frequently a dominant constituent of veins, especially those containing gold and silver mineralization.                               
|RC                          |  | Reverse Circulation drilling.                                                                                                                                                      
|Rhyolite                    |  | A silica-rich volcanic rock chemically equivalent to granite. Usually light colored, very fine-grained or glassy-looking.                                                          
|Silicification / silicified |  | Complete or partial replacement of a rock by quartz, often during hydrothermal alteration.                                                                                         
|Strike                      |  | Azimuth of a plane surface aligned at right angles to the dip of the plane used to describe the orientation of stratigraphic units or structures.                                  
|Tertiary                    |  | The geological period extending from the end of the Cretaceous (65 million years ago) to approximately 2 million years before the present time.                                    
|Tonne                       |  | A metric tonne, 1000 kilograms or 2,204.6 pounds.                                                                                                                                  
|UTM                         |  | The UTM (Universal Transverse Mercator) system is a world-wide geographic coordinate system defined in meters.                                                                     



- iv -









NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended (the Exchange Act), which represent expectations or beliefs of the Company about future events. These statements can be identified generally by forward-looking words such as expect, believe, anticipate, plan, intend, estimate, may, will or similar words.  Information concerning the interpretation of drill results and mineral resource estimates also may be deemed to be forward-looking statements, as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed.  Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in Item 3.D. of this Annual Report under the heading, Risk Factors, and elsewhere in this Annual Report.

The Companys forward-looking statements contained in this Annual Report are made as of the respective dates set forth in this Annual Report.  Such forward-looking statements are based on the beliefs, expectations and opinions of management as of the date the statements are made.  The Company does not intend to update these forward-looking statements.  For the reasons set forth above, investors should not place undue reliance on forward-looking statements.







- v -













PART I

Item 1.

Identity of Directors, Senior Management and Advisers.

A.

Directors and Senior Management.

Not Applicable

B.

Advisers.

Not Applicable

C.

Auditors.

Not Applicable

Item 2.

Offer Statistics and Expected Timetable.

Not Applicable

Item 3.

Key Information.

A.

Selected Financial Data.

The following tables set forth and summarize selected consolidated financial data for the Company, prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP).  The tables also summarize certain corresponding information prepared in conformity with United States generally accepted accounting principles (U.S. GAAP).  Canadian GAAP, as applied to the Company, materially differs from U.S. GAAP, as set forth in Note 18to the Consolidated Financial Statements of the Company.

The information presented in the tables was extracted from the financial statements of the Company.  The information presented for the fiscal years ended December 31, 2010, 2009 and 2008 and as at December 31, 2010 and 2009 was extracted from financial statements of the Company which were audited by BDO Canada LLP, Chartered Accountants.

The selected financial data should be read in conjunction with Item 5, Operating and Financial Review and Prospects and in conjunction with the Consolidated Financial Statements of the Company and the Notes thereto contained elsewhere in this Annual Report.  The Companys fiscal period ends on December 31 of each year.

The following is a summary of certain selected financial information for the Companys most recently completed fiscal year and for the Companys four preceding fiscal years.



- 1 -



Canadian GAAP

Under Canadian GAAP resource property acquisition costs and exploration costs may be deferred and amortized to the extent they meet certain criteria.  Under US GAAP, resource property acquisition costs are considered tangible assets and must be capitalized unless the resource properties do not have proven reserves.  Prior to January 1, 2009, the Companys policy under Canadian GAAP was to defer and amortize mineral property acquisition costs and exploration costs to the extent they meet certain criteria.  Capitalized costs under Canadian GAAP are amortized on a unit-of-production basis based on proved, probable and possible reserves.  During the year ended December 31, 2009, the Company changed its accounting policy for exploration costs under Canadian GAAP by expensing the costs as incurred as it more accurately reflects the exploration industry.  This accounting change was applied retroactively with restatement of prior periods.  As a result of the change in accounting policy there are no ongoing differences between Canadian and US GAAP in the accounting for mineral properties with the exception of mineral property acquisition costs of $4,211,802 previously expensed under US GAAP that remain capitalized to mineral properties under Canadian GAAP.

The following information has been reconciled to U.S. GAAP.  See Note 18to the Consolidated Financial Statements of the Company.



|                                | (in 000s, except per share data)
|------------------------------- | ---------------------------------
|                                | As at 12/31/10                   
|Working Capital                 | 8,883                            
|Resource Properties (Cdn GAAP)  | 5,032                            
|Resource Properties (US GAAP)   | 820                              
|Long Term Debt (Cdn GAAP)       | (122)                            
|Long Term Debt (US GAAP)        | (122)                            
|Shareholders Equity (Cdn GAAP) | (14,043)                         
|Shareholders Equity (US GAAP)  | (9,831)                          
|Total Assets (Cdn GAAP)         | 14,713                           
|Total Assets (US GAAP)          | 10,501                           





- 2 -



|Revenue                        | -       | -       | -       | -       | -      
|------------------------------ | ------- | ------- | ------- | ------- | -------
|Net Loss (Cdn GAAP)            | (5,124) | (1,211) | (4,779) | (4,532) | (3,983)
|Loss Per Share (Cdn GAAP)      | (0.08)  | (0.02)  | (0.09)  | (0.09)  | (0.08) 
|Comprehensive Loss (US GAAP)   | (5,337) | (31)    | (4,675) | (4,897) | (4,253)
|Comprehensive Loss (CDN GAAP)  | (5,337) | (255)   | (4,788) | (2,349) | (4,564)
|Loss Per Share (US GAAP)       | (0.08)  | (0.00)  | (0.09)  | (0.09)  | (0.08) 
|Dividends Per Share (Cdn GAAP) | -       | -       | -       | -       | -      
|Dividends Per Share (US GAAP)  | -       | -       | -       | -       | -      
|Wtd.Avg.No.Shares (Cdn GAAP)   | 65,030  | 53,548  | 53,548  | 53,426  | 52,991 
|Wtd.Avg.No.Shares (US GAAP)    | 65,030  | 53,548  | 53,548  | 53,426  | 52,991 



Except where otherwise indicated, all information extracted from or based on the Consolidated Financial Statements of the Company are presented in accordance with Canadian GAAP.

No dividends have been declared in any of the years presented above.

Exchange Rate Information

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars.  References in this document to $ and CDN$ refer to Canadian dollars, unless otherwise specified; and references to US$ refer to US dollars.

The following table sets forth the high and low rates of exchange for the Canadian dollar, expressed as Canadian dollars per U.S. dollar, for each month during the previous six months and the average of such exchange rates during the five most recent years ended December 31.  The average rates presented in the table below represent the average of the exchange rates on the last day of each month during a year for the past five fiscal years.  Exchange rates represent the noon buying rate in New York City for cable transfers payable in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The noon rate of exchange on June 17, 2011 as set forth in the H.10 statistical release of the Federal Reserve Board, for the conversion of Canadian dollars into United States dollars was US$1.00 = CDN$0.9797.

- 3 -



| |                               | Exchange Rate U.S. Dollars into
Canadian Dollars
| | ----------------------------- | ------------------------------------------------
| |                               | High                                            
| | Month ended May 31, 2011      | $0.9809                                         
| | Month ended April 30, 2011    | $0.9689                                         
| | Month ended March 31, 2011    | $0.9921                                         
| | Month ended February 28, 2011 | $0.995                                          
| | Month ended January 31, 2011  | $1.0020                                         
| | Month ended December 31, 2010 | $1.0176                                         



| |                                      | Average
| | ------------------------------------ | -------
| | Fiscal year ended December 31, 2010  | $1.0298
| | Fiscal year ended December 31, 2009  | $1.1373
| | Fiscal year ended December 31, 20081 | $1.0679
| | Fiscal year ended December 31, 20071 | $1.0742
| | Fiscal year ended December 31, 20061 | $1.1307

1 For December 2008 and prior periods, the exchange rate refers to the noon buying rate as reported by the Federal Reserve Bank of New York. For January 2009 and later periods, the exchange rate refers to the exchange rate as set forth in the H.10 statistical release of the Federal Reserve Board.

B.

Capitalization and Indebtedness.

Not Applicable

C.

Reasons for the Offer and Use of Proceeds.

Not Applicable



- 4 -



D.

Risk Factors.

The Companys auditors have expressed a Going Concern opinion.

The Companys auditor has expressed substantial doubt about the Companys ability to continue as a going concern as described in the Auditors Report by our auditors with respect to the consolidated financial statements of the Company for the years ended December 31, 2010 and 2009. Realization values may be substantially different from carrying values as shown and the financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company will require additional financing in order to conduct its planned work programs on mineral properties, meet its ongoing levels of corporate overhead and discharge its liabilities as they come due.  If the Company is unable to meet these requirements, it will not be able to fulfill its business plan and be forced to reduce certain operations or cease operations altogether.

There is no assurance that the business of the Company will achieve profitable operations.

At December 31, 2010, the Company had not yet achieved profitable operations, has accumulated losses since inception, and is expected to incur further losses in the development of its business, all of which raises substantial doubt about its ability to continue as a going concern.  The Company has depended on financing in order to conduct its planned work programs on mineral properties, meet its ongoing levels of corporate overhead and discharge its liabilities as they come due.  While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.

Mining operations and exploration activities are subject to various federal, provincial and local laws and regulations.

The mineral projects in which the Company has an interest are located in Guatemala, Nicaragua, Mexico, United States and Canada.  Mineral exploration and mining activities in these countries may be affected in varying degrees by political instability and government regulations relating to the mining industry.  Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business.  Future operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriations of property, environmental legislation and mine safety.

The mining industry is highly speculative and involves substantial risks.

Few properties that are explored are ultimately developed into producing mines.  At present, there are no known bodies of commercial ore on any of the Companys properties and the proposed exploration programs are an exploratory search for ore.  Unusual or unexpected formation, formation pressures, fires, power outages, labour disruptions, flooding, explorations, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the conduct of exploration programs.  Although the management of the Company has experience in the exploration and development of mineral properties, it has relied on and may continue to rely upon consultants and others for exploration and operating expertise.  The economics of developing mineral properties is affected by many factors including the cost of operations, variation of the grade of minerals mined and fluctuations in the price of any minerals produced.

The Company is dependent on public and private distributions of equity to obtain capital in order to sustain operations.

There can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.  Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of its projects with the possible loss of such properties.



- 5 -



Dilution from further equity financing.

If the Company raises additional funding by issuing additional equity securities, such financing may substantially dilute the interests of existing shareholders of the Company and reduce the value of their investment.

Operating hazards and risks associated with the mining industry could result in the Company having to significantly reduce or cease operations.

Hazards such as unusual or unexpected formations and other conditions are involved in mineral exploration and development.  The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure.  The payment of such liabilities may have a material, adverse effect on the Companys financial position.

Title to mineral properties are not guaranteed and could result in future claims against the Company.

While the Company has obtained the usual industry standard title reports with respect to its properties which confirms ownership and that there are no registered encumbrances against the properties, this should not be construed as a guarantee of title.  The properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects or native land claims.

Permits and licenses may be required in order to carry out business activities.

The operations of the Company may require licenses and permits from various governmental authorities.  There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects.

The Company may be adversely affected by mineral prices

Even if the Companys exploration programs are successful, factors beyond the control of the Company may affect the marketability of any minerals discovered.  Metal prices have historically fluctuated widely and are affected by numerous factors beyond the Companys control, including international, economic and political trends, expectations for inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and worldwide production levels.  The effect of these factors cannot accurately be predicted.

The Company may not be able to compete with current and potential exploration companies.

The mining industry is intensely competitive in all its phases. The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests as well as for the recruitment and retention of qualified employees.

It may be difficult for United States investors to effect services of process against the Company.

The Company is incorporated under the laws of the Province of British Columbia, Canada.  Consequently, it will be difficult for United States investors to affect service of process in the United States upon the directors or officers of the Company, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States Securities Exchange Act of 1934, as amended.  The majority of the Companys directors and officers are residents of Canada and all of the Companys assets are located outside of the United States.  A judgment of a United States court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the United States court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter.  There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities.

- 6 -



Item 4.

Information on the Company.

A.

History and Development of the Company

The Company was incorporated under the name Radius Explorations Ltd. on September 9, 1997 pursuant to the British Columbia Company Act by registration of its Memorandum and Articles.  On July 1, 2004, the Company and PilaGold Inc. amalgamated (the Amalgamation) under the British Columbia Business Corporations Act by registration of a Notice of Articles with the new name Radius Gold Inc..  The Companys registered address is 355 Burrard Street, Suite 830, Vancouver, BC  V6C 2G8 (tel:  604-801-5432).  See Item 4D, Property, Plant and Equipment, for information regarding capital expenditures made by the Company on its properties.

B.

Business Overview.

The Company is a natural resource property exploration company in the exploration stage with no history of cash flows from operations.  In 1997, it commenced activities by carrying out exploration work in the Yukon Territory, Canada.  In 1999, the Company changed its focus to Latin America and acquired property interests in Mexico and Guatemala.  In 2008, the Company signed joint venture agreements to develop its 100% owned Tambor gold deposit in Guatemala, and to further explore the Rubi Property in Peru.  In 2009, the Company optioned out its Nicaragua portfolio of properties and its property in Mexico.  In 2009 and 2010, the Company acquired a significant land position in the Yukon Territory, Canada by staking and pursuant to option agreements. Also in 2010, the Company made applications for geothermal provisional land use permits in Guatemala.

In May, 2011, the Board of Directors of the Company approved a proposed spin out transaction (the Spin Out) whereby the Company will transfer all of its Yukon and Alaskan property assets and $1.0 million in cash to a new company (Newco) in return for Newco shares and warrants.  (See Item 5, Strategic Transactions below).

Currently, the Company has property interests in Guatemala, Nicaragua, Mexico, Canada and the United States.  (See Property and Equipment, below, and Note 5 to the Financial Statements).

Presently, the Company is in the exploration stage and its properties do not contain a known commercially viable minable deposit.  There is no assurance that a commercially viable mineral deposit exists on any of the Companys properties, and further exploration is required before a final evaluation of the economic and legal feasibility is determined.

C.

Organizational Structure.

The following table sets forth the name of each material subsidiary of the Company, the jurisdiction of its incorporation and the direct or indirect percentage ownership by the Company of such subsidiary.

|Name                                    | Date of
Incorporation | Jurisdiction | Percentage
Owned
|--------------------------------------- | --------------------- | ------------ | ----------------
|Exploraciones Minera de Guatemala, S.A. | July 5, 1996          | Guatemala    | 100%            
|Minerales Sierra Pacifico, S.A.         | November 17, 1999     | Guatemala    | 100%            
|Minerales de Nicaragua S.A.             | November 18, 2002     | Nicaragua    | 100%            
|Desarrollo Geologico Minero, S.A.,      | May 15, 2003          | Nicaragua    | 100%            
|Radius (Cayman) Inc.                    | January 31, 2005      | Cayman Isl.  | 100%            





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Property and Equipment

The Company holds interests in properties in Guatemala, Nicaragua, Mexico, Canada and USA, as set out in the following maps and more particularly described below:

Latin America

[radius20f2010001.jpg]





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North America

[radius20f2010002.jpg]

Guatemala

In Guatemala, exploration concessions are granted for an initial period of three years.  Thereafter, an extension of two years may be obtained, and then a final extension of two years, for a total of seven years.  Thereafter, the concession is either converted to an exploitation concession, or forfeited.

In order to keep its properties in Guatemala in good standing, the Company would have to pay filing fees to the Guatemala government, paid annually in advance, equal to US$48.81 per square kilometer, or fraction thereof, for the first three years after the granting of a concession, and US$97.62 per square kilometer, or fraction thereof, for the fourth and fifth years, if so extended, and US$146.43 per square kilometer, or fraction thereof, for the sixth and seventh years, if so extended.  The Company would have to also file annual exploration reports.

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1.

Tambor Project

The Company holds a 100% interest in the Tambor Project which consists of six exploration concessions located in south-central Guatemala as set out in the following map:

[radius20f2010003.jpg]

The concessions are described as follows:



|Name                     | Size (Hectares) | Expiry Date                                                        
|------------------------ | --------------- | -------------------------------------------------------------------
|                         |                 |                                                                    
|Santa Margarita Derivada | 2000.00         | February 4, 2009; exploitation license
applied for January 21, 2009
|Carlos Antonio Derivada  | 335.00          | November 11, 2009                                                  
|La Laguna Derivada       | 187.50          | October 29, 2009                                                   
|Progreso VII Derivada    | 2,000.00        | Nov. 6, 2008; exploitation license
applied for October 20, 2008    
|Marga                    | 75.00           | applied for September 9, 2008                                      
|Las Navajas              | 1,519.42        | applied for November 12, 2008                                      
|                         | 6,161.92        |                                                                    





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In June 2008, the Company granted to Kappes, Cassiday & Associates (KCA) the right to earn a 51% interest in the Tambor Project by spending a total of US$6.5M on the property within 4 years through staged annual expenditure commitments, or by putting the property into commercial production within 4 years.  When KCA has earned its 51%, a joint venture will be formed between KCA and the Company.

Once commercial production has been achieved, KCA will receive preferential payback of 75% (the Company 25%) of after-tax cash flow from initial production until it receives an amount equal to its investment, less US$2 million.  At that point, the Company will receive 75% of the after-tax cash flow (KCA 25%) until it too receives the amount of preferential cash flow received by KCA, after which revenues will be split on a 51:49 basis (KCA:the Company).

In January 2004, the Company obtained a National Instrument 43-101 Technical Report compliant gold resource estimate on the Tambor Project for the Company.  There are no material changes to the property since the date of this report.  The Technical Report has been filed in SEDAR.com.  The following is a summary of the Technical Report.

Exploration and Development History

The Tambor Project is located in south-central Guatemala.  Tambor is a metasediment and greenstone hosted, structurally controlled mesothermal lode gold deposit.  Quartz-gold-arsenopyrite mineralization occurs in veins and breccias localized by kink bands in sheared host rocks. The project hosts at least 13 gold-bearing mineral occurrences spread over a 14km by 6km area.

The Tambor property received progressively more-detailed work programs between 2000 and 2003. The bulk of the work was completed by Gold Fields Ltd. who formed a joint venture with the Company in 2001 to explore the property.  The initial exploration program included the establishment of 100 line-kilometers of grid and soil sampling.  A total of 3,958 soil samples were collected over an 11 square kilometer area.  The grid area was also geologically mapped and over 1,400 rocks samples were collected along the 7-kilometer gold trend.

Early work focused on the Bella Vista area, including the Laguna North, Laguna South and JNL targets and on the Tierra Blanca area, all in the western end of the JV property. In the Bella Vista area, 15 hand trenches were excavated on six of the nine known soil anomalies.

During 2002, Gold Fields conducted initial scout drilling on seven areas, mainly on the western end and east end of the JV properties.  Of these seven areas, only the Laguna North area has received follow up drilling. In the final months of 2002, high grade quartz vein hosted mineralization with visible gold was located at Guapinol South.  Hand excavated trenches there returned values up to 10.1m of 31g/t Au in trench GP-5.

In early 2003, Gold Fields made a new high grade discovery 200 m east of the Guapinol South veins in an area called Poza del Coyote.  The first trench on this zone returned a high-grade core of 10.93m at 66.83 g/t Au within a broader lower grade mineralized zone.  An initial ten-hole reverse circulation (RC) drilling program returned high grade intercepts in five holes with moderate-grade intercepts in four additional holes.

After completing the first stage drilling at Poza del Coyote, Gold Fields moved a core drill onto the Guapinol South area and had completed 31 core holes by the end of July 2003.  About half the holes had high grade intercepts, although some were fairly narrow (1.5 to 2.0 meter core length).  The core drill was then moved to Poza del Coyote and the Cliff Zone between there and Coyote.  The results from the cliff zone returned some high grade intercepts.

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In late 2003, the Company commissioned the calculation of a resource estimate on Tambor which was completed in January 2004 (see above).

During February and March 2004, the Company completed a geophysical orientation survey over the Tambor gold project in Guatemala.  The survey was designed to test the suitability of a new 3D Induced Polarization (IP) method to locate additional mineralization.  At total of 18 line km of surveying was completed on the Guapinol and Laguna Norte zones, over drill sections containing known mineralized intercepts.  Initial interpretations suggest that there is a correlation between the known geochemical anomalies and the 3D IP geophysical anomalies.

During late 2006, the Company initiated the planning and development of an underground exploration adit on the Guapinol zone at Tambor.  In early 2007 permits were obtained and underground exploration commenced at the Tambor project by way of an exploration drift to access the high grade gold zones at Guapinol.  The primary objective of the underground work was to provide information on the structural controls, continuity and grade of the high grade gold mineralization and hence the potential to develop additional resources.  In July 2007, the exploration adit intersected the target vein as planned 202.1m into the hill.  The width of the vein exposure in the main tunnel was 3.2m, with a dip of 75o for a true width of 3.09m.  Diamond drill hole PDD-03-033, first reported in the Companys news release dated August 13, 2003, returned 80.5g/t Au over 5.3m from a quartz vein.  The vein was sampled on both sidewalls of the adit and gave results of:

 74.5 g/t Au over 3.40m (includes 0.2m of quartz veining on HW) from the vein on the east tunnel wall (est. true width 3.28m)

 77.7 g/t Au over 2.40m from the vein on the west tunnel wall (est. true width 2.32m)



In order to understand the continuity of the mineralized structure and plunge of the vein, four crosscuts were excavated underground: 2 parallel and to the west of the main drift (CW-1 & 2), and 2 parallel and to the east of the main drift (CE1 & 2).  All four cross cuts intercepted the zone and confirmed the continuity of the shoot and demonstrated the assumed easterly-dipping plunge to the high grade mineralized.

Geology, Mineral Deposits and Resources

Current understanding of the gold mineralization on the Tambor property suggests that it is a classic example of an orogenic (mesothermal) lode gold deposit. Specifically, Tambor is a metasediment and greenstone hosted, structurally controlled mesothermal lode gold deposit. Quartz-gold-arsenopyrite mineralization occurs in veins and breccias localized by kink bands in sheared host rocks. The project hosts at least 13 gold-bearing mineral occurrences spread over a 14km by 6km area.

Gold mineralization is associated with the convergence of the North American and Caribbean plates along major structures which evolved from transpressional to transcurrent movement. Mineralization is post-peak metamorphism.  The gold zones are structurally controlled discordant veins, quartz-crush zones and vein stock works associated with shear zones.

Gold Fields prepared several resource estimates for Tambor JV properties but has not made them public.  The main part of the resource is in the Guapinol South, Cliff and Poza del Coyote area.

The NI43-101 compliant gold resource estimate for the Tambor Gold Project.  Tambor contains 216,000 ounces of gold in inferred resources and 57,800 ounces in indicated resources.  The definitions of the measured, indicated and inferred resources conform to CIM Guidelines as defined in CIM Standards on the Mineral Resources and Reserves Definitions and Guidelines, dated August 20, 2000.

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The resource estimate is tabulated below:

Cautionary Note to U.S. Investors concerning estimates of Indicated Resources

This section uses the term indicated resources. We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.



|Tambor: Indicated Resource Estimate
|-----------------------------------
|Area                               
|Guapinol South Cliff Zone          
|Poza del Coyote                    
|Total                              



Cautionary Note to U.S. Investors concerning estimates of Inferred Resources

This section uses the term inferred resources. We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it.  Inferred resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category.  Under Canadian rules estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies.  U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.



|Tambor: Inferred Resource Estimate
|----------------------------------
|Area                              
|Guapinol South Cliff Zone         
|Poza del Coyote                   
|Laguna North                      
|Total                             



To assess the mineable continuity of a deposit and hence how far resources may reasonably be projected, the estimate used indicator variograms at an approximate mining cutoff.  Using reasonable economic criteria in effect when the resource estimate was prepared in late 2003 of:  a gold price of $250 per ounce; gold recovery of 70% for a heap leach operation; and an operating cost of $4.00 per tonne, results in a calculated economic cutoff grade of 0.5 g/t Au.  For purposes of the initial resource assessment, a cutoff grade of 0.3 g/t Au was selected.



- 13 -





A cutoff grade of 0.3 g/t Au is considered appropriate for resource estimation because of the demonstrated continuity of gold mineralization at this grade.  Material included in the resource having a grade between 0.3 g/t Au and 0.5 g/t Au can be considered internal dilution that may need to be mined with the ore.  The average grade of the resource estimate at the 0.3 g/t Au cutoff is 2.83 g/t Au, well above the economic cutoff grade. It should be noted that selection of a final cutoff for the deposit will require detailed metallurgical testing.

