----

----

|   |   |                                                                                     |
|--------|--------|------------------------------------------------------------------------------------------|
| [X]    |   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |

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

|                                                                                      |   |                                       |
|-------------------------------------------------------------------------------------------|--------|--------------------------------------------|
| British Columbia(State or other jurisdiction ofincorporation or organization)             |   | 98-0434111(IRS EmployerIdentification No.) |
|                                                                                      |   |                                       |
| 4415 Caribou Road P.O. Box 653Nederland, Colorado(Address of principal executive offices) |   | 80466-0653(Zip Code)                       |

----

|                                 |                                                                                                 | Page   |
|--------------------------------------|------------------------------------------------------------------------------------------------------|--------|
| Part I – Financial Information |                                                                                                 |
|                                 | Item 1. Financial Statements.                                                                        | 3      |
|                                 | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 13     |
|                                 | Item 3. Quantitative and Qualitative Disclosures About Market Risk.                                  | 17     |
|                                 | Item 4. Controls and Procedures.                                                                     | 17     |
|                                 |                                                                                                 |   |
| Part II – Other Information    |                                                                                                 |
|                                 | Item 1. Legal Proceedings.                                                                           | 19     |
|                                 | Item 1A. Risk Factors.                                                                               | 19     |
|                                 | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.                                 | 19     |
|                                 | Item 3.  Defaults Upon Senior Securities.                                                  | 20     |
|                                 | Item 4. (Removed and Reserved).                                                                      | 20     |
|                                 | Item 5. Other Information.                                                                           | 20     |
|                                 | Item 6. Exhibits.                                                                                    | 20     |
|                                 |                                                                                                 |   |
|                                 | Signatures                                                                                           | 21     |

----

|                                                                                                                                                                      |   | As of       |        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|-------------|
|                                                                                                                                                                      |   | 11/30/2011  |        |   | 5/31/2011 |   |
| ASSETS                                                                                                                                                                    |   | (unaudited) |        |   |   |   |
| Current assets                                                                                                                                                            |   |        |        |   |   |   |
| Cash and cash equivalents                                                                                                                                                 |   | $           | 91,869      |   |   | $ | 913,182 |   |
| Inventories                                                                                                                                                               |   |        | 18,894      |   |   |   | - |   |
| Prepaid expenses and other assets                                                                                                                                         |   |        | 39,898      |   |   |   | 39,961 |   |
| Total current assets                                                                                                                                                      |   |        | 150,661     |   |   |   | 953,143 |   |
|                                                                                                                                                                      |   |        |        |   |   |   |   |   |
| Restricted cash                                                                                                                                                           |   |        | 15,400      |   |   |   | 15,400 |   |
| Note receivable                                                                                                                                                           |   |        | 60,000      |   |   |   | 60,000 |   |
| Fixed assets, net                                                                                                                                                         |   |        | 28,870      |   |   |   | 15,313 |   |
| Total assets                                                                                                                                                              |   | $           | 254,931     |   |   | $ | 1,043,856 |   |
|                                                                                                                                                                      |   |        |        |   |   |   |   |   |
| LIABILITIES                                                                                                                                                               |   |        |        |   |   |   |   |   |
| Current Liabilities                                                                                                                                                       |   |        |        |   |   |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                                  |   | $           | 1,265,566   |   |   | $ | 1,631,568 |   |
| Convertible debentures, current portion                                                                                                                                   |   |        | -           |   |   |   | 702,964 |   |
| Notes payable and current portion of long-term debt                                                                                                                       |   |        | 10,253,878  |   |   |   | 10,253,878 |   |
| Total current liabilities                                                                                                                                                 |   |        | 11,519,444  |   |   |   | 12,588,410 |   |
|                                                                                                                                                                      |   |        |        |   |   |   |   |   |
| Royalty interest                                                                                                                                                          |   |        | 150,000     |   |   |   | 150,000 |   |
| Convertible debentures, long-term                                                                                                                                         |   |        | 724,399     |   |   |   | - |   |
| Environmental remediation liabilities                                                                                                                                     |   |        | 50,000      |   |   |   | 50,000 |   |
| Total liabilities                                                                                                                                                         |   |        | 12,443,843  |   |   |   | 12,788,410 |   |
|                                                                                                                                                                      |   |        |        |   |   |   |   |   |
| Shareholders' Deficit                                                                                                                                                     |   |        |        |   |   |   |   |   |
| Common stock, no par value, unlimited shares authorized, 162,196,422 and 149,184,986 shares issued and outstanding as of November 30, 2011 and May 31, 2011, respectively |   |        | 37,503,729  |   |   |   | 35,866,729 |   |
| Deficit accumulated in the exploration stage                                                                                                                              |   |        | (49,485,477 | ) |   |   | (47,371,579 | ) |
| Accumulated other comprehensive loss                                                                                                                                      |   |        | (207,164    | ) |   |   | (239,704 | ) |
| Total Shareholders' Deficit                                                                                                                                               |   |        | (12,188,912 | ) |   |   | (11,744,554 | ) |
|                                                                                                                                                                      |   |        |        |   |   |   |   |   |
| Total Liabilities and Shareholders' Deficit                                                                                                                               |   | $           | 254,931     |   |   | $ | 1,043,856 |   |

