---

U.S.SECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/AAmendment No. 3

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

For the fiscal year ended December 31, 2011

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

For the transition period from _______________to
_______________

000-54416(Commission File Number)

EMC METALS CORP.(Name of
registrant in its charter)

|British Columbia, Canada                    | 98-1009717         
|------------------------------------------- | -------------------
|(State or other jurisdiction                | (IRS Employer      
|of incorporation or organization)           | Identification No.)
|                                            |                    
|1430 Greg Street, Suite 501, Sparks, Nevada | 89431              
|(Address of principal executive offices)    | (Zip Code)         

Issuers telephone number: (775) 355-9500

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under section 12(g) of the Exchange Act:
Common shares without 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]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. 
Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 90 days. 
Yes [X] No [ ]

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 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 if disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-K
or any amendment to this Form 10-K. 
[X]

|Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
|----------------------------------------------------------------------------------------------------------------------------------------------------------
|Large Accelerated Filer [ ]                                                                                                                               
|Non-Accelerated Filer [ ]                                                                                                                                 

---

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). 
Yes [ ] No [X]

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter: $19,517,255 as at June 30, 2011.

Indicate the number of shares outstanding of each of the
registrants classes of common equity, as of the latest practicable date: 150,678,713 as at June 25, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

This Amendment No. 3 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 2011, which was filed with the Securities and
Exchange Commission (the SEC) on February 14, 2012, as amended on April 30,
2012, and June 5, 2012, is being filed to re-file Item 8 in its entirety to
correct the missing conforming signature on the audit report filed with the
original Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

The Consolidated Financial Statements of the Company and the
notes thereto are attached to this report following the signature page and
Certifications.

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS
SCHEDULES

Financial Statements

Description
    PageFinancial statements for the years ended
      December 31, 2011 and 2010 and audit report thereon.
    F-1


Exhibits

The following table sets out the exhibits filed herewith or
incorporated herein by reference.

Exhibit
    Description3.1*
    Certificate of Incorporation,
      Certificate of Name Change, Notice of Articles3.2*
    Corporate Articles10.1*
    2008 Stock Option Plan10.3**
    Stock Purchase Agreement dated November 19,
      2009 between EMC Metals Corp., Willem P.C. Duyvesteyn, and Irene G.
      Duyvesteyn10.4*
    Exploration Joint Venture
      Agreement dated February 5, 2010 between EMC Metals Corp. and Jervois
      Mining Limited10.5*
    Services Agreement between EMC Metals Corp. and
      George Putnam dated May 1, 201010.6*
    Extension Agreement dated
    September 29, 2010 between EMC Metals Corp. and Jervois Mining Limited10.7*
    Stock Purchase Agreement dated November 16,
      2010 between EMC Metals Corp. and Golden Predator US Holding Corp.21.1*
    List of Subsidiaries31.1
    Certification Pursuant to Rule 13a-14(a) or
      15d-14(a) of the U.S. Securities Exchange Act of 1934  Principal
      Executive Officer31.2
    Certification Pursuant to Rule
  13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934   Principal Financial Officer


2

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32.1
    Section 1350 Certification of the Principal Executive
      Officer32.2
    Section 1350 Certification of the Principal Financial
      Officer


|*  | Previously filed as exhibits to the Form 10 filed May 24,
      2011 and incorporated herein by reference.     
|-- | ---------------------------------------------------------------------------------------------------------------
|** | Previously filed as an exhibit to the Form 10/A filed
      July 22, 2011 and incorporated herein by
reference.

3

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

EMC METALS CORP.

|By:   | /s/ George Putnam                         | 
|----- | ----------------------------------------- | 
|      | George Putnam                             | 
|      | President and Principal Executive Officer | 
|      |                                           | 
|Date: | July 5, 2012                              | 

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Signature                   |  | Title                                                        | Date        
|--------------------------- |  | ------------------------------------------------------------ | ------------
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ George Putnam           |  | President, Principal Executive Officer, and
      Director   | July 5, 2012
|George Putnam               |  |                                                              |             
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ William Harris          |  | Chairman and Director                                        | July 5, 2012
|William Harris              |  |                                                              |             
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ Willem
      Duyvesteyn |  | Director                                                     | July 5, 2012
|Willem Duyvesteyn           |  |                                                              |             
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ Barry Davies            |  | Director                                                     | July 5, 2012
|Barry Davies                |  |                                                              |             
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ Warren Davis            |  | Director                                                     | July 5, 2012
|Warren Davis                |  |                                                              |             
|                            |  |                                                              |             
|                            |  |                                                              |             
|/s/ Edward
      Dickinson  |  | Principal Financial Officer and Principal Accounting Officer | July 5, 2012
|Edward Dickinson            |  |                                                              |             

4

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(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2011

---



---

|EMC Metals Corp.                       
|---------------------------------------
|(An Exploration Stage Company)         
|CONSOLIDATED BALANCE SHEETS            
|(Expressed in
        Canadian Dollars)

|                                                                                                                                                               |   | December 31, 2011 |   |   | December 31, 2010 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                                                                                                                                               |   |                   |   |   |                   |  
|ASSETS                                                                                                                                                         |   |                   |   |   |                   |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Current                                                                                                                                                        |   |                   |   |   |                   |  
|Cash                                                                                                                                                           | $ | 804,892           |   | $ | 4,126,424         |  
|Investments in trading
        securities, at fair value (Note 4)                                                                                              |   | 2,250             |   |   | 2,250             |  
|Prepaid expenses and receivables (net of
        allowance of $Nil (2010 - $Nil))                                                                              |   | 192,158           |   |   | 133,082           |  
|Subscription receivable                                                                                                                                        |   | -                 |   |   | 210,249           |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total Current Assets                                                                                                                                           |   | 999,300           |   |   | 4,472,005         |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Restricted cash(Note 5)                                                                                                                                        |   | 159,400           |   |   | -                 |  
|Property, plant and equipment(Note 6)                                                                                                                          |   | 30,676,426        |   |   | 34,289,873        |  
|Mineral interests(Note 7)                                                                                                                                      |   | 679,711           |   |   | 503,020           |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total Assets                                                                                                                                                   | $ | 32,514,837        |   | $ | 39,264,898        |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                           |   |                   |   |   |                   |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Current                                                                                                                                                        |   |                   |   |   |                   |  
|Accounts payable and accrued
        liabilities                                                                                                               | $ | 550,081           |   | $ | 412,849           |  
|Derivative liability (Note 9)                                                                                                                                  |   | -                 |   |   | 228,741           |  
|Current portion of promissory
        notes payable (Note 10)                                                                                                  |   | 529,752           |   |   | 500,000           |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total Current Liabilities                                                                                                                                      |   | 1,079,833         |   |   | 1,141,590         |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Promissory notes payable(Note 10)                                                                                                                              |   | 3,813,750         |   |   | 3,750,000         |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total Liabilities                                                                                                                                              |   | 4,893,583         |   |   | 4,891,590         |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Stockholders Equity                                                                                                                                           |   |                   |   |   |                   |  
|Capital stock (Note 11)
        (Authorized: Unlimited number of shares; Issued
        and 
           outstanding: 150,678,713 (2010 
        149,059,412)) |   | 88,578,045        |   |   | 88,138,487        |  
|Treasury stock (Note 13)                                                                                                                                       |   | (1,343,333        | ) |   | (2,087,333        | )
|Additional paid in capital
        (Note 11)                                                                                                                   |   | 1,476,285         |   |   | 2,003,345         |  
|Deficit accumulated during the exploration
        stage                                                                                                       |   | (61,089,743       | ) |   | (53,681,191       | )
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total Stockholders Equity                                                                                                                                     |   | 27,621,254        |   |   | 34,373,308        |  
|                                                                                                                                                               |   |                   |   |   |                   |  
|Total
        Liabilities and Stockholders Equity                                                                                                             | $ | 32,514,837        |   | $ | 39,264,898        |  

**Nature and continuance of operations**(Note 1)

The accompanying notes are an integral part of these
  consolidated financial statements.