Core drilling in 2003 defined a NI43-101 resource estimate of 57,800 ounces gold in the indicated category, and 216,200 ounces gold in the inferred category (see the Companys press release dated December 10, 2003).  This resource was established within a 1km strike length of a soil anomaly that is consistent for over 14 km.

Sample Collection, Preparation and Analysis

A rigorous Quality Assurance/Quality Control approach was adopted by Goldfields throughout the programme and all data supplied to the Company was reviewed by a Qualified Person according to Ni 43-101 to ensure reliable results. Samples were prepared at Rocky Mountain Geochemical/BSi Inspectorate Laboratories in Guatemala City. BSi is a subsidiary of Inspectorate America Corporation, a ISO 9002-certified laboratory. Rock samples were crushed to minus 10 mesh and a 300 gramme sub-sample was pulverized to minus 200 mesh. These Pulps were flown to Reno, Nevada for analayis at Rocky Mountains geochemical laboratory. Gold was assyed by a 30g Fire Assay/Atomic Absorption and for 30 additional elements by aqua regia ICP. All rock samples returning >1 g/t Au were subsequaently re-assayed by 30 gramme fire assay with gravimetric finish. Sample standards, blanks and duplicates account for approximately 10 percent of samples which were inserted into the sample stream, and duplicate samples were also sent to a second laboratory for gold check analysis. Goldfields also completed metallic sieve analysis on selected mineralized intervals from Guapinol South drilling and results indicated that normal for assays are good indicators of the total gold content of the samples.



Future Development

In February 2008, the Company announced the results of metallurgical testwork performed on a 90kg sample collected from underground workings.  The results were very encouraging and confirm the free milling, coarse grained nature of the gold at Tambor and its amenability to gravity pre-concentration as the principal method of recovery, followed by either cyanidation or flotation.  The sample head grade ranged from 36 g/t to 40.7 g/t Au.

In June 2008, the Company granted to KCA the right to develop, and earn an interest in, the Tambor Project.  The agreement calls for an initial 150 tonne per day operation from both underground and surface pits, exploiting gold mineralization hosted by a series of high-grade mesothermal quartz veins and stockworks.  Metallurgical test work by both Gold Fields and the Company indicates that most of the gold is coarse and free milling, and recoveries of up to 66 percent can be achieved using gravity concentration alone.

KCA is re-fabricating a modular processing plant and modular laboratory at its Reno, Nevada facility. The plant has a target capacity of 150 tonnes per day (52,500 tonnes per year) and is being assembled on a set of modular units mounted on 40-foot skids.  To date, KCA has purchased the skids, a ballmill and the flotation cells.  KCA expects the mill to be completed and wet-tested in Reno to facilitate rapid installation on site.

KCA has fabricated a 200 tonnes per day (70,000 tonnes per year) flotation plant and a modular laboratory at its Reno, Nevada facility.  KCA expects the mill to be completed and wet-tested in Reno to facilitate rapid installation on site.

In order to obtain the mining permits needed to develop Tambor, KCA submitted an environmental impact assessment (EIA) in June 2010 which includes the mining and development plan.  Once the Ministry of Environment and Mine has approved the EIA, a mining permit application will be submitted.

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There has been no mining surface development conducted at Tambor other than surface exploration trenching of soil anomalies.

2.

Holly-Banderas Projects

The Company holds a 100% interest in the Holly-Banderas Projects which consists of one granted exploration concessions and applications for 19 exploration concessions located in eastern Guatemala, as set out in the following map:

[radius20f2010004.jpg]



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The concessions are described as follows:



|Concession Name | Size (Hectares) | Expiry Date / Application Date                                                            
|--------------- | --------------- | ------------------------------------------------------------------------------------------
|                |                 |                                                                                           
|El Dorado       | 9,497.63        | Expires July 5, 2011; An extension application
Will be submitted prior to the expiry date.
|Joyita          | 1,364.32        | Application for reduced area submitted                                                    
|CECI            | 3,062.15        | Application submitted February 3, 2010                                                    
|Marisol I       | 4,500.00        | Application submitted February 3, 2010                                                    
|Marisol II      | 2,636.59        | Application submitted February 3, 2010                                                    
|Cirilo I        | 1,350.00        | Application submitted March 18, 2010                                                      
|Cirilo II       | 801.17          | Application submitted March 18, 2010                                                      
|Salvador I      | 6,400.00        | Application submitted March 18, 2010                                                      
|Salvador II     | 6,000.00        | Application submitted May 12, 2010                                                        
|Frida           | 7,133.92        | Application submitted May 12, 2010                                                        
|Belen           | 7,371.51        | Application submitted May 12, 2010                                                        
|Paola           | 9,956.10        | Application submitted May 12, 2010                                                        
|El Caminero     | 9,322.38        | Application submitted May 12, 2010                                                        
|Eliza           | 65,581.63       | Application submitted May 27, 2010                                                        
|Carolina        | 9,992.2         | Application submitted June 11, 2010                                                       
|Conchita        | 8,579.55        | Application submitted June 11, 2010                                                       
|La Pena         | 8,110.43        | Application submitted June 11, 2010                                                       
|Karen           | 8,848.27        | Application submitted June 11, 2010                                                       
|Juanita         | 5,167.80        | Application submitted July 13, 2010                                                       
|Las Pomas       | 6,154.30        | Application submitted February 23, 2011                                                   
|                | 181,829.97      |                                                                                           

In April 2010, the Company commenced a reactivation of its Holly and Banderas (HB) projects in eastern Guatemala.  The Company discovered and drilled these gold-silver projects between 2002 and 2004 when gold and silver spot prices were close to their record lows.  However, recent discoveries in the region underscore the potential of the district and have led the Companys technical team to review the geology and the results obtained by the previous work.  Upon review, and with the present gold/silver price in mind, management feels that these projects warrant a significant investment in further drilling.

Work at HB resumed with a review of the regional data base of stream sediment sampling and prospecting that the Company has built over several years in Guatemala.  This review has led to several additional concession applications being presented to the Ministry of Mines covering strong silver-lead-zinc anomalies.  The Company is waiting for the granting of these concessions to do follow-up work on that ground.

Recent highlights of Radius work include:

•

Delineation of an impressive zone of high-level chalcedonic silica currently traced for over 400m along strike and over 100m wide locally within the Zapote trend of the HB property.  Initial sampling of outcrop at Zapote has returned gold values from a low of 0.50 to a high of over 6.0 g/t Au.  Trenching and extensive outcrop sampling are presently underway.



•

Identification of a high grade zone on the north side of the Holly ridge.  Previous prospecting and sampling in this area discovered quartz boulders believed to be float, grading from just under 1 g/t Au up to 112 g/t Au and over 5,600 g/t Ag.  Trenching in the area has revealed texturally-similar quartz veins in situ in the schists directly below the boulders.  This is a significant find as little work has previously been done on the north side of the Jocotan fault, despite the presence of large, coherent, untested gold in soil anomalies there.





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•

Completion of 14 diamond drill holes into the Pyramid Hill and M28 zones.  Drill results are disappointing (see below).  However, a structural study of drill core and outcrop by SRK confirms a strong northwest trending gold bearing fault zone with a strike of over 3km that has been tested only at very high levels.  The study results indicate that Radius work has been focused above the productive zone of the epithermal system.  Additional drilling is being planned to target substantially deeper levels than any previous work at HB.



Zapote Zone



The Zapote zone is southwest of, and probably parallel to the M28 / Pyramid Hill zones.  At surface the zone is an impressive, steeply west-dipping vein exposed with a true thickness of between 5 to 10m, although the orientation is still uncertain.  The distribution of float, subcrop, and small veinlet orientation suggests the presence of another mineralized vein with a different orientation to the one described above, although more work is necessary to confirm that.



Trenching is underway, and all samples collected to date are highly anomalous in Au (i.e. in the ppm range).  The first 23 samples collected returned an average grade of 2.01 g/t Au, ranging from 0.50 to 6.0 g/t Au.  Systematic sampling and trenching should help define the true width and nature of the vein(s).



Zapote appears to be high in a hydrothermal system: massive chalcedony dominates in outcrop.  Radius geologists believe that there is potential at depth for better grades, which could present a very attractive drill target if the vein stays as thick as it appears to be at surface.



The Pino Zone



A data review by Radius highlighted 17 historic grab samples of electrum-bearing epithermal vein quartz collected from the Pino zone, a low sulphidation epithermal quartz vein hosted by schists on the northwestern side of the HB project.  Gold assay results from the 17 samples ranged from just under 1 g/t Au to 112 g/t Au, with an average of 19.8 g/t Au.  Silver values range from trace to 7,091.8 g/t Ag.



Radius historic exploration in the area focused on the younger volcanic rocks to the south of the major Jocotan fault.  The grab samples reported below were collected from the schists on the northern side of the fault, and were previously interpreted as transported float rocks not in situ.  Radius geologists have trenched below the float samples and encountered similar material hosted by the schists, suggesting that the high grade float reflects the presence of veins in the schists and is not transported material.  A table of the most significant historic grab sample results is given below:



| | Sample No. | Au (g/t) fire assay | Ag (g/t)
| | ---------- | ------------------- | --------
| | 18258      | 112.41              | 5,600.0 
| | 18256      | 79.28               | 7,091.8 
| | 18257      | 33.75               | 1,030.0 
| | 12296      | 27.98               | 1,423.4 
| | 18253      | 19.96               | 237.3   
| | 11093      | 14.38               | 880.7   
| | 18255      | 11.18               | 401.1   
| | 16067      | 7.67                | 258.6   
| | 18286      | 6.51                | 201.3   
| | 18254      | 4.46                | 97.0    
| | 18264      | 3.64                | 14.7    
| | 18289      | 3.15                | 35.9    
| | 16083      | 3.90                | 10.4    
| | 11092      | 3.49                | 18.8    
| | 17018      | 1.78                | Tr      
| | 17038      | 1.30                | Tr      
| | 17023      | 0.96                | 9.4     



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M28 / Pyramid Hill Drilling

Forty-nine holes have been drilled at Banderas since 2002 including 6 RC holes.  Most drilling has targeted the M28 and Pyramid Hill zones, part of a 3 kilometre long, northwest-southeast-trending structural corridor that hosts zones of gold/silver-bearing quartz veins, vein breccias and quartz vein stockwork zones.  A comprehensive in-house review of Radius full data set on the HB project is currently underway, and SRK Consulting (Canada) Inc. has been commissioned to complete a structural geological study of the project.

The initial findings of both studies, combined with the findings of a TerraSpec study on the alteration minerals present at surface and in core samples at HB, suggest that Radius drilling is still testing too shallow in the epithermal system and has not reached what would be termed the productive horizon where economic gold and silver grades would be expected to occur over mineable widths.  The work is indicating that drilling needs to target between 300-700m vertically below the paleo water table.  Interestingly, RC drill hole BRC04-024 cut an argentite-bearing quartz vein over 1.5m core length which graded 69.97 g/t Au + 516 g/t Ag, and is both the highest grade and deepest drill intersection on the Banderas property.

Consequently, Radius has stopped drilling at HB until the full data review is complete.  Management currently anticipates that the project review will result in a recommendation for a major drill program to commence later in 2011 or early 2012.



| | Hole*   | From (m) | To (m) | Width (m) | Au g/t | Ag g/t
| | ------- | -------- | ------ | --------- | ------ | ------
| | 10-008  | 73.43    | 77.03  | 3.60      | 0.84   | 12.0  
| | 10-009  | NSV**    | -      | -         | -      | -     
| | 10-010  | NSV      | -      | -         | -      | -     
| | 10-010A | NSV      | -      | -         | -      | -     
| | 10-011  | NSV      | -      | -         | -      | -     
| | 10-012  | 192.32   | 193.60 | 1.28      | 0.32   | 36.6  
| | 10-013  | 61.53    | 62.53  | 1.00      | 38.35  | 159.9 
| | 10-013  | 68.75    | 75.30  | 6.55      | 0.56   | 239.8 
| | incl.   | 68.75    | 69.75  | 1.00      | 1.34   | 95.4  
| | 10-014  | 25.08    | 27.43  | 2.35      | 1.46   | 14.0  
| | 10-014  | 74.00    | 75.10  | 1.10      | 0.82   | 48.1  
| | 10-014  | 136.64   | 137.64 | 1.00      | 1.23   | 37.3  
| | 10-014  | 179.65   | 181.00 | 1.35      | 1.81   | 20.9  

*All holes carry the prefix BDD **NSV=No Significant Values (<250 ppb Au, <10 ppm Ag)

All work is being funded from the Companys existing cash resources, and the work is supervised by the Companys Exploration Manager.

No Resource or Reserve has been defined within the Holly - Banderas Projects.

- 18 -



3.

Geothermal Licences

After revisiting its hot spring database for Guatemala, the Company submitted in June 2010 applications for Provisional Use Permits for a number of active geothermal systems covering approximately 154,000 hectares that may have potential as geothermal resources for power generation.

Power generation in Guatemala is currently comprised of hydroelectric power stations, steam turbines, gas turbines, diesel generators and geothermal power stations, with geothermal power contributing less than 3% of the total power generated.  According to a recent study by the Argentine consultancy, Montamat, which evaluated electricity prices in 13 Latin American countries, prices in Guatemala are amongst the highest in Latin America at roughly $0.17/kwh, surpassed only by the Dominican Republic and Panama.  At the same time, the Guatemalan government is forecasting that electric power demand is expected to reach a compounded annual growth rate over 8.0% to 2015.  Guatemala must increase its installed capacity to meet the projected demand growth.

A study published in International Geothermal Development in 2003 noted that geothermal resources in Guatemala are estimated at 800 to 4,000 megawatts (MW) capacity, but most likely around 1,000MW.  In 2003 the countrys installed generating capacity was 1,700MW suggesting that geothermal energy could contribute significantly to securing the countrys future power requirements.  By 2007, Guatemala had succeeded in harnessing 46 MW of geothermal energy in the fields of Zunil and Amatitlán, both owned by the American geothermal technology company Ormat Technologies.  Feasibility studies are being carried out on 3 other geothermal fields.

The Company has agreed to option its portfolio of geothermal concessions in Guatemala to Molten Power Corp. (Molten), a private Vancouver based geothermal power development company.  Molten will be the operator of the geothermal exploration project.  Under the terms of the option, and subject to satisfactory technical and legal due diligence by Molten, Molten shall have the exclusive right to earn a 100% interest in the concessions from the Company by issuing 10 shares for each hectare of ground for which a Provisional Use Permit is issued to the Company by the Ministry of Energy, for a maximum of approximately 1.54 million shares.  The Permits are expected to be received during the summer of 2011.

Radius also retains a two percent (2%) royalty of the gross revenue for the sale of geothermal electric power from the first power generation facility built on each geothermal licence.  Molten may, at its discretion, purchase at any time prior to the commencement of the commercial operation date one half (1/2) of the 2% royalty from any geothermal license for the sum of CAD$30,000/MW nameplate capacity of the first power generation facility built on each geothermal licence.  Any expansion of the nameplate capacity on any of the licenses is not subject to royalty payments.

Nicaragua

In Nicaragua, concessions are granted for 25 years.  If the Company decides to keep its properties in good standing the Company must pay yearly filing fees as follows:



|Year    | US$ per hectare per year
|------- | ------------------------
|        |                         
|1       | $0.25                   
|2       | $0.75                   
|3, 4    | $1.50                   
|5, 6    | $3.00                   
|7, 8    | $4.00                   
|9, 10   | $8.00                   
|11 - 25 | $12.00                  

- 19 -



One-half of each yearly payment must be paid in January and the second half in July.  The Company must also file annual exploration reports.

The Company began exploring in Nicaragua in 2003.  In addition to discovering a number of exploration projects with potential to host gold resources; specifically the Trebol, Pavon and San Pedro exploration properties (the Properties), the Companys technical team also compiled an extensive regional exploration data base covering much of the Central American country (the Regional Exploration Projects).

In June 2009, the Company granted to B2Gold Corp. (B2Gold) an option to acquire an interest in the Companys entire Nicaragua mineral property portfolio.

B2Golds Options

B2Gold has been granted an option from the Company to acquire a 60% interest in the Trebol, Pavon and San Pedro properties in Nicaragua by spending a total of US$4 million on exploration on any one or more of the properties within 4 years from the date of the agreement.  When B2Gold has spent the US$4 million, it will own a 60% interest in all of the properties and a joint venture will be formed whereby each party will contribute its pro-rated share of the exploration costs.

In addition, B2Gold has the option to review the conceptual gold resource outlined by Meridian Gold on the Pavon vein system.  If B2Gold feels that there is potential to mine any or all of the resource, it will have an option to put the property into production within a time frame of 3 years.  After production is achieved, ownership of the Pavon resource area will be transferred 100% to B2Gold, and the Company will receive 40% of the net cash flow generated from the operation.

The Company has also agreed to provide its regional exploration data base to B2Gold, on an exclusive basis.  If as a result of reviewing the regional data, B2Gold identifies a prospect or project for acquisition and exploration on ground that is not covered by an existing concession, the Company will apply for a concession over the area and that area will then be designated a project area.

B2Gold is currently exploring the Trebol project and has been successful in expanding the extent of known gold mineralization there.  At the Pavon project, B2Gold is investigating the potential for gold production.

1.

Trébol Property

The Trébol Property is comprised of three granted exploration concessions located within the Region Autonoma Atlantico Norte (RAAN) in north-eastern Nicaragua, as set out in the following map:



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[radius20f2010005.jpg]

The concessions are described as follows:



|Name       | Size (Hectares) | Expiry Date   
|---------- | --------------- | --------------
|           |                 |               
|La Amapola | 13,809.90       | April 19, 2032
|El Trébol  | 28,383.17       | April 19, 2032
|La Flor    | 15,504.91       | April 19, 2032
|           | 57,697.98       |               



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The Trebol Project located in north-eastern Nicaragua is a low sulphidation epithermal hot springs district consisting of numerous strong gold anomalies spanning over 14 km of strike length.  Gold is associated with vein and tabular replacement style mineralization in volcanic rocks found in a series of low-lying, heavily forested hills.  In addition to the original Cerro Domingo target partially drill tested by Radius in 2008, B2Gold identified three new drill targets located along the 6km long northeast trending corridor of mineralized volcanic rock.  The targets are comprised of thick tabular zones of low sulfidation epithermal vein, hydrothermal breccia, and replaced volcanic horizons within a Tertiary volcanic sequence.  These zones show good grade continuity for hundreds of meters of strike length.  The three principal areas are Cerro Domingo, the Paola Zone, and Trebol North.

B2Gold began a diamond drilling program at Trebol in January 2011, focusing on the three zones of low sulfidation gold occurrences in altered volcanic rocks covering a strike length of over five kilometres (km).  Positive assay results have confirmed the Trebol Propertys potential to host, at or near surface, shallow dipping gold mineralization that could potentially be mined with very low strip ratios.



Mineralization throughout the Trebol area is characterized by shallow to moderately dipping tabular shaped vein and hydrothermal breccia zones within andesite.  Outcropping horizons of the siliceous material have yielded impressive gold values in the trenching and the drilling has shown that many of these zones extend up to 100 metres down dip and show continuity over distances of several hundreds of metres of strike length.  Due to the shallow dips associated with the gold mineralization, most of mineralization is near surface and mostly oxidized.



The three zones drilled to date are Cerro Domingo, the Paola Zone, and the Trebol North Zone.  Drill holes contain up to 13.08 g/t gold over 7.00 metres in hole TR-11-047.  Drilling by Radius Gold in 2008 first located the Cerro Domingo Zone and this has been confirmed and expanded in the recent drilling.  The 2011 drilling campaign cut mineralization in the Cerro Domingo, Paola and Trebol North Zones with drill holes containing up to 1.96 g/t gold over 28.55 metres in hole TR-11-014 in the Cerro Domingo Zone, up to 8.86 g/t gold over 7.75 metres in hole TR-11-028 in the Paola Zone and up to 13.08 g/t gold over 7.00 metres in hole TR-11-047 in the Trebol North Zone.  Drill intervals are highlighted below.



B2Gold Drill Holes



|Zone          | Drill Hole  | From
(metres) | To (metres) | Interval (metres) | Gold
(g/t) | Gold
(g/t capped at 25 g/t)
|------------- | ----------- | ------------- | ----------- | ----------------- | ---------- | ---------------------------
|Cerro Domingo | TR-11-011   | 3.40          | 11.27       | 7.87              | 3.14       | 2.25                       
|              | including   | 5.45          | 5.85        | 0.40              | 42.38      | 25.00                      
|              | TR-11-014   | 4.35          | 32.90       | 28.55             | 1.96       | 1.96                       
|              | including   | 10.60         | 15.90       | 5.30              | 5.66       | 5.66                       
|              | and         | 36.80         | 44.60       | 7.80              | 0.95       | 0.95                       
|              | TR-11-015   | 48.60         | 65.36       | 16.76             | 0.86       | 0.86                       
|              | including   | 48.60         | 53.11       | 4.51              | 1.36       | 1.36                       
|              | TR-11-017   | 4.57          | 22.00       | 17.43             | 0.82       | 0.82                       
|              | *TR-11-019  | 0.75          | 16.50       | 15.75             | 2.43       | 2.43                       
|              | including   | 4.50          | 9.00        | 4.50              | 4.10       | 4.10                       
|              | TR-11-020   | 0.00          | 10.00       | 10.00             | 1.65       | 1.65                       
|              | TR-11-021   | 0.50          | 22.50       | 22.00             | 1.58       | 1.58                       
|              | TR-11-022   | 15.20         | 22.76       | 7.56              | 1.31       | 1.31                       
|Paola Zone    | TR-11-027   | 28.85         | 36.50       | 7.65              | 0.94       | 0.94                       
|              | TR-11-028   | 4.00          | 11.75       | 7.75              | 8.86       | 7.77                       
|              | including   | 6.75          | 10.75       | 4.00              | 15.82      | 13.70                      
|              | TR-11-029   | 4.50          | 16.15       | 11.65             | 3.06       | 3.06                       
|              | including   | 7.50          | 10.50       | 3.00              | 5.96       | 5.96                       
|              | TR-11-031   | 36.50         | 40.20       | 3.70              | 3.63       | 3.63                       
|              | TR-11-036   | 29.00         | 36.00       | 7.00              | 1.76       | 1.76                       
|              | TR-11-037   | 30.60         | 37.00       | 6.40              | 3.34       | 3.34                       
|              | TR-11-038   | 7.00          | 15.70       | 8.70              | 2.91       | 2.91                       
|              | **TR-11-039 | 9.40          | 12.20       | 2.80              | 1.08       | 1.08                       
|              | and         | 16.70         | 18.20       | 1.50              | 12.24      | 12.24                      
|Trebol North  | *TR-11-047  | 14.50         | 25.91       | 11.41             | 8.39       | 5.89                       
|              | including   | 14.50         | 21.50       | 7.00              | 13.08      | 9.01                       



* Indicates some intervals may have had poor recoveries

**Re-sassay pending due to low standard failure



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Previous Radius Gold Drill Holes



|Zone          | Drill Hole   | From
(metres) | To (metres) | Interval (metres) | Gold
(g/t) | Gold
(g/t capped at 25 g/t)
|------------- | ------------ | ------------- | ----------- | ----------------- | ---------- | ---------------------------
|Cerro Domingo | *TRDH-08-001 | 12.19         | 38.25       | 26.06             | 1.36       | 1.36                       
|              | TRDH-08-005  | 0.00          | 11.25       | 11.25             | 1.65       | 1.65                       
|              | and          | 16.76         | 23.20       | 6.44              | 6.36       | 6.36                       
|              | including    | 18.75         | 22.56       | 3.81              | 9.24       | 9.24                       
|              | TRDH-08-008  | 58.64         | 59.59       | 0.95              | 3.93       | 3.93                       
|              | and          | 68.08         | 69.00       | 0.92              | 11.44      | 11.44                      
|              | TRDH-08-02A  | 6.09          | 16.76       | 10.67             | 2.23       | 2.23                       
|              | TRDH-08-004  | 3.30          | 19.81       | 16.51             | 1.80       | 1.80                       
|              | TRDH-08-006  | 2.15          | 7.97        | 5.82              | 1.02       | 1.02                       



* Indicates some intervals may have had poor recoveries



The drill campaign at Trebol has successfully identified several areas that will require additional drilling to define the extent of the mineralization. The mineralization remains open to the north and south and in the covered areas between the three zones.  In addition, B2Golds geologists continue to discover more low sulfidation epithermal gold, outcrop and float occurrences within the concession that contain plus 1.00 g/t gold assays in grab and chip samples over 11.5 km of the 22 km total strike length of the trend.  In addition, a parallel zone has been located three km east of Cerro Domingo where preliminary grab sampling of similar siliceous material has yielded values up to 3.00 g/t gold.



