|   | Consolidated Financial Statements |
|--------|-----------------------------------|

|   | December 31, 2012 and 2011 |
|--------|----------------------------|

|   | (Expressed in thousands of U.S. dollars) |
|--------|------------------------------------------|

----

----

|        |                                                                                    |                                                                                                                                                                      |   |
|--------|-----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | KPMG LLPChartered AccountantsPO Box 10426 777 Dunsmuir StreetVancouver BC V7Y 1K3Canada | Telephone   (604) 691-3000Fax        (604) 691-3031Internet         www.kpmg.ca |

----

----

|        |                                                                                    |                                                                                                                                                                      |   |
|--------|-----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | KPMG LLPChartered AccountantsPO Box 10426 777 Dunsmuir StreetVancouver BC V7Y 1K3Canada | Telephone    (604) 691-3000Fax      (604) 691-3031Internet          www.kpmg.ca |

----

----

| Consolidated Balance Sheets |
|-----------------------------|

| (Expressed in thousands of U.S. dollars) |
|------------------------------------------|

|                                                     |   | Note   |   |   | December 31, 2012 |   |      | December 31, 2011 |   |
|----------------------------------------------------------|--------|--------|--------|--------|-------------------|--------|-----------|-------------------|--------|
|                                                     |   |   |   |   |              | $      |      |              |   | $ |   |
|                                                     |   |   |   |   |              |   |      |              |   |   |   |
| ASSETS                                                   |   |   |   |   |              |   |      |              |   |   |   |
| Current assets                                           |   |   |   |   |              |   |      |              |   |   |   |
| Cash and cash equivalents                                |   |   | 6      |   |              |   | 816,843   |              |   |   | 393,763 |   |
| Restricted cash                                          |   |   | 7, 16  |   |              |   | 241       |              |   |   | 55,390 |   |
| Marketable securities                                    |   |   | 8      |   |              |   | 1,988     |              |   |   | 2,640 |   |
| Accounts receivable and other                            |   |   | 9      |   |              |   | 112,324   |              |   |   | 42,309 |   |
| Inventories                                              |   |   | 10     |   |              |   | 220,766   |              |   |   | 190,968 |   |
|                                                     |   |   |   |   |              |   | 1,152,162 |              |   |   | 685,070 |   |
| Investments in significantly influenced companies        |   |   | 11     |   |              |   | 27,949    |              |   |   | 18,808 |   |
| Deferred income tax assets                               |   |   | 19     |   |              |   | 3,149     |              |   |   | 4,259 |   |
| Restricted assets and other                              |   |   | 12     |   |              |   | 31,846    |              |   |   | 38,430 |   |
| Defined benefit pension plan                             |   |   | 18     |   |              |   | 4,571     |              |   |   | - |   |
| Property, plant and equipment                            |   |   | 13     |   |              |   | 5,868,742 |              |   |   | 2,847,910 |   |
| Goodwill                                                 |   |   | 14     |   |              |   | 839,710   |              |   |   | 365,928 |   |
|                                                     |   |   |   |   |              |   | 7,928,129 |              |   |   | 3,960,405 |   |
| LIABILITIES & EQUITY                                 |   |   |   |   |              |   |      |              |   |   |   |   |
| Current liabilities                                      |   |   |   |   |              |   |      |              |   |   |   |   |
| Accounts payable and accrued liabilities                 |   |   | 15     |   |              |   | 224,567   |              |   |   | 168,367 |   |
| Current debt                                             |   |   | 16     |   |              |   | 10,341    |              |   |   | 81,031 |   |
|                                                     |   |   |   |   |              |   | 234,908   |              |   |   | 249,398 |   |
| Debt                                                     |   |   | 16     |   |              |   | 582,974   |              |   |   | - |   |
| Asset retirement obligations                             |   |   | 17     |   |              |   | 79,971    |              |   |   | 43,213 |   |
| Defined benefit pension plan                             |   |   | 18     |   |              |   | -         |              |   |   | 19,969 |   |
| Deferred income tax liabilities                          |   |   | 19     |   |              |   | 816,941   |              |   |   | 336,579 |   |
|                                                     |   |   |   |   |              |   | 1,714,794 |              |   |   | 649,159 |   |
| Equity                                                   |   |   |   |   |              |   |      |              |   |   |   |   |
| Share capital                                            |   |   | 20     |   |              |   | 5,300,957 |              |   |   | 2,855,689 |   |
| Treasury stock                                           |   |   |   |   |              |   | (7,445    | )                 |   |   | (4,018 | ) |
| Contributed surplus                                      |   |   |   |   |              |   | 65,382    |              |   |   | 30,441 |   |
| Accumulated other comprehensive loss                     |   |   |   |   |              |   | (24,535   | )                 |   |   | (10,069 | ) |
| Retained earnings                                        |   |   |   |   |              |   | 594,876   |              |   |   | 382,716 |   |
| Total equity attributable to shareholders of the Company |   |   |   |   |              |   | 5,929,235 |              |   |   | 3,254,759 |   |
| Attributable to non-controlling interests                |   |   |   |   |              |   | 284,100   |              |   |   | 56,487 |   |
|                                                     |   |   |   |   |              |   | 6,213,335 |              |   |   | 3,311,246 |   |
|                                                     |   |   |   |   |              |   | 7,928,129 |              |   |   | 3,960,405 |   |

| (Signed)Robert R. Gilmore                                                      Director | (Signed)Paul N. Wright                                                      Director |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Consolidated Income Statements |
|--------------------------------|

| (Expressed in thousands of U.S. dollars except per share amounts) |
|-------------------------------------------------------------------|

| For the year ended December 31                                  |   | Note   |   |   | 2012   |      |    | 2011   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|-----------|---------|--------|--------|
|                                                            |   |   |   |   |   | $         |    |   |   | $ |   |
| Revenue                                                         |   |   |   |   |   |      |    |   |   |   |   |
| Metal sales                                                     |   |   |   |   |   | 1,147,541 |    |   |   | 1,103,737 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |
| Cost of sales                                                   |   |   |   |   |   |      |    |   |   |   |   |
| Production costs                                                |   |   | 28     |   |   |      | 427,946 |   |   |   | 346,484 |   |
| Depreciation and amortization                                   |   |   |   |   |   |      | 113,529 |   |   |   | 122,414 |   |
|                                                            |   |   |   |   |   |      | 541,475 |   |   |   | 468,898 |   |
| Gross profit                                                    |   |   |   |   |   |      | 606,066 |   |   |   | 634,839 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Exploration expenses                                            |   |   |   |   |   |      | 39,521  |   |   |   | 30,773 |   |
| General and administrative expenses                             |   |   |   |   |   |      | 70,135  |   |   |   | 59,239 |   |
| Defined benefit pension plan expense                            |   |   | 18     |   |   |      | 1,900   |   |   |   | 2,088 |   |
| Share based payments                                            |   |   | 21     |   |   |      | 21,794  |   |   |   | 19,722 |   |
| Acquisition costs                                               |   |   | 5      |   |   |      | 21,247  |   |   |   | - |   |
| Foreign exchange (gain) loss                                    |   |   |   |   |   |      | (2,780  | )      |   |   | 5,367 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Operating profit                                                |   |   |   |   |   |      | 454,249 |   |   |   | 517,650 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Loss (gain) on disposal of assets                               |   |   |   |   |   |      | 509     |   |   |   | (2,729 | ) |
| Gain on marketable securities and other investments             |   |   |   |   |   |      | (176    | )      |   |   | (664 | ) |
| Loss on investments in significantly influenced companies       |   |   |   |   |   |      | 5,627   |   |   |   | 4,225 |   |
| Other income                                                    |   |   |   |   |   |      | (6,870  | )      |   |   | (2,869 | ) |
| Asset retirement obligation accretion                           |   |   | 17     |   |   |      | 1,842   |   |   |   | 1,546 |   |
| Interest and financing costs                                    |   |   | 29     |   |   |      | 6,983   |   |   |   | 5,331 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Profit before income tax                                        |   |   |   |   |   |      | 446,334 |   |   |   | 512,810 |   |
| Income tax expense                                              |   |   | 19     |   |   |      | 128,276 |   |   |   | 165,587 |   |
| Profit for the year                                             |   |   |   |   |   |      | 318,058 |   |   |   | 347,223 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Attributable to:                                                |   |   |   |   |   |      |    |   |   |   |   |   |
| Shareholders of the Company                                     |   |   |   |   |   |      | 305,302 |   |   |   | 318,662 |   |
| Non-controlling interests                                       |   |   |   |   |   |      | 12,756  |   |   |   | 28,561 |   |
| Profit for the year                                             |   |   |   |   |   |      | 318,058 |   |   |   | 347,223 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Weighted average number of shares outstanding                   |   |   | 30     |   |   |      |    |   |   |   |   |   |
| Basic                                                           |   |   |   |   |   |      | 689,007 |   |   |   | 549,791 |   |
| Diluted                                                         |   |   |   |   |   |      | 690,669 |   |   |   | 551,625 |   |
|                                                            |   |   |   |   |   |      |    |   |   |   |   |   |
| Earnings per share attributable to shareholders of the Company: |   |   | 30     |   |   |      |    |   |   |   |   |   |
| Basic earnings per share                                        |   |   |   |   |   |      | 0.44    |   |   |   | 0.58 |   |
| Diluted earnings per share                                      |   |   |   |   |   |      | 0.44    |   |   |   | 0.58 |   |