F-2

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|EMC Metals Corp.                       
|---------------------------------------
|(An Exploration Stage Company)         
|CONSOLIDATED STATEMENTS OF OPERATIONS  
|(Expressed in
        Canadian Dollars)

|                                                              |   | Cumulative amounts  |   |   |                   |   |   |                   |  
|------------------------------------------------------------- | - | ------------------- | - | - | ----------------- | - | - | ----------------- | -
|                                                              |   | from incorporation  |   |   |                   |   |   |                   |  
|                                                              |   | on July 17, 2006 to |   |   | Year ended        |   |   | Year ended        |  
|                                                              |   | December 31, 2011   |   |   | December 31, 2011 |   |   | December 31, 2010 |  
|                                                              |   |                     |   |   |                   |   |   |                   |  
|EXPENSES                                                      |   |                     |   |   |                   |   |   |                   |  
|Amortization                                                  | $ | 2,284,219           |   | $ | 327,954           |   | $ | 455,227           |  
|Consulting                                                    |   | 2,272,241           |   |   | 96,615            |   |   | 57,243            |  
|Exploration                                                   |   | 14,425,705          |   |   | 2,079,997         |   |   | 489,397           |  
|General and
        administrative                            |   | 7,281,463           |   |   | 634,092           |   |   | 437,198           |  
|Insurance                                                     |   | 957,878             |   |   | 67,101            |   |   | 147,351           |  
|Professional fees                                             |   | 3,051,016           |   |   | 214,214           |   |   | 263,917           |  
|Research and development                                      |   | 3,474,068           |   |   | -                 |   |   | -                 |  
|Salaries and benefits                                         |   | 6,709,189           |   |   | 840,288           |   |   | 732,617           |  
|Stock-based compensation (Note 11)                            |   | 5,413,675           |   |   | 292,899           |   |   | 795,268           |  
|Travel and
        entertainment                              |   | 1,609,967           |   |   | 186,193           |   |   | 107,601           |  
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Loss before other items                                       |   | (47,479,421         | ) |   | (4,739,353        | ) |   | (3,485,819        | )
|                                                              |   |                     |   |   |                   |   |   |                   |  
|                                                              |   |                     |   |   |                   |   |   |                   |  
|OTHER ITEMS                                                   |   |                     |   |   |                   |   |   |                   |  
|Foreign exchange gain
        (loss)                          |   | 525,637             |   |   | (57,531           | ) |   | 205,218           |  
|Loss on transfer of marketable
        securities             |   | (3,115,889          | ) |   | -                 |   |   | -                 |  
|Gain on settlement of
        convertible debentures          |   | 1,449,948           |   |   | -                 |   |   | -                 |  
|Gain on sale of marketable securities                         |   | 1,836,011           |   |   | -                 |   |   | (70,583           | )
|Write-off of mineral
        interests                        |   | (18,091,761         | ) |   | -                 |   |   | (1,138,432        | )
|Write-off of land and water rights                            |   | (3,100,000          | ) |   | (3,100,000        | ) |   | -                 |  
|Gain on insurance
        proceeds                            |   | 972,761             |   |   | -                 |   |   | -                 |  
|Interest income (expense)                                     |   | 247,218             |   |   | (223,008          | ) |   | (301,244          | )
|Other income                                                  |   | 502,965             |   |   | -                 |   |   | 53,723            |  
|Gain on disposition of assets                                 |   | 959,281             |   |   | 482,599           |   |   | 37,256            |  
|Change in fair value of
        derivative liability (Note 9) |   | 485,358             |   |   | 228,741           |   |   | (22,874           | )
|Unrealized gain on marketable
        securities              |   | 53,830              |   |   | -                 |   |   | -                 |  
|                                                              |   |                     |   |   |                   |   |   |                   |  
|                                                              |   | (17,274,641         | ) |   | (2,669,199        | ) |   | (1,236,936        | )
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Loss before income taxes                                      |   | (64,754,062         | ) |   | (7,408,552        | ) |   | (4,722,755        | )
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Deferred income tax recovery                                  |   | 6,522,138           |   |   | -                 |   |   | -                 |  
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Loss and comprehensive loss for the period                    |   |                     |   |   |                   |   |   |                   |  
|                                                              | $ | (58,231,924         | ) | $ | (7,408,552        | ) | $ | (4,722,755        | )
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Basic and diluted loss per common share                       |   |                     |   |   | (0.05             | ) |   | (0.04             | )
|                                                              |   |                     |   |   |                   |   |   |                   |  
|Weighted average number of common shares outstanding          |   |                     |   |   | 150,404,210       |   |   | 121,344,723       |  

The accompanying notes are an integral part of these
  consolidated financial statements.

F-3

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|EMC Metals Corp.                       
|---------------------------------------
|(An Exploration Stage Company)         
|CONSOLIDATED STATEMENTS OF CASH FLOWS  
|(Expressed in
        Canadian Dollars)

|                                                            |   | Cumulative       |   |   |              |   |   |              |  
|----------------------------------------------------------- | - | ---------------- | - | - | ------------ | - | - | ------------ | -
|                                                            |   | amounts from     |   |   |              |   |   |              |  
|                                                            |   | incorporation on |   |   |              |   |   |              |  
|                                                            |   | July 17, 2006 to |   |   | Year ended   |   |   | Year ended   |  
|                                                            |   | December 31,     |   |   | December 31, |   |   | December 31, |  
|                                                            |   | 2011             |   |   | 2011         |   |   | 2010         |  
|                                                            |   |                  |   |   |              |   |   |              |  
|CASH FLOWS FROM OPERATING ACTIVITIES                        |   |                  |   |   |              |   |   |              |  
|                                                            |   |                  |   |   |              |   |   |              |  
|Loss for the period                                         | $ | (58,231,924      | ) | $ | (7,408,552   | ) | $ | (4,722,755   | )
|Items not affecting cash:                                   |   |                  |   |   |              |   |   |              |  
|Amortization                                                |   | 2,284,219        |   |   | 327,954      |   |   | 455,227      |  
|Research
        and development                            |   | 3,474,068        |   |   | -            |   |   | -            |  
|Consulting paid with common shares                          |   | 10,711           |   |   | -            |   |   | -            |  
|Gain on
        disposal of assets                          |   | (959,281         | ) |   | (482,599     | ) |   | (37,256      | )
|Convertible debenture costs                                 |   | (1,312,878       | ) |   | -            |   |   | -            |  
|Unrealized
        foreign exchange                         |   | 787,112          |   |   | 72,250       |   |   | (220,672     | )
|Stock-based compensation                                    |   | 5,413,675        |   |   | 292,899      |   |   | 795,268      |  
|Unrealized
        gain on marketable securities            |   | (53,830          | ) |   | -            |   |   | -            |  
|Realized gain on marketable securities                      |   | (1,836,011       | ) |   | -            |   |   | 70,583       |  
|Write-off
        of mineral properties                     |   | 18,091,761       |   |   | -            |   |   | 1,138,432    |  
|Write-off of land and water rights                          |   | 3,100,000        |   |   | 3,100,000    |   |   | -            |  
|Realized
        loss on transfer of marketable securities  |   | 3,115,889        |   |   | -            |   |   | -            |  
|Change in fair value of derivative liability                |   | (485,358         | ) |   | (228,741     | ) |   | 22,874       |  
|Deferred
        income tax recovery                        |   | (6,522,138       | ) |   | -            |   |   | -            |  
|Accrued interest expense                                    |   | 21,252           |   |   | 21,252       |   |   | -            |  
|Accrued
        interest income                             |   | (2,809           | ) |   | (2,809       | ) |   | -            |  
|                                                            |   |                  |   |   |              |   |   |              |  
|                                                            |   | (33,105,542      | ) |   | (4,308,346   | ) |   | (2,498,299   | )
|Changes in
        non-cash working capital items:          |   |                  |   |   |              |   |   |              |  
|Increase in
        prepaids and receivables                |   | (125,608         | ) |   | (56,267      | ) |   | 142,678      |  
|Decrease in accounts payable and accrued liabilities        |   | (512,828         | ) |   | 335,565      |   |   | (94,913      | )
|Increase in
        due to related parties                  |   | 1,163,028        |   |   | -            |   |   | 762,028      |  
|Asset retirement obligations                                |   | (1,065,891       | ) |   | -            |   |   | -            |  
|                                                            |   |                  |   |   |              |   |   |              |  
|                                                            |   | (33,646,841      | ) |   | (4,029,048   | ) |   | (1,688,506   | )
|                                                            |   |                  |   |   |              |   |   |              |  
|CASH FLOWS FROM INVESTING ACTIVITIES                        |   |                  |   |   |              |   |   |              |  
|Cash
        acquired from subsidiary                       |   | 4,857,012        |   |   | -            |   |   | -            |  
|Cash paid for Subsidiary                                    |   | (11,359,511      | ) |   | -            |   |   | (557,523     | )
|Spin-out of
        Golden Predator Corp.                   |   | (76,388          | ) |   | -            |   |   | -            |  
|Restricted cash                                             |   | (159,400         | ) |   | (159,400     | ) |   | -            |  
|Reclamation
        bonds                                   |   | 795,785          |   |   | -            |   |   | -            |  
|Proceeds from sale of marketable securities, net            |   | (4,135,798       | ) |   | -            |   |   | -            |  
|Proceeds
        from sale of property, plant and equipment |   | 675,742          |   |   | 15,406       |   |   | 109,797      |  
|Purchase of property, plant and equipment                   |   | (21,255,448      | ) |   | (40,335      | ) |   | (90,252      | )
|Proceeds
        from sale of mineral interests             |   | 500,000          |   |   | 500,000      |   |   | -            |  
|Additions to unproven mineral interests                     |   | (3,173,518       | ) |   | (182,003     | ) |   | (300,000     | )
|                                                            |   |                  |   |   |              |   |   |              |  
|                                                            |   | (33,331,524      | ) |   | 133,668      |   |   | (837,978     | )
|                                                            |   |                  |   |   |              |   |   |              |  
|CASH FLOWS FROM FINANCING ACTIVITIES                        |   |                  |   |   |              |   |   |              |  
|Common
        shares issued                                |   | 55,521,421       |   |   | 210,249      |   |   | 4,746,172    |  
|Share issuance costs                                        |   | (1,277,713       | ) |   | -            |   |   | -            |  
|Special
        warrants                                    |   | 13,000,000       |   |   | -            |   |   | -            |  
|Options exercised                                           |   | 384,900          |   |   | 43,000       |   |   | 230,300      |  
|Warrants
        exercised                                  |   | 11,164,849       |   |   | 320,599      |   |   | 1,092,000    |  
|Notes payable                                               |   | (9,966,000       | ) |   | -            |   |   | -            |  
|Payment of
        promissory note                          |   | (1,260,700       | ) |   | -            |   |   | -            |  
|Advances from related party                                 |   | 216,500          |   |   | -            |   |   | -            |  
|Loans
        advanced to Midway                            |   | (2,000,000       | ) |   | -            |   |   | -            |  
|Loan repayment from Midway                                  |   | 2,000,000        |   |   | -            |   |   | -            |  
|                                                            |   |                  |   |   |              |   |   |              |  
|                                                            |   | 67,783,257       |   |   | 573,848      |   |   | 6,068,472    |  
|                                                            |   |                  |   |   |              |   |   |              |  
|Change in cash during the period                            |   | 804,892          |   |   | (3,321,532   | ) |   | 3,541,988    |  
|                                                            |   |                  |   |   |              |   |   |              |  
|Cash, beginning of period                                   |   | -                |   |   | 4,126,424    |   |   | 584,436      |  
|                                                            |   |                  |   |   |              |   |   |              |  
|Cash, end of period                                         | $ | 804,892          |   | $ | 804,892      |   | $ | 4,126,424    |  