Exploration is ongoing at Trebol and will continue as B2Gold geologists compile the recent drill data and plan the next round of trenching and drilling.

No Resource or Reserve has been defined within the Trebol Property.

2.

Pavon (Natividad) Project

The Pavon gold project is located in central Nicaragua, a 5 hour drive from Managua and about 1 hour from the town of Waslala.  It outcrops on a main road and access to most parts of the project area is possible by foot or on horse back.  It is located in a hilly agricultural region largely given over to cattle grazing.  The original forest cover has been cut down over many years by slash and burn farmers.  The property consists of one granted exploration concession, more particularly described as follows:



|Name      | Size (Hectares) | Expiry Date      
|--------- | --------------- | -----------------
|          |                 |                  
|Natividad | 1,301.10        | February 11, 2029

The Pavon low sulphidation system in central Nicaragua was discovered by the Company in 2003.  Several veins occurring over a strike length of 6 km have been explored with 74 trenches and 71 diamond drill holes totalling approximately 10,700 m.  Historic results include up to 9.1 g/t Au over 14.2 m in Trench 1 and 10.3 g/t Au over 16.8 m in PADH-005 in the north zone and up to 6.7 g/t Au over 11 m in PADH-01 in the south zone (see the Companys news releases dated Sept. 16, 2004 and March 17, 2004).

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B2Gold completed an extensive trenching program in 2010 and are now evaluating the potential for production from near surface high grade zones in the epithermal veining discovered by the Company (see Radiuss news releases from 2003 and 2004).

No Resource or Reserve has been defined within the Pavon Project.

3.

San Pedro Property

The San Pedro Property is comprised of applications for two granted exploration concessions located in the east-central Nicaragua, more particularly described as follows:



|Name     | Size (Hectares) | Expiry Date      
|-------- | --------------- | -----------------
|         |                 |                  
|San Jose | 12,474.57       | November 25, 2035
|Tatiana  | 13,657.00       | July 22, 2035    
|         | 26,131.57       |                  

Access to the Property is via truck from Copalar to San Pedro (2 hrs), boat to La Estrelia (20mins), followed by a 5km horse ride to the camp, 5km.  From the camp it is possible to walk to all of the showings in the northwest of the San Pedro project, which cover a 2km by 1.5km area.  In the dry season you can drive to about 1km west of the zone.

No Resource or Reserve has been defined within the San Pedro Property.

Mexico

Tlacolula Property

The Tlacolula Property consists of one granted exploration concession, described as follows:



|Name                  | Size (Hectares) | Expiry Date      
|--------------------- | --------------- | -----------------
|                      |                 |                  
|Reduccion Tlacolula 2 | 12,642          | November 21, 2057

The Company discovered silver mineralization in 2005 following a regional stream geochemical survey in various areas of the state of Oaxaca.  An initial trenching program on the Tlacolula property defined a broad low grade silver/gold anomaly associated with opaline silica, indicating a high level system.  In late 2009, the Company optioned the Tlacolula silver project to Fortuna Silver Mines Inc. (TSX-FVI) (Fortuna).  The Company and Fortuna have certain directors in common.

Fortuna can earn a 60% interest by spending US$2-million on exploration, which includes a commitment to drill 1,500m within 3 years, and making staged annual payments totalling US$250,000 cash and US$250,000 in common shares over 4 years.  The 12,642 hectare property is located 14km east-southeast of the city of Oaxaca and 30 km northeast of Fortunas 100%-owned San Jose silver-gold development project.  To date, the Company has received US$50,000 cash and 14,569 shares of Fortuna.

No Resource or Reserve has been defined within the Tlacolula Property.

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Canada  Yukon Territory

In the Yukon Territory, claims are granted for an initial period of one year and are extendable by filing assessment work or paying cash in lieu to the Yukon government equal to $105 per claim.  In 2009 and 2010, the Company acquired interests in various areas by staking and option agreements and has in turn optioned out portions in return for equity positions and carried interests in the properties.

1.

Scarlet Property, Yukon

In 2010, the Company acquired by staking 550 claims in the Mayo Mining District known as the Scarlet Property.  The claims are in two blocks, Scarlet West and Scarlet East, covering prospective stratigraphy along the northern and southern edges of ATAC Resources claim block where ATAC has discovered a cluster of Carlin-type gold deposits and occurrences.  Mineralization in their Osiris Target appears to share many of the characteristics of Carlin-type gold deposits, including similar alteration assemblages and association with the low temperature arsenic sulphides, realgar and orpiment.  Host rocks are two, 150m to 250m thick limestone debris flow and turbidite units, referred to as the Osiris and Isis Horizons, which occur within basinal silty mudstones.  ATACs drilling at Osiris returned a highlight of 31.13 m @ 9.26 g/t Au approximately 10km northwest of Radius Scarlet East claim block.

Scarlet East lies on the southeastern end of ATACs claims and potentially covers the extension of the structure controlling the mineralization.  The Scarlet West claim block lies about 30km west of Osiris, roughly midway between ATACs Osiris and Ariana targets.

The Company will target both claim blocks with geochemical surveys (stream sediment, soil and rock sampling), airborne geophysics (magnetic and radiometrics) and geological mapping as early as possible in the 2011 summer season.  The first stage of exploration is expected to take approximately 6 weeks.

All work is being funded from the Companys existing cash resources, and the work is supervised by the Companys Exploration Manager.

No Resource or Reserve has been defined within the Scarlet Property.



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2.

Ten Mile Creek Property

During 2009, the Company acquired interests in a large land package at the head waters of several active placer gold producing creeks known as the Ten Mile Creek placer camp in the Yukon.  Certain of the claims are owned 100% by the Company and the balance have been optioned from a local prospector,

Subsequently, the Company optioned the property to Solomon Resources Inc. (Solomon).  Solomon can earn a 51% interest in the property by spending $2.5-million on exploration and making staged cash and share payments totalling $500,000 cash and 1,000,000 shares over three years, of which the Company has received $100,000 and 600,000 shares to date.

Limited historic hard rock exploration on the claims has defined significant gold/arsenic mineralization in soils and rock, hosted for the most part by strongly altered intrusive rocks and minor schists.  Soil sampling has defined five broad northwesterly trending gold/arsenic anomalies with strike lengths of up to 1.6 km.  Limited trenching of these anomalies has produced results of 25m @ 1.6g/t Au and 19m @ 1.0 g/t Au.  The location, geology, geochemistry and trench results compare favourably with recent significant gold discoveries in the area.

In August 2010, Solomon announced that it had completed the first phase of its 2010 field exploration program on the property.  That work consisted of soil geochemical surveys, geophysical surveys and mechanical trenching.  The objective of their program was to verify the results reported by former operators and refine diamond drill targets for drilling this year.

Solomon announced in October 2010 that it has completed the 2010 drilling program for this project.  Six diamond drill holes were completed with a total of 800 metres of core recovered.  Drill results were announced in late November 2010, with Solomon concluding that gold mineralization discovered to date at the Ten Mile Creek project appears to be associated with late-stage faults and fracture sets crosscutting regional foliation.  On the southernmost claims, arsenic values in-soil show a close correlation with higher gold values, while elsewhere on the property, arsenic values in-soil appear to be more broadly dispersed as haloes around higher gold values.  Solomons drilling also revealed more post-tectonic textures with mylonitization, crosscutting subidioblastic textures and milled pyrite with graphitic inclusions.

No Resource or Reserve has been defined within the Ten Mile Creek Property.

3.

Snowcap Gold Project

Wesgold Minerals Inc. (Wesgold), which recently listed on the TSX Venture Exchange, has an option to earn a 60% interest in the Companys 100% owned Snowcap project in central Yukon, in consideration of issuing to the Company a total of 1,000,000 Wesgold common shares and incurring exploration expenditures of $1,000,000, over a four-year period.  The Company has received 600,000 Wesgold shares to date.  The Company and Wesgold have certain directors and officers in common.

In 2009, Wesgold completed airborne geophysics and soil geochemistry, which resulted in the identification of anomalous gold and mercury values in two of the alteration zones coincident with aeromagnetic lows over the volcaniclastic basins.  In late 2010, Wesgold completed four diamond drill holes totaling 420 meters at one of the alteration zones near the southern part of the Snowcap project to test for the source of the anomalous mercury and gold values in soil in an area of no outcrop.  The drill holes intersected variably altered volcanic and epiclastic rocks with irregular quartz, carbonate, and pyrite veining.

- 26 -





While assay results did not return gold values of economic interest, cinnabar mineralization and anomalous concentrations of antimony, arsenic, and mercury were encountered.  These pathfinder elements are considered by Wesgold management to be a highly favourable indicator of epithermal precious metal mineralization in this geological environment.  The source of the anomalous gold values in soil remains unexplained, and Wesgold is integrating the geological, geochemical and geophysical data to plan for more exploration work in 2011.

No Resource or Reserve has been defined within the Snowcap Gold Project.

4.

Rivier Property

In July 2010, the Company acquired interests in a total of 116 claims in the Watson Lake Mining District, Yukon known as the Rivier Property.  The Company acquired 16 claims by staking, and was granted an option to earn a 100% interest in 100 claims.  Subsequently, the Company optioned a 60% interest in the Property to Emerick Resources Corp. (TSXV-ERC) (Emerick) in consideration of Emerick spending $1.0 million on exploration of the Property and issuing a total of 1.0 million shares to the Company over a period of three years, all subject to Emerick obtaining regulatory approval to the agreement.  The Company and Emerick have certain directors and officers in common.

The geological setting and anomalous geochemical values found at the Rivier Property are consistent with the possible presence of intrusion related and/or Listwanite hosted gold deposits.  The Property covers an area of roughly 4km by 9km over a series of anomalous gold + arsenic in stream sediment samples taken from streams that drain a Mid Cretaceous granitoid pluton, intruding siliciclastics of the Nasina subterrane and ultramafic rocks of the Slide Mountain Terrane.

Emerick plans to follow up last years soil sampling completed by the Company with detailed mapping, additional soil and rock geochemical sampling and regional geophysics, with the aim of identifying drill targets.

No Resource or Reserve has been defined within the Rivier Property.

Canada  Yukon Territory / USA - Alaska

Sixty Mile Project

Through claim staking and negotiating a number of option deals with local placer gold miners and mineral claim holders in 2009 and early 2010, the Company has acquired interests in 945 claims in the Sixty Mile area of the Yukon Territory, Canada, as set out in the following map:



- 27 -





[radius20f2010006.jpg]

As well, the Company located in April 2010 and recorded in May 2010, 30 mineral claims which are situate in western central Alaska adjacent to the Yukon Sixty Mile claim block and which form part of the Sixty Mile Project.  The Alaska claims are located approximately 80 km due west of Dawson, Yukon adjacent to the Alaska - Yukon border.

The Company has acquired a large land position covering the headwaters and drainage areas of the prolific Sixty Mile Gold Camp of the Yukon Territory which reportedly produced over 500,000 oz of gold from the creeks that drain the Companys holdings.  The hard rock source for this placer gold has never been determined.  The regional geology, geochemical signature and structural setting have strong similarities to the setting of International Tower Hills (TSX-V: ITH.V) major Livengood gold discovery in Alaska, a multi-million ounce gold discovery driven by the search for the source of placer gold in that area.

Historic soil sampling by Kennecott in the 1990s defined several arsenic/gold anomalies, including a coherent 1.5 km x 2 km-diameter, gold-arsenic soil anomaly on the south side of lower Miller Creek.  Mechanized trenching at the accessible southern edge of this anomaly revealed easterly striking sheeted mesothermal quartz veins returning 1.6 g/t gold over a 13 meter interval, similar in style to that found in other metasediment-hosted granite-related porphyry gold systems within the Tintina Gold Belt.

- 28 -







Radius announced in November 2010 the results of its 2010 exploration program which had two objectives:  (i) to discover the source of the placer gold mined from the creeks draining the hillsides of border ridge, an area of over 100 square kilometres (the Thrust Fault Zone), and (ii) to test the strongly altered volcanic rocks that are known to exist in the Sixty Mile valley (the Graben Fault Zone) for epithermal gold potential.  After conducting in the summer of 2010, airborne geophysics, geological mapping and extensive soil sampling programs, a preliminary drill program of seven holes, for a total of 1,607m, tested the two target areas.  Five holes (DDH10-1 to 5) were drilled into the meta-sediments.  Three of these holes intersected gold-bearing quartz/sulfide veins and veinlets hosted by quartzite units in the metasediments.

Two drill holes (DDH10-6 &7) targeted the altered volcanics in Graben Fault Zone.  Both intersected broad intervals of low grade gold mineralization associated with carbonate/sulfide veining in propylitic to argillic altered andesite.  Significant mineralized intercepts include:



| | Hole #    | From
(m) | To
(m) | Length
(m) | Gold
(ppb)
| | --------- | -------- | ------ | ---------- | ----------
| | DDH10-1   | 10.02    | 32.00  | 21.98      | 346       
| |           |          |        |            |           
| | DDH10-2   | 35.65    | 76.43  | 40.78      | 414       
| | including | 35.65    | 43.28  | 7.63       | 1065      
| | and       |          |        |            |           
| | DDH10-2   | 223.60   | 249.94 | 26.34      | 342       
| | including | 241.40   | 243.00 | 1.60       | 2907      
| |           |          |        |            |           
| | DDH10-3   | 35.05    | 45.72  | 10.67      | 461       
| | DDH10-3   | 243.82   | 323.09 | 79.27      | 160       
| |           |          |        |            |           
| | DDH10-6   | 12.19    | 86.87  | 74.68      | 327       
| | including | 49.84    | 56.39  | 6.55       | 1645      
| |           |          |        |            |           
| | DDH10-7   | 88.39    | 146.67 | 58.28      | 329       
| | DDH10-7   | 206.60   | 208.07 | 1.47       | 4458      

Holes DDH10-4&5 tested separate structural targets at the Thrust Fault Zone with no significant gold results returned.

Orogenic gold mineralization has been identified within the brittle siliclastic metasediments.  The host units are extensive, and there are multiple beds of quartzite hosting cross cutting, gold bearing veins. With only 4 core holes drilled into this unit to date anomalous gold has been encountered over down-hole widths of up to 79m.  This unit appears to be the source of the extensive placer gold in the Sixty Mile region and management of the Company is of the view that further work on the target is warranted.

The epithermal target in the Graben Fault Zone also has excellent potential.  The altered volcanic rocks have been mapped, associated with the Sixty Mile graben fault, for a strike length of over 7km and over widths of 2km.  Holes DDH10-6 & 7 both returned strongly anomalous values over widths of up to 75m associated with argillic alteration.

The Company intends to conduct in 2011 an exploration program which is designed to confirm the economic potential of the two target Zones.  A minimum 5000 m diamond drilling program commenced in early June, initially focusing on the Graben Fault Zone.  A Controlled Source Audio Frequency Magnetotelluric (CSAMT) and Induced Polarization (IP) survey, also commenced in June, with the aim of identifying siliceous, possibly gold-bearing bodies hosted in the andesites.  A grid-based auger drill program is also underway, designed to collect bedrock samples beneath mined gravels and overburden for geochemical analysis and alteration studies to help focus the drilling.

- 29 -



A second rig will be mobilized to the property to drill test the second, thrust related gold discovery.

Option Terms

Pursuant to the option agreements with various landowners, the Company can acquire a 100% interest in the properties by paying a total of $837,300 cash and issuing a total of $688,000 worth of shares by August 31, 2013.  The owners will retain NSR royalties ranging from 2.5% to 3.0%.

All work is being funded from the Companys existing cash resources, and the work is supervised by the Companys Exploration Manager.

No Resource or Reserve has been defined within the Sixty Mile Project.

Item 5.

Operating and Financial Review and Prospects.

Overview

At the date of this Annual Report, the Company has not been able to identify a known body of commercial grade ore on any of its properties, and the ability of the Company to realize the costs it has incurred to date on these properties is dependent upon the Company being able to identify a commercial ore body, to finance its exploration costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the property, or being able to realize the costs incurred on a subsequent disposal of the property.

The following discussion and analysis of the financial condition and operating results of the Company for the three years ended December 31, 2010, 2009 and 2008 should be read in conjunction with the Consolidated Financial Statements and related notes to the financial statements which have been prepared in accordance with Canadian GAAP.  The discussion and analysis set forth below covers the results measured under Canadian GAAP.  Material differences between the application of Canadian GAAP and U.S. GAAP to the Companys audited financial statements exist as described in Note 18 to the Consolidated Financial Statements.

Strategic Transactions

In 2004, Radius Explorations Ltd. and PilaGold Inc. amalgamated (the Amalgamation) and continued as one company, Radius Gold Inc., pursuant to the provisions of the British Columbia Business Corporations Act.  The holders of Radius Explorations shares received one (1) Radius Gold share for every one (1) Radius Explorations share held, and PilaGold shareholders received one (1) Radius Gold share for every two and one-quarter (2.25) PilaGold shares held.

In May 2011, the Board of Directors of the Company approved a proposed spin out transaction (the Spin Out) whereby the Company will transfer all of its Yukon and Alaskan property assets and $1.0 million in cash to a new company (Newco) in return for Newco shares and warrants, the majority of which will then be distributed to the Companys shareholders by way of a plan of arrangement.  The implementation of the Spin Out is subject to, among other things, approval by the Companys shareholders, court approval and TSX Venture Exchange (Exchange) approval, including Exchange approval of the listing of the common shares of Newco on the Exchange.

The objective of the Spin Out is to maximize shareholder value by allowing the market to independently value geographically separate property portfolios.  The Spin Out will result in two strategically positioned companies, one focused on Latin America and the other focused on the Yukon.

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A.

Operating Results.

Critical Accounting Policies

Management has prepared the consolidated financial statements of the Company in accordance with Canadian generally accepted accounting principles which conform, in all material respects, with those generally accepted in the United States of America, except as explained in Note 18.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.  Actual results may differ from those estimates.  The financial statements have, in managements opinion, been properly prepared using careful judgement and within the framework of the significant accounting policies summarized below.

a)

Mineral Properties



During the fourth quarter of 2009, the Company changed its accounting policy for exploration costs by expensing the costs as incurred as it more accurately reflects the exploration industry.  The change was effective on January 1, 2009 and applied retroactively.  In the years ending December 31, 2008 and prior to, the Company capitalized the acquisition cost of mineral properties and deferred exploration and development expenditures directly related to specific mineral properties, net of recoveries received. Management believes that the revised treatment provides a more relevant and consistent depiction of the asset base of the Company prior to establishing the economic feasibility of its resource base. These changes have been applied retrospectively for all periods presented.



Consistent with prior periods, mineral property acquisition costs are capitalized and include the cash consideration paid and the fair value of common shares issued on acquisition, based on the trading price of the shares on the date of the agreement to issue the shares.



Options are exercisable entirely at the discretion of the optionee and, amounts received from optionees in connection with option agreements are credited against the capitalized acquisition costs classified as mineral properties on the balance sheet and amounts received in excess are credited to gain from mineral property option agreements on the statement of operations.



Where the Company has entered into option agreements to acquire interests in mineral properties that provide for periodic payments or periodic share issuances, amounts unpaid and unissued are not recorded as liabilities since they are payable and issuable entirely at the Companys option. Option payments are recorded as mineral property costs when the payments are made or received and the share issuances are recorded as mineral property costs using the fair market value of the Companys common shares at the earlier of the date the counterpartys performance is complete or the issuance date.



The Company is in the process of exploring and developing its mineral properties and has not yet determined the amount of reserves available.  Management reviews the carrying value of mineral properties on a periodic basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable will recognize impairment in value based upon current exploration results, the prospect of further work being carried out by the Company, the assessment of future probability of profitable revenues from the property or from the sale of the property.  Amounts shown for properties represent costs incurred net of write-downs and recoveries, and are not intended to represent present or future values.





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Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated.  Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Companys commitment to a plan of action based on the then known facts.



b)

Stock-based Compensation



The Company has a stock-based compensation plan as disclosed in Note 8, whereby stock options are granted in accordance with the policies of regulatory authorities.  The fair value of all share purchase options is expensed over their vesting period with a corresponding increase to contributed surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital.



The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of grant.  Option valuation models require the input of highly subjective assumptions, including the expected price volatility.  Changes in these assumptions can materially affect the fair value estimate.



c)

Impairment of Long-lived Assets



Canadian generally accepted accounting principles require that long-lived assets and intangibles to be held and used by the Company be reviewed for possible impairment whenever events or changes in circumstances indicate that the asset may not be recoverable.  If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold and use may not be recoverable, future cash flows expected to result from the use of the asset and its disposition must be estimated.  If the undiscounted value of the future cash flows is less than the carrying amount of the asset, impairment is recognized.



d)

Financial Instruments



The Company has made the following designations of its financial instruments: cash and cash equivalents as held-for-trading; marketable securities as available-for-sale; advances and other receivables and due from related parties as loans and receivables; and accounts payable and accrued liabilities as other financial liabilities.



The classification of fair value measurements is based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The level within which the fair value measurement is categorized is based upon the lowest level of input that is significant to the measurement. The Company categorizes all of its financial instruments which are measured at fair value as Level 1. Level inputs are as follows:

Level 1  quoted prices in active markets for identical securities

Level 2  significant observable inputs other than quoted prices included in Level 1

Level 3  significant unobservable inputs





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Comprehensive Income



Comprehensive income is composed of the Companys earnings and other comprehensive income.  Other comprehensive income includes unrealized gains and losses on available-for-sale securities, all net of income taxes.  Cumulative changes in other comprehensive loss will be included in accumulated other comprehensive loss which will be presented as a separate category in shareholders equity.

Future Accounting Change

International Financial Reporting Standards (IFRS)

In February 2008, the AcSB adopted a strategic plan for the direction of accounting standards in Canada.  As part of that plan, accounting standards in Canada for public companies will converge with IFRS. AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canadian GAAP.  This date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010.  In response to these requirements, the Company has developed and executed an IFRS transition project plan.

IFRS Conversion

The Companys IFRS conversion plan addressed matters including changes in accounting policies, IT and data systems, restatement of comparative periods, organizational and internal controls and any required changes to business processes.  To facilitate this process and ensure the full impact of the conversion is understood and managed reasonably, the Company retained an external advisor.  The Company also reviewed its internal and disclosure control processes and believes they will not need significant modification as a result of the conversion to IFRS.  Further, the Company has assessed the impact on IT and data systems and has concluded there will be no significant impact to applications arising from the transition to IFRS.



IFRS 1 First-Time Adoption of International Financial Reporting Standards

Under IFRS 1 First-time Adoption of International Financial Reporting Standards, the IFRS are applied retrospectively at the transition date with all adjustments to assets and liabilities as stated under GAAP taken to retained earnings unless certain exemptions are applied.  IFRS provides for certain optional exemptions and certain mandatory exceptions for first time IFRS adopters. Based on its analysis, management has made the following conclusions regarding the adoption of IFRS:



1)

The adoption of IFRS has resulted in changes to the Companys reported financial position and results of operations for the comparative period (fiscal year 2010).  The Companys adoption of IFRS did not have an impact on the total operating, investing or financing cash flows.  The change in the Companys reported financial position and results of operations on transition to IFRS relates to the adoption of the following IFRS standards:

•

IAS 12 Income Taxes different treatment of flow-through shares

•

IAS 12 Income Taxes  different treatment of future income tax liability in a foreign subsidiary

•

IAS 38 Intangible Assets  different treatment of website development costs

2)

Management has modified its share based payments, income taxes, and asset retirement obligation accounting policies to conform with IFRS requirements.

3)

There are some financial statement presentation and disclosure changes on adoption of IFRS.  These will be reflected in the interim and annual financial statements in fiscal year 2011, beginning with the first quarterly report as at and for the period ended March 31, 2011.