----

| Consolidated Statements of Comprehensive Income |
|-------------------------------------------------|

| (Expressed in thousands of U.S. dollars) |
|------------------------------------------|

| For the year ended December 31                                                              |   | Note   |   |   | 2012   |    |    | 2011   |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|---------|---------|--------|--------|
|                                                                                        |   |   |   |   |   | $       |    |   |   |  $ |   |
|                                                                                        |   |   |   |   |   |    |    |   |   |   |   |
| Profit for the year                                                                         |   |   |   |   |   | 318,058 |    |   |   | 347,223 |   |
| Other comprehensive loss:                                                                   |   |   |   |   |   |    |    |   |   |   |   |
| Change in fair value of available-for-sale financial assets (net                            |   |   |   |   |   |    |    |   |   |   |   |
| of income taxes of nil and $12)                                                             |   |   |   |   |   | (1,429  | )       |   |   | (977 | ) |
| Realized gains on disposal of available-for-sale financial assets transferred to net income |   |   |   |   |   | (56     | )       |   |   | (794 | ) |
| Actuarial losses on defined benefit pension plans                                           |   |   | 18     |   |   |    | (12,981 | )      |   |   | (6,661 | ) |
| Total other comprehensive loss for the year                                                 |   |   |   |   |   |    | (14,466 | )      |   |   | (8,432 | ) |
| Total comprehensive income for the year                                                     |   |   |   |   |   |    | 303,592 |   |   |   | 338,791 |   |
|                                                                                        |   |   |   |   |   |    |    |   |   |   |   |   |
| Attributable to:                                                                            |   |   |   |   |   |    |    |   |   |   |   |   |
| Shareholders of the Company                                                                 |   |   |   |   |   |    | 290,836 |   |   |   | 310,230 |   |
| Non-controlling interests                                                                   |   |   |   |   |   |    | 12,756  |   |   |   | 28,561 |   |
|                                                                                        |   |   |   |   |   |    | 303,592 |   |   |   | 338,791 |   |

----

| Consolidated Statements of Cash Flows |
|---------------------------------------|

| (Expressed in thousands of U.S. dollars) |
|------------------------------------------|

| For the year ended December 31                           |   | Note   |   |   | 2012   |    |     | 2011   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|---------|----------|--------|--------|
|                                                     |   |   |   |   |   | $       |     |   |   |  $ |   |
| Cash flows generated from (used in):                     |   |   |   |   |   |    |     |   |   |   |   |
| Operating activities                                     |   |   |   |   |   |    |     |   |   |   |   |
| Profit for the year                                      |   |   |   |   |   | 318,058 |     |   |   | 347,223 |   |
| Items not affecting cash                                 |   |   |   |   |   |    |     |   |   |   |   |
| Asset retirement obligation accretion                    |   |   |   |   |   | 1,842   |     |   |   | 1,546 |   |
| Depreciation and amortization                            |   |   |   |   |   | 113,529 |     |   |   | 122,414 |   |
| Unrealized foreign exchange (gain) loss                  |   |   |   |   |   | (1,072  | )        |   |   | 6,500 |   |
| Deferred income tax (recovery) expense                   |   |   |   |   |   | (14,311 | )        |   |   | 1,804 |   |
| Loss (gain) on disposal of assets                        |   |   |   |   |   | 509     |     |   |   | (2,729 | ) |
| Loss on investment in significantly influenced companies |   |   |   |   |   | 5,627   |     |   |   | 4,225 |   |
| Gain on marketable securities and other investments      |   |   |   |   |   | (176    | )        |   |   | (664 | ) |
| Share based payments                                     |   |   |   |   |   | 21,794  |     |   |   | 19,722 |   |
| Defined benefit pension plan expense                     |   |   |   |   |   | 1,900   |     |   |   | 2,088 |   |
|                                                     |   |   |   |   |   | 447,700 |     |   |   | 502,129 |   |
|                                                     |   |   |   |   |   |    |     |   |   |   |   |
| Changes in non-cash working capital                      |   |   | 22     |   |   |    | (152,472 | )      |   |   | 9,948 |   |
|                                                     |   |   |   |   |   |    | 295,228  |   |   |   | 512,077 |   |
| Investing activities                                     |   |   |   |   |   |    |     |   |   |   |   |   |
| Net cash received on acquisition of subsidiary           |   |   | 5      |   |   |    | 18,789   |   |   |   | - |   |
| Purchase of property, plant and equipment                |   |   |   |   |   |    | (426,174 | )      |   |   | (272,818 | ) |
| Proceeds from the sale of property, plant and equipment  |   |   |   |   |   |    | 859      |   |   |   | 147 |   |
| Proceeds on pre-production sales                         |   |   |   |   |   |    | 54,705   |   |   |   | - |   |
| Purchase of marketable securities                        |   |   |   |   |   |    | -        |   |   |   | (1,823 | ) |
| Proceeds from the sale of marketable securities          |   |   |   |   |   |    | 1,270    |   |   |   | 8,154 |   |
| Funding of non-registered supplemental retirement plan   |   |   |   |   |   |    |     |   |   |   |   |   |
| investments, net                                         |   |   |   |   |   |    | 14,486   |   |   |   | (7,045 | ) |
| Investments in significantly influenced companies        |   |   |   |   |   |    | (14,768  | )      |   |   | (16,830 | ) |
| Decrease (increase) in restricted cash                   |   |   |   |   |   |    | 55,149   |   |   |   | (2,957 | ) |
|                                                     |   |   |   |   |   |    | (295,684 | )      |   |   | (293,172 | ) |
| Financing activities                                     |   |   |   |   |   |    |     |   |   |   |   |   |
| Issuance of common shares for cash                       |   |   |   |   |   |    | 22,145   |   |   |   | 31,600 |   |
| Dividend paid to non-controlling interests               |   |   |   |   |   |    | (9,399   | )      |   |   | (8,095 | ) |
| Dividend paid to shareholders                            |   |   |   |   |   |    | (93,142  | )      |   |   | (61,167 | ) |
| Purchase of treasury stock                               |   |   |   |   |   |    | (6,830   | )      |   |   | (6,438 | ) |
| Long-term and bank debt proceeds                         |   |   |   |   |   |    | 650,000  |   |   |   | 5,782 |   |
| Long-term and bank debt repayments                       |   |   |   |   |   |    | (120,430 | )      |   |   | (98,169 | ) |
| Loan financing costs                                     |   |   |   |   |   |    | (18,808  | )      |   |   | (2,999 | ) |
|                                                     |   |   |   |   |   |    | 423,536  |   |   |   | (139,486 | ) |
| Net increase in cash and cash equivalents                |   |   |   |   |   |    | 423,080  |   |   |   | 79,419 |   |
| Cash and cash equivalents - beginning of year            |   |   |   |   |   |    | 393,763  |   |   |   | 314,344 |   |
|                                                     |   |   |   |   |   |    |     |   |   |   |   |   |
| Cash and cash equivalents - end of year                  |   |   |   |   |   |    | 816,843  |   |   |   | 393,763 |   |

----

| Consolidated Statements of Changes in Equity |
|----------------------------------------------|

| (Expressed in thousands of U.S. dollars) |
|------------------------------------------|

| For the year ended December 31,                                             |   | Note   |   |      | 2012   |      | 2011      |   |
|-----------------------------------------------------------------------------|--------|--------|--------|-----------|--------|-----------|-----------|--------|
|                                                                        |   |   |   |      | $      |      |      | $      |   |
| Share capital                                                               |   |   |   |      |   |      |      |   |   |
| Balance beginning of year                                                   |   |   |   |      |   | 2,855,689 |      |   | 2,814,679 |   |
| Shares issued upon exercise of share options, for cash                      |   |   |   | 22,145    |   |      | 30,115    |   |
| Transfer of contributed surplus on exercise of options                      |   |   |   | 23,221    |   |      | 9,410     |   |
| Shares issued on acquisition of European Goldfields Ltd.                    |   |   | 5      |      |   |      | 2,380,140 |   |   | - |   |
| Tranfer of contributed surplus on exercise of deferred phantom units        |   |   |   | 19,762    |   |      | -         |   |
| Shares issued upon exercise of warrants, for cash                           |   |   |   | -         |   |      | 1,485     |   |
| Balance end of year                                                         |   |   |   |      |   |      | 5,300,957 |   |   | 2,855,689 |   |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Treasury stock                                                              |   |   |   |      |   |      |      |   |   |   |   |
| Balance beginning of year                                                   |   |   |   |      |   |      | (4,018    | )      |   | - |   |
| Purchase of treasury stock                                                  |   |   |   |      |   |      | (6,830    | )      |   | (6,438 | ) |
| Shares redeemed upon exercise of restricted share units                     |   |   |   | 3,403     |   |      | 2,420     |   |
| Balance end of year                                                         |   |   |   |      |   |      | (7,445    | )      |   | (4,018 | ) |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Contributed surplus                                                         |   |   |   |      |   |      |      |   |   |   |   |
| Balance beginning of year                                                   |   |   |   |      |   |      | 30,441    |   |   | 22,967 |   |
| Share based payments                                                        |   |   |   |      |   |      | 21,092    |   |   | 19,304 |   |
| Shares redeemed upon exercise of restricted share units                     |   |   |   | (3,403    | )      |      | (2,420    | )      |
| Options issued on acquisiton of European Goldfields Ltd.                    |   |   | 5      |      |   |      | 31,130    |   |   | - |   |
| Deferred phantom units granted on acquisition of European                   |   |   |   |      |
| Goldfields Ltd.                                                             |   |   | 5      |      |   |      | 29,105    |   |   | - |   |
| Transfer to share capital on exercise of options and deferred phanton units |   |   |   |      |   |      | (42,983   | )      |   | (9,410 | ) |
| Balance end of year                                                         |   |   |   |      |   |      | 65,382    |   |   | 30,441 |   |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Accumulated other comprehensive loss                                        |   |   |   |      |   |      |      |   |   |   |   |
| Balance beginning of year                                                   |   |   |   |      |   |      | (10,069   | )      |   | (1,637 | ) |
| Other comprehensive loss for the year                                       |   |   |   |      |   |      | (14,466   | )      |   | (8,432 | ) |
| Balance end of year                                                         |   |   |   |      |   |      | (24,535   | )      |   | (10,069 | ) |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Retained earnings                                                           |   |   |   |      |   |      |      |   |   |   |   |
| Balance beginning of year                                                   |   |   |   |      |   |      | 382,716   |   |   | 125,221 |   |
| Dividends paid                                                              |   |   |   |      |   |      | (93,142   | )      |   | (61,167 | ) |
| Profit attributable to shareholders of the Company                          |   |   |   | 305,302   |   |      | 318,662   |   |
| Balance end of year                                                         |   |   |   |      |   |      | 594,876   |   |   | 382,716 |   |
| Total equity attributable to shareholders of the Company                    |   |   |   | 5,929,235 |   |      | 3,254,759 |   |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Non-controlling interests                                                   |   |   |   |      |   |      |      |   |   |   |   |
| Balance beginning of year                                                   |   |   |   |      |   |      | 56,487    |   |   | 36,021 |   |
| Profit attributable to non-controlling interests                            |   |   |   |      |   |      | 12,756    |   |   | 28,561 |   |
| Dividends declared to non-controlling interests                             |   |   |   |      |   |      | (9,399    | )      |   | (8,095 | ) |
| Acquired non-controlling interest                                           |   |   | 5      |      |   |      | 224,256   |   |   | - |   |
| Balance end of year                                                         |   |   |   |      |   |      | 284,100   |   |   | 56,487 |   |
|                                                                        |   |   |   |      |   |      |      |   |   |   |   |
| Total equity                                                                |   |   |   |      |   |      | 6,213,335 |   |   | 3,311,246 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 1. | General Information |
|----|---------------------|