Supplemental disclosure with respect to cash flows(Note
  15)

The accompanying notes are an integral part of these
  consolidated financial statements.

F-4

---

|EMC Metals Corp.                                          
|----------------------------------------------------------
|(An Exploration Stage Company)                            
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
|(Expressed in
      Canadian Dollars)                     

|                                                                                 |  | Capital Stock |  |  |             |   |  |             |   |  | Deficit    |   |  |             |  
|-------------------------------------------------------------------------------- |  | ------------- |  |  | ----------- | - |  | ----------- | - |  | ---------- | - |  | ----------- | -
|                                                                                 |  |               |  |  |             |   |  |             |   |  |            |   |  | Accumulated |  
|                                                                                 |  |               |  |  |             |   |  | Additional  |   |  |            |   |  | During the  |  
|                                                                                 |  | Number of     |  |  |             |   |  | Paid in     |   |  | Treasury   |   |  | Exploration |  
|                                                                                 |  | Shares        |  |  | Amount      |   |  | Capital     |   |  | Stock      |   |  | Stage       |  
|                                                                                 |  |               |  |  | $           |   |  | $           |   |  | $          |   |  | $           |  
|Balance, July 17, 2006                                                           |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | -           |  
|Private placements                                                               |  | 5,000,000     |  |  | 3,500,000   |   |  | -           |   |  | -          |   |  | -           |  
|Excess of exchange amount over carrying 
      amount of Springer Mining Company |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (2,857,819  | )
|Loss for the period                                                              |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (357,670    | )
|Balance, December 31, 2006                                                       |  | 5,000,000     |  |  | 3,500,000   |   |  | -           |   |  | -          |   |  | (3,215,489  | )
|Private placements                                                               |  | 17,577,500    |  |  | 35,155,000  |   |  | -           |   |  | -          |   |  | -           |  
|Conversion of special warrants                                                   |  | 5,390,000     |  |  | 5,390,000   |   |  | -           |   |  | -          |   |  | -           |  
|Exercise of warrants                                                             |  | 50,000        |  |  | 75,000      |   |  | -           |   |  | -          |   |  | -           |  
|Share issuance costs  brokers fees                                             |  | -             |  |  | (1,215,074  | ) |  | 99,000      |   |  | -          |   |  | -           |  
|Share issuance costs  shares issued                                             |  | 100,000       |  |  | 100,000     |   |  | -           |   |  | -          |   |  | -           |  
|Shares issued for mineral properties                                             |  | 100,000       |  |  | 100,000     |   |  | -           |   |  | -          |   |  | -           |  
|Stock-based compensation                                                         |  | 40,000        |  |  | 40,000      |   |  | 489,562     |   |  | -          |   |  | -           |  
|Loss for the year                                                                |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (6,128,912  | )
|Balance, December 31, 2007                                                       |  | 28,257,500    |  |  | 43,144,926  |   |  | 588,562     |   |  | -          |   |  | (9,344,401  | )
|Private placements                                                               |  | 5,322,500     |  |  | 10,645,000  |   |  | -           |   |  | -          |   |  | -           |  
|Conversion of special warrants                                                   |  | 7,610,000     |  |  | 7,610,000   |   |  | -           |   |  | -          |   |  | -           |  
|Share issuance costs  brokers fees                                             |  | -             |  |  | (261,638    | ) |  | -           |   |  | -          |   |  | -           |  
|Shares issued for mineral properties                                             |  | 110,000       |  |  | 210,000     |   |  | -           |   |  | -          |   |  | -           |  
|Acquisition of Gold Standard Royalty                                             |  | 2,050,000     |  |  | 4,100,000   |   |  | 143,017     |   |  | -          |   |  | -           |  
|Corp. Acquisition of Great American Minerals                                     |  | 1,045,775     |  |  | 2,091,550   |   |  | 426,672     |   |  | -          |   |  | -           |  
|Inc. Acquisition of Fury Explorations Ltd.                                       |  | 10,595,814    |  |  | 13,774,558  |   |  | 7,787,783   |   |  | (2,087,333 | ) |  | -           |  
|Exercise of stock options                                                        |  | 6,637,224     |  |  | 10,027,915  |   |  | (184,265    | ) |  | -          |   |  | -           |  
|Shares issued for repayment of 
      promissory note                            |  | 4,728,000     |  |  | 2,364,000   |   |  | -           |   |  | -          |   |  | -           |  
|Stock-based compensation                                                         |  | -             |  |  | -           |   |  | 2,324,458   |   |  | -          |   |  | -           |  
|Loss for the year                                                                |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (17,968,454 | )
|Balance, December 31, 2008                                                       |  | 66,356,813    |  |  | 93,706,311  |   |  | 11,086,227  |   |  | (2,087,333 | ) |  | (27,312,855 | )
|Private placements                                                               |  | 14,500,000    |  |  | 1,190,000   |   |  | -           |   |  | -          |   |  | -           |  
|Exercise of stock options                                                        |  | 101,000       |  |  | 126,186     |   |  | (105,986    | ) |  | -          |   |  | -           |  
|Shares issued for mineral properties                                             |  | 2,765,643     |  |  | 367,695     |   |  | -           |   |  | -          |   |  | -           |  
|Settlement of convertible debentures                                             |  | 7,336,874     |  |  | 2,934,752   |   |  | 62,903      |   |  | -          |   |  | -           |  
|Shares issued for consulting                                                     |  | 89,254        |  |  | 10,711      |   |  | -           |   |  | -          |   |  | -           |  
|Shares issued for acquisition of TTS                                             |  | 19,037,386    |  |  | 2,094,112   |   |  | -           |   |  | -          |   |  | -           |  
|Stock-based compensation before spin-out                                         |  | -             |  |  | -           |   |  | 836,240     |   |  | -          |   |  | -           |  
|Spin-out of GPD                                                                  |  | -             |  |  | (18,540,194 | ) |  | (11,879,384 | ) |  | -          |   |  | -           |  
|Stock-based compensation after spin-out                                          |  | -             |  |  | -           |   |  | 979,611     |   |  | -          |   |  | -           |  
|Loss for the year                                                                |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (21,645,581 | )
|Balance, December 31, 2009                                                       |  | 110,186,970   |  |  | 81,889,573  |   |  | 979,611     |   |  | (2,087,333 | ) |  | (48,958,436 | )
|Private placements                                                               |  | 30,252,442    |  |  | 4,700,312   |   |  | 454,768     |   |  | -          |   |  | -           |  
|Exercise of stock options                                                        |  | 1,320,000     |  |  | 456,602     |   |  | (226,302    | ) |  | -          |   |  | -           |  
|Exercise of warrants                                                             |  | 7,300,000     |  |  | 1,092,000   |   |  | -           |   |  | -          |   |  | -           |  
|Stock-based compensation                                                         |  | -             |  |  | -           |   |  | 795,268     |   |  | -          |   |  | -           |  
|Loss for the year                                                                |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (4,722,755  | )
|Balance, December 31, 2010                                                       |  | 149,059,412   |  |  | 88,138,487  |   |  | 2,003,345   |   |  | (2,087,333 | ) |  | (53,681,191 | )
|Exercise of stock options                                                        |  | 250,000       |  |  | 118,959     |   |  | (75,959     | ) |  | -          |   |  | -           |  
|Exercise/expiry of warrants                                                      |  | 1,369,301     |  |  | 320,599     |   |  | (744,000    | ) |  | 744,000    |   |  | -           |  
|Stock-based compensation                                                         |  | -             |  |  | -           |   |  | 292,899     |   |  | -          |   |  | -           |  
|Loss for the year                                                                |  | -             |  |  | -           |   |  | -           |   |  | -          |   |  | (7,408,552  | )
|                                                                                 |  |               |  |  |             |   |  |             |   |  |            |   |  |             |  
|Balance, December 31, 2011                                                       |  | 150,678,713   |  |  | 88,578,045  |   |  | 1,476,285   |   |  | (1,343,333 | ) |  | (61,089,743 | )