----

|                                                     |   |                           |        |   |                              |   |        | December 30, 1986         |   |
|----------------------------------------------------------|--------|--------------------------------|-------------|--------|-----------------------------------|--------|-------------|---------------------------|--------|
|                                                     |   | Three Months EndedNovember 30, |        |   | Six Months EndedNovember 30, |   |        |  (inception) through |   |
|                                                     |   | 2011                           |        |   | 2010                              |   |        | 2011                      |   |   | 2010 |   |   | November 30, 2011 |   |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |
| Revenues                                                 |   | $                              | 76,023      |   |                              | $      | -           |                      |   | $ | 76,023 |   |   | $ | - |   |   | $ | 76,023 |   |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Costs and Expenses                             |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs applicable to sales                                |   |                           | 239,383     |   |                              |   | -           |                      |   |   | 547,203 |   |   |   | - |   |   |   | 547,203 |   |
| General and administrative                               |   |                           | 789,598     |   |                              |   | 449,430     |                      |   |   | 1,234,491 |   |   |   | 634,027 |   |   |   | 13,549,468 |   |
| Exploration and mine development                         |   |                           | 21,189      |   |                              |   | 42,238      |                      |   |   | 40,126 |   |   |   | 58,176 |   |   |   | 12,422,079 |   |
| Depreciation and amortization                            |   |                           | 2,478       |   |                              |   | 99          |                      |   |   | 2,578 |   |   |   | 99 |   |   |   | 205,280 |   |
| Total operating costs and expenses                       |   |                           | 1,052,648   |   |                              |   | 491,767     |                      |   |   | 1,824,398 |   |   |   | 692,302 |   |   |   | 26,724,030 |   |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from Operations                                     |   |                           | (976,625    | )      |                              |   | (491,767    | )                         |   |   | (1,748,375 | ) |   |   | (692,302 | ) |   |   | (26,648,007 | ) |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Other (income) and expenses                              |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss on impairment                                       |   |                           | -           |   |                              |   | -           |                      |   |   | - |   |   |   | - |   |   |   | 9,808,572 |   |
| Loss (gain) on settlement of debts                       |   |                           | 107,685     |   |                              |   | (292,718    | )                         |   |   | 107,685 |   |   |   | (312,932 | ) |   |   | (3,281,057 | ) |
| Interest and financing fees                              |   |                           | 203,738     |   |                              |   | 209,891     |                      |   |   | 410,898 |   |   |   | 423,423 |   |   |   | 14,850,243 |   |
| Foreign currency transaction loss                        |   |                           | 3,078       |   |                              |   | 110         |                      |   |   | 3,485 |   |   |   | 110 |   |   |   | 1,371,356 |   |
| Other (income) expense                                   |   |                           | (10         | )      |                              |   | (156        | )                         |   |   | (156,545 | ) |   |   | (155 | ) |   |   | 88,356 |   |
| Total other (income) and expenses                        |   |                           | 314,491     |   |                              |   | (82,873     | )                         |   |   | 365,523 |   |   |   | 110,446 |   |   |   | 22,837,470 |   |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income taxes                                 |   |                           | (1,291,116  | )      |                              |   | (408,894    | )                         |   |   | (2,113,898 | ) |   |   | (802,748 | ) |   |   | (49,485,477 | ) |
| Income tax expense (benefit)                             |   |                           | -           |   |                              |   | -           |                      |   |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                                                 |   |                           | (1,291,116  | )      |                              |   | (408,894    | )                         |   |   | (2,113,898 | ) |   |   | (802,748 | ) |   |   | (49,485,477 | ) |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss) - foreign              |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
|     currency translation adjustments |   |                           | 34,106      |   |                              |   | (153,850    | )                         |   |   | 32,540 |   |   |   | (166,282 | ) |   |   | (207,164 | ) |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                       |   |                           | (1,257,010  | )      |                              |   | (562,744    | )                         |   |   | (2,081,358 | ) |   |   | (969,030 | ) |   |   | (49,692,641 | ) |
|                                                     |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted-average number of             |   |                           |        |   |                              |   |        |                      |   |   |   |   |   |   |   |   |   |   |   |   |
| common shares outstanding                                |   |                           | 155,926,235 |   |                              |   | 100,618,432 |                      |   |   | 154,801,699 |   |   |   | 92,973,040 |   |   |   |   |   |
| Basic and diluted loss per common share                  |   | $                              | (0.01       | )      |                              | $      | (0.00       | )                         |   | $ | (0.01 | ) |   | $ | (0.01 | ) |   |   |   |   |