| 2. | Basis of preparation |
|----|----------------------|

|   | ● | IAS 19 Employee Benefits’ – On June 16, 2011, the International Accounting Standards Board (IASB) published a revised version of IAS 19.  The revised IAS 19 (“IAS 19R”) represents IASB’s effort to improve the accounting for employee retirement benefits.  The revisions include: |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Requirement to recognize past service costs immediately in net income rather than using the corridor method. |
|--------|---|--------------------------------------------------------------------------------------------------------------|

|   | - | Requirement to recognize actuarial gains and losses immediately in other comprehensive income OCI. Previously, companies had the option of recognizing actuarial gains and losses through OCI immediately or via use of the corridor method. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Requirement that expected return on plan assets be calculated based on the rate used to discount the defined benefit obligation which is based on high quality bond yields.  Previously, equity returns were incorporated into the expected return on plan assets. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Requirement for more disclosure relating to the characteristics and risks of the amounts in the financial statements regarding defined benefit plans, including the timing and uncertainty of the entity’s cash flows. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | IFRS 9 ‘Financial Instruments: Classification and Measurement’ – This is the first part of a new standard on classification and measurement of financial assets that will replace IAS 39, ‘Financial Instruments: Recognition and Measurement’. IFRS 9 has two measurement categories: amortized cost and fair value. All equity instruments are measured at fair value. A debt instrument is recorded at amortized cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is measured at fair value with changes in fair value through profit or loss. In addition, this new standard has been updated to include guidance on financial liabilities and derecognition of financial instruments. This standard is effective for years beginning on or after January 1, 2015. The extent of the impact of adoption of IFRS 9 has not yet been determined. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 2. | Basis of preparation (continued) |
|----|----------------------------------|

|   | ● | IFRS 10 ‘Consolidated Financial Statements’ – IFRS 10 establishes control as the basis for an investor to consolidate its investee; it defines control as an investor’s power over the investee with exposure, or rights, to variable returns from the investee and the ability to affect the investor’s return through its power over the investee. This standard is effective for years beginning on or after January 1, 2013. The Company does not expect the adoption of IFRS 10 to have a material impact on the consolidated financial statements. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | IFRS 11 ‘Joint Arrangements’ – This standard replaces the guidance in IAS 31 ‘Interests in Joint Ventures’.  Under IFRS 11, joint arrangements are classified as either joint operations or joint ventures.  Joint ventures entities are now accounted for using the equity method.  |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | IFRS 12 ‘Disclosure of Interests in Other Entities’ – This IFRS shall be applied by companies with an interest in subsidiaries, joint arrangements, associates or unconsolidated structured entities.  The application of this standard intends to enable users of the financial statements to evaluate the nature of and risks associated with its interests in other entities, and the effects of those interests on its financial position, financial performance and cash flows. Companies will be required to disclose information about significant judgments and assumptions made in determining the control of another entity, the joint control of an arrangement or significant influence over another entity and the type of joint arrangement when the arrangement has been structured through a separate vehicle.  This standard is effective for years beginning on or after January 1, 2013.   The Company does not expect the adoption of IFRS 12 to have a material impact on the consolidated financial statements. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRS. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS. The Company does not expect the adoption of IFRS 13 to have a material impact on the consolidated financial statements. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | IFRIC 20 ‘Stripping costs in the production phase of a surface mine’ – This interpretation applies to waste removal costs that are incurred in open pit mining activity during the production phase of the mine.  Recognition of a stripping activity asset requires the asset to be related to an identifiable component of the ore body.  Stripping costs that relate to inventory produced should be accounted for as a current production cost in accordance with IAS 2, ‘Inventories’. Stripping costs that generate a benefit of improved access and meet the definition of an asset should be accounted for as an addition to an existing asset.  Existing stripping costs on the balance sheet at transition that do not relate to a specific ore body should be written off to opening retained earnings. The stripping activity asset shall be depreciated on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity.  This interpretation is effective for years beginning on or after January 1, 2013. The Company does not expect the adoption of IFRIC 20 to have a material impact on the consolidated financial statements as the Company currently applies comparable principles to those found in this interpretation. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

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

|   | 3.1 | Basis of presentation and principles of consolidation |
|--------|-----|-------------------------------------------------------|

|   | (i) | Subsidiaries and business combinations |
|--------|-----|----------------------------------------|

| Subsidiary                                                                    | Location | Ownershipinterest | Status       | Operations and developmentprojects owned               |
|-------------------------------------------------------------------------------|----------|-------------------|--------------|--------------------------------------------------------|
| Tüprag Metal Madencilik Sanayi ve Ticaret AS (“Tüprag”) | Turkey   | 100%              | Consolidated | Kişladağ MineEfemçukuru  Mine |
| Unamgen Mineração e Metalurgia S/A                                  | Brazil   | 100%              | Consolidated | Vila Nova Iron Ore Mine                                |
| Qinghai Dachaidan Mining Ltd (“QDML”)                             | China    | 90%               | Consolidated | TJS Mine                                               |
| Thracean Gold Mining SA                                                       | Greece   | 100%              | Consolidated | Perama Hill Project                                    |
| Sino Guizhou Jinfeng Mining Limited                                           | China    | 82%               | Consolidated | Jinfeng Mine                                           |
| Sino Gold Jilin BMZ Mining Limited                                            | China    | 95%               | Consolidated | White Mountain Mine                                    |
| Heihe Rockmining Limited                                                      | China    | 95%               | Consolidated | Eastern Dragon Project                                 |
| Brazauro Resources Corporation (“Brazauro”)                       | Brazil   | 100%              | Consolidated | Tocantinzinho Project                                  |
| Hellas Gold SA (“Hellas”)                                         | Greece   | 95%               | Consolidated | Stratoni MineOlympias projectSkouries project          |
| Deva Gold SA (“Deva”)                                             | Romania  | 80%               | Consolidated | Certej Project                                         |

|   | (ii) | Investments in associates (equity accounted for investees) |
|--------|------|------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (iii) | Transactions with non-controlling interests |
|--------|-------|---------------------------------------------|

|   | (iv) | Transactions eliminated on consolidation |
|--------|------|------------------------------------------|

|   | 3.2 | Foreign currency translation |
|--------|-----|------------------------------|

|   | (i) | Functional and presentation currency |
|--------|-----|--------------------------------------|

|   | (ii) | Transactions and balances |
|--------|------|---------------------------|

|   | 3.3 | Property, plant and equipment |
|--------|-----|-------------------------------|

|   | (i) | Cost and valuation |
|--------|-----|--------------------|

|   | (ii) | Property, plant and equipment |
|--------|------|-------------------------------|

|   | (iii) | Depreciation |
|--------|-------|--------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (iv) | Subsequent costs |
|--------|------|------------------|

|   | (v) | Deferred stripping costs |
|--------|-----|--------------------------|

|   | (vi) | Borrowing costs |
|--------|------|-----------------|

|   | (vii) | Mine standby and restructuring costs |
|--------|-------|--------------------------------------|

|   | 3.4 | Exploration and evaluation expenditures |
|--------|-----|-----------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | i) | establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities in an ore body that is classified as either a mineral resource or a proven and probable reserve; |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii) | determining the optimal methods of extraction and metallurgical and treatment processes; |
|--------|-----|------------------------------------------------------------------------------------------|

|   | iii) | studies related to surveying, transportation and infrastructure requirements; |
|--------|------|-------------------------------------------------------------------------------|

|   | iv) | permitting activities; and |
|--------|-----|----------------------------|

|   | v) | economic evaluations to determine whether development of the mineralized material is commercially justified, including scoping, prefeasibility and final feasibility studies. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | There is a probable future benefit that will contribute to future cash inflows; |
|--------|---------|---------------------------------------------------------------------------------|

|   | ● | The Company can obtain the benefit and control access to it; and |
|--------|---------|------------------------------------------------------------------|

|   | ● | The transaction or event giving rise to the benefit has already occurred. |
|--------|---------|---------------------------------------------------------------------------|

|   | 3.5 | Goodwill |
|--------|-----|----------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | 3.6 | Impairment of non-financial assets |
|--------|-----|------------------------------------|

|   | 3.7 | Financial assets |
|--------|-----|------------------|

|   | (i) | Classification |
|--------|-----|----------------|

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

|   | (b) | Loans and receivables |
|--------|-----|-----------------------|

|   | (c) | Available-for-sale financial assets |
|--------|-----|-------------------------------------|

|   | (ii) | Recognition and measurement |
|--------|------|-----------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | (iii) | Impairment of financial assets |
|--------|-------|--------------------------------|

|   | 3.8 | Derivative financial instruments |
|--------|-----|----------------------------------|

|   | 3.9 | Inventories |
|--------|-----|-------------|

|   | i) | Product inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material at properties with milling or processing operations, gold concentrate, other metal concentrate, iron ore stockpile awaiting shipment, doré awaiting refinement and unsold bullion. Product inventory costs consist of direct production costs including mining, crushing and processing; site administration costs; and allocated indirect costs, including depreciation and amortization of property, plant and equipment. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | ii) | Materials and supplies inventory consists of consumables used in operations, such as fuel, chemicals, reagents and spare parts, which are valued at the lower of average cost and net realisable value and, where appropriate, less a provision for obsolescence. Costs include acquisition, freight and other directly attributable costs. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10 | Trade receivables |
|--------|------|-------------------|

|   | 3.11 | Cash and cash equivalents |
|--------|------|---------------------------|