F-5

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

|1. | NATURE AND CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | EMC Metals Corp. (the Company) is incorporated under
        the laws of the Province of British Columbia. The Company is focused on
        specialty metals exploration and production and has recently acquired
        various metallurgical technologies and licenses that it is utilizing to
        gain access to a number of specialty metals opportunities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Companys principal properties are located in the
        state of Nevada, Australia, and Norway. The Companys principal asset, the
        Springer Tungsten mine and mill, is currently on care and maintenance
        pending a sustained improvement in tungsten prices. To December 31, 2011,
        the Company has not commenced production and has generated no revenue. The
        Companys remaining properties are in the exploration or pre-exploration
        stage. As such, the Company is in the exploration stage and anticipates
        incurring significant expenditures prior to commencement of contract
        milling operations.                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | These consolidated financial statements have been
        prepared on a going concern basis that contemplates the realization of
        assets and discharge of liabilities at their carrying values in the normal
        course of business for the foreseeable future. These financial statements
        do not reflect any adjustments that may be necessary if the Company is
        unable to continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company currently earns no operating revenues and
        will require additional capital in order to refit its Springer tungsten
        mill and earn its 50% interest in the Nyngan property. The Companys
        ability to continue as a going concern is uncertain and is dependent upon
        the generation of profits from mineral properties, obtaining additional
        financing or maintaining continued support from its shareholders and
        creditors. The Company is currently working on securing additional
        financing to meet its needs, including a US$500,000 payment due in June
        2012; however there is no guarantee that these efforts will be successful.
        In the event that additional financial support is not received or
        operating profits are not generated, the carrying values of the Companys
        assets may be adversely affected. The inability to raise additional
        financing may affect the future assessment of the Company as a going
        concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | **a.** **Basis of
        presentation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | These consolidated financial statements have been
        prepared in conformity with generally accepted accounting principles of
        the United States of America (US GAAP).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | These consolidated financial statements include the
        accounts of the Company and its wholly owned subsidiaries. All significant
        intercompany accounts and transactions have been eliminated on
        consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | **b.** **Use of
        estimates**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The preparation of consolidated financial statements in
        conformity with US GAAP requires management to make estimates and
        assumptions that affect the reported amounts of assets and liabilities and
        disclosure of contingent assets and liabilities at the date of the
        financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | **c.** **Investment in trading
        securities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Companys trading securities are reported at fair
        value, with unrealized gains and losses included in earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | **d.** **Property, plant and
        equipment**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Property, plant and equipment are recorded at cost less
        accumulated amortization, calculated as
        follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

Plant and equipment
        5% straight lineBuilding
        5% straight lineComputer equipment
        30% straight lineSmall tools and equipment
        20% straight lineOffice equipment
        20% straight lineAutomobile
        30% straight lineLeasehold improvements
        Over life of the lease


e. Mineral properties and
  exploration and development costs

The costs of acquiring mineral rights
  are capitalized at the date of acquisition. After acquisition, various factors
  can affect the recoverability of the capitalized costs. If, after review,
  management concludes that the carrying amount of a mineral property is impaired,
  it will be written down to estimated fair value. Exploration costs incurred on
  mineral properties are expensed as incurred. Development costs incurred on
  proven and probable reserves will be capitalized. Upon commencement of
  production, capitalized costs will be amortized using the unit-of-production
  method over the estimated life of the ore body based on proven and probable
  reserves (which exclude non-recoverable reserves and anticipated processing
  losses).

F-6

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
      Canadian Dollars)         

f. Asset retirement obligations

The Company records the fair value of
  an asset retirement obligation as a liability in the period in which it incurs a
  legal obligation associated with the retirement of tangible long-lived assets
  that result from the acquisition, construction, development, and/or normal use
  of the long-lived assets. The Company also records a corresponding asset which
  is amortized over the life of the asset. Subsequent to the initial measurement
  of the asset retirement obligation, the obligation is adjusted at the end of
  each period to reflect the passage of time (accretion expense) and changes in
  the estimated future cash flows underlying the obligation (asset retirement
  cost).

g. Long-lived assets

Long-lived assets held and used by the
  Company are reviewed for impairment whenever events or changes in circumstances
  indicate that the carrying amount of an asset may not be recoverable. For
  purposes of evaluating the recoverability of long-lived assets, the
  recoverability test is performed using undiscounted net cash flows related to
  the long-lived assets. If such assets are considered to be impaired, the
  impairment recognized is measured by the amount by which the carrying amount of
  the assets exceeds the fair value of the assets. Assets to be disposed of are
  reported at the lower of the carrying amount or fair value less costs to
  sell.

h. Income taxes

The Company accounts for income taxes
  under the asset and liability method. Deferred tax assets and liabilities are
  recognized for the future tax consequences attributable to differences between
  the financial statement carrying amounts of existing assets and liabilities and
  their respective tax bases. Deferred tax assets and liabilities are measured
  using enacted tax rates expected to apply to taxable income in the years in
  which those temporary differences are expected to be recovered or settled. Under
  the asset and liability method the effect on deferred tax assets and liabilities
  of a change in tax rates is recognized in income in the period that includes the
  enactment date. A valuation allowance is recognized if it is more likely than
  not that some part or all of the deferred tax asset will not be recognized.

i. Loss per share

Basic loss per common share is computed
  using the weighted average number of common shares outstanding during the year.
  To calculate diluted loss per share, the Company uses the treasury stock method
  and the if converted method. As of December 31, 2011, there were Nil warrants
  (2010  23,792,485) and 11,848,750 options (2010  11,473,750) outstanding which
  have not been included in the weighted average number of common shares
  outstanding as these were anti-dilutive.

j. Foreign exchange

The Company's functional currency is
  the Canadian dollar. Any monetary assets and liabilities that are in a currency
  other than the Canadian dollar are translated at the rate prevailing at year
  end. Revenue and expenses in a foreign currency are translated at rates that
  approximate those in effect at the time of translation. Gains and losses from
  translation of foreign currency transactions into Canadian dollars are included
  in current results of operations.

k. Stock-based compensation

The Company accounts for stock-based
  compensation under the provisions of Accounting Standard Codification (ASC)
  718, Compensation-Stock Compensation. Under the fair value recognition
  provisions, stock-based compensation expense is measured at the grant date for
  all stock-based awards to employees and directors and is recognized as an
  expense over the requisite service period, which is generally the vesting
  period. The Black-Scholes option valuation model is used to calculate fair
  value.

l. Financial instruments

The Companys financial instruments
  consist of cash, investments in trading securities, subscriptions receivable,
  receivables, accounts payable and accrued liabilities, and promissory notes
  payable. It is management's opinion that the Company is not exposed to
  significant interest, currency or credit risks arising from its financial
  instruments. The fair values of these financial instruments approximate their
  carrying values unless otherwise noted. The Company has its cash primarily in
  one commercial bank in Vancouver, British Columbia, Canada.

m. Concentration of credit
  risk

The financial instrument which
  potentially subjects the Company to concentration of credit risk is cash. The
  Company maintains cash in bank accounts that, at times, may exceed federally
  insured limits. As of December 31, 2011 and 2010, the Company has exceeded the
  federally insured limit. The Company has not experienced any losses in such
  amounts and believes it is not exposed to any significant risks on its cash in
  bank accounts.

n. Comparative figures

Certain comparative figures have been
  reclassified to conform with the current years presentation.