----

|                                                                                           |   | Six Months Ended November 30, |       |   | December 30, 1986 (inception) through November 30, |   |
|------------------------------------------------------------------------------------------------|--------|-------------------------------|------------|--------|---------------------------------------------------------|--------|
|                                                                                           |   | 2011                          |       |   | 2010                                                    |   |   | 2011 |   |
| Cash flows from operating activities:                                                          |   |                          |       |   |                                                    |   |   |   |   |
|    Net loss                                                                          |   | $                             | (2,113,898 | )      |                                                    | $      | (802,748 | ) |   | $ | (49,485,477 | ) |
|     Adjustments to reconcile net loss to net cash used in operating activities: |   |                          |       |   |                                                    |   |   |   |   |   |   |   |
|       Accretion expense                                               |   |                          | -          |   |                                                    |   | - |   |   |   | 105,655 |   |
|       Amortization of deferred financing costs                        |   |                          | -          |   |                                                    |   | - |   |   |   | 3,369,936 |   |
|       Depreciation and depletion                                      |   |                          | 2,578      |   |                                                    |   | 99 |   |   |   | 203,613 |   |
|       Non-cash interest expense                                       |   |                          | 209,031    |   |                                                    |   | 411,639 |   |   |   | 12,048,931 |   |
|       Loss on impairment of mineral properties                        |   |                          | -          |   |                                                    |   | - |   |   |   | 8,824,989 |   |
|       Loss on impairment of investment                                |   |                          | -          |   |                                                    |   | - |   |   |   | 983,583 |   |
|       Common shares issued in connection with trust deed modification |   |                          | -          |   |                                                    |   | - |   |   |   | 90,000 |   |
|       Common shares issued in connection with debt settlement         |   |                          | -          |   |                                                    |   | - |   |   |   | 1,048,053 |   |
|       Common shares issued for services                               |   |                          | 138,500    |   |                                                    |   | 50,000 |   |   |   | 1,662,941 |   |
|       Warrants cancelled for services                                 |   |                          | -          |   |                                                    |   | - |   |   |   | (18,173 | ) |
|       Warrants issued in connection with debt restructure             |   |                          | -          |   |                                                    |   | - |   |   |   | 155,007 |   |
|       Loss (gain) recognized in connection with debt settlement       |   |                          | 107,685    |   |                                                    |   | (314,877 | ) |   |   | (2,991,161 | ) |
|       Gain on sale of property, plant and equipment                   |   |                          | (156,500   | )      |                                                    |   | - |   |   |   | (151,627 | ) |
|       Loss on disposal of property, plant and equipment               |   |                          | -          |   |                                                    |   | - |   |   |   | 8,040,143 |   |
|       Loss on abandonment of mineral properties                       |   |                          | -          |   |                                                    |   | - |   |   |   | 300,600 |   |