|   | 3.12 | Share capital |
|--------|------|---------------|

|   | 3.13 | Trade payables |
|--------|------|----------------|

|   | 3.14 | Debt and borrowings |
|--------|------|---------------------|

|   | 3.15 | Current and deferred income tax |
|--------|------|---------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | 3.16 | Employee benefits |
|--------|------|-------------------|

|   | (i) | Defined benefit plans |
|--------|-----|-----------------------|

|   | (ii) | Termination benefits |
|--------|------|----------------------|

|   | (iii) | Short-term benefits |
|--------|-------|---------------------|

|   | 3.17 | Share-based payment transactions |
|--------|------|----------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | 3.18 | Provisions |
|--------|------|------------|

|   | (i) | Rehabilitation and restoration |
|--------|-----|--------------------------------|

|   | 3.19 | Revenue recognition |
|--------|------|---------------------|

|   | 3.20 | Finance income and expenses |
|--------|------|-----------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 3. | Significant accounting policies (continued) |
|----|---------------------------------------------|

|   | 3.21 | Earnings per share |
|--------|------|--------------------|

| 4. | Critical accounting estimates and judgements |
|----|----------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 4. | Critical accounting estimates and judgements (continued) |
|----|----------------------------------------------------------|

| 5. | Acquisition of European Goldfields Ltd. |
|----|-----------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 5. | Acquisition of European Goldfields Ltd. (continued) |
|----|-----------------------------------------------------|

| Preliminary purchase price:                                      |   |   |      |
|------------------------------------------------------------------|--------|--------|-----------|
|                                                             |   |   |      |
| 157,959,316 common shares of shares of Eldorado at C$15.05/share |   | $      | 2,380,140 |   |
| 4,713,248 replacement options                                    |   |   | 31,130    |   |
| 1,931,542 equity settled deferred phantom units                  |   |   | 29,105    |   |
| Cash consideration                                               |   |   | 19        |   |
| Total Consideration                                              |   | $      | 2,440,394 |   |
|                                                             |   |   |      |   |
| Net assets acquired:                                             |   |   |      |   |
|                                                             |   |   |      |   |
| Cash                                                             |   | $      | 18,808    |   |
| Accounts receivable                                              |   |   | 20,844    |   |
| Inventory                                                        |   |   | 9,689     |   |
| Other assets                                                     |   |   | 9,232     |   |
| Mining interests                                                 |   |   | 2,745,440 |   |
| Goodwill                                                         |   |   | 473,782   |   |
| Accounts payable                                                 |   |   | (71,944   | ) |
| Other liabilities                                                |   |   | (45,457   | ) |
| Deferred income taxes                                            |   |   | (495,744  | ) |
| Non-controlling interest                                         |   |   | (224,256  | ) |
|                                                             |   | $      | 2,440,394 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 5. | Acquisition of European Goldfields Ltd. (continued) |
|----|-----------------------------------------------------|

| Risk-free interest rate      |   |  1.28%           |
|------------------------------|--------|-----------------------|
| Expected volatility (range)  |   |  39% – 44% |
| Expected life (range)        |   | 0.7 – 1.7 years |
| Expected dividends per share |   | Cdn $0.09             |
| Forfeiture rate              |   |  0%              |

| 6. | Cash and cash equivalents |
|----|---------------------------|

|                     |   | December 31,2012$ |    |   | December 31,2011$ |   |
|--------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Cash at bank and on hand |   |              | 559,267 |   |              |   | 387,761 |   |
| Short-term bank deposits |   |              | 257,576 |   |              |   | 6,002 |   |
|                     |   |              | 816,843 |   |              |   | 393,763 |   |

| 7. | Restricted cash |
|----|-----------------|

|                                                          |   | December 31,2012$ |   |   | December 31,2011$ |   |
|---------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                          |   |              |   |   |              |   |
| Eastern Dragon CMB standby letter of credit loan (Note 16(c)) |   |              | -      |   |              |   | 52,390 |   |
| Unamgen HSBC letter of credit                                 |   |              | -      |   |              |   | 3,000 |   |
| Other restricted cash – Hellas SA                       |   |              | 241    |   |              |   | - |   |
|                                                          |   |              | 241    |   |              |   | 55,390 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 8. | Marketable securities |
|----|-----------------------|

| 9. | Accounts receivable and other |
|----|-------------------------------|

|                                    |   | December 31, 2012$ |    |   | December 31,2011$ |   |
|-----------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| Trade receivables                       |   |               | 53,147  |   |              |   | 7,037 |   |
| Value added and other taxes recoverable |   |               | 6,724   |   |              |   | 7,679 |   |
| Other receivables and advances          |   |               | 27,173  |   |              |   | 5,528 |   |
| Prepaid expenses and deposits           |   |               | 25,280  |   |              |   | 22,065 |   |
|                                    |   |               | 112,324 |   |              |   | 42,309 |   |

| 10. | Inventories |
|-----|-------------|

|                                    |   | December 31,2012$ |    |   | December 31,2011$ |   |
|-----------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                    |   |              |    |   |              |   |
| Ore stockpiles                          |   |              | 46,826  |   |              |   | 66,656 |   |
| In-process inventory and finished goods |   |              | 83,639  |   |              |   | 58,382 |   |
| Materials and supplies                  |   |              | 90,301  |   |              |   | 65,930 |   |
|                                    |   |              | 220,766 |   |              |   | 190,968 |   |

| 11. | Investments in significantly influenced companies |
|-----|---------------------------------------------------|

|                                     |   | December 31,2012$ |   |   | December 31,2011$ |   |
|------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                     |   |              |   |   |              |   |
| Serabi Mining Plc (“Serabi”) |   |              | 2,145  |   |              |   | 3,646 |   |
| Kopy Goldfields (“Kopy”)     |   |              | 4,929  |   |              |   | 3,959 |   |
| Glory Resources (“Glory”)    |   |              | 10,675 |   |              |   | 11,203 |   |
| Kenai Resources (“Kenai”)    |   |              | 1,150  |   |              |   | - |   |
| Nordic Mines (“Nordic”)      |   |              | 9,050  |   |              |   | - |   |
|                                     |   |              | 27,949 |   |              |   | 18,808 |   |

|   | (a) | Serabi |
|--------|-----|--------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 11. | Investments in significantly influenced companies (continued) |
|-----|---------------------------------------------------------------|

|                      |   | 2012   |   |   | 2011   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|
|                      |   |   | $      |   |   |   | $ |   |
| Balance at January 1,     |   |   | 3,646  |   |   |   | 6,202 |   |
| Purchases during the year |   |   | 696    |   |   |   | 1,318 |   |
| Equity loss for the year  |   |   | (2,197 | )      |   |   | (3,874 | ) |
| Balance at December 31,   |   |   | 2,145  |   |   |   | 3,646 |   |

|   | (b) | Kopy |
|--------|-----|------|

|                       |   | 2012   |   |   | 2011   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   | $      |   |   |   | $ |   |
| Balance at January 1,      |   |   | 3,959  |   |   |   | - |   |
| Purchases during the year  |   |   | 2,161  |   |   |   | 4,273 |   |
| Equity loss for the period |   |   | (1,191 | )      |   |   | (314 | ) |
| Balance at December 31,    |   |   | 4,929  |   |   |   | 3,959 |   |

|   | (c) | Glory |
|--------|-----|-------|

|                       |   | 2012   |   |   | 2011   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   | $      |   |   |   | $ |   |
| Balance at January 1,      |   |   | 11,203 |   |   |   | - |   |
| Purchases during the year  |   |   | -      |   |   |   | 11,240 |   |
| Equity loss for the period |   |   | (528   | )      |   |   | (37 | ) |
| Balance at December 31,    |   |   | 10,675 |   |   |   | 11,203 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 11. | Investments in significantly influenced companies (continued) |
|-----|---------------------------------------------------------------|

|   | (d) | Kenai |
|--------|-----|-------|

|                       |   | 2012   |   |
|----------------------------|--------|--------|--------|
|                       |   |   | $      |   |
| Balance at January 1,      |   |   | -      |   |
| Purchases during the year  |   |   | 1,495  |   |
| Equity loss for the period |   |   | (345   | ) |
| Balance at December 31,    |   |   | 1,150  |   |

|   | (e) | Nordic |
|--------|-----|--------|

|                       |   | 2012   |   |
|----------------------------|--------|--------|--------|
|                       |   |   | $      |   |
| Balance at January 1,      |   |   | -      |   |
| Purchases during the year  |   |   | 10,416 |   |
| Equity loss for the period |   |   | (1,366 | ) |
| Balance at December 31,    |   |   | 9,050  |   |

| 12. | Restricted assets and other |
|-----|-----------------------------|

|                                                |   | December 31,2012$ |   |   | December 31,2011$ |   |
|-----------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Restricted non-current asset – SERP (Note 18) |   |              | -      |   |              |   | 14,456 |   |
| Restricted credit card deposits                     |   |              | 673    |   |              |   | 648 |   |
|                                                |   |              | 673    |   |              |   | 15,104 |   |
| Non-current accounts receivable                     |   |              | 1,288  |   |              |   | 369 |   |
| Prepaid loan costs (Note 16(f))                     |   |              | 3,918  |   |              |   | 2,849 |   |
| Environmental guarantee deposits                    |   |              | 12,468 |   |              |   | 12,304 |   |
| Deposit on land acquisition at Jinfeng              |   |              | 654    |   |              |   | 7,804 |   |
| Long-term value added and other taxes recoverable   |   |              | 12,845 |   |              |   | - |   |
|                                                |   |              | 31,846 |   |              |   | 38,430 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 13. | Property, plant and equipment |
|-----|-------------------------------|