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Results of Operations

Year Ended December 31, 2010 compared to December 31, 2009

The net loss for the year ended December 31, 2010 was $5,123,701 compared to $1,210,725 for the year ended December 31, 2009, an increase of $3,912,976.  The current year exploration expenditures totalled $2,838,390 compared to $639,438 for the comparative year, an increase of $2,198,952.  The significant increase in exploration costs relate to the Companys exploration programs conducted on the Sixty Mile Property in the Yukon and the Holly/Banderas Property in Guatemala.  Overall costs for the 2010 year were partially offset by a mineral property option payment received of $86,574 and a write-off of accounts payable and accrued liabilities of $52,500.  In contrast, the comparative year had a $224,110 write off of mineral property costs which more than offset the option payment income of $51,828 for that year.

General and administrative expenses for the year ended December 31, 2010 were $2,440,870 compared to $671,496 in the year ended December 31, 2009, an increase of $1,769,374.  Most of this increase is due to non-cash compensation charges of $1,612,792, relating to stock options issued to directors, officers, employees and consultants of the Company, recorded in the current year compared to only $2,426 in the comparative year.  Excluding this non-cash item, the current years corporate expenses were higher by $159,008.  Notable cost increases in the current year were $64,785 in salaries and wages, $54,157 in public relations, $36,743 in travel and accommodation, and $19,845 in transfer agent and regulatory fees.  Notable cost decreases were $10,652 in consulting fees and $7,818 in rent and utilities.  Cost increases are attributed to the increased exploration activity in Canada and Guatemala and efforts to promote the Company and secure private placement financings during the current year.

Year Ended December 31, 2009 compared to December 31, 2008

For the year ended December 31, 2009, the Company had a net loss before income taxes of $1,402,725 compared to $4,779,322 for the year ended December 31, 2008, a decrease of $3,376,597.  The primary reason for the difference was exploration expenditures which were $587,610 in 2009 compared to $3,655,231 in 2008, a decrease of $3,067,621.  In 2008, the Company had dropped several properties and scaled back exploration on its remaining properties in 2009.  During 2009, the Companys joint venture partners on various properties continued to perform exploration activities as part of their option earn-in requirements.  Write-offs of acquisition costs in the current year totalled $224,110 compared to $149,947 in 2008, an increase of $74,163.  The majority of the current year write-off was due to the dropping of the Rubi property in Peru.

The total investment and other income earned in 2009 was $49,405 compared to $179,789 for 2008, a decrease of $130,384.  This was the result of investments periodically being liquidated to provide operating cash flow.

The Company recorded a future income tax recovery of $192,000 in 2009 but no such income or expense was recorded in 2008.

General and administrative expenses for the year ended December 31, 2009 were $671,496 compared to $1,123,938 for the year ended December 31, 2008, a decrease of $452,442.  The Companys efforts to reduce costs in the previous fiscal year in conjunction with a decrease of $162,793 in non-cash compensation charges are the reasons for the overall decrease in corporate expenses.  All other general and administrative costs, with the exception of legal and accounting fees, decreased as well.  Besides non-cash compensation charge reductions, other notable reductions were $92,566 in salaries and wages, $58,301 in travel and accommodation, $39,198 in public relations, and $28,694 in consulting.



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Mineral Properties

Year Ended December 31, 2010

During the year ended December 31, 2010, the Company incurred the following expenditures on its mineral properties:

Yukon/Alaska - $828,844 was incurred on acquisition costs and $2,016,987 on exploration.  Of the $828,844 in acquisition costs, $111,300 was the value of common shares issued pursuant to option agreements.  During the current year, the Company received an option payment on its Ten Mile Creek Property of $116,000, consisting of $100,000 cash and $16,000 in Solomon Resources Limited shares and received 400,000 shares of Wesgold as option payments on the Snowcap Property.  As a result, there were cost recoveries that reduced the carrying value of acquisition costs of the Ten Mile Creek Property and the Snowcap Property to nil.

Nicaragua - $55,992 was incurred on exploration.

Guatemala - $753,900 was incurred on exploration.

Mexico - $11,511 was incurred on miscellaneous exploration related costs.  The Company also received cash and shares from Fortuna with a combined value of $41,148 as a result of option payments received on its Tlacolula Property.

Year Ended December 31, 2009

During the year ended December 31, 2009, the Company incurred the following expenditures on its mineral properties:

Nicaragua - $271,039 on exploration, including $97,947 for licences, rights and taxes and $66,293 for geological consulting.

Mexico - $38,332 on exploration, including $10,876 for licences, rights and taxes, $10,318 for legal and accounting, and $7,600 for salaries.  An additional $37,308 was charged to exploration costs for value-added taxes that are not expected to be refunded.

Guatemala - $125,298 on exploration, including $34,952 for salaries, $27,607 for geological consulting, and $21,908 for legal and accounting.

Peru - $62,059 on acquisition costs and $51,493 on exploration, including $21,719 for geological consulting, $19,916 for legal and accounting, and $7,600 for salaries.  Due to the Company deciding, along with its joint venture partner, to terminate its option in the Rubi property, the Company wrote off a total $210,566 in acquisition costs.  The $62,059 in acquisition costs were recovered when the Companys option in the Nueva California Property was assigned to Focus.

Canada (Yukon) - $183,313 on acquisition costs and $115,968 on exploration, including $44,275 for transportation and accommodation, $44,132 for geological consulting, and $15,627 for geochemistry.  Of the $183,313 in acquisition costs, $86,883 was recovered in the form shares received for farm-out agreements, $14,640 was recovered in cash from the sale of properties and $13,544 was written off.  Of the $115,968 in exploration costs, $51,828 was recovered in the form of shares received for a farm-out agreement.

- 35 -



Year Ended December 31, 2008

During the year ended December 31, 2008, the Company incurred the following expenditures on its mineral properties:

Guatemala - $147,780 on exploration including $34,581 for geological consulting, $28,232 for salaries, $22,043 for licences, rights and taxes, and $20,468 for rent and utilities.

Nicaragua - $2,403,470 on exploration including $476,129 for geological consulting, $416,555 for drilling, $270,304 for salaries, $211,438 for geochemistry, $152,729 for public and community relations, $123,157 for automobile, $119,655 for camp, food and supplies and $109,708 for licences, rights and taxes.

Mexico - $594,281 on exploration including $217,832 for geological consulting, $119,862 for licences, rights and taxes, $45,747 for other consulting, $41,233 for geochemistry, $36,777 for travel and accommodation, and $34,908 for legal and accounting.

Peru - $36,817 on acquisition costs and $467,878 on exploration, including $148,062 for geological consulting, $74,282 for other consulting, $54,578 for licences, rights and taxes, $42,205 for legal and accounting, and $38,068 for salaries.  Acquisition costs of $36,817 were written-off during the year for properties that were dropped.

Ecuador  $41,822 on exploration, including $25,093 for public relations and $16,729 for licences, rights and taxes.  Acquisition costs of $113,130 were written-off during the year for the Cerro Colorado property.

Per Share Losses

Both the net losses and losses per share decreased significantly from fiscal 2008 to 2009.  This was the result of significantly lower exploration activity and reduced general administrative expenses. Both the net losses and the losses per share increased from the fiscal 2009 to 2010 due mainly to an increase in exploration expenditures.  As the Companys weighted average number of shares had not changed over 2008 to 2009 period, the loss per share has changed proportionately with the changes in the net losses from 2008 to 2009.  In fiscal 2010, both the net loss and weighted average number of shares increased significantly, with the higher net loss contributing to a greater loss per share in 2010.

B.

Liquidity and Capital Resources

Outlook

For the fiscal year ended December 31, 2010, the Companys auditors have expressed substantial doubt about the Companys ability to continue as a going concern as the Company had not yet achieved profitable operations, has accumulated losses of $46,280,912 since inception, and is expected to incur further losses in the development of its business.  However, as a result of the financings completed in 2010, the Company expects its current capital resources to be sufficient to cover its operating costs for the next twelve months.  Actual funding requirements may vary from those planned due to a number of factors, including the progress of exploration and development activity.  Management believes it will be able to raise equity capital as required in the long term, but recognizes the uncertainty attached thereto.  The Company continues to use various strategies to minimize its dependence on equity capital, including the securing of joint venture partners where appropriate.





- 36 -





Year ended December 31, 2010 compared to December 31, 2009

The Companys cash increased from approximately $0.50 million at December 31, 2009 to $7.72 million at December 31, 2010.  During 2010, the Company closed a private placement of 13 million units for gross proceeds of $4.55 million and two private placements totalling 11.41 million flow-through shares for gross proceeds of $6.29 million.  Since the flow-through proceeds are subject to the Canadian flow-through share program rules, the Company intends to spend such funds on eligible exploration activities on its Yukon properties.  As at December 31, 2010, the Companys flow-through commitment is $4.35 million.  Proceeds from the non-flow-through private placement are intended to be used for exploration activities on the Companys Holly/Banderas Project in Guatemala and for general working capital purposes.

Year ended December 31, 2009 compared to December 31, 2008

The Companys cash and marketable securities decreased from approximately $2.26 million at December 31, 2008 to $2.21 million at December 31, 2009.  Working capital at December 31, 2009 was $2.30 million compared to $2.37 million at December 31, 2008.  The Companys working capital was bolstered in 2009 due to the Company receiving 1,000,000 shares of Focus as per the Nueva California property option assignment to Focus and 500,000 shares of Solomon through the optioning of the Companys Ten Mile Creek Property.  The Company is holding these shares as marketable securities.  As at December 31, 2009 the Focus shares had a value of $1,030,000 but as of April 29, 2010 the value was $450,000.    As at December 31, 2009 the Solomon shares had a value of $130,000 and as at April 29, 2010 the value was $132,500.

C.

Research and Development, Patents and Licenses, etc.

Not applicable.

D.

Trend Information.

The Company is an exploration stage natural resource company engaged in the process of exploring and evaluating its mineral properties and projects and has not yet determined whether its properties and projects contain ore reserves that are economically recoverable.  Consequently, there is no production, sales, or inventory in the conventional sense.  The Companys financial success will be dependent upon the extent to which it can discover mineralization and the economic viability of developing such properties.  Such development may take years to complete and the amount of resulting income, if any, is difficult to determine with any certainty.  The sales value of any mineralization discovered by the Company is largely dependent upon factors beyond the Companys control such as the market value of the commodities produced.

The Company is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect upon the Companys net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

E.

Off-balance Sheet Arrangements

The Company has no Off-Balance Sheet Arrangements.



- 37 -



F.

Tabular Disclosure of Contractual Obligations

The following table lists as of December 31, 2010 information with respect to the Companys known contractual obligations.



|                                                                                         | Payments due by period
|---------------------------------------------------------------------------------------- | ----------------------
|Contractual Obligations                                                                  | Total                 
|Long-Term Debt Obligations                                                               | 0                     
|Capital (Finance) Lease Obligations                                                      | 0                     
|Operating Lease Obligations(1)                                                           | $674,496              
|Purchase Obligations                                                                     | 0                     
|Other Long-Term Liabilities Reflected
on the Company's Balance Sheet under Canadian GAAP | 0                     
|Total                                                                                    | $674,496              

(1)

Amount indicated is the office rent lease for the Companys head office in Vancouver, BC.



G.

Safe harbour

See Note Regarding Forward-Looking Statements.



Item 6.

Directors, Senior Management and Employees.

A.

Directors and Senior Management.

The following table lists as of June 17, 2011 the names of the directors and senior management of the Company.  The directors and senior management have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting of Shareholders or until a successor is duly elected, unless the office is vacated in accordance with the Companys Articles.

- 38 -

|Name and Municipality of Residence         | Position(s) held                                 | Date of First Appointment                                                                              
|------------------------------------------ | ------------------------------------------------ | -------------------------------------------------------------------------------------------------------
|Simon Ridgway
Vancouver, BC, Canada        | Director, President and Chief Executive Officer  | September 30, 1997                                                                                     
|Mario Szotlender,
Caracas, Venezuela       | Director                                         | December 13, 1999                                                                                      
|Ralph Rushton
Vancouver, BC, Canada        | Director & Vice-President, Corporate Development | May 2, 2003                                                                                            
|Bradford Cooke
North Vancouver, BC, Canada | Director                                         | July 1, 2004                                                                                           
|Craig Bow
Beulah, Colorado, USA            | Director                                         | January 28, 2006 (previously a director of Radius Explorations Ltd. from July 17, 2001 to July 1, 2004)
|Kevin Bales
Delta, BC, Canada              | Chief Financial Officer                          | July 23, 2009                                                                                          
|Tim Osler
Vancouver, BC, Canada            | Secretary                                        | May 7, 1998                                                                                            
|                                          



Biographical Information

The following is a brief description of the employment background ofthe Companys directors and senior management:

Simon T.P. Ridgway, Age 62  President, Chief Executive Officer and Director

Mr. Simon Ridgway is an exploration financier with 19 years experience financing and managing exploration companies operating in North, Central and South America.  Mr. Ridgway began his career prospecting for gold in the Yukon Territory where he learned the value added approach of grass roots exploration.  A firm believer in the gold potential of Central America, his practical, low cost approach to exploration management has led to major discoveries in Honduras and Guatemala.  He is a director of Emerick Resources Corp., Focus Ventures Ltd. and Fortuna Silver Mines Inc., all publicly-traded resource companies.

Mario Szotlender, Age 50 - Director

Mr. Szotlender holds a degree in international relations and is fluent in several languages.  He has successfully directed Latin American affairs for numerous private and public companies over the past 25 years, specializing in developing new business opportunities and establishing relations within the investment community.  He has been involved in various mineral exploration and development joint ventures (precious metals and diamonds) in Central and South America, including heading several mineral operations in Venezuela, such as Las Cristinas in the 1980's.

- 39 -



He was President of Mena Resources Inc. until it was purchased by Rusoro Mining Ltd., of which he also was President.  Mr. Szotlender is a Director of Endeavour Silver Corp., Focus Ventures Ltd., Fortuna Silver Mines Inc., Iron Creek Capital Corp. and Magellan Minerals Ltd., all publicly-trade resource companies  He also consults to other public companies, and to several private exploration companies.

Ralph Rushton, Age 48  Vice President, Corporate Development and Director

Mr. Ralph Rushton earned a BSc. in Geology from Portsmouth in the UK, an MSc from the University of Alberta, and studied Business Communications at Simon Fraser University in Vancouver. With 15 years experience in gold mining and exploration gained mainly with the Anglo American group in Southern Africa, the Middle East and Eastern Europe, Mr. Rushtons current responsibilities include corporate development work and investor relations, and maintaining the Companys links with senior mining companies.  He is also a director of Emerick Resources Corp., Wesgold Minerals Inc. and Western Pacific Resources Corp., all publicly-traded resource companies.

Bradford Cooke, Age 56 - Director

Bradford Cooke, P. Geo., is a professional geologist with over 30 years experience in the mining industry. He has participated in the discovery of several mineral deposits, including uranium in Labrador, gold and tungsten in B.C., gold in Suriname and silver in Mexico, and has raised over CAD$250 million in equity and joint venture financings for resource projects since 1988. Mr. Cooke received his B.Sc. Geology (Honors) degree in 1976 and a M.Sc. Geology degree in 1984. From 1976 to 1987, he worked as a project geologist for Noranda Mines, Shell Minerals, Chevron Minerals and as a geological consultant to junior mining companies. Mr. Cooke founded Canarc Resource Corp. in 1988 and Endeavour Silver Corp. in 2003, both publicly-traded resource companies.

Craig Bow, Age 61 - Director

Dr. Craig Bow is a precious-metals-oriented geologist with over 25 years experience in North American and international exploration. Dr. Bow has worked for Gold Fields Exploration as a Senior Geologist and Exploration Manager, North America as well as for Newcrest Resources as Exploration Manager, South America. Prior to Newcrest, he directed the Cyprus Amax entry into Cu/Au exploration in north/central Peru and Colombia (Rio Blanco and Murindo porphyry projects) and contributed to the evolution of the Stillwater PGE project from an initial exploration stage to positive production decision.

Kevin Bales, Age 44  Chief Financial Officer

Mr. Bales has 16 years of financial reporting experience in mining and information technology industries.  He currently serves as Chief Financial Officer for several public junior exploration companies with operations in Canada, the United States, Central America and South America.  Mr. Bales holds a Bachelor of Management degree with a major in accounting from the University of Lethbridge.  He is also CFO of Emerick Resources Corp., Focus Ventures Ltd., Iron Creek Resources Corp. and Western Pacific Resources Corp., all publicly-traded resource companies.



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Tim Osler, Age 59 - Secretary

Mr. Tim Osler, B.Sc., owns and operates a mining consulting and retail mining equipment business, and has developed a gold mining placer property in the Yukon Territory which is currently producing.  Mr. Osler is currently a director of Focus Ventures Ltd., Iron Creek Capital Corp. and Wesgold Minerals Inc., all publicly-traded resource companies.

There are no family relationships among the members of the board of directors or the members of senior management of the Company.  There are no arrangements or understanding with major shareholders, customers, suppliers or others, pursuant to which any member of the board of directors or member of senior management was selected.

B.

Compensation.

Directors and senior management are compensated in a manner consistent with their respective contributions to the overall benefit of the Company.  During the fiscal year ended December 31, 2010, the Company paid to its Directors and senior management the following amounts:

|Name              | Position                              | Amount    
|----------------- | ------------------------------------- | ----------
|                  |                                       |           
|Simon Ridgway (1) | President & Chief Executive Officer   | $  60,000 
|Kevin Bales       | Chief Financial Officer               | $  26,718 
|Ralph Rushton     | Vice-President, Corporate Development | $  59,704 
|David Cass (2)(3) | Vice-President, Exploration           | $  30,000 
|Tim Osler         | Secretary                             | $  22,630 
|Craig Bow(4)      | Director                              | $    3,170



(1)

Paid to Mill Street Services Ltd., a private company owned by the Ridgway Family Trust, of which Simon Ridgway is the Trustee.

(2)

Paid to Condor Pacific Consulting Inc., a private company owned by David Cass and his spouse.

(3)

Mr. Cass ceased as Vice-President, Operations on October 21, 2010.

(4)

For geological consulting services.

The following stock options were granted to the Companys directors and senior management during the fiscal year ended December 31, 2010:

|Name             | Position                            | No. of
Options | Exercise
Price | Expiry Date   
|---------------- | ----------------------------------- | -------------- | -------------- | --------------
|                 |                                     |                |                |               
|Simon Ridgway    | President & Chief Executive Officer | 200,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 220,000        | $0.69          | Sept. 23, 2020
|Ralph Rushton    | Vice-President, Corp. Development   | 200,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept. 23, 2020
|Kevin Bales      | Chief Financial Officer             | 150,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept 23, 2020 
|Tim Osler        | Secretary                           | 50,000         | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept. 23, 2020
|Mario Szotlender | Director                            | 125,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept. 23, 2020
|Bradford Cooke   | Director                            | 125,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept. 23, 2020
|Craig Bow        | Director                            | 125,000        | $0.29          | Jan. 7, 2020  
|                 |                                     | 100,000        | $0.69          | Sept. 23, 2020



- 41 -







The Company has no standard arrangement pursuant to which directors are compensated for their services in their capacity as such except for the granting from time to time of incentive stock options.  The following table sets out all options in the Company which are held as of June 17, 2011 by the current directors and officers:



|Optionees        | Number of Shares Subject      | Exercise Price ($) | Expiration Date                                      
|---------------- | ----------------------------- | ------------------ | -----------------------------------------------------
|Simon Ridgway    | 300,000
200,000220,000720,000 | $0.56
$0.29
$0.69  | September 5, 2012
January 7, 2020
September 23, 2020 
|Mario Szotlender | 100,000
125,000100,000325,000 | $0.56
$0.29
$0.69  | September 5, 2012 
January 7, 2020
September 23, 2020
|Ralph Rushton    | 150,000
200,000100,000450,000 | $0.56
$0.29
$0.69  | September 5, 2012 
January 7, 2020
September 23, 2020
|Bradford Cooke   | 100,000
125,000100,000325,000 | $0.56
$0.29
$0.69  | September 5, 2012 
January 7, 2020
September 23, 2020
|Craig Bow        | 100,000
125,000100,000325,000 | $0.56
$0.29
$0.69  | September 5, 2012 
January 7, 2020
September 23, 2020



|Kevin Bales | 130,000100,000230,000         | $0.29
$0.69       | January 7, 2020
September 23, 2020                   
|----------- | ----------------------------- | ----------------- | -----------------------------------------------------
|Tim Osler   | 50,000
  30,000100,000180,000 | $0.56
$0.29
$0.69 | September 5, 2012 
January 7, 2020
September 23, 2020
|TOTAL:      | 2,555,000                     |                   |                                                      



- 42 -



C.

Board Practices.

The directors of the Company are elected annually and hold office until the next Annual General Meeting of the members of the Company or until their successors in office are duly elected or appointed.  All directors are elected for a one-year term.  All officers serve at the pleasure of the board of directors.  The next annual general meeting will be held no later than December 31, 2011.

Currently, there are no directors service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment.

Audit Committee

The Audit Committee of the Company is comprised of Mario Szotlender, Bradford Cooke and Craig Bow, all of whom are independent and financially literate.  The Audit Committee Charter provides that the primary function of the Audit Committee is to assist the Board of Directors of the Company (the Board) in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems of internal controls and management information systems established by management and the Companys external audit process and monitoring compliance with the Companys legal and regulatory requirements with respect to its financial statements.

The Audit Committee is accountable to the Board.  In the course of fulfilling its specific responsibilities hereunder, the Audit Committee is expected to maintain an open communication between the Companys external auditors and the Board.  The responsibilities of a member of the Audit Committee are in addition to such members duties as a member of the Board.

The Audit Committee does not plan or perform audits or warrant the accuracy or completeness of the Companys financial statements or financial disclosure or compliance with generally accepted accounting procedures as these are the responsibility of management and the external auditors.

Compensation Committee

The Compensation Committee of the Company is comprised of Mario Szotlender, Bradford Cooke and Craig Bow, all of whom are independent of management.  The Compensation Committee Charter provides that the function of the Compensation Committee is to assist the Board in discharging its oversight responsibilities relating to compensation, including the compensation of key senior management employees of the Company.

The Compensation Committee is to review and make recommendations to the Board on an annual basis with respect to the Companys stock option plan and make recommendations respecting grants of options.  It shall also review and recommend to the Board annually, or more frequently as required, managements succession plans for the Executive Management, including the specific development plans and career planning for potential successors to occupy these positions.

Disclosure Committee

The Disclosure Committee of the Company is comprised of Simon Ridgway and Ralph Rushton, and was formed in order to ensure that communications with the investing public about the Company are timely, factual, accurate, and broadly disseminated in accordance with all applicable legal and regulatory requirements.

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The Disclosure Committee Charter extends to all employees of the Company, its Board of Directors, those authorized to speak on its behalf and all other insiders.  It covers disclosures in documents filed with the securities regulators, financial and non-financial disclosure, including managements discussion and analysis and written statements made in the Companys annual and quarterly reports, new releases, letter to shareholders, presentations by senior management and information contained on the Companys website and other electronic communications with analysts and investors, interviews with the media as well as speeches, press conferences and conference calls.

D.

Employees.

As at December 31, 2010, the Company had 14 employees, 10 in the Vancouver office and 4 in Guatemala and Nicaragua.  Eleven employees provide administrative services and 3 employees provide geological services.  None of the employees is represented by a union.

E.

Share Ownership.

The following table sets forth, as of June 17, 2011, the number of the Companys Common Shares beneficially owned by (a) the directors and members of senior management of the Company, individually, and as a group, and (b) the percentage ownership of the outstanding Common Shares represented by such shares.  The security holders listed below are deemed to be the beneficial owners of Common Shares underlying options and warrants which are exercisable within 60 days from the above date.  Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.



|Title 
of Class | Name and Address of Beneficial Owner                           | Amount
and Nature(1) | Percentage 
of Class(1)
|--------------- | -------------------------------------------------------------- | -------------------- | -----------------------
|Common          | Simon Ridgway
Vancouver, BC                                    | 5,238,952 (2)        | 6.4%                   
|Common          | Mario Szotlender
Caracas, Venezuela                            | 2,033,231 (3)        | 2.5%                   
|Common          | Ralph Rushton
Vancouver, BC                                    | 526,000(4)           | 0.7%                   
|Common          | Bradford Cooke
North Vancouver, BC                             | 450,000(5)           | 0.56%                  
|Common          | Craig Bow
Beulah, Colorado, USA                                | 325,000(6)           | 0.4%                   
|Common          | Kevin Bales
Delta, BC                                          | 230,000(7)           | 0.3%                   
|Common          | Tim Osler
Vancouver, BC                                        | 563,845(8)           | 0.7%                   
|Common          | All Directors and Senior Management as a group
(7 individuals) | 9,367,028            | 11.5%                  

(1)

Based on 80,191,101 shares outstanding as at June 17, 2011, plus any Common Shares deemed to be beneficially owned by the individual (or, for the last row of the table, by the group) pursuant to options and warrants which are exercisable by the individual (or, for the last row of the table, by the group) within 60 days from the above date.