|       Loss on default of exploration development agreement            |   |                          | -          |   |                                                    |   | - |   |   |   | 456,090 |   |
|       Loss on foreign exchange                                        |   |                          | 3,485      |   |                                                    |   | 110 |   |   |   | 1,690,126 |   |
|       Environmental remediation liability                             |   |                          | -          |   |                                                    |   | - |   |   |   | 50,000 |   |
|   Changes in operating assets and liabilities:                                            |   |                          |       |   |                                                    |   |   |   |   |   |   |   |
|     Increase in inventories                                                     |   |                          | (18,894    | )      |                                                    |   | - |   |   |   | (18,894 | ) |
|     Decrease (increase) in prepaid expenses                                     |   |                          | 63         |   |                                                    |   | (36,205 | ) |   |   | (81,240 | ) |
|     (Decrease) increase in accounts payable and other current liabilities       |   |                          | (575,035   | )      |                                                    |   | 94,122 |   |   |   | 1,942,994 |   |
|     Decrease (increase) in other operating assets and liabilities               |   |                          | -          |   |                                                    |   | 11,082 |   |   |   | (202,668 | ) |
| Net cash used in operating activities                                                          |   |                          | (2,402,985 | )      |                                                    |   | (586,778 | ) |   |   | (11,976,579 | ) |
|                                                                                           |   |                          |       |   |                                                    |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                          |   |                          |       |   |                                                    |   |   |   |   |   |   |   |
|    Purchase of mineral properties & equipment                                    |   |                          | -          |   |                                                    |   | - |   |   |   | (17,481,692 | ) |
|    Dispositions of equipment                                                         |   |                          | 156,500    |   |                                                    |   | - |   |   |   | 317,852 |   |
|    Net additions to equipment                                                        |   |                          | (16,135    | )      |                                                    |   | (5,464 | ) |   |   | (199,677 | ) |
|    Deferred exploration expenditures                                                 |   |                          | -          |   |                                                    |   | - |   |   |   | (143,071 | ) |
|    Deposit on equipment                                                              |   |                          | -          |   |                                                    |   | - |   |   |   | (17,880 | ) |
|    Acquisition of shares of subsidiary                                               |   |                          | -          |   |                                                    |   | - |   |   |   | (715,932 | ) |
|    Advance to subsidiary                                                             |   |                          | -          |   |                                                    |   | - |   |   |   | (177,875 | ) |
|    Payable under option agreement                                                    |   |                          | -          |   |                                                    |   | - |   |   |   | 716,481 |   |
|    Refundable deposit on purchase of shares of subsidiary                            |   |                          | -          |   |                                                    |   | - |   |   |   | (73,847 | ) |
| Net cash (used in) provided by investing activities                                            |   |                          | 140,365    |   |                                                    |   | (5,464 | ) |   |   | (17,775,641 | ) |