|                               |   | Land andbuildings |     |   | Plant andequipment |   |      | Capital works inprogress |   |   | Mineral propertiesand leases |   |   | Total  |      |
|------------------------------------|--------|-------------------|----------|--------|--------------------|--------|-----------|--------------------------|--------|--------|------------------------------|--------|--------|--------|-----------|
|                               |   |              | $        |   |               |   | $         |                     |   |   | $                            |   |   |   | $         |   |   |   | $ |   |
| Cost                               |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| Balance at January 1, 2011         |   |              | 283,929  |   |               |   | 728,897   |                     |   |   | 140,285                      |   |   |   | 1,818,685 |   |   |   | 2,971,796 |   |
| Additions/transfers                |   |              | 58,067   |   |               |   | 185,012   |                     |   |   | (81,593                      | )      |   |   | 118,299   |   |   |   | 279,785 |   |
| Other movements                    |   |              | -        |   |               |   | (6,303    | )                        |   |   | -                            |   |   |   | -         |   |   |   | (6,303 | ) |
| Disposals                          |   |              | (345     | )      |               |   | (1,418    | )                        |   |   | -                            |   |   |   | (3,430    | ) |   |   | (5,193 | ) |
| Balance at December 31, 2011       |   |              | 341,651  |   |               |   | 906,188   |                     |   |   | 58,692                       |   |   |   | 1,933,554 |   |   |   | 3,240,085 |   |
|                               |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| Balance at January 1, 2012         |   |              | 341,651  |   |               |   | 906,188   |                     |   |   | 58,692                       |   |   |   | 1,933,554 |   |   |   | 3,240,085 |   |
| Additions/transfers                |   |              | 64,272   |   |               |   | 199,349   |                     |   |   | 75,293                       |   |   |   | 110,439   |   |   |   | 449,353 |   |
| Acquistion of EGU                  |   |              | -        |   |               |   | 345,442   |                     |   |   |                         |   |   |   | 2,399,998 |   |   |   | 2,745,440 |   |
| Proceeds on pre-production sales   |   |              | -        |   |               |   | (54,705   | )                        |   |   |                         |   |   |   | -         |   |   |   | (54,705 | ) |
| Other movements                    |   |              | -        |   |               |   | 3,309     |                     |   |   | -                            |   |   |   | (1,682    | ) |   |   | 1,627 |   |
| Disposals                          |   |              | -        |   |               |   | (3,621    | )                        |   |   | -                            |   |   |   | -         |   |   |   | (3,621 | ) |
| Balance at December 31, 2012       |   |              | 405,923  |   |               |   | 1,395,962 |                     |   |   | 133,985                      |   |   |   | 4,442,309 |   |   |   | 6,378,179 |   |
|                               |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| Depreciation and impairment losses |   |              |     |   |               |   |      |                     |   |   |                         |   |   |
| Balance at January 1, 2011         |   |              | (57,697  | )      |               |   | (175,572  | )                        |   |   | -                            |   |   |   | (38,740   | ) |   |   | (272,009 | ) |
| Depreciation for the year          |   |              | (31,712  | )      |               |   | (63,869   | )                        |   |   | -                            |   |   |   | (27,611   | ) |   |   | (123,192 | ) |
| Disposals                          |   |              | 1,847    |   |               |   | 1,179     |                     |   |   | -                            |   |   |   | -         |   |   |   | 3,026 |   |
| Balance at December 31, 2011       |   |              | (87,562  | )      |               |   | (238,262  | )                        |   |   | -                            |   |   |   | (66,351   | ) |   |   | (392,175 | ) |
|                               |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| Balance at January 1, 2012         |   |              | (87,562  | )      |               |   | (238,262  | )                        |   |   | -                            |   |   |   | (66,351   | ) |   |   | (392,175 | ) |
| Depreciation for the year          |   |              | (25,696  | )      |               |   | (61,083   | )                        |   |   | -                            |   |   |   | (28,513   | ) |   |   | (115,292 | ) |
| Other movements                    |   |              | -        |   |               |   | (4,304    | )                        |   |   | -                            |   |   |   | 192       |   |   |   | (4,112 | ) |
| Disposals                          |   |              | -        |   |               |   | 2,142     |                     |   |   | -                            |   |   |   | -         |   |   |   | 2,142 |   |
| Balance at December 31, 2012       |   |              | (113,258 | )      |               |   | (301,507  | )                        |   |   | -                            |   |   |   | (94,672   | ) |   |   | (509,437 | ) |
|                               |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| Carrying amounts                   |   |              |     |   |               |   |      |                     |   |   |                         |   |   |   |      |   |   |   |   |   |
| At January 1, 2011                 |   |              | 226,232  |   |               |   | 553,325   |                     |   |   | 140,285                      |   |   |   | 1,779,945 |   |   |   | 2,699,787 |   |
| At December 31, 2011               |   |              | 254,089  |   |               |   | 667,926   |                     |   |   | 58,692                       |   |   |   | 1,867,203 |   |   |   | 2,847,910 |   |
| Balance at December 31, 2012       |   |              | 292,665  |   |               |   | 1,094,455 |                     |   |   | 133,985                      |   |   |   | 4,347,637 |   |   |   | 5,868,742 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 14. | Goodwill |
|-----|----------|

|                     |   | 2012   |    |   | 2011   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|
|                     |   |   | $       |   |   |   | $ |   |
| Cost                     |   |   |    |   |   |   |   |   |
| Balance at January 1,    |   |   | 365,928 |   |   |   | 365,928 |   |
| Acquired during the year |   |   | 473,782 |   |   |   | - |   |
| Balance at December 31,  |   |   | 839,710 |   |   |   | 365,928 |   |

|              |   | 2012   |           | 2011   |   |
|-------------------|--------|--------|----------------|--------|--------|
| Gold price ($/oz) |   | $      | 1,350 - $1,700 |   | $      | 1,300 - $1,700 |   |
| Discount rate     |   |   | 7% - 9%        |   |   | 7% - 9% |   |

| 15. | Accounts payable and accrued liabilities |
|-----|------------------------------------------|

|                |   | December 31,2012$ |    |   | December 31,2011$ |   |
|---------------------|--------|-------------------|---------|--------|-------------------|--------|
| Trade payables      |   |              | 101,505 |   |              |   | 67,056 |   |
| HST and other taxes |   |              | 19,607  |   |              |   | 40,256 |   |
| Accrued expenses    |   |              | 103,455 |   |              |   | 61,055 |   |
|                |   |              | 224,567 |   |              |   | 168,367 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 16. | Debt |
|-----|------|

|                                                 |   | December 31,2012$ |    |   | December 31,2011$ |   |
|------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Current:                                             |   |              |    |   |              |   |
| Jinfeng construction loan  (a)             |   |              | -       |   |              |   | 19,929 |   |
| Eastern Dragon CMB standby letter of credit loan (c) |   |              | -       |   |              |   | 50,786 |   |
| Eastern Dragon HSBC revolving loan facility (d)      |   |              | 10,341  |   |              |   | 10,316 |   |
|                                                 |   |              | 10,341  |   |              |   | 81,031 |   |
| Non-current:                                         |   |              |    |   |              |   |   |   |
| Senior notes  (g)                          |   |              | 582,974 |   |              |   | - |   |
|                                                 |   |              | -       |   |              |   | - |   |
| Total debt                                           |   |              | 593,315 |   |              |   | 81,031 |   |

|   | (a) | Jinfeng construction loan |
|--------|-----|---------------------------|

|   | i) | Sino Gold corporate guarantee; |
|--------|----|--------------------------------|

|   | ii) | Pledge of all shares held by Sino Gold in Jinfeng; |
|--------|-----|----------------------------------------------------|

|   | iii) | mortgage on all fixed assets of Jinfeng with a value above $100; |
|--------|------|------------------------------------------------------------------|

|   | iv) | mortgage on Jinfeng mining license and exploration license; and |
|--------|-----|-----------------------------------------------------------------|

|   | v) | mortgage on land use right. |
|--------|----|-----------------------------|

|   | (b) | Jinfeng CMB working capital loan |
|--------|-----|----------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 16. | Debt (continued) |
|-----|------------------|

|   | (c) | Eastern Dragon CMB standby letter of credit loan |
|--------|-----|--------------------------------------------------|

|   | (d) | Eastern Dragon HSBC revolving loan facility |
|--------|-----|---------------------------------------------|

|   | (e) | Eastern Dragon CMB project-financing loan |
|--------|-----|-------------------------------------------|

|   | i) | A 5 year term, RMB 320.0 million ($50,911) long term loan (“the long term loan”); |
|--------|----|-----------------------------------------------------------------------------------------------|

|   | ii) | A 4 year term RMB 100.0 million ($15,910) fixed asset loan (“the fixed asset loan”); and |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | iii) | A one year term RMB 30.0 million ($4,773) working capital loan (“the working capital loan”). |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | 1. | Receipt of project approval from the Heilongjiang Provincial Development and Reform Commission; |
|--------|----|-------------------------------------------------------------------------------------------------|

|   | 2. | Sino Gold to open an offshore banking business bank account with CMB and deposit $40,000; |
|--------|----|------------------------------------------------------------------------------------------------|

|   | 3. | The aggregate of the amount deposited in the offshore account, Eastern Dragon registered capital and shareholder and entrusted loan is at least $84,660 (this threshold has been reached as at December 31, 2009). |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 16. | Debt (continued) |
|-----|------------------|

|   | i) | The project obtains the mining license; |
|--------|----|-----------------------------------------|

|   | ii) | The project has been developed and is in production; |
|--------|-----|------------------------------------------------------|

|   | iii) | The gold operation permit has been granted; and |
|--------|------|-------------------------------------------------|

|   | iv) | The safety production permit and environmental protection permit have been granted. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (f) | HSBC revolving credit facility |
|--------|-----|--------------------------------|

|   | (g) | Senior notes |
|--------|-----|--------------|

|   | i) | At any time prior to December 15, 2016 at a redemption price equal to 100% of the aggregate principal amount of the notes at the treasury yield plus 50 basis points, and any accrued and unpaid interest; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii) | On and after the dates provided below, at the redemption prices, expressed as a percentage of principal amount of the notes to be redeemed, set forth below, plus accrued and unpaid interest on the notes: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 16. | Debt (continued) |
|-----|------------------|