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(2)

1,220,000 of these shares represent currently exercisable warrants and stock options.  607,640 of the free trading shares are held by Mill Street Services Ltd., a private company owned by the Ridgway Family Trust, of which Simon Ridgway is the Trustee.  9,389 of the free trading shares are held by Elvietri Holdings, AVV, a private company owned by Simon Ridgway.

(3)

539,285 of these shares represent currently exercisable warrants and stock options.

(4)

450,000 of these shares represent currently exercisable stock options.

(5)

350,000 of these shares represent currently exercisable warrants and stock options.

(6)

All of these shares represent currently exercisable stock options.

(7)

All of these shares represent currently exercisable stock options.

(8)

180,000 of these shares represent currently exercisable stock options.

Stock Option Plan



In January 2010, the Company established a Director and Employee Stock Option Plan, the material terms of which are as follows:



1.

the Plan reserves a rolling maximum of 10% of the issued capital of the Company at the time of granting of each option, with no vesting provisions;

2.

no more than 5% of the issued capital may be reserved for issuance to any one individual in any 12 month period;

3.

no more than 2% of the issued capital may be reserved for issuance to any Consultant (as defined by the TSX Venture Exchange) or to an optionee providing investor relations services in any 12 month period;

4.

the minimum exercise price of an option cannot be less than the Market Price (as defined by the TSX Venture Exchange) of the Companys shares;

5.

options will be granted for a period of up to 10 years;

6.

options are non-assignable and non-transferable; and

7.

there are provisions for adjustment in the number of shares issuable on exercise of options in the event of a share consolidation, split, reclassification or other relevant change in the Companys corporate structure or capitalization.

As at June 17, 2011, there were 5,450,000 shares reserved for issuance and subject to outstanding options granted under the Plan.

Item 7.

Major Shareholders and Related Party Transactions.

A.

Major Shareholders.

A major shareholder of the Company is a person that beneficially owns, directly or indirectly, more than 5% of the Companys issued and outstanding Common Shares including any Common Shares deemed to be beneficially owned by the shareholder pursuant to options and warrants which are exercisable by the shareholder within 60 days from June 17, 2011.  To the best of the Companys knowledge, as of June 17, 2011 the only major shareholder in the Company is Simon Ridgway who holds 5,238,952 shares, or 6.4%.

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To the best of the Companys knowledge, there are no arrangements the operation of which may result in a change in control of the Company.

The Company is a publicly-owned corporation, the shares of which are owned by residents of Canada, the United States, and other countries.  The Company is not controlled directly or indirectly by another corporation or any foreign government.  As of June 17, 2011, there were 80,191,101 shares of the Company outstanding, of which approximately 1,777 U.S. holders of record or beneficial holders, held a total of 6,548,298 shares (8.1%).  The number of beneficial holders was determined based on a review of the number of holders represented by Broadridge Investor Communications, a U.S. mailing service.

B.

Related Party Transactions.

The Company and PilaGold Inc. amalgamated and continued as one company pursuant to the provisions of the British Columbia Business Corporations Act on July 1, 2004.  Certain of the directors and officers of the Company were directors, officers and/or shareholders of PilaGold Inc.

Effective as at the Amalgamation date of July 1, 2004, the Company agreed to pay to Mill Street Services Ltd. $16,000 per month for Mr. Ridgways services as President of the Company.  Mill Street Services Ltd. is a private company owned by the Ridgway Family Trust, of which Simon Ridgway is the Trustee.  During 2010, Mill Street billed portions of this fee to other public companies of which Mr. Ridgway is a director for his services rendered to those companies and the portion billed to the Company was $5,000 per month.

During the fiscal year ended December 31, 2010, the Company paid an aggregate of $251,051 to directors, officers and companies which have common directors with the Company for consulting, management and administrative services.

C.

Interests of Experts and Counsel.

Not Applicable.

Item 8.

Financial Information.

A.

Consolidated Statements and Other Financial Information.

The financial statements as required under Item 17 are attached hereto and found immediately following Item 19 of this Annual Report.  In early 2008, the Companys auditor, Amisano Hanson, was acquired by BDO Canada LLP, Chartered Accountants, which continued at the Companys auditor.  An auditors report of BDO Canada LLP with respect to the fiscal years ended December 31, 2010, 2009 and 2008 and the balance sheets as at December 31, 2010 and 2009, are included herein immediately preceding the consolidated financial statements.

There are no legal proceedings currently pending which may have, or have had in the recent past, significant effects on the Companys financial position or profitability.

The Company has no history of paying dividends and the Company does not contemplate that any dividends will be paid on its shares in the immediate or the foreseeable future.  The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.

B.

Significant Changes.

There have been no significant changes in the Company since the date of the Companys annual financial statements.

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Item 9.

The Offer and Listing.



The Company shares were listed and posted for trading on the TSX Venture Exchange (the TSXV) (formerly the Canadian Venture Exchange and before that, the Vancouver Stock Exchange) on October 7, 1998 and currently trades on the TSXV.  The TSXV trading symbol is RDU.



Effective October 4, 2002, the Company began trading on the Regulated Unofficial Market of the Frankfurt Stock Exchange under the trading symbol RE1.  The Company has the German Security ID number of 725224.

Effective December 22, 2004, the Companys shares began trading on the U.S. Over-the-Counter Bulletin Board (OTCBB) under the trading symbol RDUFF.

A.

Offer and Listing Details.

The following tables set forth the reported high and low closing bid prices (all expressed in Canadian dollars) on the TSXVand the OTCBBfor (a) the Companys five most recent fiscal years; (b) each quarterly period for the Companys past two fiscal years and for the first quarter of the Companys 2011 fiscal year, and (c) for each of the six months from December 2010 to May 2011.

|High and Low Price for the Five Most Recent Fiscal Years
|--------------------------------------------------------
|Fiscal Year ended December 31                           
|High                                                    
|2010                                                    
|2009                                                    
|2008                                                    
|2007                                                    
|2006                                                    



|High and Low Prices for Each Quarterly Period for the Past Two Fiscal Years and For the First Quarter of Fiscal 2011
|--------------------------------------------------------------------------------------------------------------------
|Period Ended                                                                                                        
|High                                                                                                                
|March 31, 2011                                                                                                      
|December 31, 2010                                                                                                   
|September 30, 2010                                                                                                  
|June 30, 2010                                                                                                       
|March 31, 2010                                                                                                      



|December 31, 2009  | $0.28 | $0.18 | $0.27 | $0.15
|------------------ | ----- | ----- | ----- | -----
|September 30, 2009 | $0.24 | $0.14 | $0.33 | $0.11
|June 30, 2009      | $0.28 | $0.15 | $0.27 | $0.08
|March 31, 2009     | $0.22 | $0.09 | $0.17 | $0.06

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|High and Low Prices for the Most Recent Six Months
|--------------------------------------------------
|                                                  
|Period                                            
|May 2011                                          
|April 2011                                        
|March 2011                                        
|February 2011                                     
|January 2011                                      
|December 2010                                     

On June 17, 2011, the closing price of the Common Shares was $0.55 per Common Share on TSXV and US$0.59 per Common Share on the OTCBB.  During the last three years, the Common Shares have not been subject to any trading suspensions.

B.

Plan of Distribution.

Not Applicable

C.

Markets.

The Companys shares were listed and posted for trading on the TSX Venture Exchange (the TSXV) (formerly the Canadian Venture Exchange and before that, the Vancouver Stock Exchange) on October 7, 1998 and currently trades on the TSXV.  The TSXV trading symbol is RDU.



Effective October 4, 2002, the Companys shares began trading on the Regulated Unofficial Market of the Frankfurt Stock Exchange under the trading symbol RE1.  The Company has the German Security ID number of 725224.

Effective December 22, 2004, the Companys shares began trading on the U.S. Over-the-Counter Bulletin Board under the trading symbol RDUFF.

D.

Selling Shareholders.

Not Applicable.

E.

Dilution.

Not Applicable



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F.

Expenses of the Issue.

Not Applicable

Item 10.

Additional Information.

A.

Share Capital.

Not Applicable

B.

Articles of Association.

The Companys Articles do not contain any restrictions on the type of business in which the Company may engage.

Section 17 of the Companys Articles provides that, A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.  A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

Section 13.5 of the Articles provides that the directors may from time to time determine the remuneration of directors.  However, a disclosable interest does not include compensation to be paid to a director, and therefore such interest is not required to be disclosed pursuant to Section 17 of the Articles.  Management believes that, in the absence of an independent quorum, a director cannot vote compensation to himself or herself.

The borrowing powers of the directors are addressed in Part 8, which states that, The Company, if authorized by the directors, may:

(1)

borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2)

issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3)

guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4)

mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

There is no provision in the Companys Articles regarding a mandatory age for retirement of directors.  There is no requirement for a director to hold shares of the Company.





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All of the authorized shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.  Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefor.

Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.

Any modification, amendment or variation of such shareholder rights or provisions are governed by the British Columbia Business Corporations Act and must be approved by a vote of at least 2/3 of the votes cast at a shareholders meeting.  Unless the British Columbia Business Corporations Act or the Companys Articles otherwise provide, any action to be taken by a resolution of the members may be taken by an ordinary resolution or by a vote of a majority of the shares represented at the shareholders meeting.

The conditions governing the manner in which annual general meetings and extraordinary general meetings of shareholders are convoked, including the conditions of admission are described in the Articles of the Company in Section 10  Meetings of Shareholders.

Section 10.1 states that, Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

Section 10.4 states that, The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:



(1)

if and for so long as the Company is a public company, 21 days;



(2)

otherwise, 10 days.



The conditions of admission are described in Section 11.5 where it is stated that, The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

There are no limitations on the rights to own securities.

There is no provision of the Companys Articles, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).

There are no conditions imposed by the Articles governing changes in the capital, where such conditions are more stringent that is required by law.

- 50 -



C.

Material Contracts.

Other than as disclosed elsewhere in this Annual Report, the Company has not entered into any material contracts, other than contracts entered into in the ordinary course of business, during the two year period immediately preceding the filing of this Annual Report.

D.

Exchange Controls.

The Company is not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-Canadian holders of the common shares.  There are no limitations on the right of non-Canadian owners to hold or vote the common shares imposed by Canadian federal or provincial law or by the charter or other constituent documents of the Company.

E.

Taxation

The following summary of the material Canadian federal income tax consequences are stated in general terms and are not intended to be advice to any particular shareholder.  Each prospective investor is urged to consult his or her own tax advisor regarding the tax consequences of his or her purchase, ownership and disposition of Common Shares.  The tax consequences to any particular holder of Common Shares will vary according to the status of that holder as an individual, trust, corporation or member of a partnership, the jurisdiction in which that holder is subject to taxation, the place where that holder is resident and, generally, according to that holders particular circumstances.  This summary is applicable only to holders who are resident in the United States, have never been resident in Canada, deal at arms length with the Company, hold their Common Shares as capital property and who will not use or hold the Common Shares in carrying on business in Canada.  Special rules, which are not discussed in this summary, may apply to a United States holder that is an issuer that carries on business in Canada and elsewhere.

This summary is based upon the provisions of the Income Tax Act of Canada and the regulations thereunder (collectively, the Tax Act or ITA) and the Canada-United States Tax Convention (the Tax Convention) as at the date of this Annual Report and the current administrative practices of Canada Customs and Revenue Agency.  This summary does not take into account provincial income tax consequences.

Management urges each holder to consult his own tax advisor with respect to the income tax consequences applicable to him in his own particular circumstances.

Canadian Income Tax Consequences

The summary below is restricted to the case of a holder (a Holder) of one or more Common Shares who for the purposes of the Tax Act is a non-resident of Canada, holds his Common Shares as capital property and deals at arms length with the Company.

Dividends

A Holder will be subject to Canadian withholding tax (Part XIII Tax) equal to 25%, or such lower rates as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his Common Shares. Under the Tax Convention, the rate of Part XIII Tax applicable to a dividend on Common Shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Company, 5% and, in any other case, 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.



- 51 -



Disposition of Common Shares

A Holder who disposes of Common Shares, including by deemed disposition on death, will not be subject to Canadian tax on any capital gain thereby realized unless the common Share constituted taxable Canadian property as defined by the Tax Act. Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder unless he held the common share as capital property used by him carrying on a business in Canada, or he or persons with whom he did not deal at arms length alone or together held or held options to acquire, at any time within the 60 months preceding the disposition, 25% or more of the issued shares of any class of the capital stock of the Company.

A Holder who is a resident of the United States and realizes a capital gain on disposition of Common Shares that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the Common Shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resources properties, (b) the Common Shares formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding disposition, or (c) the Holder (i) was a resident of Canada at any time within the ten years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the Common Shares when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of Common Shares must include one half of the capital gain (taxable capital gain) in computing his taxable income earned in Canada.  The Holder may, subject to certain limitations, deduct one half of any capital loss (allowable capital loss) arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.

United States Federal Income Tax Consequences

The following is a discussion of material United States Federal income tax consequences, under the law, generally applicable to a U.S. Holder (as defined below) of Common Shares.  This discussion does not cover any state, local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possible on a retroactive basis, at any time.  In addition, the discussion does not consider the potential effects, both adverse and beneficial, or recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.  The discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of Common Shares of the Company.  Each holder and prospective holder of Common Shares of the Company is advised to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of Common Shares of the Company applicable to their own particular circumstances.





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U.S. Holders

As used herein, a (U.S. Holder) includes a holder of Common Shares of the Company who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code.  This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a functional currency other than the U.S. dollar, shareholders who hold Common Shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their Common Shares through the exercise of employee stock options or otherwise as compensation for services.  This summary is limited to U.S. Holders who own Common Shares as capital assets.  This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire Common Shares.



Distribution of Common Shares

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions.  Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holders United States Federal Income tax liability or, alternatively, for individuals may be deducted in computing the U.S. Holders United States Federal taxable income by those individuals who itemize deductions.  (See more detailed discussion at Foreign Tax Credit below).  To the extent that distributions exceed current or accumulated earnings and profits of the Company, they generally will be treated first as a return of capital up to the U.S. Holders adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust.  There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale of other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.  A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company.  The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Under current Treasury Regulations, dividends paid on the Companys common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Companys common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 30% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.



- 53 -



Foreign Tax Credit

For individuals whose entire income from sources outside the United States consists of qualified passive income, the total amount of creditable foreign taxes paid or accrued during the taxable year does not exceed $300 ($600 in the case of a joint return) and an election is made under section 904(k), the limitation on credit does not apply.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of Common Shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax.  This election is made on a year-by-year basis and applies to all foreign income taxes (or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder during the year.  There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holders United States income tax liability that the U.S. Holders foreign source income bears to his/her or its worldwide taxable income in the determination of the application of this limitation.  The various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process.  In addition, this limitation is calculated separately with respect to specific classes of income such as passive income, high tax income, financial services income, and certain other classifications of income.  Dividends distributed by the Company will generally constitute passive income or, in the case of certain U.S. Holders, financial services income for these purposes.  The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and management urges holders and prospective holders of common shares of the Company to consult their own tax advisors regarding their individual circumstances.



Disposition of Common Shares

A U.S. Holder will recognize gain or loss upon the sale of Common Shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholders tax basis in the Common Shares of the Company.  Preferential tax rates apply to long-term capital gains of U.S. Holders, which are individuals, estates or trusts.  This gain or loss will be capital gain or loss if the Common Shares are capital assets in the hands of the U.S. Holder, which will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder.  Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year.  Deductions for net capital losses are subject to significant limitations.  For U.S. Holders which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted, but individuals may not carry back capital losses.  For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Other Considerations

In the following circumstances, the above sections of the discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of Common Shares of the Company.



Passive Foreign Investment Company

As a foreign corporation with U.S. Holders, the Company could potentially be treated as a passive foreign investment company (PFIC), as defined in Section 1297 of the Code, depending upon the percentage of the Companys income which is passive, or the percentage of the Companys assets which is held for the purpose of producing passive income.



- 54 -





Certain United States income tax legislation contains rules governing PFICs, which can have significant tax effects on U.S. shareholders of foreign corporations.  These rules do not apply to non-U.S. shareholders.  Section 1297(a) of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (i) 75% or more of its gross income is passive income, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the company is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more.  The taxation of a US shareholder who owns stock in a PFIC is extremely complex and is therefore beyond the scope of this discussion.  Management urges US persons to consult with their own tax advisors with regards to the impact of these rules.



Controlled Foreign Corporation

A Controlled Foreign Corporation (CFC) is a foreign corporation more than 50% of whose stock by vote or value is, on any day in the corporations tax year, owned (directly or indirectly) by U.S. Shareholders.  If more than 50% of the voting power of all classes of stock entitled to vote is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own actually or constructively 10% or more of the total combined voting power of all classes of stock of the Company, then the Company could be treated as a controlled foreign corporation under Subpart F of the Code.  This classification would affect many complex results, one of which is the inclusion of certain income of a CFC, which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFCs Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFCs earnings invested in U.S. property.  The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Corporation, and such U.S. Holder owned 10% or more of the voting power at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company (accumulated in corporate tax years beginning after 1962, but only while the shares were held and while the Company was controlled) attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to the United States Shareholders of the CFC.  This rule generally will be effective for taxable years of United States Shareholders beginning after 1986 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders.  The PFIC provisions continue to apply in the case of PFIC that is also a CFC with respect to the U.S. Holders that are less than 10% shareholders.  Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion.

The amount of any backup withholding will not constitute additional tax and will be allowed as a credit against the U.S. Holders federal income tax liability.



Filing of Information Returns

Under a number of circumstances, a United States Investor acquiring Common Shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns.  In particular, any U.S. Holder who becomes the owner, directly or indirectly, of 10% or more of the Common Shares of the Company will be required to file such a return.  Other filing requirements may apply, and management urges U.S. Holders to consult their own tax advisors concerning these requirements.





- 55 -







F.

Dividends and Paying Agents.

Not Applicable

G.

Statement by Experts.

Not Applicable

H.

Documents on Display.

The documents concerning the Company which are referred to in this Annual Report may be inspected at the Companys executive offices, located at Suite 830, 355 Burrard Street, Vancouver, BC.

I.

Subsidiary Information.

Not Applicable

Item 11.

Quantitative and Qualitative Disclosures About Market Risk.

There are no market risks which can be expected to materially affect the Companys business.

Mineral Prices

Even if the Companys exploration programs are successful, factors beyond the control of the Company may affect the marketability of any minerals discovered.  Metal prices have historically fluctuated widely and are affected by numerous factors, including international, economic and political trends, expectations for inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities and worldwide production levels.  The effect of these factors cannot be accurately predicted.

Foreign Currency Translation

Monetary items denominated in a foreign currency are translated into Canadian dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred.  Foreign currency denominated revenue and expense items are translated at exchange rates prevailing at the transaction date.  Gains or losses arising from the translations are included in operations.

Item 12.

Description of Securities Other than Equity Securities.

Not Applicable



- 56 -



PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds.

None.

Item 15.

Controls and Procedures

Disclosure Controls and Procedures

The Companys management, including the Chief Executive Officer and the Chief Financial Officer, has reviewed and evaluated the effectiveness of the Companys disclosure controls and procedures as of December 31, 2010.  Based on that review and evaluation, management has concluded that the Companys disclosure controls and procedures are effective in providing management with all material information required to be disclosed in this annual report on a timely basis.



Managements Annual Report on Internal Control over Financial Reporting



Management is responsible for establishing and maintaining adequate internal control over financial reporting. All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Managements framework for evaluating the effectiveness of its internal controls is based upon the criteria established in Internal Control Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.



As at December 31, 2010, management assessed the effectiveness of our internal controls over financial reporting and concluded that such internal controls over financial reporting are effective and that there were no material weaknesses in our internal controls over financial reporting.



Attestation Report of the Registered Accounting Firm.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this Form 20-F annual report.

Changes in Internal Controls Over Financial Reporting

There has been no change in the Companys internal controls over financial reporting that occurred during the period covered by this Form 20-F, that has materially affected or is reasonably likely to materially affect, the Companys internal controls over financial reporting.



- 57 -



Item 16.

[Reserved]

Item 16A.

Audit Committee Financial Expert



The Company has not identified an Audit Committee Financial Expert among the three directors currently serving on the audit committee.  The current members are Mario Szotlender, Bradford Cooke and Craig Bow. All three members have extensive experience as officers and directors of public mineral exploration companies, and as a result, are financially literate and have an understanding of internal controls and procedures.

Item 16B.

Code of Ethics

The Company has not adopted a formal written code of ethics given its relatively small size.  Directors and officers of the Company are subject to the laws of the Province of British Columbia, Canada, whereby they are required to act honestly, in good faith and in the best interests of the Company.  Also, the Board of Directors of the Company is comprised of two lawyers who are available to the management of the Company to provide a high standard of care in the activities of the Company and to provide guidance when needed.

Item 16C.

Principal Accountant Fees and Services

The chart below sets forth the total amounts billed the Company by BDO Canada LLP during the Companys fiscal years ended December 31, 2010 and 2009, and breaks down these amounts by category of service:



|                             | Years ended December 31
|---------------------------- | -----------------------
|                             | 2010                   
|Audit:                       | $95,000                
|Audit Related:               | -                      
|Tax (tax return preparation) | $6,200                 
|All Other Fees               | -                      
|Total                        | $101,200               

Audit is the aggregate amount billed for the audit of the Companys consolidated annual financial statements in connection with statutory and regulatory filings or engagements.

Audit Committee's pre-approval policies and procedures

The Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audit, audit-related services, tax services and other services provided by the Companys outside auditors.  Any services provided by the auditors that are not specifically included within the scope of the audit must be pre-approved by the audit committee prior to any engagement.  The audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimusexception before the completion of the engagement.  In 2010, none of the fees paid to the auditors were approved pursuant to the de minimusexception.



- 58 -





Item 16D.

Exemptions from the Listing Standards for Audit Committees.

Not Applicable

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

None

PART II

Item 17.

Financial Statements

The Companys Consolidated Financial Statements are stated in Canadian Dollars and are prepared in accordance with Canadian GAAP, the application of which, in the case of the Company, conforms in all material respects for the periods presented with U.S. GAAP, except as discussed in Note 18 to the Consolidated Financial Statements of the Company.

The Consolidated Financial Statements of the Company as required under Item 17 of Form 20-F attached hereto are individually listed under Item 19, and are found immediately following the text of this Annual Report.  The audit report of BDO Canada LLP, Chartered Accountants is included herein immediately preceding the Consolidated Financial Statements.

Item 18.

Financial Statements.

Not Applicable

Item 19.

Exhibits.

Financial Statements

The Consolidated Financial Statements of the Corporation and exhibits listed below are filed with this Annual Report on Form 20-F in the United States.

The following financial statements are attached to and form part of this Annual Report:

|Consolidated Financial Statements of the Company                                                                
|----------------------------------------------------------------------------------------------------------------
|-
Report of Independent Registered Public Accounting Firm of BDO Canada LLP, Chartered Accountants              
|-
Consolidated Balance Sheets as at December 31, 2010 and 2009                                                  
|-
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008                    
|-
Consolidated Statements of Deficit and Comprehensive Loss for the years ended December 31, 2010, 2009 and 2008
|-
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008                    
|-
Notes to the Consolidated Financial Statements of the Company for the years ended December 31, 2010 and 2009  

- 59 -



Exhibits

The following exhibits are attached to and form part of this Annual Report:

|Exhibit No. | Description                                                                        
|----------- | -----------------------------------------------------------------------------------
|1 (1)       | Certificate of Amalgamation and Articles of the Company dated July 1, 2004.        
|4 (2)       | Agreement dated June 2, 2008 between the Company and Kappes, Cassiday & Associates.
|4 (3)       | Agreement dated December 23, 2009 between the Company and B2Gold Corp.             
|8 (4)       | List of Subsidiaries                                                               
|18          | Letter Regarding Accounting Policy Change                                          
|31.1        | Section 302 Certification of the President, C.E.O. and C.F.O.                      
|32.1        | Section 906 Certification of the President, C.E.O. and C.F.O.                      