----

|                                                                                                                                  |   | Six Months Ended November 30, |      |   | December 30, 1986 (inception) through November 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|--------|---------------------------------------------------------|--------|
|                                                                                                                                  |   | 2011                          |      |   | 2010                                                    |   |   | 2011 |   |
|                                                                                                                                  |   |                          |      |   |                                                    |   |   |   |   |
| Cash flows from financing activities:                                                                                                 |   |                          |      |   |                                                    |   |   |   |   |
|    Proceeds from sale of common shares                                                                                      |   | $                             | 1,498,500 |   |                                                    | $      | 1,806,300 |   |   | $ | 23,303,579 |   |
|    Proceeds from sale of private equity                                                                                     |   |                          | -         |   |                                                    |   | - |   |   |   | 345,000 |   |
|    Proceeds from borrowings long term-debt                                                                                  |   |                          | -         |   |                                                    |   | - |   |   |   | 17,029,960 |   |
|    Proceeds from borrowing on shareholder note                                                                              |   |                          | -         |   |                                                    |   | - |   |   |   | 282,000 |   |
|    Repayments of long term debt                                                                                             |   |                          | -         |   |                                                    |   | - |   |   |   | (11,902,794 | ) |
|    Repayments of debt - convertible debentures                                                                              |   |                          | (57,193   | )      |                                                    |   | (45,500 | ) |   |   | (529,817 | ) |
|    Advances to affiliated companies, shareholders and directors                                                             |   |                          | -         |   |                                                    |   | - |   |   |   | (106,730 | ) |
|    Restricted cash                                                                                                          |   |                          | -         |   |                                                    |   | - |   |   |   | (31,789 | ) |
|    Share subscriptions received in advance                                                                                  |   |                          | -         |   |                                                    |   | - |   |   |   | 518,415 |   |
| Net cash provided by financing activities                                                                                             |   |                          | 1,441,307 |   |                                                    |   | 1,760,800 |   |   |   | 28,907,824 |   |
|                                                                                                                                  |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
| Effect of foreign exchange                                                                                                            |   |                          | -         |   |                                                    |   | - |   |   |   | 936,263 |   |
|                                                                                                                                  |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
| Net change in cash and cash equivalents                                                                                               |   |                          | (821,313  | )      |                                                    |   | 1,168,558 |   |   |   | 91,869 |   |
| Cash at beginning of period                                                                                                           |   |                          | 913,182   |   |                                                    |   | 27,919 |   |   |   | - |   |
| Cash at end of period                                                                                                                 |   | $                             | 91,869    |   |                                                    | $      | 1,196,477 |   |   | $ | 91,869 |   |
|                                                                                                                                  |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
|                                                                                                                                  |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
| Supplemental Cash Flow Information                                                                                                    |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
|      Interest expense paid in cash                                                                                |   | $                             | 201,866   |   |                                                    | $      | 11,783 |   |   | $ | 1,405,199 |   |
|      Interest received                                                                                            |   | $                             | -         |   |                                                    | $      | - |   |   | $ | 3,999 |   |
| Non-cash financing and investing activity:                                                                                            |   |                          |      |   |                                                    |   |   |   |   |   |   |   |
|      Debt restructuring - warrants issued                                                                         |   | $                             | -         |   |                                                    | $      | - |   |   | $ | 412,407 |   |
|      Common shares issued in connection with debt restructuring and settlement of accrued   liabilities |   | $                             | -         |   |                                                    | $      | 1,216,049 |   |   | $ | 4,987,140 |   |
|      Common shares issued for acquisition of property                                                             |   | $                             | -         |   |                                                    | $      | - |   |   | $ | 32,500 |   |
|      Shares issued for mineral  property development                                                    |   | $                             | -         |   |                                                    | $      | - |   |   | $ | 96,315 |   |
|      Shares issued for repayment of shareholder advances                                                          |   | $                             | -         |   |                                                    | $      | - |   |   | $ | 9,240,146 |   |

----

----

----

----

|                  |   | November 30, 2011 |    |   | May 31,2011 |   |
|-----------------------|--------|-------------------|---------|--------|-------------|--------|
| Debenture             |   | $                 | 724,399 |   |        | $      | 702,964 |   |
| Less: Current portion |   |              | -       |   |        |   | (702,964 | ) |
| Long-term portion     |   | $                 | 724,399 |   |        | $      | - |   |

| ·   | We raised $1,498,500 in cash from accredited investors for the sale of units comprising 11,626,668 shares of restricted common stock and warrants to purchase 5,813,335 common shares.  The common stock prices ranged from $0.10 to $0.20 per share and the warrants have an exercise price from $0.20 to $0.30 per share with expiration dates of June 2012 through September 2013. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In connection with the issuance of some of the shares mentioned above, as compensation for consulting services we issued 1,385,000 shares of restricted common stock at $0.10 and warrants to purchase 125,000 common shares at an exercise price of $0.30 which expire October 2012. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | Number of Warrants Outstanding | Exercise Price    |
|--------------------------------|--------|-------------------------------------|-------------------|
| Outstanding as of May 31, 2011 |   | 31,498,196                          | $0.12-$0.25       |
| Issued                         |   |  5,938,335                     | $0.20-$0.30       |
| Expirations                    |   | -                                   |              |
| Balance at November 30, 2011   |   | 37,436,531                          |  $0.12-$0.30 |