|   | (h) | Entrusted loan |
|--------|-----|----------------|

| 17. | Asset retirement obligations |
|-----|------------------------------|

|                                |   |   |   |   | Asset retirement obligations |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|------------------------------|--------|--------|--------|--------|
|                                |   | Greece |   |   | Brazil                       |   |   | China  |   |   | Turkey |   |   | Total |   |
|                                |   |   | $      |   |                         |   | $      |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |
| At January 1, 2011                  |   |   | -      |   |                         |   | 2,841  |   |   |   | 17,103 |   |   |   | 13,284 |   |   |   | 33,228 |   |
| Accretion during the year           |   |   | -      |   |                         |   | 135    |   |   |   | 855 |   |   |   | 556 |   |   |   | 1,546 |   |
| Revisions to estimate of obligation |   |   | -      |   |                         |   | 269    |   |   |   | 1,991 |   |   |   | 6,179 |   |   |   | 8,439 |   |
| At December 31, 2011                |   |   | -      |   |                         |   | 3,245  |   |   |   | 19,949 |   |   |   | 20,019 |   |   |   | 43,213 |   |
|                                |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Estimated undiscounted amount       |   |   | -      |   |                         |   | 4,281  |   |   |   | 25,788 |   |   |   | 51,640 |   |   |   | 81,709 |   |
|                                |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At January 1, 2012                  |   |   | -      |   |                         |   | 3,245  |   |   |   | 19,949 |   |   |   | 20,019 |   |   |   | 43,213 |   |
| Acquired during the year            |   |   | 6,750  |   |                         |   | -      |   |   |   | - |   |   |   | - |   |   |   | 6,750 |   |
| Accretion during the year           |   |   | 272    |   |                         |   | 135    |   |   |   | 865 |   |   |   | 570 |   |   |   | 1,842 |   |
| Revisions to estimate of obligation |   |   | 26,627 |   |                         |   | 26     |   |   |   | 4,789 |   |   |   | (3,276 | ) |   |   | 28,166 |   |
| At December 31, 2012                |   |   | 33,649 |   |                         |   | 3,406  |   |   |   | 25,603 |   |   |   | 17,313 |   |   |   | 79,971 |   |
|                                |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Estimated undiscounted amount       |   |   | 33,041 |   |                         |   | 3,923  |   |   |   | 29,856 |   |   |   | 43,454 |   |   |   | 110,274 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 17. | Asset retirement obligations (continued) |
|-----|-----------------------------------------------|

|                 |   |       |   |   | Asset retirement obligations |   |   |   |       |
|----------------------|--------|------------|--------|--------|------------------------------|--------|--------|--------|------------|
|                 |   | Greece     |   |   | Brazil                       |   |   | China  |       |   | Turkey |   |
|                 |   | %          |   |   | %                            |   |   | %      |       |   | % |   |
| At January 1, 2011   |   |       |   |   |                         |   |   |   |       |   |   |   |
| Inflation rate       |   |       | -      |   |                         |   | 5.0    |   |       |   | 4.0 |   |   |   | 5.0 |   |
| Discount rate        |   |       | -      |   |                         |   | 3.3    |   |       | 2.0 to 3.3 |   |   | 4.1 to 4.3 |   |
|                 |   |       |   |   |                         |   |   |   |       |   |   |   |   |   |   |   |
| At December 31, 2011 |   |       |   |   |                         |   |   |   |       |   |   |   |   |   |   |   |
| Inflation rate       |   |       | -      |   |                         |   | 3.5    |   |       |   | 3.5 |   |   |   | 3.5 |   |
| Discount rate        |   |       | -      |   |                         |   | 3.1    |   |       |   | 3.1 |   |   |   | 3.1 |   |
|                 |   |       |   |   |                         |   |   |   |       |   |   |   |   |   |   |   |
| At December 31, 2012 |   |       |   |   |                         |   |   |   |       |   |   |   |   |   |   |   |
| Inflation rate       |   |       | 2.5    |   |                         |   | 2.5    |   |       |   | 2.5 |   |   |   | 2.5 |   |
| Discount rate        |   | 0.7 to 2.7 |   |   |                         | 1.6    |   |   | 0.7 to 1.8 |   |   | 1.9 to 3.0 |   |

| 18. | Defined benefit plans |
|-----|-----------------------|

|                                      |   | December 31,2012$ |   |   | December 31,2011$ |   |
|-------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
| Balance sheet obligations (asset) for:    |   |              | 616    |   |              |   | 388 |   |
| Pension plan                              |   |              | (5,187 | )      |              |   | 19,581 |   |
| Non-registered supplementary pension plan |   |              | (4,571 | )      |              |   | 19,969 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 18. | Defined benefit plans (continued) |
|-----|-----------------------------------|

|                                                                                                                     |   | Year endedDecember 31,2012$ |         |   | Year endedDecember 31,2011$ |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------------|--------|-----------------------------|--------|
| Income statement charge for:                                                                                             |   |                             | 146          |   |                        |   | 118 |   |
| Pension plan                                                                                                             |   |                             | 1,754        |   |                        |   | 1,970 |   |
| Non-registered supplementary pension plan                                                                                |   |                             | 1,900        |   |                        |   | 2,088 |   |
|                                                                                                                     |   |                             |         |   |                        |   |   |   |
|     Actuairal losses recognised in the statement of other comprehensive income in the period (before tax) |   |                             | 12,981       |   |                        |   | 6,661 |   |
|     Cumulative actuarial losses recognised in the statement of other comprehensive income (before tax)    |   |                             |  22,277 |   |                        |   |  9,296 |   |

|                              |   | 2013   |   |   | 2014   |   |   | 2015   |   |   | 2016 andlater |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------------|--------|
|                              |   |   | $      |   |   |   | $      |   |   |   | $             |   |   |   | $ |   |
| Estimated future pension payments |   |   | 253    |   |   |   | 1,811  |   |   |   | 1,811         |   |   |   | 2,187 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 18. | Defined benefit plans (continued) |
|-----|-----------------------------------|

|                                |   | December 31, 2012 |   |   | December 31, 2011 |   |
|-------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                |   | Pension Plan      |   |   | SERP              |   |   | Pension Plan |   |   | SERP |   |
|                                |   |              | $      |   |              |   | $ |   |   |   | $ |   |   |   | $ |   |
|                                |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Present value of funded obligations |   |              | 2,585  |   |              |   | 35,903 |   |   |   | 2,101 |   |   |   | 19,581 |   |
| Fair value of plan assets           |   |              | (1,969 | )      |              |   | (41,090 | ) |   |   | (1,713 | ) |   |   | - |   |
| Liability (asset) on balance sheet  |   |              | 616    |   |              |   | (5,187 | ) |   |   | 388 |   |   |   | 19,581 |   |

|                    |   | 2012         |   |   | 2011   |   |
|-------------------------|--------|--------------|--------|--------|--------|--------|
|                    |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                    |   | Pension Plan |   |   | SERP   |   |   | Total |   |   | Pension Plan |   |   | SERP |   |   | Total |   |
|                    |   |         | $      |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |
| Balance at January 1,   |   |         | 2,101  |   |   |   | 19,581 |   |   |   | 21,682 |   |   |   | 1,609 |   |   |   | 11,690 |   |   |   | 13,299 |   |
| Current service cost    |   |         | 154    |   |   |   | 1,470 |   |   |   | 1,624 |   |   |   | 120 |   |   |   | 1,292 |   |   |   | 1,412 |   |
| Interest cost           |   |         | 100    |   |   |   | 925 |   |   |   | 1,025 |   |   |   | 92 |   |   |   | 678 |   |   |   | 770 |   |
| Actuarial losses        |   |         | 182    |   |   |   | 13,619 |   |   |   | 13,801 |   |   |   | 265 |   |   |   | 6,396 |   |   |   | 6,661 |   |
| Benefit payments        |   |         | -      |   |   |   | (172 | ) |   |   | (172 | ) |   |   | - |   |   |   | (174 | ) |   |   | (174 | ) |
| Exchange variance       |   |         | 48     |   |   |   | 480 |   |   |   | 528 |   |   |   | 15 |   |   |   | (301 | ) |   |   | (286 | ) |
| Balance at December 31, |   |         | 2,585  |   |   |   | 35,903 |   |   |   | 38,488 |   |   |   | 2,101 |   |   |   | 19,581 |   |   |   | 21,682 |   |

|                           |   | Pension Plan |   |   | SERP   |   |   | Pension Plan |   |   | SERP  |   |
|--------------------------------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|--------|-------|--------|
|                           |   |         | $      |   |   |   | $      |         |   |   | $     |   |   |   | $ |   |
| At January 1,                  |   |         | 1,713  |   |   |   | -      |         |   |   | 1,280 |   |   |   | - |   |
| Expected return on plan assets |   |         | 108    |   |   |   | 641    |         |   |   | 94    |   |   |   | - |   |
| Actuarial gains and losses     |   |         | (20    | )      |   |   | 841    |         |   |   | 58    |   |   |   | - |   |
| Contributions by employer      |   |         | 130    |   |   |   | 39,471 |         |   |   | 322   |   |   |   | - |   |
| Exchange variance              |   |         | 38     |   |   |   | 137    |         |   |   | (41   | )      |   |   | - |   |
| At December 31,                |   |         | 1,969  |   |   |   | 41,090 |         |   |   | 1,713 |   |   |   | - |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 18. | Defined benefit plans (continued) |
|-----|-----------------------------------|

|                           |   | 2012         |   |   | 2011   |   |
|--------------------------------|--------|--------------|--------|--------|--------|--------|
|                           |   |         |   |   |   |   |   |   |   |   |   |   |
|                           |   | Pension Plan |   |   | SERP   |   |   | Pension Plan |   |   | SERP |   |
|                           |   |         | $      |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |
|                           |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current service cost           |   |         | 154    |   |   |   | 1,470 |   |   |   | 120 |   |   |   | 1,292 |   |
| Interest cost                  |   |         | 100    |   |   |   | 925 |   |   |   | 92 |   |   |   | 678 |   |
| Expected return on plan assets |   |         | (108   | )      |   |   | (641 | ) |   |   | (94 | ) |   |   | - |   |
| Defined benefit plans expense  |   |         | 146    |   |   |   | 1,754 |   |   |   | 118 |   |   |   | 1,970 |   |