F-7

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

o. Fair value of financial assets
  and liabilities

The Company measures the fair value of
  financial assets and liabilities based on US GAAP guidance which defines fair
  value, establishes a framework for measuring fair value, and expands disclosures
  about fair value measurements.

The Company classifies financial assets
  and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans
  and receivables or other financial liabilities depending on their nature.
  Financial assets and financial liabilities are recognized at fair value on their
  initial recognition, except for those arising from certain related party
  transactions which are accounted for at the transferors carrying amount or
  exchange amount.

Financial assets and liabilities
  classified as held-for-trading are measured at fair value, with gains and losses
  recognized in net income. Financial assets classified as held-to-maturity, loans
  and receivables, and financial liabilities other than those classified as
  held-for-trading are measured at amortized cost, using the effective interest
  method of amortization. Financial assets classified as available-for-sale are
  measured at fair value, with unrealized gains and losses being recognized as
  other comprehensive income until realized, or if an unrealized loss is
  considered other than temporary, the unrealized loss is recorded in income.

Financial instruments, including
  receivables, subscriptions receivable, accounts payable and accrued liabilities,
  and promissory notes payable are carried at cost, which management believes
  approximates fair value due to the short term nature of these instruments.
  Investments in trading securities are classified as held for trading, with
  unrealized gains and losses being recognized in income.

The following table presents
  information about the assets that are measured at fair value on a recurring
  basis as of December 31, 2011, and indicates the fair value hierarchy of the
  valuation techniques the Company utilized to determine such fair value. In
  general, fair values determined by Level 1 inputs utilize quoted prices
  (unadjusted) in active markets for identical assets. Fair values determined by
  Level 2 inputs utilize data points that are observable such as quoted prices,
  interest rates and yield curves. Fair values determined by Level 3 inputs are
  unobservable data points for the asset or liability, and included situations
  where there is little, if any, market activity for the asset:

Fair value of financial assets and
  liabilities

| |                                   |   |              |  |   | Quoted Prices     |  |   | Significant Other |  |   | Significant         | 
| | --------------------------------- | - | ------------ |  | - | ----------------- |  | - | ----------------- |  | - | ------------------- | 
| |                                   |   | December 31, |  |   | in Active Markets |  |   | Observable Inputs |  |   | Unobservable Inputs | 
| |                                   |   | 2011         |  |   | **(Level 1)**     |  |   | **(Level 2)**     |  |   | **(Level 3)**       | 
| | Assets:                           |   |              |  |   |                   |  |   |                   |  |   |                     | 
| | Cash and restricted cash          | $ | 964,292      |  | $ | 964,292           |  | $ |                  |  | $ |                    | 
| | Investments in trading securities | $ | 2,250        |  | $ | 2,250             |  | $ |                  |  | $ |                    | 
| |                                   |   |              |  |   |                   |  |   |                   |  |   |                     | 
| | Total                             | $ | 966,542      |  | $ | 966,542           |  | $ |                  |  | $ |                    | 

|   | The fair values of cash, restricted cash and investments
        in trading securities are determined through market, observable and
        corroborated sources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3. | RECENT ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Recent accounting pronouncements that the Company has
        adopted or will be required to adopt in the future are summarized
        below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In May 2011, the Financial Accounting Standards Board
        (FASB) issued Accounting Standards Update (ASU) No. 2011-04, Fair
        Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
        Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which is
        intended to improve comparability of fair value measurements presented and
        disclosed in financial statements prepared in accordance with U.S.
        generally, accepted accounting principles and International Financial
        Reporting Standards. This standard clarifies the application of existing
        fair value measurement requirements including (1) the application of the
        highest and best use valuation premise, (2) the methodology to measure the
        fair value of an instrument classified in a reporting entitys
        shareholders equity, (3) disclosure requirements for quantitative
        information on Level 3 fair value measurements and (4) guidance on
        measuring the fair value of financial instruments managed within a
        portfolio. In addition, the standard requires additional disclosures of
        the sensitivity of fair value to changes in unobservable inputs for Level
        3 securities. This standard is effective for interim and annual reporting
        periods ending on or after December 15, 2011. Based on the Companys
        evaluation of the ASU, the adoption of ASU 2011-04 will not have material
        impact on the Companys financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In June 2011, the FASB issued ASU No. 2011-05,
        Presentation of Comprehensive Income, which requires that comprehensive
        income be presented either in a single continuous statement of
        comprehensive income or in two separate but consecutive statements. The
        standard also requires entities to disclose on the face of the financial
        statements reclassification adjustments for items that are reclassified
        from other comprehensive income to net earnings. This standard no longer
        allows companies to present components of other comprehensive income only
        in the statement of equity. This standard is effective for interim and
        annual reporting periods beginning after December 15, 2011. The adoption
        of this guidance is not expected to have a significant impact on the
        Companys financial statements other than the prescribed change in
        presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-8

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

|   | In September 2011, the FASB issued ASU No. 2011-08,
        IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for
        Impairment (ASU 2011-08). ASU 2011-08 is intended to simplify how
        entities, both public and nonpublic, test goodwill for impairment. ASU
        2011-08 permits an entity to first assess qualitative factors to determine
        whether it is more likely than not that the fair value of a reporting
        unit is less than its carrying amount as a basis for determining whether
        it is necessary to perform the two- step goodwill impairment test
        described in Topic 350. The more-likely-than-not threshold is defined as
        having a likelihood of more than 50%. ASU 2011-08 is effective for annual
        and interim goodwill impairment tests performed for fiscal years beginning
        after December 15, 2011. Although early adoption is permitted, the Company
        will adopt ASU 2011-08 as of January 1, 2012. Based on the Companys
        evaluation of this ASU, the adoption of ASU 2011-08 will not have a
        material impact on the Companys financial statements.                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In December 2011, the FASB issued ASU No. 2011-11,
        Balance Sheet (Topic 210)Disclosures about Offsetting Assets and
        Liabilities (ASU 2011-11). The update requires entities to disclose
        information about offsetting and related arrangements of financial
        instruments and derivative instruments. ASU 2011-11 is effective for the
        Company in the first quarter of its fiscal year ending June 30, 2014
        (fiscal 2014). The Company currently believes there will be no
        significant impact on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In December 2011, the FASB issued ASU 2011-12,
        Comprehensive Income (Topic 220)  Deferral of the Effective Date for
        Amendments to the Presentation of Reclassifications of Items Out of
        Accumulated Other Comprehensive Income in Accounting Standards Update No.
        2011-05. ASU 2011-12 defers only those changes in Update No. 2011-05 that
        relate to the presentation of the reclassification adjustments. Under the
        amendments in Update No. 2011-05, entities are required to present
        reclassification adjustments and the effect of those reclassification
        adjustments on the face of the financial statements where net income
        presented, by component of net income, and on the face of the financial
        statements where other comprehensive income is presented, by component of
        other comprehensive income. In addition, the amendments in Update No.
        2011-05 require that reclassification adjustments be presented in interim
        financial periods. This standard is effective for interim and annual
        reporting periods beginning after December 15, 2011. The adoption of this
        guidance is not expected to have a significant impact on the Companys
        financial statements other than the prescribed change in
        presentation.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | INVESTMENTS IN TRADING SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | At December 31, 2011, the Company held investments
        classified as trading securities, which consisted of various equity
        securities. All trading securities are carried at fair value. As of
        December 31, 2011, the fair value of trading securities was $2,250 (2010 
        $2,250).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | RESTRICTED CASH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company has a Bank of Montreal line of credit of up
        to $159,400 as a deposit on the Companys Vancouver office lease and is
        secured by a short-term investment of $159,400 bearing interest at prime
        less 2.05% maturing on May 8, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | PROPERTY, PLANT AND
        EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                              | December 31, 2011 |            | December 31, 2010 |  
| | ---------------------------- | ----------------- | ---------- | ----------------- | -
| |                              |                   |            |                   |  
| |                              |                   | Cost       |                   |  
| | Land and water rights        | $                 | 4,673,958  |                   | $
| | Plant and equipment          |                   | 25,618,528 |                   |  
| | Cosgrave plant and equipment |                   | 375,763    |                   |  
| | Building                     |                   | 222,685    |                   |  
| | Automobiles                  |                   | 179,767    |                   |  
| | Computer equipment           |                   | 364,697    |                   |  
| | Small tools and equipment    |                   | 963,537    |                   |  
| | Office equipment             |                   | 134,691    |                   |  
| | Leasehold improvements       |                   | -          |                   |  
| |                              | $                 | 32,533,626 |                   | $

Land and water rights are in respect of
  properties in Nevada. The plant and equipment is comprised of the Springer Plant
  and Mill in Nevada which is currently under care and maintenance.