(1)

Incorporated by reference to the Companys Form 20-F Registration Statement dated July 13, 2005.



(2)

Incorporated by reference to the Companys Form 20-F Registration Statement dated May 27, 2009.



(3)

Incorporated by reference to the Companys Form 20-F Registration Statement dated June 30, 2011.



(4)

See Item 4, Organizational Structure, herein.











- 60 -



















[radius20f2010007.jpg]





(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

(Expressed in Canadian Dollars)















- 61 -







[radius20f2010008.jpg]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the shareholders of Radius Gold Inc.



We have audited the accompanying financial statements of Radius Gold Inc., which comprise the consolidated balance sheets as at December 31, 2010 and December 31, 2009, and the consolidated statements of operations, deficit and comprehensive loss, and cash flows for each of the years in the three-year period ended December 31, 2010, and a summary of significant accounting policies and other explanatory information.



Management's Responsibility for the Financial Statements



Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian Generally Accepted Accounting Principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.



Auditor's Responsibility



Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.



An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the presentation of the financial statements.



We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.



Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Radius as at December 31, 2010 and 2009 and the results of its operations and its cash flows for each of the years ended in the three-year period ended December 31, 2010 in accordance with Canadian Generally Accepted Accounting Principles.



Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the financial statements, which indicates that the Company incurred accumulated losses of $46,280,912 since inception and is expected to incur further losses in the development of its business.  These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that casts substantial doubt upon the Companys ability to continue as a going concern.



(signed) BDO Canada LLP



Chartered Accountants

April 28, 2011



- 62 -









|RADIUS GOLD INC.                                 
|-------------------------------------------------
|(An Exploration Stage Company)                   
|CONSOLIDATED BALANCE SHEETS                      
|DECEMBER 31, 2010 AND 2009                       
|(Expressed in Canadian Dollars)                  
|                                                 
|                                                 
|ASSETS                                           
|                                                 
|CURRENT                                          
|Cash and cash equivalents                        
|Marketable securities (Note 4)                   
|Advances and other receivables (Note 7)          
|Taxes receivable                                 
|Due from related parties (Note 7)                
|Prepaid expenses and deposits                    
|                                                 
|                                                 
|LONG-TERM DEPOSITS                               
|PROPERTY & EQUIPMENT(Note 5)                     
|MINERAL PROPERTIES(Note 6)                       
|                                                 
|                                                 
|                                                 
|LIABILITIES and SHAREHOLDERS EQUITY             
|                                                 
|CURRENT                                          
|Accounts payable and accrued liabilities (Note 7)
|                                                 
|FUTURE INCOME TAX LIABILITY(Note 13)             
|                                                 
|                                                 
|SHAREHOLDERS'  EQUITY                            
|                                                 
|SHARE CAPITAL(Note 8)                            
|CONTRIBUTED SURPLUS(Note 8)                      
|DEFICIT                                          
|ACCUMULATED OTHER COMPREHENSIVE INCOME(Note 11)  
|                                                 
|                                                 
|                                                 



Nature of Operations and Ability to Continue as a Going Concern (Note 1)

Commitments (Notes 8 and 12)

Subsequent Event (Notes 6 and 16)



APPROVED BY THE DIRECTORS:



Simon Ridgway, Director

Mario Szotlender:, Director

Simon Ridgway

Mario Szotlender



See Accompanying Notes



- 63 -







|RADIUS GOLD INC.                                     
|-----------------------------------------------------
|(An Exploration Stage Company)                       
|CONSOLIDATED STATEMENTS OF OPERATIONS                
|FOR THE YEARS ENDED DECEMBER 31, 2010, 2009, AND 2008
|(Expressed in Canadian Dollars)                      
|                                                     
|                                                     
|                                                     
|EXPLORATION EXPENDITURES                             
|                                                     
|GENERAL AND ADMINISTRATIVE EXPENSES                  
|Amortization                                         
|Consulting fees (Note 7)                             
|Donations                                            
|Legal and audit fees                                 
|Management fees (Note 7)                             
|Non-cash compensation charge (Note 8)                
|Office and miscellaneous                             
|Public relations                                     
|Rent and utilities                                   
|Repair and maintenance                               
|Salaries and wages                                   
|Telephone and communications                         
|Transfer agent and regulatory fees                   
|Travel and accommodation                             
|                                                     
|Loss before other items                              
|                                                     
|OTHER INCOME (EXPENSES)                              
|Foreign currency exchange gain (loss)                
|Gain on sale of properties (Note 6)                  
|Gain (loss) on disposal of property and equipment    
|Gain (loss) on sale of marketable securities         
|Gain from mineral property option agreements         
|Investment income                                    
|Write-off of prepaid expenses and deposits           
|Write-off of accrued liabilities                     
|Write-off of mineral properties costs                
|Loss before income taxes                             
|                                                     
|Future income tax recovery (expense) (Note 13)       
|                                                     
|Net loss for the year                                
|                                                     
|BASIC AND DILUTED LOSS PER SHARE                     
|                                                     
|WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 



See Accompanying Notes





- 64 -







|RADIUS GOLD INC.                                                           
|---------------------------------------------------------------------------
|(An Exploration Stage Company)                                             
|CONSOLIDATED STATEMENTS OF DEFICIT AND COMPREHENSIVE LOSS                  
|FOR THE YEARS ENDED DECEMBER 31, 2010, 2009, AND 2008                      
|(Expressed in Canadian Dollars)                                            
|                                                                           
|                                                                           
|                                                                           
|Deficit,  beginning of the year                                            
|As previously reported                                                     
|Prior period adjustment (Note 2)                                           
|As restated                                                                
|Net loss for the year                                                      
|Deficit,  end of the year                                                  
|                                                                           
|Net Loss                                                                   
|Other comprehensive income, net of tax                                     
|Unrealized gain (loss) on available-for-sale
marketable securities (Note 4)
|COMPREHENSIVE LOSS                                                         



See Accompanying Notes



- 65 -







|RADIUS GOLD INC.                                             
|-------------------------------------------------------------
|(An Exploration Stage Company)                               
|CONSOLIDATED STATEMENTS OF CASH FLOWS                        
|FOR THE YEARS ENDED DECEMBER 31, 2010, 2009, AND 2008        
|(Expressed in Canadian Dollars)                              
|                                                             
|OPERATING  ACTIVITIES                                        
|Net loss for the year                                        
|Items not involving cash:                                    
|Amortization                                                 
|Gain from mineral property option agreements                 
|Gain on sale of properties                                   
|Loss (gain) from disposal of property and equipment          
|Unrealized foreign exchange                                  
|Settlement of severance payment                              
|Write off of prepaid expenses and deposits                   
|Write off of mineral properties costs                        
|Write off of VAT receivable                                  
|Write off of accrued liabilities                             
|Loss (gain) on disposal of investments                       
|Future income tax expenses (recovery)                        
|Non-cash compensation charge                                 
|                                                             
|Changes in non-cash working capital items:                   
|Advances and other receivables                               
|Taxes receivable                                             
|Prepaid expenses                                             
|Due from related parties                                     
|Accounts payable and accrued liabilities                     
|                                                             
|INVESTING ACTIVITIES                                         
|Purchase of marketable securities and investments            
|Expenditures on mineral property acquisition costs           
|VAT recoverable                                              
|Gain from mineral property option agreements                 
|Proceeds from sale of mineral properties                     
|Proceeds from sale of assets                                 
|Proceeds from sale of marketable securities and investments  
|Purchase of property & equipment                             
|                                                             
|FINANCING  ACTIVITIES                                        
|Proceeds on issuance of common shares, net                   
|Foreign exchange on opening cash and cash equivalents        
|INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS FOR THE YEAR
|Cash and cash equivalents,  beginning of year                
|CASH AND CASH EQUIVALENTS, END OF YEAR                       



Supplemental cash flow information - Note 6 and 9



See Accompanying Notes



- 66 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



1.

Nature of Operations and Ability to Continue as a Going Concern



Radius Gold Inc. (the Company) was formed by the amalgamation of Radius Explorations Ltd. and PilaGold Inc. which became effective on July 1, 2004.



The Company is engaged in acquisition and exploration of mineral properties located primarily in Central America and Canada.  The amounts shown for the mineral properties represent costs incurred to date and do not reflect present or future values.  The Company is in the process of exploring its mineral properties and has not yet determined whether the properties contain reserves that are economically recoverable.  Accordingly, the recoverability of these capitalized costs is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete their development and upon future profitable production or disposition thereof.



These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.  Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At December 31, 2010, the Company had not yet achieved profitable operations, has accumulated losses of $46,280,912 since inception, and is expected to incur further losses in the development of its business, all of which raises substantial doubt about its ability to continue as a going concern.  The Company will require additional financing in order to conduct its planned work programs on mineral properties, meet its ongoing levels of corporate overhead and discharge its liabilities as they come due.  While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.  Accordingly, these financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern.  If the going concern assumption was not used then the adjustments required to report the Companys assets and liabilities on a liquidation basis could be material to these financial statements.



2.

Significant Accounting Policies



Management has prepared the consolidated financial statements of the Company in accordance with Canadian generally accepted accounting principles.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.  Actual results may differ from those estimates.  The financial statements have, in managements opinion, been properly prepared using careful judgement and within the framework of the significant accounting policies summarized below.



a)

Principles of Consolidation



These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries:



i)

Minerales Sierra Pacifico S.A., Exploraciones Mineras de Guatemala S.A., and Recursos Del Golfo, companies incorporated under the laws of Guatemala;

ii)

Minerales de Nicaragua S.A. and Desarrollo Geologico Minerao, S.A., companies incorporated under the laws of Nicaragua;

iii)

Recursos Del Cibao, S.A., a company incorporated under the laws of the Dominican Republic;

iv)

Radius Panamá Corporation, Weltern Resources Corp. and Corporación Geológica de Panamá, companies incorporated under the laws of Panamá.  All of which were dissolved during the year ended December 31, 2009;





- 67 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



2.

Significant Accounting Policies  (contd)



a)

Principles of Consolidation  (contd)



v)

Radius (Cayman) Inc. and Pavon (Cayman) Inc., companies incorporated under the laws of Cayman Island;

vi)

Geometales Del Norte-Geonorte, a company incorporated under the laws of Mexico and

vii)

Minera Aymara S.A.C. (formerly called Radius Peru, S.A.C.), a company incorporated under the laws of Peru.



All significant inter-company transactions have been eliminated upon consolidation.



b)

Cash and Cash Equivalents



Cash and cash equivalents included highly liquid investments with original maturities of three months or less.



c)

Marketable Securities



Marketable securities are recorded at fair market value as they are considered available-for-sale.



d)

Mineral Properties



During the fourth quarter of 2009, the Company changed its accounting policy for exploration costs by expensing the costs as incurred as it more accurately reflects the exploration industry.  The change was effective on January 1, 2009 and applied retroactively.  In the years ending December 31, 2008 and prior to, the Company capitalized the acquisition cost of mineral properties and deferred exploration and development expenditures directly related to specific mineral properties, net of recoveries received. Management believes that the revised treatment provides a more relevant and consistent depiction of the asset base of the Company prior to establishing the economic feasibility of its resource base. These changes have been applied retrospectively for all periods presented.



Consistent with prior periods, mineral property acquisition costs are capitalized and include the cash consideration paid and the fair value of common shares issued on acquisition, based on the trading price of the shares on the date of the agreement to issue the shares.



Options are exercisable entirely at the discretion of the optionee and, amounts received from optionees in connection with option agreements are credited against the capitalized acquisition costs classified as mineral properties on the balance sheet and amounts received in excess are credited to gain from mineral property option agreements on the statement of operations.



Where the Company has entered into option agreements to acquire interests in mineral properties that provide for periodic payments or periodic share issuances, amounts unpaid and unissued are not recorded as liabilities since they are payable and issuable entirely at the Companys option. Option payments are recorded as mineral property costs when the payments are made or received and the share issuances are recorded as mineral property costs using the fair market value of the Companys common shares at the earlier of the date the counterpartys performance is complete or the issuance date.





- 68 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



2.

Significant Accounting Policies  (contd)



d)

Mineral Properties  (contd)



The Company is in the process of exploring and developing its mineral properties and has not yet determined the amount of reserves available.  Management reviews the carrying value of mineral properties on a periodic basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable will recognize impairment in value based upon current exploration results, the prospect of further work being carried out by the Company, the assessment of future probability of profitable revenues from the property or from the sale of the property.  Amounts shown for properties represent costs incurred net of write-downs and recoveries, and are not intended to represent present or future values.



Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated.  Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Companys commitment to a plan of action based on the then known facts.



e)

Property, Equipment and Amortization



Property and equipment are recorded at cost.  Equipment is amortized over their estimated useful lives using the following methods:



Leasehold improvements

5 years straight-line

Trucks

4  8 years straight-line

Computer equipment

25% - 50% declining balance

Field equipment

30% declining balance

Furniture and equipment

20% declining balance

Geophysical equipment

20% declining balance

Website

30% declining balance



Additions to equipment are amortized at one-half rate during the year of acquisition.



f)

Basic and Diluted Loss per Share



Basic loss per share is calculated by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the year.  Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity.  In a loss year, potentially dilutive common shares are excluded from the loss per share calculation as the effect would be anti-dilutive.  Basic and diluted loss per share are the same for the years presented.



For the years ended December 31, 2010, 2009 and 2008, potentially dilutive common shares (relating to options and warrants outstanding at year-end) totalling 14,294,696 (2009: 4,270,000; 2008: 5,025,000) were not included in the computation of loss per share because their effect was anti-dilutive.



g)

Income Taxes



The Company accounts for income taxes using the asset and liability method.  Under this method, current income taxes are recognized for the estimated income taxes payable for the current period.  Future income taxes assets and liabilities are recognized for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes only if it is more likely than not that they can be realized.





- 69 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



2.

Significant Accounting Policies  (contd)



h)

Flow-through Shares



The Company provides certain share subscribers with a flow-through component for tax incentives available on qualifying Canadian exploration and development expenditures. Upon renunciation to the shareholders, the Company reduces share capital and records a future income tax liability for the amount of tax deduction renounced to shareholders at the date of filing with the tax authority.



i)

Foreign Currency Translation



These consolidated financial statements are measured and expressed in Canadian dollars.  Integrated foreign operations are translated using the temporal method, whereby monetary items denominated in a foreign currency are translated into Canadian dollars at exchange rates prevailing at the balance sheet date and non-monetary items are translated at exchange rates prevailing when the assets were acquired or obligations incurred.  Foreign currency denominated revenue and expense items are translated at exchange rates prevailing at the transaction date.  Gains or losses arising from the translations are included in operations.



j)

Stock-based Compensation



The Company has a stock-based compensation plan as disclosed in Note 8, whereby stock options are granted in accordance with the policies of regulatory authorities.  The fair value of all share purchase options is expensed over their vesting period with a corresponding increase to contributed surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital.



The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of grant.  Option valuation models require the input of highly subjective assumptions, including the expected price volatility.  Changes in these assumptions can materially affect the fair value estimate.



k)

Asset Retirement Obligation



The fair value of obligations associated with the retirement of tangible long-lived assets is recorded in the period it is incurred with a corresponding increase to the carrying amount of the related asset.  The obligations recognized are statutory, contractual or legal obligations.  The liability is accreted over time for changes in the fair value of the liability through charges to accretion, which is included in depletion, amortization and accretion expense.  The costs capitalized to the related assets are amortized in a manner consistent with the depletion and amortization of the related asset.



At December 31, 2010 and 2009, the fair value of the mineral properties site restoration costs is not significant.



l)

Impairment of Long-lived Assets



Canadian generally accepted accounting principles require that long-lived assets and intangibles to be held and used by the Company be reviewed for possible impairment whenever events or changes in circumstances indicate that the asset may not be recoverable.  If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold and use may not be recoverable, future cash flows expected to result from the use of the asset and its disposition must be estimated.  If the undiscounted value of the future cash flows is less than the carrying amount of the asset, impairment is recognized.





- 70 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



2.

Significant Accounting Policies  (contd)



m)

Financial Instruments



The Company has made the following designations of its financial instruments: cash and cash equivalents as held-for-trading; marketable securities as available-for-sale; advances and other receivables and due from related parties as loans and receivables; and accounts payable and accrued liabilities as other financial liabilities.



The classification of fair value measurements is based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The level within which the fair value measurement is categorized is based upon the lowest level of input that is significant to the measurement. The Company categorizes all of its financial instruments which are measured at fair value as Level 1. Level inputs are as follows:

Level 1  quoted prices in active markets for identical securities

Level 2  significant observable inputs other than quoted prices included in Level 1

Level 3  significant unobservable inputs



Comprehensive Income



Comprehensive income is composed of the Companys earnings and other comprehensive income.  Other comprehensive income includes unrealized gains and losses on available-for-sale securities, all net of income taxes.  Cumulative changes in other comprehensive loss will be included in accumulated other comprehensive loss which will be presented as a separate category in shareholders equity.



n)

Financial Instruments Value-added Taxes Recoverable



The Company incurred value-added taxes (VAT) in Mexico during the years ended December 31, 2010 and 2009 which relates to mineral property expenditures and other expenses.  Due to the uncertainty surrounding the collection, the Company has included the VAT in exploration expenditures.



3.

Future Accounting Changes



International Financial Reporting Standards (IFRS)



In 2006, the Canadian Accounting Standards Board (AcSB) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies.  The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period.  In February 2008 the AcSB announced that 2011 is the changeover date for the publicly-listed companies to use IFRS, replacing Canadas own GAAP.  The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010 in the financial statements for the year ended December 31, 2011. The eventual changeover to IFRS represents changes due to new accounting standards. The transition from current Canadian GAAP to IFRS is a significant undertaking that may materially affect the Company's reported financial position and results of operations.





- 71 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



3.

Future Accounting Changes  (contd)



Business Combinations, Consolidated Financial Statements and Non-Controlling Interest



In January 2009, the Canadian Institute of Chartered Accountants (CICA) issued CICA Handbook Section 1582, Business Combinations, Section 1601, Consolidations, and Section 1602, Non-Controlling Interests. These sections replace the former Section 1581, Business Combinations, and Section 1600, Consolidated Financial Statements, and establish a new section for accounting for a non-controlling interest in a subsidiary. Section 1582 establishes standards for the accounting for a business combination, and states that all assets and liabilities of an acquired business will be recorded at fair value. Obligations for contingent consideration and contingencies will also be recorded at fair value at the acquisition date. The standard also states that acquisition-related costs will be expensed as incurred and that restructuring charges will be expensed in the periods after the acquisition date. It provides the Canadian equivalent to IFRS 3, Business Combinations (January 2008). The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011.



Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in the preparation of consolidated financial statements subsequent to a business combination. It is equivalent to the corresponding provisions of IFRS International Accounting Standards (IAS) 27, Consolidated and Separate Financial Statements (January 2008).



Sections 1601 and 1602 apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier adoption of these sections is permitted as of the beginning of a fiscal year. All three sections must be adopted concurrently. The Company is currently evaluating the impact of the adoption of these sections.



4.

Marketable Securities and Portfolio Investments



Marketable securities are recorded at fair market value as they are classified as available-for-sale financial instruments.  As of December 31, 2010, marketable securities consisted of 1,007,406 common shares of Focus Ventures Ltd. (Focus), 7,813 common shares of Fortuna Silver Mines Inc. (Fortuna), and 600,000 common shares in Wesgold Minerals Inc. (Wesgold), all public companies with common directors or officers, and 600,000 common shares in Solomon Resources Limited (Solomon).



As of December 31, 2010, all the Companys portfolio investments has been disposed of. As at December 31, 2009 portfolio of marketable securities consists of short term notes with a yield range of .21% - 0.95%, Canadian provincial government bonds with a yield of 3.55%, corporate bonds with a yield range of 0.61% - 7.86%, pool fund bonds with a yield range of 3.97% - 4.76%, and preferred equities with a yield range of 4.43% - 7.27%.



As at December 31, 2010, the carrying amount for the marketable securities was $994,609 (2009: $1,715,650).  An unrealized loss of $212,917 was recorded in other comprehensive income (2009: gain of $956,004; 2008: loss of $8,692).





- 72 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



5.

Property and Equipment



| |                         | 2010              
| | ----------------------- | ------------------
| |                         |                   
| |                         | Cost              
| | Leasehold improvements  | $           21,328
| | Trucks                  | 259,918           
| | Computer equipment      | 191,418           
| | Furniture and equipment | 43,452            
| | Geophysical equipment   | 91,494            
| | Field equipment         | 2,480             
| | Website                 | 14,233            
| |                         | $        624,323  





| |                         | 2009            
| | ----------------------- | ----------------
| |                         |                 
| |                         | Cost            
| | Leasehold improvements  | $         17,730
| | Trucks                  | 299,597         
| | Computer equipment      | 173,178         
| | Furniture and equipment | 31,558          
| | Geophysical equipment   | 36,178          
| | Website                 | 8,433           
| |                         | $       566,674 



Amortization for property and equipment for the year ended December 31, 2010 was $49,655 (2009: $54,540; 2008: $88,609).





- 73 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties



| |                             | Guatemala   | Nicaragua | Peru      | Canada    | Total      
| | --------------------------- | ----------- | --------- | --------- | --------- | -----------
| | Balance,  December 31, 2008 | $
4,142,864 | $
82,482  | $
210,566 | $
-       | $
4,435,912
| | Cash                        | -           | -         | 62,059    | 183,313   | 245,372    
| | Acquisition costs recovered | -           | -         | (62,059)  | (101,523) | (163,582)  
| | Write-off acquisition costs | -           | -         | (210,566) | (13,544)  | (224,110)  
| | Balance,  December 31, 2009 | 4,142,864   | 82,482    | -         | 68,246    | 4,293,592  
| | Shares                      | -           | -         | -         | 111,300   | 111,300    
| | Cash                        | -           | -         | -         | 717,544   | 717,544    
| | Acquisition costs recovered | -           | -         | -         | (90,701)  | (90,701)   
| | Balance,  December 31, 2010 | $
4,142,864 | $
82,482  | $
-       | $
806,389 | $
5,031,735



Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.



A)

Canada



i)

Ten Mile Creek Property - Yukon Territory

The Ten Mile Creek Property, Yukon is comprised of 323 claims, of which 269 claims were acquired by the Company in April 2009 by staking, and 54 claims (the Optioned Claims) were optioned to the Company in June 2009.  The Company has the option to earn a 100% interest in the Optioned Claims in consideration of conducting an initial sampling program of $70,000 (completed) and cash and share payments to the property owner according to the following schedule:

a)

$25,000 on signing of the agreement (paid);

b)

$50,000 on or before May 31, 2010 (paid);

c)

$75,000 on or before May 31, 2011;

d)

$75,000 on or before May 31, 2012;

e)

$75,000 on or before May 31, 2013; and

f)

either $100,000 or issue 400,000 shares, on or before May 31, 2013, the method of such payment at the discretion of the property owner.



Commencing on May 31, 2014 and on May 31 each year thereafter, the Company must pay $10,000 to the property owner until such time as commercial production of the Property is achieved, at which time the $10,000 payment shall cease and the property owner shall be entitled to a 1.0% NSR royalty.  As well, an underlying 1.5% NSR royalty is payable to Teck Resources Limited.  The Company has the right at any time to reduce the property owners NSR to 0.5% by paying $500,000, or to 0.25% by paying $1.0 million.



In September 2009, the Company optioned its interests in the Ten Mile Creek Property to Solomon Resources Limited (Solomon).  Solomon can earn a 51% interest in the Property by spending $2.5 million on exploration and making staged cash and share payments to the Company of $500,000 cash and 1 million shares of Solomon over three years according to the following schedule:





- 74 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



A)

Canada  (contd)



i)

Ten Mile Creek Property - Yukon Territory  (contd)

a)

500,000 shares upon TSX Venture Exchange (TSX-V) approval of the transaction (received);

b)

$100,000 cash and 100,000 common shares by May 21, 2010 (received), and spending $350,000 during the 2010 exploration season (expended);

c)

$150,000 cash and 150,000 common shares by May 21, 2011, and spending $650,000 during the 2011 exploration season; and

d)

$250,000 cash and 250,000 common shares by May 21, 2012, and spending $1,500,000 during the 2012 exploration season.