|                                                                              |   | 2012         |   |   | 2011      |   |
|-----------------------------------------------------------------------------------|--------|--------------|--------|--------|-----------|--------|
|                                                                              |   |         |   |   |      |   |   |   |   |   |   |   |
|                                                                              |   | Pension Plan |   |   | SERP      |   |   | Pension Plan |   |   | SERP |   |
|                                                                              |   | %            |   |   | %         |   |   | % |   |   | % |   |
|                                                                              |   |         |   |   |      |   |   |   |   |   |   |   |
| Expected return on plan assets                                                    |   |         | 6.0    |   |      |   | 3.0 |   |   |   | 6.5 |   |   |   | 6.5 |   |
| Discount rate - beginning of year                                                 |   |         | 4.5    |   |      |   | 4.5 |   |   |   | 5.5 |   |   |   | 5.5 |   |
| Discount rate - end of year                                                       |   |         | 3.9    |   |      |   | 3.9 |   |   |   | 4.5 |   |   |   | 4.5 |   |
| Rate of salary escalation                                                         |   |         | 3.0    |   |      |   | 3.0 |   |   |   | 3.0 |   |   |   | 3.0 |   |
| Average remaining service period of active employees expected to receive benefits |   | 7.8 years    |   |   | 7.8 years |   |   | 6.7 years |   |   | 6.7 years |   |

|                 |   | December 31, 2012 |   |   | December 31, 2011 |   |
|----------------------|--------|-------------------|--------|--------|-------------------|--------|
|                 |   | Pension Plan      |   |   | SERP              |   |   | Pension Plan |   |   | SERP |   |
| Cash and equivalents |   |              | 1      | %      |              |   | 49 | % |   |   | 2 | % |   |   | 2 | % |
| Fixed income         |   |              | 99     | %      |              |   | 22 | % |   |   | 98 | % |   |   | 43 | % |
| Equity               |   |              | -      |   |              |   | 29 | % |   |   | - |   |   |   | 55 | % |
| Total                |   |              | 100    | %      |              |   | 100 | % |   |   | 100 | % |   |   | 100 | % |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 18. | Defined benefit plans (continued) |
|-----|-----------------------------------|

|                   | Change in assumption      | Impact on overall liability |
|------------------------|---------------------------|-----------------------------|
| Discount rate          | Increase by 0.5%          | Decrease by 6.2%            |
|                   | Decrease by 0.5%          | Increase by 6.8%            |
| Salary escalation rate | Increase/decrease by 0.5% | Increase/decrease by 0.3%   |

| 19. | Income tax expense and deferred taxes |
|-----|---------------------------------------|

|                            |   | December 31, |    |   | December 31, |   |
|---------------------------------|--------|--------------|---------|--------|--------------|--------|
|                            |   | 2012         |    |   | 2011         |   |
|                            |   |         | $       |   |         |   | $ |   |
| Current tax expense             |   |         | 142,587 |   |         |   | 163,783 |   |
| Deferred tax expense (recovery) |   |         | (14,311 | )      |         |   | 1,804 |   |
|                            |   |         | 128,276 |   |         |   | 165,587 |   |

|                |   | 2012   |    |   | 2011   |   |
|---------------------|--------|--------|---------|--------|--------|--------|
|                |   |   | $       |   |   |   | $ |   |
| Turkey              |   |   | 74,052  |   |   |   | 94,781 |   |
| China               |   |   | 52,794  |   |   |   | 70,131 |   |
| Greece              |   |   | 847     |   |   |   | 260 |   |
| Brazil              |   |   | 1,110   |   |   |   | 125 |   |
| Canada              |   |   | -       |   |   |   | 172 |   |
| Romania             |   |   | (540    | )      |   |   | - |   |
| Other jurisdictions |   |   | 13      |   |   |   | 118 |   |
|                |   |   | 128,276 |   |   |   | 165,587 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 19. | Income tax expense and deferred taxes |
|-----|---------------------------------------|

|                                                             |           |           | 2012           | 2011    |
|------------------------------------------------------------------|----------------|----------------|----------------|---------|
|                                                             |           |           | $              | $       |
| Profit before income tax                                         |           |           | 446,951        | 512,810 |
| Canadian statutory tax rate                                      |           |           | 25.00%         | 26.50%  |
| Tax on profit at Canadian statutory tax rate                     | 111,738        | 135,895        |
|                                                             |           |           |           |    |
| Items that cause an increase (decrease) in income tax expense:   |           |           |
|                                                             |           |           |           |    |
| Foreign income subject to different income tax rates than Canada |  (18,256) |  (23,973) |
| Derecognition (initial recognition) of deferred tax assets       | -              |  (7,634)  |
| Non-tax effected operating losses and capital gains              | 19,261         | 16,593         |
| Non-deductible expenses and other items                          | 12,179         | 9,302          |
| Foreign exchange and other translation adjustments               |  (6,325)  | 18,699         |
| Amounts under (over) provided in prior years                     |  (50)     | 5,800          |
| Investment tax credits                                           |           |           |  (15,846) | -       |
| Withholding tax on foreign income                                |           | 25,575         | 10,905         |
| Income tax expense                                               |           |           | 128,276        | 165,587 |

|                                                                         |   |   | 2012     |    | 2011     |    |
|------------------------------------------------------------------------------|--------|--------|----------|---------|----------|---------|
| Net deferred tax asset (liability)                                           |   |   | $        |    | $        |    |
| Balance at January 1,                                                        |   |   | (332,320 | )  | (330,512 | )  |
| Deferred income tax (expense) recovery in the income statement               |   |   | 14,311   |    | (1,804   | )  |
|     Deferred income tax charged to other comprehensive income |   |   | -        |    | (12      | )  |
|     Other                                                     |   |   | (495,744 | )  | -        |    |
| Net balance at December 31,                                                  |   |   | (39      | )  | 8        |    |
|                                                                         |   |   | (813,792 | )  | (332,320 | )  |

|                          |   |                |   |   |                     |   |   |                    |   |   |    |   |   | Expense (recovery) |    |
|-------------------------------|--------|---------------------|--------|--------|--------------------------|--------|--------|-------------------------|--------|--------|---------|--------|--------|--------------------|---------|
| Type of temporary difference  |   | Deferred tax assets |   |   | Deferred tax liabilities |   |   | on the income statement |
|                          |   | 2012                |   |   | 2011                     |   |   | 2012                    |   |   | 2011    |   |   | 2012               |    |   | 2011 |   |
|                          |   |                | $      |   |                     |   | $      |                    |   |   | $       |   |   |               | $       |   |   |   | $ |   |   | $ |   |
| Property, plant and equipment |   |                | 2,428  |   |                     |   | 1,838  |                    |   |   | 852,556 |   |   |               | 346,687 |   |   |   | 7,506 |   |   |   | 9,259 |   |
| Loss carryforwards            |   |                | 11,246 |   |                     |   | 11,142 |                    |   |   | -       |   |   |               | -       |   |   |   | 329 |   |   |   | (4,561 | ) |
| Liabilities                   |   |                | 15,955 |   |                     |   | 11,534 |                    |   |   | 5,510   |   |   |               | 6,365   |   |   |   | (5,372 | ) |   |   | 2,015 |   |
| Investment tax credits        |   |                | 11,050 |   |                     |   | -      |                    |   |   | -       |   |   |               | -       |   |   |   | (11,050 | ) |   |   | - |   |
| Other items                   |   |                | 4,549  |   |                     |   | 1,536  |                    |   |   | 954     |   |   |               | 5,318   |   |   |   | (5,724 | ) |   |   | (4,909 | ) |
| Balance at December 31,       |   |                | 45,228 |   |                     |   | 26,050 |                    |   |   | 859,020 |   |   |               | 358,370 |   |   |   | (14,311 | ) |   |   | 1,804 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 19. | Income tax expense and deferred taxes |
|-----|---------------------------------------|

| Unrecognized deferred tax assets       |   | 2012   |   |   | 2011   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
|                                   |   |   | $      |   |   |   | $ |   |
| Tax losses                             |   |   | 92,566 |   |   |   | 61,287 |   |
| Other deductible temporary differences |   |   | 4,471  |   |   |   | 9,639 |   |
| Total unrecognized deferred tax assets |   |   | 97,037 |   |   |   | 70,926 |   |

| Expiry date                               |   | Canada |    |   | Brazil |   |   | Greece |   |   | Australia |   |   | Total  |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                                      |   |   | $       |   |   |   | $      |   |   |   | $         |   |   |   | $      |   |   |   | $ |   |
|     2013              |   |   | 5,989   |   |   |   | -      |   |   |   | 1,679     |   |   |   | -      |   |   |   | 7,668 |   |
|     2015              |   |   | 6,030   |   |   |   | -      |   |   |   | 8,355     |   |   |   | -      |   |   |   | 14,385 |   |
|     2016              |   |   | -       |   |   |   | -      |   |   |   | 600       |   |   |   | -      |   |   |   | 600 |   |
|     2025              |   |   | 7,946   |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 7,946 |   |
|     2026              |   |   | 14,874  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 14,874 |   |
|     2027              |   |   | 10,729  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 10,729 |   |
|     2028              |   |   | 25,906  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 25,906 |   |
|     2029              |   |   | 23,457  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 23,457 |   |
|     2030              |   |   | 7,515   |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 7,515 |   |
|     2031              |   |   | 45,375  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 45,375 |   |
|     2032              |   |   | 86,548  |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 86,548 |   |
| No expiry                            |   |   | -       |   |   |   | 9,354  |   |   |   | -         |   |   |   | 34,596 |   |   |   | 43,950 |   |
|                                      |   |   | 234,369 |   |   |   | 9,354  |   |   |   | 10,634    |   |   |   | 34,596 |   |   |   | 288,953 |   |
|                                      |   |   |    |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Capital losses with no equity             |   |   | 146,369 |   |   |   | -      |   |   |   | -         |   |   |   | -      |   |   |   | 146,309 |   |
|                                      |   |   |    |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Tax effect of total losses not recognized |   |   | 76,881  |   |   |   | 3,180  |   |   |   | 2,127     |   |   |   | 10,378 |   |   |   | 92,566 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 19. | Income tax expense and deferred taxes |
|-----|---------------------------------------|