Impairment of land and water rights

During the year ended December 31,
  2011, the Company has reviewed the carrying value of its land and water rights
  for impairment and compared the carrying value to the estimated recoverable
  amount and has written down its land and water rights by $3,100,000.

F-9

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

|7. | MINERAL INTERESTS
|-- | -----------------

| | December 31, 2011                  |   | Other   |  |   | Tungsten |   |   | Total   |  
| | ---------------------------------- | - | ------- |  | - | -------- | - | - | ------- | -
| |                                    |   |         |  |   |          |   |   |         |  
| | **Acquisition
        costs**      |   |         |  |   |          |   |   |         |  
| | Balance,
        December 31, 2010 | $ | 300,000 |  | $ | 203,020  |   | $ | 503,020 |  
| | Additions                          |   | 182,260 |  |   | 2,534    |   |   | 184,794 |  
| | Sold                               |   | -       |  |   | (8,103   | ) |   | (8,103  | )
| | Balance, December 31, 2011         | $ | 482,260 |  | $ | 197,451  |   | $ | 679,711 |  

| | December 31, 2010                  |   | Other   |  |   | Gold       |   |   | Tungsten |  |   | Total      |  
| | ---------------------------------- | - | ------- |  | - | ---------- | - | - | -------- |  | - | ---------- | -
| |                                    |   |         |  |   |            |   |   |          |  |   |            |  
| | **Acquisition
        costs**      |   |         |  |   |            |   |   |          |  |   |            |  
| | Balance,
        December 31, 2009 | $ | -       |  | $ | 1,343,173  |   | $ | 203,020  |  | $ | 1,546,193  |  
| | Additions                          |   | 300,000 |  |   | -          |   |   | -        |  |   | 300,000    |  
| | Written-off                        |   | -       |  |   | (1,138,432 | ) |   | -        |  |   | (1,138,432 | )
| | Sold                               |   | -       |  |   | (204,741   | ) |   | -        |  |   | (204,741   | )
| | Balance, December 30, 2010         | $ | 300,000 |  | $ | -          |   | $ | 203,020  |  | $ | 503,020    |  

Title to mineral property interests
  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
  property interests. The Company has investigated title to all of its mineral
  property interests and, to the best of its knowledge, title to all of its
  properties is in good standing.

Impairment of mineral
  properties

During the year ended December 31,
  2010, the Company reviewed the carrying value of its mineral properties for
  impairment and compared the carrying value to the future cash flows in the case
  of its tungsten properties, and fair market value in respect of its remaining
  properties, and has written down its gold properties by $1,138,432. The Company
  sold these properties during the year ended December 31, 2010.

TUNGSTEN PROPERTY

Springer Property

On November 21, 2006, the Company
  acquired all outstanding and issued shares of Springer Mining Company
  (Springer). Included in the assets of Springer and allocated to property,
  plant and equipment (Note 5) are the Springer Mine and Mill located in Pershing
  County, Nevada.

Fostung Property

The Company held a 100% interest
  certain mineral claims known as the Fostung Property, Ontario. During the year
  ended December 31, 2011, the Company sold these claims for $500,000 and recorded
  a gain on the sale of $491,897.

SCANDIUM PROPERTY

Nyngan, New South Wales
  Property

On February 5, 2010, the Company
  entered in to an agreement with Jervois Mining Limited (Jervois) whereby it
  would acquire a 50% interest in certain properties located in New South Wales,
  Australia. In order for the Company to earn its interest which is subject to a
  2% Net Smelter Royalty (NSR), the Company paid the sum of $300,000 into escrow,
  that was released to Jervois upon satisfaction of certain conditions precedent,
  including verification of title to the Nyngan property and approval of the
  Toronto Stock Exchange, and must:

F-10

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

| | a) | Incur exploration and metallurgical work of A$500,000
        (CAD$466,000) within 180 business days of the conditions precedent being
        satisfied, or pay cash in lieu thereof. On September 29, 2010 the Company
        received a six month extension to complete its exploration commitment. In
        the event that the Company wishes to continue the joint venture, the
        Company must deliver a feasibility study within 480 (extended to February
        28, 2012) business days of the conditions precedent being satisfied,
        failing which the agreement will terminate.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | b) | Upon delivering the feasibility study to Jervois, pay to
        Jervois an additional A$1,300,000 plus GST at which time it will be
        granted a 50% interest in the joint venture. The joint venture agreement
        provides for straight-line dilution, with interests diluted below 10%
        being converted into a 2% NSR royalty.                                                                                                                                                                                                                                                        

|   | Tordal and Evje properties, Norway                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has entered into an earn-in agreement with
        REE Mining AS (REE), whereby the Company has an option to earn up to a
        100% interest in the Tordal and Evje properties. To earn its interest, the
        Company must pay REE US$630,000, including an initial cash payment of
        US$130,000 (paid) and issue 1,000,000 common shares.                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is also required to incur US$250,000 of
        exploration work to be completed over 18 months from the date of closing
        in order to acquire its interest. The Company shall also issue 250,000
        common shares upon releasing the second of two full feasibility studies on
        the two properties.                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Fairfield property, Utah                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has entered into an earn-in agreement with
        Mineral Exploration Services LLC, whereby the Company has an option to
        earn a 100% interest in a patented mining claim and former scandium
        property known as The Little Green Monster near Fairfield, Utah.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is required to pay US$380,000 over a 3 year
        period from the date of closing in order to acquire its interest. Mineral
        Exploration Services LLC maintains a production right of US$5 per ton of
        resource mined up to US$500,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Hogtuva property, Norway                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has entered into an earn-in agreement with
        REE Mining AS (REE), whereby the Company has an option to earn a 100%
        interest in three scandium and beryllium exploration sites in Norway. To
        earn 100% of the exploration rights, the Company must pay REE US$150,000
        over 18 months, including an initial cash payment of US$50,000 (paid) and
        issue up to 200,000 common shares. In consideration for paying the Company
        US$200,000, REE may elect to accelerate the Companys option to earn a
        100% interest in the properties.                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | No related party transactions occurred during the year
        ended December 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During fiscal 2010, the Company paid or accrued
        consulting fees of $46,175 to the former CEO of the Company and paid or
        accrued consulting fees of $137,247 to the current CEO and president of
        the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The above transactions occurred in the normal course of
        operations and were measured at the exchange amount, which is the amount
        of consideration established and agreed to by the related parties. Amounts
        payable to related parties have no specific terms of repayment, are
        unsecured, and have no interest rate.                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During fiscal 2010, the Company sold software with a net
        book value of $103,134 to a company with previously common
        directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|9. | DERIVATIVE LIABILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company evaluated the application of SFAS 133 and
        EITF 00-19 for the settlement of convertible debentures through the
        issuance of shares and warrants. Based on the guidance in SFAS 133 and
        EITF 00-19, the Company concluded that the warrants were required to be
        accounted for as derivatives. The warrants issued pursuant to the
        settlement were in a functional currency different than that of the
        Company and therefore met the attributes of a liability. The Company is
        required to record the fair value of these warrants on its balance sheet
        at fair value with changes in the values of these derivatives reflected in
        the statement of operations.