| Exercise Price |   |   | Number of Shares |   |       | Remaining Contractual Life in Years |   |   | Exercise Price Times Number of Shares |   | Weighted Average Exercise Price |
|----------------|--------|--------|------------------|--------|------------|-------------------------------------|--------|--------|---------------------------------------|--------|---------------------------------|
|           | $0.12  |   |             |   | 20,923,296 |                                |   |   | 1.2                                   |   |                            | $ | 2,510,795 |   |   |
|           | $0.12  |   |             |   | 7,000,000  |                                |   |   | 2.4                                   |   |                            |   | 840,000 |   |   |
|           | $0.12  |   |             |   | 1,249,900  |                                |   |   | 9.7                                   |   |                            |   | 149,988 |   |   |
|           | $0.20  |   |             |   | 5,655,000  |                                |   |   | 0.8                                   |   |                            |   | 1,131,000 |   |   |
|           | $0.25  |   |             |   | 233,335    |                                |   |   | 1.8                                   |   |                            |   | 58,334 |   |   |
|           | $0.25  |   |             |   | 875,000    |                                |   |   | 8.1                                   |   |                            |   | 218,750 |   |   |
|           | $0.30  |   |             |   | 1,500,000  |                                |   |   | 0.6                                   |   |                            |   | 450,000 |   |   |
|           |   |   |             |   | 37,436,531 |                                |   |   |                                  |   |                            | $ | 5,358,867 |   | $0.14 |

| ·       | Our notes payable balance as of November 30, 2011 consisted of one note payable to Brigus Gold Corp. (“Brigus”).  When this note was consummated in February 2010, the counterparty to this note was Apollo Gold Corp., a predecessor of Brigus.  Our current CEO, R. David Russell, was the CEO of Apollo Gold Corp. at that time. |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·      | From time to time, our President and Vice President of Corporate Development incur expenses on behalf of the Company and are reimbursed by us.  As of November 30, 2011, included in accounts payable are amounts due to the officers as reimbursement.  These amounts are not considered to be material. |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·      | The Canadian-dollar denominated convertible debenture (Note 6) is owned by a company related to a shareholder and former director. |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 2. |   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------------------|

|   | • |   | our ability to execute against our plans;                                                                                                                                                                                                                                                                                |
|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • |   | our ability to continue as a going concern;                                                                                                                                                                                                                                                                              |
|   | • |   | the possible loss of our interest in our Caribou properties if we do not meet our debt obligations;                                                                                                                                                                                                                      |
|   | • |   | the potential that we will not obtain good title to our Manhattan project;                                                                                                                                                                                                                                               |
|   | • |   | the volatility and low trading volume of our common stock;                                                                                                                                                                                                                                                               |
|   | • |   | our ability to secure additional capital;                                                                                                                                                                                                                                                                                |
|   | • |   | the possibility we may never achieve significant mineral production;                                                                                                                                                                                                                                                     |
|   | • |   | the future dilution to our shareholders from future capital-raising activities and payments to employees, directors and consultants;                                                                                                                                                                                     |
|   | • |   | the possibility our Board of Directors may issue authorized and unissued shares of common stock and preferred stock;                                                                                                                                                                                                     |
|   | • |   | the effects the penny stock rules may have on the trading of our stock;                                                                                                                                                                                                                                                  |
|   | • |   | our dependence on a few key employees;                                                                                                                                                                                                                                                                                   |
|   | • |   | the influence of a few large shareholders on our business;                                                                                                                                                                                                                                                               |
|   | • |   | risks associated with our incorporation in Canada;                                                                                                                                                                                                                                                                       |
|   | • |   | our lack of experience in mining and selling minerals;                                                                                                                                                                                                                                                                   |
|   | • |   | operational and environmental risks associated with the mining industry;                                                                                                                                                                                                                                                 |
|   | • |   | the effect of government regulations on our business;                                                                                                                                                                                                                                                                    |
|   | • |   | lack of clear title to our mineral prospects;                                                                                                                                                                                                                                                                            |
|   | • |   | the fact our mineral interests are not yet proven;                                                                                                                                                                                                                                                                       |
|   | • |   | fluctuation in the prices of gold and silver; and                                                                                                                                                                                                                                                                        |
|   | • |   | the limited liquidity in our common stock due to a cease trade order issued by the British Columbia Securities Commission in February 2005 and an administrative action initiated by the Securities and Exchange Commission to revoke our registration as a reporting company under the Securities Exchange Act of 1934. |