Upon completion of the earn-in, a 51/49 joint venture will be formed between Solomon and the Company.



ii)

Gold Run Property - Yukon Territory

In June 2009, the Company was granted the option to earn a 100% interest in the Gold Run Property, Yukon which consists of 26 claims, in consideration of conducting an initial sampling program of $50,000 (completed) and cash and share payments to the property owner over a period of four years, of which the Company paid $10,000 on signing of the agreement.



During the year ended December 31, 2009, management of the Company decided to terminate its option on the property and wrote-off $13,544 in acquisition costs.



iii)

Sixty Mile Area -Yukon Territory & Alaska

The Sixty Mile Property straddles the Yukon/Alaska border and consists of 945 claims as at December 31, 2010.  670 claims were acquired by the Company by staking or purchase from third parties, of which 640 claims are located in the Yukon and 30 claims in Alaska.



In 2009 and 2010, the Company entered into agreements with various landowners whereby it has the option to acquire a 100% interest in 275 of the Yukon claims in consideration of cash payments totaling $837,300 and the issuance of a total of $688,000 worth of shares of the Company, over a four-year period.  Up to December 31, 2010, the Company has made option payments totaling $253,600 cash and issued 197,509 shares with a fair value of $91,800, and the Company completed its earn-in to acquire 18 of the optioned claims.



After completing the cash payments and share issuances pursuant to the option agreements, the Company must pay annual advance royalty payments totaling $204,000 to the property owners until such time as commercial production on the applicable property is achieved, at which time the property owner(s), as applicable, shall be entitled to NSR royalties ranging from 2.5% to 3.0%.



iv)

Snowcap Property -Yukon Territory

In 2009, the Company staked 198 claims in the Whitehorse Mining District, Yukon known as the Snowcap Property. By an agreement dated November 8, 2009, as amended, the Company granted to Wesgold Minerals Inc. (Wesgold) the option to acquire 60% interest in the Property in consideration of issuing to the Company an aggregate of 1,000,000 Wesgold common shares and incurring exploration expenditures of $1,000,000, over a four-year period according to the following schedule:





- 75 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



A)

Canada  (contd)



iv)

Snowcap Property  Yukon Territory  (contd)

a)

200,000 shares upon signing (received);

b)

$100,000 in exploration expenditures by December 31, 2009 (expended);

c)

200,000 shares upon public listing of Wesgold (received);

d)

200,000 shares and $200,000 in exploration expenditures by December 31, 2010 (shares received and expenditures incurred);

e)

200,000 shares and $300,000 in exploration expenditures by October 30, 2011; and

f)

200,000 shares and $400,000 in exploration expenditures by October 30, 2012.



The Company and Wesgold have common directors and officers.  The Company and Wesgold are related parties and the transaction has been accounted for at its carrying amount.



v)

Rivier Property - Yukon Territory

During the year ended December 31, 2010, the Company acquired interests in a total of 116 claims in the Watson Lake Mining District, Yukon known as the Rivier Property.  The Company acquired 16 claims by staking, and was granted an option to earn a 100% interest in 100 claims. In order to exercise the option, the Company must pay to the property owner a total of $175,000 cash and issue a total of 200,000 shares over four years according to the following schedule:

a)

$25,000 cash and 25,000 common shares upon signing (cash paid and shares issued);

b)

$10,000 cash and 25,000 common shares on or before July 18, 2011;

c)

$20,000 cash and 50,000 common shares on or before July 18, 2012;

d)

$40,000 cash and 50,000 common shares on or before July 18, 2013; and

e)

$80,000 cash and 50,000 common shares on or before July 18, 2014.



Subsequent to the year end, the Company optioned its interests in the Rivier Property to Emerick Resources Corp. (Emerick).  Emerick can earn a 60% interest in the Property by spending $1 million on exploration and making staged share payments to the Company totaling 1 million shares over three years according to the following schedule:

a)

100,000 shares upon TSX-V approval;

b)

200,000 shares and $250,000 in exploration expenditures by December 31, 2011;

c)

200,000 shares and $500,000 in exploration expenditures by December 31, 2012; and

d)

500,000 shares and $250,000 in exploration expenditures by December 31, 2012.



The Company and Emerick have common directors and officers.



vi)

Regional Exploration

During the year ended December 31, 2010, the Company acquired by staking:

a)

550 claims by staking in the Mayo Mining District, Yukon known as the Scarlet Property;

b)

462 claims by staking in the Dawson Mining District, Yukon known as the Newt Property; and

c)

94 claims by staking in the Dawson Mining District, Yukon known as the Face Property.



During the year ended December 31, 2009, the Company staked 83 mineral claims east of Prince George, British Columbia. The mineral claims were then sold for net proceeds of $7,649.





- 76 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



B)

Guatemala



i)

Tambor

The Tambor Project consists of six 100% owned concessions located in south-central Guatemala covering a total of 6,117 hectares, as follows:

a)

La Laguna Derivada  exploitation licence applied for October 2009.

b)

Carlos Antonio Derivada  exploitation licence applied for November 2009; ownership subject to a 2.5% net smelter returns royalty.

c)

Santa Margarita Derivada  exploitation licence applied for January 2009; ownership subject to a 2.5% net smelter returns royalty.

d)

Progreso VII Derivada  exploitation licence applied for October 2008; ownership subject to a 4.0% net smelter returns royalty, of which one-half may be purchased by the Company for US$2.0 million.

e)

Marga  exploration licence applied for September 2008.

f)

Las Navajas  exploration licence applied for November 2008.



In June 2008, the Company signed a binding Letter of Intent with Kappes, Cassiday & Associates (KCA) whereby KCA can earn a 51% interest in the Tambor Project by incurring exploration expenditures on the property totaling US$6,500,000 over 4 years, or by putting the property into commercial production within 4 years.  If KCA earns its 51% interest, a joint venture will be formed between KCA and the Company.  Once commercial production has been achieved, KCA will receive preferential payback of 75% (the Company 25%) of after-tax cash flow from initial production until KCA receives an amount equal to its investment, less US$2,000,000.  At that point, the Company will receive 75% of the after-tax cash flow (KCA 25%) until the Company receives the amount of preferential cash flow received by KCA, after which revenues will be split 51% KCA / 49% the Company.  A schedule of minimum annual required expenditures by KCA is as follows, with KCA having a commitment to expend US$1,000,000 in the first year:

a)

US$1,000,000 by June 2, 2009 (expended);

b)

US$1,500,000 by June 2, 2010 (expended);

c)

US$1,500,000 by June 2, 2011; and

d)

US$2,500,000 by June 2, 2012.



ii)

Banderas

The Company holds a 100% interest in the Banderas Project which, as at December 31, 2010, consisted of nineteen exploration concessions (one granted and eighteen applications for title pending) covering a total of 175,676 hectares.  Subsequent to December 31, 2010, one additional exploration concession covering 6,154 hectares was applied for.



iii)

Geothermal Permits

In 2010, the Company applied for eight geothermal temporary use permits in Guatemala.  The total area under application is 216,000 hectares.



In November 2010, the Company entered into a letter of intent with Molten Power Corp. (Molten) to grant Molten an option to earn 100% interest in the geothermal concessions.  As of December 31, 2010 due diligence is still being conducted and the terms of the option agreement have not been finalized.



iv)

Regional Exploration

During 2008, 2009 and 2010, the Company conducted property investigation work on other properties.



- 77 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



C)

Nicaragua



i)

Natividad (El Pavon)

The Company owns a 100% interest in the Natividad Project which consists of one granted exploration concession covering 1,301 hectares.



ii)

Trebol

The Company owns a 100% interest in the Trebol Project which consists of three granted exploration concessions covering a total of 57,698 hectares.



iii)

San Pedro

In 2008, the Company had relinquished the concession comprising the San Pedro Project, and in 2009, applied for two new exploration concessions covering a total of 26,132 hectares in the same area.  The concessions were granted in 2010.



Option to B2Gold Corp



In June 2009, the Company granted to B2Gold Corp. (B2Gold) an option to acquire an interest in the Companys mineral property portfolio in Nicaragua.   The agreement with B2Gold consists of three parts:



1.

Natividad, Trebol, and San Pedro Properties (the Properties)

B2Gold has the right to acquire a 60% interest in the Properties by expending a total of US$4 million on exploration at any one or more of the Properties within 4 years from the date of the agreement.  When B2Gold has spent the US$4,000,000, it will own a 60% interest in all of the Properties and a joint venture will be formed in under which each party will contribute its prorated share of the exploration costs.



2.

Production from the Pavon Resource Property

In 2005 Meridian Gold completed a 2 stage exploration drill program at the Pavon vein system within the Natividad Project (the Pavon Resource Property).  B2Gold has the right to review the conceptual gold resource outlined by Meridian Gold.  If B2Gold feels that there is potential to mine any or all of the resource, it may put the property into production within 3 years.  After production is achieved, 100% ownership of the Pavon Resource Property will be transferred to B2Gold and the Company will receive 40% of the net cash flow generated from the operation.



3.

The Regional Exploration Projects

The Company has assembled an extensive data base of regional geological, geochemical and geophysical data covering much of Nicaragua and has agreed to provide this data to B2Gold, on an exclusive basis.  If as a result of reviewing the regional data, B2Gold identifies a prospect or project for acquisition and exploration on ground that is not covered by an existing concession, the Company will apply for a concession over the area and that area will then be designated a project area.



Following the granting of a concession, B2Gold will have the option to earn a 70% interest in any such designated project area by expending US$2 million on exploration of it within 3 years from the date of the granting of the concession.  Once B2Gold has spent US$2 million exploring the designated project, it will be vested with a 70% interest in the project and a joint venture between the Company and B2Gold will be formed.





- 78 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



D)

Mexico



i)

Tlacolula Property

The Company owns a 100% interest in the Tlacolula Property which consists of one granted exploration concession covering 12,642 hectares.



In September 2009, the Company granted to Fortuna the option to earn a 60% interest in the Tlacolula Property by spending US$2 million on exploration of the Property, which includes a commitment to drill 1,500 meters within 3 years, and making staged annual payments of US$250,000 cash and US$250,000 in common stock according to the following schedule:

a)

US$20,000 cash and $20,000 cash equivalent in shares upon regulatory approval (received);

b)

US$30,000 cash and $30,000 cash equivalent in shares by the first year anniversary (received subsequent to December 31, 2010);

c)

US$50,000 cash and $50,000 cash equivalent in shares by the second year anniversary;

d)

US$50,000 cash and $50,000 cash equivalent in shares by the third year anniversary; and

e)

US$100,000 cash and $100,000 cash equivalent in shares by the fourth year anniversary.



The Company and Fortuna have two common directors. The Company and Fortuna are related parties and the transaction has been accounted for at its carrying amount.



ii)

Regional Exploration and Other Properties



During 2008, the Company conducted exploration work on various other concessions in Mexico, all of which had been relinquished as at December 31, 2008 as management was not planning any further work thereon.



E)

Peru



i)

Rubi Property

In August 2007, the Company was granted an option to acquire a 100% interest in the Rubi Property, Peru.  After conducting some exploration work on the property, the Company entered into an agreement in October 2008 with International Minerals Corporation (IMC) to continue exploration on the property as joint venture partners in a newly formed Peruvian company (JVCO).  The original August 2007 option agreement held by the Company was replaced by an October 2008 option agreement whereby JVCO could earn a 100% interest in the Rubi Property by making a series of payments and exploration expenditures over four years.



Under its agreement with the Company, IMC had the right to earn its 60% interest in JVCO by paying the initial signing fee to the property owner of US$75,000 (paid) and by funding the first years exploration expenditures on the Rubi Property, for a total of US$475,000.  The remaining cash payments and exploration expenditures were to be funded by JVCO (60% IMC, 40% the Company).



During the year ended December 31, 2009, the Company and IMC terminated their option on the Rubi Property and the Company wrote off $210,566 in acquisition costs towards this property.





- 79 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



6.

Mineral Properties  (contd)



E)

Peru  (contd)



ii)

Nueva California

In March 2009, the Company was granted an option to acquire 100% interest in the Nueva California gold property located in north-central Peru in consideration of incurring US$3 million in exploration and make a series of payments to the property owner (a private Peruvian company) totaling US$3 million, over a period of 4 years, of which US$50,000 was paid on signing.



In March 2009, the Company assigned the option to Focus Ventures Ltd. (Focus) whereby Focus assumes all of the Companys obligations under the Option agreement. As consideration the Company received 1,000,000 common shares of Focus, US$50,000 cash and a 1.5% net smelter return royalty on the Property. Subsequent to the year end, Focus terminated the Option Agreement.



The Company and Focus have common directors and officers.



iii)

Artemisas Property

In November 2007, the Company was granted an option to acquire a 70% interest in the Artemisas Property, Peru.  After conducting exploration work on the Property in 2008, management of the Company decided no further work was warranted, and the Company relinquished the option.



iv)

Charpal Property

In January 2008, the Company was granted an option to acquire a 100% interest in the Charpal Property, Peru.  After conducting exploration work on the Property, management of the Company decided no further work was warranted, and the Company relinquished the option prior to December 31, 2008.  During the year ended December 31, 2008, the Company wrote-off $36,817 in acquisition costs.



v)

Apurimac Property

In 2008, the Company acquired a 100% interest in the Apurimac Property, Peru.  After conducting exploration work on the Property, management of the Company decided no further work was warranted, and the Company relinquished the property prior to year end.



vi)

Regional exploration

During 2008 and 2009, the Company conducted property investigation work on other properties.



F)

Ecuador



In November 2006, the Company was granted the option to acquire a 70% interest in the Cerro Colorado Property which consists of two concessions located in Southern Ecuador. In order to earn the interest the Company was required to make cash payments totalling US$1,000,000, of which US$100,000 was paid, and incur exploration expenditures of US$3,000,000 within three years.



During the year ended December 31, 2008, the Company wrote off $113,130 in acquisition costs.





- 80 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



7.

Related Party Transactions



In addition to related party transactions disclosed elsewhere in the consolidated financial statements, the Company incurred the following expenditures charged by officers and companies which have common directors with the Company:



| |                            | 2010             | 2009            | 2008          
| | -------------------------- | ---------------- | --------------- | --------------
| | Expenses:                  |                  |                 |               
| | Management fees            | $         60,000 | $        60,000 | $       60,000
| | Consulting                 | 30,000           | 31,031          | 38,372        
| | Mineral property costs:    |                  |                 |               
| | Geological consulting fees | 3,170            | 13,750          | 199,200       
| |                            | $         93,170 | $      104,781  | $     297,572 



These expenditures were measured by the exchange amount which is the amount agreed upon by the transacting parties.



Advances and other receivables include $26,384 (2009: $12,836) due from directors and officers of the Company. These were funds advanced for Company expenses and any balance owed will be repaid in the normal course of business.



Due from related parties of $176,508 (2009: $152,948) are amounts due from companies which have a common director with the Company and arose from shared administrative costs.



Accounts payable and accrued liabilities include $19,356 (2009: $17,363) payable to an officer of the Company for general administrative and Yukon camp maintenance and exploration expense reimbursements.





- 81 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



8.

Share Capital



a)

Authorized:  Unlimited common shares without par value

b)

Issued:



| |                                                         | Number of  |                | Contributed  
| | ------------------------------------------------------- | ---------- | -------------- | -------------
| |                                                         | Shares     | Amount         | Surplus      
| |                                                         |            |                |              
| | Balance, December 31, 2008                              | 53,548,488 | $   42,587,194 | $   4,329,806
| | Non-cash compensation charge                            | -          | -              | 2,426        
| | Balance, December 31, 2009                              | 53,548,488 | 42,587,194     | 4,332,232    
| | Shares issued for private placements                    | 24,406,143 | 10,842,764     | -            
| | Shares issued for finders fees                         | 953,549    | 415,404        | -            
| | Shares issued for property acquisition                  | 222,509    | 111,300        | -            
| | Share issuance costs                                    | -          | (692,175)      | 159,128      
| | Exercise of stock options                               | 460,000    | 187,100        | -            
| | Exercise of warrants                                    | 136,850    | 68,650         | -            
| | Transfer of contributed surplus on exercise
of options  | -          | 137,282        | (137,282)    
| | Transfer of contributed surplus on exercise
of warrants | -          | 243            | (243)        
| | Non-cash compensation charge                            | -          | -              | 1,612,792    
| | Balance, December 31, 2010                              | 79,727,539 | $   53,657,762 | $   5,966,627



As part of option payments relating to portions of the Sixty Mile Property, the Company issued 50,633 shares on March 16, 2010, 79,309 shares on August 26, 2010 and 67,567 shares on September 10, 2010.  The Company issued 25,000 shares on September 8, 2010 as part of the option payments due on the Rivier Project.



On May 27, 2010, the Company closed a private placement of 5,606,143 flow-through common shares at $0.45 per share for gross proceeds of $2,522,764. The Company issued 233,361 common shares and 233,361 share purchase warrants as finders fees in connection with the financing.  All warrants issued entitle the holder to purchase an additional common share exercisable for one year at a price of $0.50.  The fair value of the warrants issued for finders fees was $18,694 and was recorded as share issuance costs and an offset to contributed surplus.  The fair value of each finders fee warrant has been estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 1.60%, dividend yield of 0%, volatility of 87% and expected life of one year.



On June 17, 2010, the Company closed a private placement of 13,000,000 units at $0.35 per unit for gross proceeds of $4,550,000.  The proceeds on the sale of units are all allocated to share capital and none to warrants. The Company paid $15,857 cash, 525,766 units and 571,071 warrants as finders fees in connection with the financing.  Each private placement unit consists of one common share and one-half of a share purchase warrant.  The warrants issued as part of the private placement unit entitle the holder to purchase an additional common share exercisable for two years at a price of $0.50.  The 571,071 warrants issued as finders fees entitle the holder to purchase an additional common share exercisable for one year at a price of $0.55.  The fair value of the 571,071 finders fee warrants was $30,919 and was recorded as share issuance costs and an offset to contributed surplus.  The fair value of each finders fee warrant has been estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 1.76%, dividend yield of 0%, volatility of 84% and expected life of one year.





- 82 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



8.

Share Capital  (contd)



b)

Issued:  (contd)



On December 3, 2010, the Company closed a private placement of 5,800,000 flow-through common shares at $0.65 per share for gross proceeds of $3,770,000. The Company issued 194,422 common shares and 259,230 share purchase warrants and paid $42,125 cash as finders fees in connection with the financing.  All warrants issued entitle the holder to purchase an additional common share exercisable for one and a half years at a price of $0.70.  The fair value of the warrants issued for finders fees was $109,515 and was recorded as share issuance costs and an offset to contributed surplus.  The fair value of each finders fee warrant has been estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 1.62%, dividend yield of 0%, volatility of 87% and expected life of one and a half years.



During the year ended December 31, 2010, 460,000 stock options were exercised for gross proceeds of $187,100.  The Company reallocated the fair value of these options previously recorded in the amount of $137,282 from contributed surplus to capital stock.



During the year ended December 31, 2010, 136,850 share purchase warrants were exercised for gross proceeds of $68,650. The Company reallocated the fair value of these share purchase warrants previously recorded in the amount of $243 from contributed surplus to capital stock.



c)

Stock Options:



The Company has a formal stock option plan in accordance with the policies of the TSX Venture Exchange (TSX-V) under which it is authorized to grant options up to 10% of its outstanding shares to officers, directors, employees and consultants.  The exercise price of each option is not less than the market price of the Companys stock as calculated on the date of grant.  Options vest ranging from a four month period to one year from the date of grant. Options granted to investor relations vest in accordance with TSX-V regulation.  The options are for a maximum term of ten years.



Stock option transactions and the number of stock options outstanding are summarized as follows:



| |                                | 2010              | 2009                            | 2008             
| | ------------------------------ | ----------------- | ------------------------------- | -----------------
| |                                | Number of Options | Weighted Average Exercise Price | Number of Options
| | Outstanding,
beginning of year | 4,270,000         | $0.57                           | 5,025,000        
| | Granted                        | 3,605,000         | $0.48                           | -                
| | Forfeited / Expired            | -                 | -                               | (755,000)        
| | Cancelled                      | (810,000)         | $0.70                           | -                
| | Exercised                      | (460,000)         | $0.41                           | -                
| | Outstanding, end of year       | 6,605,000         | $0.52                           | 4,270,000        
| | Exercisable, end of year       | 6,373,750         |                                 | 4,270,000        





- 83 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



8.

Share Capital  (contd)



c)

Stock Options:  (contd)



At December 31, 2010, there were 6,605,000 stock options outstanding entitling the holders thereof the right to purchase one common share for each purchase option held:



| | Number    | Exercise
Price | Expiry Date        | Average Remaining Contractual Life
in Years
| | --------- | -------------- | ------------------ | -------------------------------------------
| | 1,110,000 | $0.70          | February 21, 2011  | 0.14                                       
| | 595,000   | $0.52          | April 16, 2012     | 1.29                                       
| | 850,000   | $0.56          | September 5, 2012  | 1.68                                       
| | 615,000   | $0.26          | May 5, 2013        | 2.35                                       
| | 1,640,000 | $0.29          | January 7, 2020    | 9.02                                       
| | 100,000   | $0.36          | May 25, 2020       | 9.41                                       
| | 1,620,000 | $0.69          | September 23, 2020 | 9.74                                       
| | 75,000    | $0.69          | November 17, 2020  | 9.89                                       
| | 6,605,000 |                |                    | 5.46                                       



On January 8, 2010, the Company cancelled 810,000 stock options with exercise prices ranging from $0.62-$0.70 per share and expiring in February 2011 and April 2012.



On January 8, 2010, the Company granted 1,810,000 stock options to directors, officers, employees and consultants at an exercise price of $0.29 per share and expiring on January 7, 2020.  1,760,000 of the options vested immediately and 50,000 options will become vested after one year. The Company calculated the fair value of the options to be $0.31 per share and recognized the associated non-cash compensation expense of $557,443 in connection with the options that have vested with the offsetting amount credited to contributed surplus.



On May 26, 2010, the Company granted 100,000 stock options to an employee at an exercise price of $0.36 per share and expiring on May 25, 2020.  The options are subject to a vesting schedule over a one year period. The Company calculated the fair value of the options to be $0.31 per share and recognized the associated non-cash compensation expense of $26,371 in connection with the options that have vested with the offsetting amount credited to contributed surplus.



On September 24, 2010, the Company granted 1,620,000 stock options to directors, officers and employees at an exercise price of $0.69 per share and expiring on September 23, 2020.  1,445,000 of the options vested immediately and 175,000 options will become vested over a one year period. The Company calculated the fair value of the options to be $0.64 per share and recognized the associated non-cash compensation expense of $993,163 in connection with the options that have vested with the offsetting amount credited to contributed surplus.



On November 18, 2010, the Company granted 75,000 stock options to an employee at an exercise price of $0.69 per share and expiring on November 17, 2020.  The options are vested immediately. The Company calculated the fair value of the options to be $0.50 per share and recognized the associated non-cash compensation expense of $37,815 with the offsetting amount credited to contributed surplus.





- 84 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



8.

Share Capital  (contd)



c)

Stock Options:  (contd)



On May 6, 2008, the Company granted 745,000 stock options to directors, officers, employees and consultants at an exercise price of $0.26 per share and expiring on May 5, 2013.  615,000 of the options vested immediately, 80,000 options vested over a period of one year and 50,000 options were cancelled prior to becoming vested. The Company calculated the fair value of the options to be $0.16 per share and recognized the associated non-cash compensation expense of $112,405 with the offsetting amount credited to contributed surplus.



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



Stock-based Compensation



The Company uses the fair value based method of accounting for stock options granted to consultants, directors, officers and employees. The non-cash compensation charge for the year ending December 31, 2010 of $1,612,792 (2009: $2,426; 2008: $165,219) is associated with the granting of options to consultants and employees.



The weighted fair value of the share purchase options granted during the year ended December 31, 2010 of $0.46 (2009: $Nil; 2008: $0.22) per option is estimated on the grant date using the Black Scholes option valuation model.  Volatility is based on the Companys historical prices.  The assumptions used in calculating fair value for the years ended December 31, 2010, 2009 and 2008 are as follows:



| |                                                     | 2010           | 2009 | 2008   
| | --------------------------------------------------- | -------------- | ---- | -------
| | Expected dividend yield                             | 0%             | -    | 0%     
| | Expected volatility based on historical share price | 89% - 90%      | -    | 74%    
| | Risk-free interest rate                             | 2.86% - 3.59 % | -    | 3.13%  
| | Expected term in years                              | 10 years       | -    | 5 years



As of December 31, 2010 there was approximately $63,539 (2009: $Nil; 2008: $2,426) of total unrecognized compensation cost related to unvested share-based compensation awards.