F-11

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

|    | The Company uses the Black-Scholes valuation model for
        calculation of the fair value of derivative liabilities. The Company uses
        volatility rates based upon the closing stock price of its common stock.
        The Company uses a risk-free interest rate which is the bank of Canada
        rate with a maturity that approximates the estimated expected life of a
        derivative. The Company uses the closing market price of the common stock
        on the date of issuance of a derivative or at the end of a quarter when a
        derivative is valued at fair value. The volatility was 100%, the risk-free
        interest rate was 1%, a dividend rate of 0%, and the expected life was
        0.17 respectively, during the year ending December 31, 2010.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | During the year ended December 31, 2011, the warrants
        expired and the derivative liability was valued at $Nil resulting in a
        change in fair value of $228,741 realized through the statement of
        operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10. | PROMISSORY NOTES
        PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 2011      |   |   | 2010      |  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- | - | - | --------- | -
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |           |   |   |           |  
| | Promissory note with a principal balance of
        US$500,000, bearing interest at prime per annum, maturing June 30, 2012
        due to a director of the Company secured by the stock of a subsidiary
        company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 529,752   |   | $ | 500,000   |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |           |   |   |           |  
| | Promissory note with a principal balance of US$ 3,750,000, bearing
        interest at 6% per annum, maturing July 3, 2013 and secured by land and
        water rights.
          During fiscal 2008 the Company entered into a promissory note for
            US$6,750,000 as consideration for the acquisition of land and water
            rights. The Company subsequently made principal payments of US$3,000,000
            consisting of a cash payment of US$1,000,000 and 4,728,000 units of the
            Company equity valued at US$2,000,000. Each unit consisted of one common
            share and one-half share purchase warrant exercisable at CDN$0.75 each and
            exercisable for a period of two years. |  |   | 3,813,750 |   |   | 3,750,000 |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |           |   |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   | 4,343,502 |   |   | 4,250,000 |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |           |   |   |           |  
| | Less: current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | (529,752  | ) |   | (500,000  | )
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |           |   |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | $ | 3,813,750 |   | $ | 3,750,000 |  

|11. | CAPITAL STOCK AND ADDITIONAL PAID IN
        CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On December 3, 2010, the Company issued 18,929,740 common
        shares at a value of $0.19 per common share for total proceeds of
        $3,596,651. A total of $210,249 was received during fiscal 2011.                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On November 25, 2010, the Company issued 6,100,000 units
        at a value of $0.10 per unit for total proceeds of $610,000. Each unit
        consisted of one common share and one-half of one share purchase warrant
        exercisable at $0.18 expiring on November 25, 2011. The warrants have a
        calculated total fair value of $142,358 using the Black-Scholes pricing
        model with a volatility of 142.52%, risk- free rate of 1.73%, expected
        life of 1 year, and a dividend rate of 0%.                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On June 30, 2010, the Company issued 2,947,702 units at a
        value of $0.10 per unit for total proceeds of $294,770. Each unit
        consisted of one common share and one-half of one share purchase warrant
        exercisable at $0.18 until June 30, 2011. The warrants have a calculated
        total fair value of $35,638 using the Black-Scholes pricing model with a
        volatility of 123.84%, risk-free rate of 1.39%, expected life of 1 year,
        and a dividend rate of 0%.                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On February 17, 2010, the Company issued 2,275,000 units
        at a value of $0.20 per unit for total proceeds of $455,000. Each unit
        consisted of one common share and one-half of one share purchase warrant
        exercisable at $0.25 until February 17, 2011. The warrants have a
        calculated total fair value of $78,113 using the Black-Scholes pricing
        model with a volatility of 131.19%, risk-free rate of 1.34%, expected life
        of 1 year, and a dividend rate of 0%. All of the warrants were exercised
        during fiscal 2011.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On November 17, 2009, the Company issued 13,000,000 units
        at a value of $0.08 per unit for total proceeds of $1,040,000. Each unit
        consisted of one common share and one-half of one share purchase warrant.
        Each full warrant entitled the holder to purchase an additional share at
        $0.15 per share until November 17, 2010.                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On October 13, 2009, the Company issued 500,000 common
        shares at a value of $45,000 for the Fostung Tungsten project.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On August 27, 2009, the Company issued 1,500,000 units at
        a value of $0.10 per unit, pursuant to a non-brokered private placement
        for proceeds of $150,000. Each unit consisted of one common share and
        one-half of one share purchase warrant. Each full warrant entitled the
        holder to purchase an additional share at $0.15 per share until August 27,
        2010.                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On May 13, 2009, the Company issued 89,254 common shares
        at a value of $0.12 per share to a consultant for settlement of consulting
        fees for Fury Explorations Ltd. (Fury), a subsidiary of GPD, under the
        plan of Arrangement of spin-out.                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On April 21, 2009, the Company issued 51,859 common
        shares at a value of $0.10 per share for the Platte River
        property.                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-12

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

On January 21, 2009, the Company issued
  66,784 common shares at a value of $0.20 per share for the Guijoso property for
  Fury.

On January 6, 2009, the Company issued
  2,147,000 common shares at a value of US$250,000 for the Adelaide and Tuscarora
  projects for Golden Predator Mines US Inc., a wholly owned subsidiary of the
  Company prior to the spin-out.

On November 17, 2008, the Company
  issued 76,274 common shares in connection with the acquisition of the
  subsidiary, Great American Minerals Inc.

On October 18, 2008, the Company issued
  4,728,000 units to Cosgrave for repayment of a promissory note at a value of
  US$2,000,000. Each unit consisted of one common share of the Company and
  one-half of one common share purchase warrant with a two year life and
  exercisable at $0.75.

In July 2008, the Company completed a
  private placement consisting of 2,500,000 common shares at $2.00 per share for
  proceeds of $5,000,000. In connection with this private placement the Company
  paid a finders fee of $250,000.

In January 2008, the Company completed
  a private placement consisting of 2,822,500 units at $2.00 per unit for gross
  proceeds of $5,645,000. Included in the proceeds was $3,620,000 received in
  advance as of December 31, 2007. Each unit consisted of one common share and one
  half of one share purchase warrant. Each whole warrant entitled the holder to
  acquire one additional common share at $3.00 for a period of 12 months.

In November 2007, the Company completed
  private placements consisting of 17,577,500 units at $2.00 per unit for proceeds
  of $35,155,000. Each unit consisted of one common share and one half of one
  common share purchase warrant. Each whole warrant entitled the holder to acquire
  one additional common share at $3.00 for a period of 12 months following the
  closing of the placement.

In December 2007, the Company issued
  5,390,000 common shares pursuant to the conversion of special warrants. The
  Company paid $1,016,074 and issued 100,000 common share valued at $100,000 as
  issuance costs and finders fees. The Company also granted warrants to acquire
  300,000 common shares exercisable at $1.50 expiring September 22, 2008. The
  warrants were valued at $99,000 with the Black-Scholes option pricing model
  using an expected volatility of 115%, life of one year, a risk free interest
  rate of 4% and a dividend yield of 0%.

In December 2006, the Company issued
  5,000,000 common shares at $0.70 per common share for gross proceeds of
  $3,500,000.

Stock Options and Warrants

The Company established a stock option
  plan (the Plan) under which it is authorized to grant options to executive
  officers and directors, employees and consultants and the number of options
  granted under the Plan shall not exceed 15% of the shares outstanding. Under the
  Plan, the exercise period of the options may not exceed five years from the date
  of grant and vesting is determined by the Board of Directors.

Stock option and share purchase warrant
  transactions are summarized as follows:

| |                                      |  |             |   |   |                  | 
| | ------------------------------------ |  | ----------- | - | - | ---------------- | 
| |                                      |  | Warrants    |   |   | Stock Options    | 
| |                                      |  |             |   |   | Weighted average | 
| |                                      |  | Number      |   |   | exercise price   | 
| | Outstanding, December 31, 2009       |  | 27,795,135  |   | $ | 1.66             | 
| | Granted                              |  | 5,661,350   |   |   | 0.19             | 
| | Cancelled                            |  | (2,364,000  | ) |   | 0.60             | 
| | Exercised                            |  | (7,300,000  | ) |   | 0.15             | 
| | Outstanding, December 31, 2010       |  | 23,792,485  |   |   | 1.82             | 
| | Granted                              |  | -           |   |   | -                | 
| | Cancelled                            |  | (22,423,184 | ) |   | 1.97             | 
| | Exercised                            |  | (1,369,301  | ) |   | 0.24             | 
| | Outstanding, December 31, 2011       |  | -           |   | $ | -                | 
| | Number currently
        exercisable |  | -           |   | $ | -                | 