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| ·      | 6,966,668 for cash proceeds of $720,000 |
|---------------------------------|-----------------------------------------|

| ·      | 1,385,000 for consulting services valued at $138,500 |
|---------------------------------|------------------------------------------------------|

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|                                                |   | 2011 |       |   | 2010   |   |
|-----------------------------------------------------|--------|------|------------|--------|--------|--------|
| Net cash used in operating activities               |   | $    | (2,402,985 | )      |   | $      | (586,778 | ) |
| Net cash provided by (used in) investing activities |   | $    | 140,365    |   |   | $      | (5,464 | ) |
| Net cash provided by financing activities           |   | $    | 1,441,307  |   |   | $      | 1,760,800 |   |

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|         |                    |                      |            | Warrants           |           |
|--------------|-------------------------|---------------------------|-----------------|--------------------|----------------|
| Date of Sale |  Name of Purchaser |  Title of Securities | Shares of Stock | Number of Warrants | ExercisePrices | Expiration Date | Consideration ($) |
| 09/11        | 6 accredited investors  | Common Stock              | 3,966,668       | 1,983,335          | $0.20-$0.25    | 09/12-09/13 | 420,000 |    (a) |
| 10/11        | 4 accredited investors  | Common Stock              | 2,000,000       | 1,000,000          | $0.20          | 10/12 | 200,000 |    (a) |
| 11/11        | 1 accredited investor   | Common Stock              | 1,000,000       | 500,000            | $0.20          | 11/12 | 100,000 |    (a) |
| 10/11        | 1 consultant            | Common Stock              | 250,000         | 125,000            | $0.30          | 10/12 | 25,000 |    (b) |
| 11/11        | 2 consultants           | Common Stock              | 1,135,000       | -                  | n/a            | n/a | 113,500 |    (b) |

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| ExhibitNumber                                                                                                                                                                                                               |   | Description                                                                                                                                                                                                                                                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                            |
| 10.1                                                                                                                                                                                                                        |   | Extension Agreement with Brigus Gold Corp. dated October 24, 2011 (1)                                                                                                                                                                                                                                                                                                           |
| 10.2                                                                                                                                                                                                                        |   | Employment Agreement with Brent E. Timmons dated October 26, 2011 (1)                                                                                                                                                                                                                                                                                                           |
| 31.1                                                                                                                                                                                                                        |   | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.                                                                                                                                                                                 |
| 31.2                                                                                                                                                                                                                        |   | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.                                                                                                                                                                                 |
| 32                                                                                                                                                                                                                          |   | Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act.                                                                                                                                                                                             |
| 101*                                                                                                                                                                                                                        |   | Financial statements from the Quarterly Report on Form 10-Q of Calais Resources Inc. for the quarter ended November 30, 2011, formatted in XBRL: (i) the Consolidated Balance Sheet; (ii) the Consolidated Statement of Operations; (iii) the Consolidated Statement of Cash Flows; and (iv) the Notes to Unaudited Consolidated Financial Statements tagged as blocks of text. |
|                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                            |
| (1)           Incorporated by reference to the exhibits filed with the registrant’s current report on Form 8-K dated October 24, 2011, filed October 28, 2011. |

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|             | CALAIS RESOURCES INC. |                                                  |
|------------------|-----------------------|-------------------------------------------------------|
|             |                  |                                                  |   |
| January 19, 2012 | By:                   | /s/ David K. Young                               |   |
|             |                  | David K. Young                                        |   |
|             |                  | President, Chief Operating Officer                    |   |
|             |                  |                                                  |   |
|             |                  |                                                  |   |
| January 19, 2012 | By:                   | /s/ Brent E. Timmons                                  |   |
|             |                  | Brent E. Timmons                                      |   |
|             |                  | Vice President of Finance and Chief Financial Officer |   |

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