- 85 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



8.

Share Capital  (contd)



d)

Share Purchase Warrants:



Share purchase warrant transactions and the number of share purchase warrants outstanding are summarized as follows:



| |                                | 2010               | 2009                            | 2008              
| | ------------------------------ | ------------------ | ------------------------------- | ------------------
| |                                | Number of Warrants | Weighted Average Exercise Price | Number of Warrants
| | Outstanding,
beginning of year | -                  | $         -                     | -                 
| | Issued                         | 7,826,546          | $   0.51                        | -                 
| | Exercised                      | (136,850)          | $   0.50                        | -                 
| | Outstanding, end of year       | 7,689,696          | $   0.51                        | -                 



As at December 31, 2010, the following share purchase warrants were outstanding:



| | Expiry Date   | Number of
Warrants | Exercise
Price
| | ------------- | ------------------ | --------------
| | May 26, 2011  | 233,361            | $0.50         
| | June 16, 2011 | 566,571            | $0.55         
| | June 2, 2012  | 259,230            | $0.70         
| | June 16, 2012 | 6,630,534          | $0.50         
| |               | 7,689,696          |               



9.

Supplemental Cash Flow Information



| |                                                    | 2010                    | 2009                    | 2008                   
| | -------------------------------------------------- | ----------------------- | ----------------------- | -----------------------
| | Supplementary disclosure of cash flow information: |                         |                         |                        
| | Cash paid for interest                             | $                     - | $                     - | $                     -
| | Cash paid for income taxes                         | $                     - | $                     - | $                     -
| | Cash and cash equivalents is comprised of:         |                         |                         |                        
| | Cash                                               | $      7,715,347        | $         499,266       | $         772,989      



Non-cash Transactions

Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statements of cash flows.  During the year ended December 31, 2010, the Company incurred the following non-cash transactions:

i)

Issued 50,633 common shares at $0.395 per share for a value of $20,000, 79,309 common shares at $0.59 per share for a value of $46,800, and 67,567 common shares at $0.37 per share for a value of $25,000 as part of the Sixty Mile Property option agreements;





- 86 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



9.

Supplemental Cash Flow Information  (contd)



Non-cash Transactions  (contd)

ii)

Issued 25,000 common shares at $0.78 per share for a value of $19,500 as part of the Rivier Property option agreement;

iii)

Received 7,813 common shares of Fortuna at $2.63 per share for a value of $20,574 as an option payment relating to the Companys Tlacolula Property, Mexico;

iv)

Received 100,000 common shares of Solomon at $0.16 per share for a value of $16,000 as an option payment relating to the Companys Ten Mile Creek Property, Yukon Territory;

v)

Issued 233,361 common shares at $0.45 for a value of $105,013 in lieu of cash for private placement finders fees;

vi)

Issued 525,766 units, consisting of 525,766 common shares and 262,883 share purchase warrants at $0.35 per unit for a value of $184,018 in lieu of cash for private placement finders fees;

vii)

Issued 1,063,662 share purchase warrants with a value of $159,128 as part of private placement finders fees;

viii)

Received 200,000 common shares of Wesgold at $0.40 per share for a value of $80,000 as an option payment relating to the Companys Snowcap Property, Yukon Territory; and

ix)

Received 200,000 common shares of Wesgold at $0.50 per share for a value of $100,000 as an option payment relating to the Companys Snowcap Property, Yukon Territory.



During the year ending December 31, 2009 and 2008, the Company incurred the following non-cash transactions:

i)

Included in accounts payable was $Nil (2008: $52,430) in exploration costs which was included in deferred exploration costs.



10.

Segmented Information



Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.  All of the Companys operations are within the mining sector relating to gold exploration.  Due to the geographic and political diversity, the Companys exploration operations are decentralized whereby exploration managers are responsible for business results and regional corporate offices provide support to the exploration programs in addressing local and regional issues.  The Companys operations are therefore segmented on a district basis.  The Companys assets are located in Canada, Caymans, Guatemala, Nicaragua, Peru, Mexico and Alaska.



Details of identifiable assets by geographic segments are as follows:



| |              | 2010             | 2009             
| | ------------ | ---------------- | -----------------
| | Total Assets |                  |                  
| | Canada       | $      9,555,050 | $       1,482,484
| | Caymans      | 597,101          | 1,071,703        
| | Guatemala    | 4,345,165        | 4,241,029        
| | Nicaragua    | 185,166          | 223,320          
| | Mexico       | 19,048           | 8,057            
| | Peru         | 9,780            | 14,869           
| | Other        | 1,501            | 1,575            
| |              | $    14,712,811  | $       7,043,037



.../contd





- 87 -







Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



10.

Segmented Information  (contd)



| |                          | 2010               | 2009                |                    
| | ------------------------ | ------------------ | ------------------- | -------------------
| | Property and equipment   |                    |                     |                    
| | Canada                   | $          129,587 | $            63,384 |                    
| | Guatemala                | 20,964             | 24,687              |                    
| | Nicaragua                | 72,382             | 89,128              |                    
| | Peru                     | 3,536              | 6,021               |                    
| |                          | $          226,469 | $          183,220  |                    
| |                          |                    |                     |                    
| | Mineral properties       |                    |                     |                    
| | Canada                   | $          806,389 | $            68,246 |                    
| | Guatemala                | 4,142,864          | 4,142,864           |                    
| | Nicaragua                | 82,482             | 82,482              |                    
| |                          | $       5,031,735  | $       4,293,592   |                    
| |                          |                    |                     |                    
| |                          | 2010               | 2009                | 2008               
| | Exploration expenditures |                    |                     |                    
| | Canada                   | $       2,016,987  | $         115,968   | $            41,822
| | Guatemala                | 753,900            | 125,298             | 147,780            
| | Peru                     | -                  | 51,493              | 467,878            
| | Mexico                   | 11,511             | 75,640              | 594,281            
| | Nicaragua                | 55,992             | 271,039             | 2,403,470          
| |                          | $       2,838,390  | $         639,438   | $       3,655,231  



11.

Accumulated Other Comprehensive Income



| | Balance at December 31, 2008                                | $         (43,731)
| | ----------------------------------------------------------- | ------------------
| | Unrealized gain on available for sale marketable securities | 956,004           
| | Balance at December 31, 2009                                | 912,273           
| | Unrealized loss on available for sale marketable securities | (212,917)         
| | Balance at December 31, 2010                                | $          699,356



- 88 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



12.

Commitment



The Company has entered into operating lease agreements for its office premises.  The Company also sub leases rental space to other companies on a month to month basis which are netted against rental expense; however, there are no commitments from these companies and thus the amounts presented below is the gross commitments.  The annual lease commitment under the leases are as follows:



| | 2011 | $         210,389
| | ---- | -----------------
| | 2012 | 104,514          
| | 2013 | 106,175          
| | 2014 | 107,006          
| | 2015 | 109,498          
| | 2016 | 36,914           
| |      | $         674,496



13.

Income Taxes



The income tax provision recorded differs from the income tax obtained by applying the statutory income tax rate of 28.50% (2009: 30.00% 2008: 31.00%) to the income for the year and is reconciled as follows:



| |                                                       | 2010               | 2009               | 2008                   
| | ----------------------------------------------------- | ------------------ | ------------------ | -----------------------
| | Benefit at Canadian statutory rate                    | $    (1,452,000)   | $       (421,000)  | $    (1,481,000)       
| | Foreign income taxed at other than CDN
statutory rate | 98,000             | 53,000             | 894,000                
| | Permanent differences                                 | 138,000            | 122,000            | 139,000                
| | Non deductible stock based compensation               | 460,000            | 1,000              | 61,000                 
| | Effect of a reduction in statutory rate               | 91,000             | 6,000              | (188,000)              
| | Share issuance costs                                  | (128,000)          | -                  | (5,000)                
| | Expiry of loss carryforward                           | 503,000            | 751,000            | 271,000                
| | Other                                                 | 82,266             | -                  | -                      
| | Increase/(decrease) in valuation allowance            | 238,000            | (704,000)          | 309,000                
| |                                                       | $           30,266 | $        (192,000) | $                     -



The tax effects on the temporary differences that give rise to the Companys future tax assets and liabilities are as follows:



| |                                  | 2010              | 2009              
| | -------------------------------- | ----------------- | ------------------
| | Net operating and capital losses | $       1,113,000 | $       1,588,000 
| | Property and equipment           | 65,000            | 56,000            
| | Undeducted Financing Costs       | 103,000           | -                 
| | Resource related costs  Canada  | 579,000           | 112,000           
| | Resource related costs  Foreign | (122,000)         | (122,000)         
| | Investments                      | 3,000             | (131,000)         
| |                                  | 1,741,000         | 1,503,000         
| | Less: Valuation allowance        | (1,863,000)       | (1,625,000)       
| |                                  | $       (122,000) | $        (122,000)



- 89 -











Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



13.

Income Taxes  (contd)



At December 31, 2010, the Company had estimated net operating losses carried forward of approximately $3,865,000 (2009: $4,960,000) (expiring in various amounts over the period from 2014 to 2030) available to reduce future taxable income.



The Company evaluates its valuation allowance requirements based on projected future operations.  When circumstances change and this causes a change in managements judgment about the recoverability of future tax assets, the impact of the change on valuation allowance is reflected in current income.



The Company operates in foreign jurisdictions and is subject to audit by taxing authorities.  These audits may result in the assessment of amounts different than the amounts recorded in the consolidated financial statements.  The Company liaises with the relevant authorities in these jurisdictions in regard to its income tax and other returns.  Management believes the Company has adequately provided for any taxes, penalties and interest that may fall due.



Flow-through Shares



Flow-through common shares require the Company to spend an amount equivalent to the proceeds of the issued flow-through common shares on Canadian qualifying exploration expenditures. The Company may be required to indemnify the holders of such shares for any tax and other costs payable by them in the event the Company has not made the required exploration expenditures.



During the year ended December 31, 2010, the Company received $6,292,764 from the issue of flow-through shares.  These amounts will not be available to the Company for future deduction from taxable income.  Effective December 31, 2010, the Company renounced $4,348,771 to the subscribers under the look-back rule and is required to incur the expenditures during the year ended December 31, 2011.



14.

Financial Instruments and Risk Management



As at December 31, 2010, the Companys financial instruments are comprised of cash and cash equivalents, marketable securities, advances and other receivables, amounts due from related parties and accounts payable and accrued liabilities.  The fair value of cash and cash equivalents, marketable securities, advances and other receivables, amounts due from related parties and accounts payable and accrued liabilities approximate their carrying value due to their short-term maturity.  The Company has chosen to expense transaction costs relating to financial assets and liabilities that have been designated as other than held for trading.



The following table provides an analysis of financial instruments grouped into levels 1, 2, or 3 based on the degree to which the fair value is observable as at December 31, 2010:



| |                           | Carrying Amount       | Fair Value          | Discount Rate
| | ------------------------- | --------------------- | ------------------- | -------------
| | Level 1:                  |                       |                     |              
| | Cash and cash equivalents | $           7,715,347 | $         7,715,347 | N/A          
| | Marketable Securities     | 994,609               | 994,609             | N/A          



The Company did not have any financial instruments in Level 2 and 3.



The Companys financial instruments are exposed to certain financial risks, including currency risk, credit risk, liquidity risk and interest rate risk.





- 90 -









Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



14.

Financial Instruments and Risk Management  (contd)



Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.  The Company is exposed to fluctuations in foreign currencies through its operations in foreign countries.  The Company monitors this exposure, but has no hedge positions.  As at December 31, 2010, cash totalling $252,026 (2009: $227,593) was held in US dollars, $3,773 (2009: $4,603) in Nicaragua Cordoba, $15,220 (2009: $7,280) in Guatemala Quetzal, $10,096 (2009: $4,313) in Mexican Pesos and $837 (2009: $1,882) in Peruvian Sols. Based on the above net exposures at December 31, 2010, a 10% depreciation or appreciation of the above currencies against the Canadian dollar would result in a $28,195 increase or decrease in the Companys after tax net earnings, respectively.



Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.  The Companys credit risk is primarily attributable to its cash and cash equivalents, marketable securities and advances and other receivables.  The Company limits exposure to credit risk by maintaining its cash and cash equivalents with large financial institutions.  The Company does not have cash and cash equivalents or marketable securities that are invested in asset based commercial paper.  For advances and other receivables, the Company estimates, on a continuing basis, the probable losses and provides a provision for losses based on the estimated realizable value.



Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company ensures there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations, the Companys holdings of cash and cash equivalents and marketable securities, and capital raised through private placements during the year ended December 31, 2010.  The Company believes that these sources will be sufficient to cover the known requirements at this time.



Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As the Companys cash and cash equivalents are currently held in short-term interest bearing accounts, management considers the interest rate risk to be limited.



15.

Capital Management



The Companys objectives when managing capital are to safeguard the Companys ability to continue as a going concern in order to advance its mineral properties. In order to facilitate the management of its capital requirements, the Company prepares periodic budgets that are updated as necessary. The Company manages its capital structure and makes adjustments to it to effectively support the acquisition and exploration of mineral properties. The properties in which the Company currently has an interest are in the exploration stage; as such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for general administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.



Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management during the year ended December 31, 2010. The Companys investment policy is to hold cash in interest bearing bank accounts, which pay comparable interest rates to highly liquid short-term interest bearing investments with maturities of one year or less and which can be liquidated at any time without penalties.  Neither the Company nor its subsidiaries are subject to externally imposed capital requirements and do not have exposure to asset-backed commercial paper or similar products. The Company expects its current capital resources to be sufficient to carry out its planned exploration programs and operating costs for the next twelve months; however, the Company had not yet achieved profitable operations, has accumulated losses of $46,280,912 since inception, and is expected to incur further losses in the development of its business, all of which raises substantial doubt about its ability to continue as a going concern.





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Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



16.

Subsequent Events



Subsequent to the period end, the following events which have not been disclosed elsewhere in these financial statements have occurred:

i)

45,000 stock options and 96,761 share purchase warrants were exercised for proceeds of $21,050 and $48,406 respectively.

ii)

Options to purchase up to 1,110,000 shares at $0.70 per share expired unexercised.



17.

Comparative Figures



Certain comparative figures for the year ended December 31, 2008 have been reclassified to conform to the presentation adopted for the years ended December 31, 2010 and 2009.



18.

Reconciliation to United States of America Generally Accepted Accounting Principles



These consolidated financial statements have been prepared in accordance with Canadian GAAP, On July 1, 2009, the Financial Accounting Standards Board (FASB) ratified the Accounting Standards Codification (ASC) as the sole source of authoritative non-governmental US GAAP.  The ASC has not intended to change US GAAP, but rather reorganized existing guidance by accounting topic to allow easier identification of accounting standards.  New accounting pronouncements issued by the FASB are called Accounting Standards Updates (ASU).  The Company has updated references to US GAAP to reflect the ASC.  Accounting practices under Canadian (CDN GAAP) and of United States of America generally accepted accounting principles (US GAAP), as they affect the Company, are substantially the same, except for the following:



a)

Mineral Properties

Prior to January 1, 2009, the Companys policy under Canadian GAAP was to defer and amortize mineral property acquisition costs and exploration costs to the extent they meet certain criteria.  Capitalized costs under Canadian GAAP are amortized on a unit-of-production basis based on proved, probable and possible reserves.



Under US GAAP, mineral property acquisition costs are considered tangible assets and must be initially capitalized and evaluated periodically for impairment and requires mineral exploration costs be charged to operations in the period incurred.



During the year ended December 31, 2009, the Company changed its accounting policy for exploration costs under Canadian GAAP by expensing the costs as incurred as it more accurately reflects the exploration industry.  This accounting change has been applied retroactively with restatement of prior periods.  As a result of the change in accounting policy there are no ongoing differences between Canadian and US GAAP in the accounting for mineral properties with the exception of mineral property acquisition costs of $4,211,802 previously expensed under US GAAP that remain capitalized to mineral properties under Canadian GAAP.



b)

Accounting for uncertainty in income taxes

The Company recognizes uncertain tax positions that are more-likely-than-not (50% or greater) of being sustained on audit, based on the technical merits of the position.  With the adoption of this standard, the Company has performed a comprehensive review of all material tax positions in accordance with recognition and measurement standards established by FIN 48 (now known as ASC 740).





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Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



18.

Reconciliation to United States of America Generally Accepted Accounting Principles (contd)



b)

Accounting for uncertainty in income taxes  (contd)

Based on this review, the provisions of ASC 740 did not have a material impact on the Companys annual consolidated financial statements.  The Company has elected to apply the provisions of ASC 740 in assessing their uncertain tax positions under Canadian GAAP as well, removing any differences that would arise with US GAAP.



c)

Newly Adopted Accounting Pronouncements

ASC 805.  FASB Statement No. 141(R) Business Combinations. This statement was incorporated into ASC 805, Business Combinations, under the new FASB codification. ASC 805 requires that upon initially obtaining control, an acquirer should recognize 100% of the fair values of acquired assets, including goodwill and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100% of its target. Additionally, contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration and transaction costs will be expensed as incurred. This statement also modifies the recognition for pre-acquisition contingencies, such as environmental or legal issues, restructuring plans and acquired research and development value in purchase accounting. This statement amends ASC 740-10, Income Taxes (ASC 740) to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. ASC 805 is effective for fiscal years beginning after December 15, 2008. The adoption of this standard did not have any impact on the Companys financial position or results from operations.



ASC 810. The FASB issued FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements  an amendment of ARB No. 51, which is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. SFAS No. 160 was incorporated into ASC 810, Consolidation (ASC 810) and requires companies to present minority interest separately within the equity section of the balance sheet. The adoption of this standard did not have any impact on the Companys financial position or results from operations.



ASC 815.  The FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The Statement changes the disclosure requirements for derivative instruments and hedging activities. SFAS No. 161 was incorporated into ASC 815, Derivatives and Hedging (ASC 815). ASC 815 requires entities to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. This statement became effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The adoption of this standard did not have any impact on the Companys financial position or results from operations.



ASC 105.  The Financial Accounting Standards Board (FASB) issued FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, (SFAS No. 168)  a replacement of FASB Statement No. 162.  SFAS No. 168 is the new source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This statement was incorporated into ASC 105, Generally Accepted Accounting Principles under the new FASB codification which became effective on July 1, 2009. The new Codification supersedes all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. The Company adopted this statement during the fourth quarter of 2009. The adoption of this standard did not have any impact on the Companys financial position or results from operations.





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Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



18.

Reconciliation to United States of America Generally Accepted Accounting Principles (contd)



c)

Newly Adopted Accounting Pronouncements  (contd)

ASC 855.  In May 2009, the FASB issued ASC No. 855, Subsequent Events, which established general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued. It sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. ASC 855 was effective for financial statements issued for interim and annual periods ending after June 15, 2009 and did not have any impact on the Companys financial statements.



Management has evaluated subsequent events through the date the financial statements were issued.



In June 2009, FASB issued further guidance on accounting for transfers of financial assets.  This guidance improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferors continuing involvement, if any, in transferred financial assets.  The Board undertook this project to address: (a) practices that have developed that are not consistent with the original intent and key requirements of that guidance; and (b) concerns of financial statement users that many of the financial assets (and related obligations) that have been derecognized should continue to be reported in the financial statements of transferors.  This guidance was applied for the Company on January 1, 2010.  Adoption did not have an impact.



In June 2009, FASB issued guidance which improves financial reporting by enterprises involved with variable interest entities.  The Board undertook this project to address: (a) the effects on certain provisions of as a result of the elimination of the qualifying special-purpose entity concept in ASC 860-10, Accounting for Transfers of Financial Assets; and (b) constituent concerns about the application of certain key provisions, including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprises involvement in a variable interest entity.  This guidance is effective for the Company on January 1, 2010.  Adoption did not have an impact.



d)

New Accounting Pronouncements  Not Yet Adopted

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements, which is included in the ASC in Topic 820 (Fair Value Measurements and Disclosures). ASU 2010-06 requires new disclosures on the amount and reason for transfers in and out of Level 1 and 2 fair value measurements. ASU 2010- 06 also requires disclosure of activities, including purchases, sales, issuances, and settlements within the Level 3 fair value measurements and clarifies existing disclosure requirements on levels of disaggregation and disclosures about inputs and valuation techniques. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009. The Company is currently assessing the impact of adoption of ASU 2009-14 and does not currently plan to early adopt.





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Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



18.

Reconciliation to United States of America Generally Accepted Accounting Principles  (contd)



e)

Reconciliation of net loss determined in accordance with CDN GAAP to net loss determined under US GAAP is as follows:



| |                                                          | Years ended December 31,
| | -------------------------------------------------------- | ------------------------
| |                                                          | 2010                    
| |                                                          |                         
| | Net loss for the year as reported using CDN GAAP         | $    (5,123,701)        
| | Adjustments to mineral properties                        | -                       
| | Write-off of mineral properties                          | -                       
| | Net loss for the year per US GAAP                        | (5,123,701)             
| | Unrealized gain (loss) from marketable securities        | (212,917)               
| | Comprehensive loss for the year per US GAAP              | $    (5,336,618)        
| |                                                          |                         
| | Basic loss per share per US GAAP                         | $(0.08)                 
| |                                                          |                         
| | Weighted average number of share outstanding
per US GAAP | 65,030,359              



f)

The effects of the differences in accounting under CDN GAAP and US GAAP on the balance sheets and statements of cash flows are as follows:



| | Balance Sheets                                         | 2010            | 2009            | 
| | ------------------------------------------------------ | --------------- | --------------- | 
| |                                                        |                 |                 | 
| | Total assets per CDN GAAP                              | $    14,712,811 | $     7,043,037 | 
| | Adjustments for mineral properties                     | (4,211,802)     | (4,211,802)     | 
| | Total assets per US GAAP                               | $    10,501,009 | $     2,831,235 | 
| |                                                        |                 |                 | 
| | Total liabilities per CDN and US GAAP                  | $669,978        | $368,549        | 
| |                                                        |                 |                 | 
| | Deficit, per CDN GAAP                                  | (46,280,912)    | (41,157,211)    | 
| | Adjustments for mineral properties                     | (4,211,802)     | (4,211,802)     | 
| | Deficit, per US GAAP                                   | (50,492,714)    | (45,369,013)    | 
| | Contributed surplus per CDN GAAP and US GAAP           | 5,966,627       | 4,332,232       | 
| | Accumulated other comprehensive income
CDN and US GAAP | 699,356         | 912,273         | 
| | Share capital per CDN and US GAAP                      | 53,657,762      | 42,587,194      | 
| | Total shareholders equity per US GAAP                 | 9,831,031       | 2,462,686       | 
| | Total liabilities and shareholders equity
per US GAAP | $    10,501,009 | $    2,831,235  | 

- 95 -











Radius Gold Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

(Expressed in Canadian Dollars)



18.

Reconciliation to United States of America Generally Accepted Accounting Principles  (contd)



f)

 (contd)



| |                                                          | Years ended December 31,
| | -------------------------------------------------------- | ------------------------
| |                                                          | 2010                    
| |                                                          |                         
| | Cash flows used in operating activities per
CDN GAAP     | $     (3,614,938)       
| | Adjustments for mineral properties                       | -                       
| |                                                          |                         
| | Cash flows used in operating activities per
US GAAP      | (3,614,938)             
| |                                                          |                         
| | Cash flows provided by investing activities per
CDN GAAP | (146,210)               
| | Adjustments for mineral properties                       | -                       
| |                                                          |                         
| | Cash flows provided by investing activities per
US GAAP  | (136,210)               
| |                                                          |                         
| | Cash flows from financing activities per CDN and
US GAAP | 10,980,871              
| |                                                          |                         
| | Foreign exchange on opening cash and cash
equivalents    | (3,642)                 
| |                                                          |                         
| | Increase (decrease) in cash per US GAAP                  | $       7,216,081       







- 96 -



















SIGNATURE PAGE



Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.





Dated: June 28, 2011

By  /s/ "Simon Ridgway"

Simon Ridgway,

President and Chief Executive Officer













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