F-13

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

As at December 31, 2011, incentive
  stock options were outstanding as follows:

| |         |  | Number of  |  |   | Exercise |  |  |                    | 
| | ------- |  | ---------- |  | - | -------- |  |  | ------------------ | 
| |         |  | options    |  |   | Price    |  |  | Expiry Date        | 
| |         |  |            |  |   |          |  |  |                    | 
| | Options |  | 332,500    |  | $ | 0.200    |  |  | July 26, 2012      | 
| |         |  | 5,000      |  |   | 1.000    |  |  | July 26, 2012      | 
| |         |  | 40,000     |  |   | 0.200    |  |  | October 4, 2012    | 
| |         |  | 15,000     |  |   | 1.000    |  |  | October 4, 2012    | 
| |         |  | 220,000    |  |   | 0.390    |  |  | January 18, 2013   | 
| |         |  | 152,500    |  |   | 0.200    |  |  | February 25, 2013  | 
| |         |  | 100,000    |  |   | 2.000    |  |  | February 25, 2013  | 
| |         |  | 100,000    |  |   | 0.200    |  |  | March 4, 2013      | 
| |         |  | 115,000    |  |   | 0.200    |  |  | May 13, 2013       | 
| |         |  | 5,000      |  |   | 2.150    |  |  | May 13, 2013       | 
| |         |  | 50,000     |  |   | 0.200    |  |  | June 2, 2013       | 
| |         |  | 30,000     |  |   | 0.200    |  |  | August 20, 2013    | 
| |         |  | 725,000    |  |   | 0.200    |  |  | October 31, 2013   | 
| |         |  | 997,500    |  |   | 0.300    |  |  | January 23, 2014   | 
| |         |  | 50,000     |  |   | 0.300    |  |  | February 26, 2014  | 
| |         |  | 1,395,000  |  |   | 0.160    |  |  | June 16, 2014      | 
| |         |  | 225,000    |  |   | 0.120    |  |  | August 27, 2014    | 
| |         |  | 50,000     |  |   | 0.160    |  |  | December 14, 2014  | 
| |         |  | 200,000    |  |   | 0.105    |  |  | December 16, 2014  | 
| |         |  | 1,071,250  |  |   | 0.250    |  |  | January 4, 2015    | 
| |         |  | 4,800,000  |  |   | 0.100    |  |  | November 5, 2015   | 
| |         |  | 120,000    |  |   | 0.310    |  |  | April 27, 2013     | 
| |         |  | 250,000    |  |   | 0.315    |  |  | May 4, 2016        | 
| |         |  | 500,000    |  |   | 0.250    |  |  | May 16, 2016       | 
| |         |  | 300,000    |  |   | 0.155    |  |  | September 15, 2016 | 
| |         |  | 11,848,750 |  |   |          |  |  |                    | 

As at December 31, 2011 there were no
  purchase warrants outstanding.

Stock-based compensation

During the year ended December 31,
  2011, the Company recognized stock-based compensation of $292,899 (2010 -
  $795,268) in the statement of operations as a result of shares for services and
  incentive stock options granted and vested. The weighted average fair value of
  the options granted was $0.31 (2010 - $0.12) per share.

The fair value of all compensatory
  options and warrants granted is estimated on grant date using the Black-Scholes
  option pricing model. The weighted average assumptions used in calculating the
  fair values are as follows:

2011
        
        
        2010Risk-free interest rate
        
        2.33%
        
        
        2.75%Expected life
        
        4.39 years
        
        
        3 yearsVolatility
        
        126.61%
        
        
        123.93%Forfeiture rate
        
        0.00%
        
        
        0.00%Dividend rate
        
        0.00%
        
        
        0.00%


F-14

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
      Canadian Dollars)         

|12. | DEFERRED INCOME TAXES                                                                           
|--- | ------------------------------------------------------------------------------------------------
|    |                                                                                                 
|    | A reconciliation of income taxes at statutory rates with
      the reported taxes is as follows:

| |                                            |   | 2011       |   |   | 2010       |  
| | ------------------------------------------ | - | ---------- | - | - | ---------- | -
| | Loss before income taxes                   | $ | (7,408,552 | ) | $ | (4,722,755 | )
| | Expected income tax expense (recovery)     |   | (2,291,000 | ) |   | (1,339,466 | )
| | Other items                                |   | 1,004,000  |   |   | 226,651    |  
| | Write-off of mineral properties            |   | -          |   |   | 324,453    |  
| |                                            |   | (1,287,000 | ) |   | (788,362   | )
| | Unrecognized benefit of non-capital losses |   | 1,287,000  |   |   | 788,362    |  
| | Income tax recovery                        | $ | -          |   | $ | -          |  

The income tax effects of temporary
  differences that give rise to significant components of deferred income tax
  assets and liabilities are as follows:

| |                                                           |   | 2011       |   |   | 2010       |  
| | --------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                           |   |            |   |   |            |  
| | Deferred income tax assets (liabilities)                  |   |            |   |   |            |  
| | Non-capital losses available for future
      periods     | $ | 4,647,000  |   | $ | 8,421,245  |  
| | Capital losses
      available for future periods         |   | 1,381,000  |   |   | -          |  
| | Share issuance costs                                      |   | 14,000     |   |   | 82,718     |  
| | Mineral interests and
      property, plant and equipment |   | 1,496,000  |   |   | (253,132   | )
| |                                                           |   |            |   |   |            |  
| |                                                           |   | 7,538,000  |   |   | 8,250,831  |  
| | Less: valuation allowance                                 |   | (7,538,000 | ) |   | (8,250,831 | )
| |                                                           |   |            |   |   |            |  
| | Net deferred
      income tax liability                   | $ | -          |   | $ | -          |  

|    | At December 31, 2011, the Company has Canadian
      non-capital loss carry forwards of approximately $9,600,000 and United
      States operating losses of approximately $6,450,000. The Canadian
      non-capital loss carry forwards and United States operating losses expire
      at various dates from 2026 to 2031. The potential income tax benefits
      related to the Canadian loss carry forwards and the United States
      operating losses have not been reflected in the accounts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13. | TREASURY STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| |                 |  | Number    |  |   | Amount    | 
| | --------------- |  | --------- |  | - | --------- | 
| | Treasury shares |  | 1,033,333 |  | $ | 1,343,333 | 
| |                 |  | 1,033,333 |  | $ | 1,343,333 | 

Treasury shares comprise shares of the
  Company which cannot be sold without the prior approval of the TSX.

F-15

---

|EMC Metals Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|December 31, 2011                             
|(Expressed in
        Canadian Dollars)       

|14. | SEGMENTED INFORMATION                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                               
|    | The Companys mineral properties are located in Norway,
        Canada, Australia, and the United States and its capital assets
        geographic information is as follows:

December 31,2011
        
        Norway
        
        
        Australia
        
        
        Canada
        
        
        United States
        
        
        TotalProperty, plant and equipment
        $
        -
        
        $
        -
        
        $
        -
        
        $
        30,676,426
        
        $
        30,676,426Mineral properties
        
        182,260
        
        
        300,000
        
        
        -
        
        
        197,451
        
        
        679,711$
        182,260
        
        $
        300,000
        
        $
        -
        
        $
        30,873,877
        
        $
        31,408,082


| | December 31, 2010             |   | Australia |  |   | Canada |  |   | United States |  |   | Total       | 
| | ----------------------------- | - | --------- |  | - | ------ |  | - | ------------- |  | - | ----------- | 
| | Property, plant and equipment | $ | -         |  | $ | 61,935 |  | $ | 34,227,938    |  | $ | 34,289, 873 | 
| | Mineral properties            |   | 300,000   |  |   | -      |  |   | 203,020       |  |   | 503,020     | 
| |                               | $ | 300,000   |  | $ | 61,935 |  | $ | 34,340,958    |  | $ | 34,792,893  | 

|15. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH
        FLOWS
|--- | ----------------------------------------------------------

| |                                                    |   | 2011    |  |   | 2010    | 
| | -------------------------------------------------- | - | ------- |  | - | ------- | 
| | Cash paid during the year for interest             | $ | 258,186 |  | $ | 301,244 | 
| | Cash paid during
        the year for income taxes | $ | -       |  | $ | -       | 

There were no significant non cash
  transactions for the year ended December 31, 2011.

Significant non cash transactions for
  the year ended December 31, 2010 included:

| | a) | Transferred a net value of $103,134 of property, plant,
        and equipment to GPD for a reduction in accounts payable.                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                             
| | b) | Transferred marketable securities with a value of
        $131,749 to GPD for a reduction in due to related parties.                        
| |    |                                                                                                                                             
| | c) | The Company sold its subsidiary, Great American Minerals
        Inc. for $225,000 to GPD for an increase in due to related
        parties.
| |    |                                                                                                                                             
| | d) | A revaluation of warrants with a fair value of $198,659
        from GPD for a reduction in due to related
        parties.                 

F-16

---