| 20. | Share capital |
|-----|---------------|

| Voting common shares                                   |   | Number ofShares |        |   | Total$ |   |
|--------------------------------------------------------|--------|-----------------|-------------|--------|--------|--------|
|                                                   |   |            |        |   |   |   |
| At January 1, 2011                                     |   |            | 548,187,192 |   |   |   | 2,814,679 |   |
|                                                   |   |            |        |   |   |   |   |   |
| Shares issued upon exercise of share options, for cash |   |            | 3,399,096   |   |   |   | 30,115 |   |
| Estimated fair value of share options exercised        |   |            | -           |   |   |   | 9,410 |   |
| Shares issued for cash upon exercise of warrants       |   |            | 96,629      |   |   |   | 1,485 |   |
|                                                   |   |            |        |   |   |   |   |   |
| At December 31, 2011                                   |   |            | 551,682,917 |   |   |   | 2,855,689 |   |
|                                                   |   |            |        |   |   |   |   |   |
| Shares issued upon exercise of share options, for cash |   |            | 3,271,683   |   |   |   | 22,145 |   |
| Estimated fair value of share options exercised        |   |            | -           |   |   |   | 23,221 |   |
| Shares issued for acquisition of subsidiary            |   |            | 157,959,316 |   |   |   | 2,380,140 |   |
| Common shares issued for deferred phantom units        |   |            | 1,430,560   |   |   |   | 19,762 |   |
|                                                   |   |            |        |   |   |   |   |   |
| At December 31, 2012                                   |   |            | 714,344,476 |   |   |   | 5,300,957 |   |

| 21. | Share-based payments |
|-----|----------------------|

|   | (a) Share option plans |
|--------|------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 21. | Share-based payments (continued) |
|-----|----------------------------------|

|                                                                           |   | 2012                              |   |   | 2011             |   |
|--------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|------------------|--------|
|                                                                           |   | Weightedaverageexercise priceCdn$ |   |   | Number ofoptions |   |   | Weightedaverageexercise priceCdn$ |   |   | Number ofoptions |   |
| At January 1,                                                                  |   |                              | 12.60  |   |             |   | 8,616,113 |   |   |   | 9.49 |   |   |   | 8,720,524 |   |
|                                                                           |   |                              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Regular options granted                                                        |   |                              | 14.80  |   |             |   | 5,915,081 |   |   |   | 16.53 |   |   |   | 3,869,691 |   |
| Replacement options granted on acquisition of European Goldfields Ltd (note 5) |   |                              | 9.73   |   |             |   | 4,713,248 |   |   |   | - |   |   |   | - |   |
| Exercised                                                                      |   |                              | 6.73   |   |             |   | (3,271,683 | ) |   |   | 8.70 |   |   |   | (3,399,096 | ) |
| Forfeited                                                                      |   |                              | 15.24  |   |             |   | (898,315 | ) |   |   | 14.96 |   |   |   | (575,006 | ) |
|                                                                           |   |                              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| At December 31,                                                                |   |                              | 13.68  |   |             |   | 15,074,444 |   |   |   | 12.60 |   |   |   | 8,616,113 |   |

|                      |   |   | December 31, 2012         |       |
|---------------------------|--------|--------|---------------------------|------------|
|                      |   |   | Total options outstanding |       |   | Exercisable options |   |
| Range ofexercisepriceCdn$ |   |   | Shares                    |       |   | Weightedaverageremainingcontractuallife(years) |   |   | WeightedaverageexercisepriceCdn$ |   |   | Shares |   |   | WeightedaverageexercisepriceCdn$ |   |
|                      |   |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |
| $4.00 to $4.99            |   |   |                      | 1,135,936  |   |   |   | 0.8 |   |   |   | 4.88 |   |   |   | 1,135,936 |   |   |   | 4.88 |   |
| $5.00 to $5.99            |   |   |                      | 66,250     |   |   |   | 1.1 |   |   |   | 5.92 |   |   |   | 66,250 |   |   |   | 5.92 |   |
| $6.00 to $6.99            |   |   |                      | 201,000    |   |   |   | 0.2 |   |   |   | 6.38 |   |   |   | 201,000 |   |   |   | 6.38 |   |
| $7.00 to $7.99            |   |   |                      | 725,000    |   |   |   | 2.6 |   |   |   | 7.13 |   |   |   | 725,000 |   |   |   | 7.13 |   |
| $9.00 to $9.99            |   |   |                      | 302,900    |   |   |   | 1.3 |   |   |   | 9.64 |   |   |   | 302,900 |   |   |   | 9.64 |   |
| $10.00 to $10.99          |   |   |                      | 162,922    |   |   |   | 4.0 |   |   |   | 10.85 |   |   |   | 54,306 |   |   |   | 10.85 |   |
| $11.00 to $11.99          |   |   |                      | 10,000     |   |   |   | 1.2 |   |   |   | 11.40 |   |   |   | 10,000 |   |   |   | 11.40 |   |
| $12.00 to $12.99          |   |   |                      | 744,485    |   |   |   | 4.0 |   |   |   | 12.70 |   |   |   | 330,649 |   |   |   | 12.66 |   |
| $13.00 to $13.99          |   |   |                      | 2,242,122  |   |   |   | 2.1 |   |   |   | 13.24 |   |   |   | 2,242,122 |   |   |   | 13.24 |   |
| $14.00 to $14.99          |   |   |                      | 325,622    |   |   |   | 4.5 |   |   |   | 14.61 |   |   |   | 184,094 |   |   |   | 14.72 |   |
| $15.00 to $15.99          |   |   |                      | 5,097,383  |   |   |   | 4.1 |   |   |   | 15.25 |   |   |   | 1,890,279 |   |   |   | 15.27 |   |
| $16.00 to $16.99          |   |   |                      | 4,016,824  |   |   |   | 3.3 |   |   |   | 16.57 |   |   |   | 3,114,064 |   |   |   | 16.55 |   |
| $18.00 to $18.99          |   |   |                      | 24,000     |   |   |   | 2.9 |   |   |   | 18.81 |   |   |   | 24,000 |   |   |   | 18.81 |   |
| $19.00 to $20.02          |   |   |                      | 20,000     |   |   |   | 3.8 |   |   |   | 19.19 |   |   |   | 13,334 |   |   |   | 19.19 |   |
|                      |   |   |                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                      |   |   |                      | 15,074,444 |   |   |   | 3.2 |   |   |   | 13.68 |   |   |   | 10,293,934 |   |   |   | 12.99 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 21. | Share-based payments (continued) |
|-----|----------------------------------|

|                            |   | 2012                  |               |   | 2011                  |   |
|---------------------------------|--------|-----------------------|--------------------|--------|-----------------------|--------|
|                            |   |                  |               |   |                  |   |
| Risk-free interest rate (range) |   |                  | 1.08% – 1.23 | %      |                  |   | 1.60% – 2.05 | % |
| Expected volatility (range)     |   |                  | 39% – 46     | %      |                  |   | 29% – 61 | % |
| Expected life (range)           |   | 0.7 – 2.7 years |               |   | 0.8 – 2.8 years |   |
| Expected dividends              |   | Cdn $0.10 to $0.12    |               |   | Cdn $0.08 to $0.10    |   |
| Forfeiture rate                 |   |                  | 6                  | %      |                  |   | 4 | % |

|   | (b) Restricted share unit plan |
|--------|--------------------------------|

|            |   | 2012   |     |   | 2011   |   |
|-----------------|--------|--------|----------|--------|--------|--------|
| At January 1,   |   |   | 253,587  |   |   |   | - |   |
| Granted         |   |   | 470,070  |   |   |   | 416,454 |   |
| Redeemed        |   |   | (257,825 | )      |   |   | (146,059 | ) |
| Forfeited       |   |   | -        |   |   |   | (16,808 | ) |
| At December 31, |   |   | 465,832  |   |   |   | 253,587 |   |

|   | (c) Deferred share units plan |
|--------|-------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 21. | Share-based payments (continued) |
|-----|----------------------------------|

|   | (d) Deferred phantom units |
|--------|----------------------------|

|   | 22. | Supplementary cash flow information |
|--------|-----|-------------------------------------|

|                                                                                  |   | December 31,2012$ |      |   | December 31,2011$ |   |
|---------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|
|                                                                                  |   |              |      |   |              |   |
| Changes in non-cash working capital                                                   |   |              |      |   |              |   |
| Accounts receivable and other                                                         |   |              | (47,729   | )      |              |   | (7,902 | ) |
| Inventories                                                                           |   |              | (18,346   | )      |              |   | (13,299 | ) |
| Accounts payable and accrued liabilities                                              |   |              | (86,397   | )      |              |   | 31,149 |   |
| Total                                                                                 |   |              | (152,472  | )      |              |   | 9,948 |   |
|                                                                                  |   |              |      |   |              |   |   |   |
| Supplementary cash flow information                                                   |   |              |      |   |              |   |   |   |
| Income taxes paid                                                                     |   |              | 105,364   |   |              |   | 134,594 |   |
| Interest paid                                                                         |   |              | 4,013     |   |              |   | 7,856 |   |
|                                                                                  |   |              |      |   |              |   |   |   |
| Non-cash investing and financing activities                                           |   |              |      |   |              |   |   |   |
| Shares, options and DPUs  issued on acquisition of European Goldfields Ltd. |   |              | 2,440,375 |   |              |   | - |   |

| 23. | Financial risk management |
|-----|---------------------------|

|   | 23.1 Financial risk factors |
|--------|-----------------------------|

|   | (a) | Market risk |
|--------|-----|-------------|

|   | (i) | Foreign exchange risk |
|--------|-----|-----------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 23. | Financial risk management (continued) |
|-----|---------------------------------------|

|                                     |   |   Canadiandollar |    |   |   Australiandollar |   |   |    Euro |   |   |   SwedishKrona |    |   |   RomanianLei |   |   | GreatBritishPound |   |   |   Turkishlira |   |   |   Chineserenminbi |   |   |   Brazilianreal |    |
|------------------------------------------|--------|-----------------------|---------|--------|-------------------------|--------|--------|-------------------|--------|--------|---------------------|---------|--------|--------------------|--------|--------|-------------------|--------|--------|--------------------|--------|--------|------------------------|--------|--------|----------------------|---------|
|                                     |   |                  |    |   |                    |   |   |              |   |   |                |    |   |               |   |   |              |   |   |               |   |   |                   |   |   |                 |    |
| Cash and cash equivalents                |   |                  | 256,134 |   |                    |   | 1,141  |              |   |   | 2,806               |    |   |               | -      |   |              |   | 3,874  |               |   |   | 305                    |   |   |                 | 3,608   |   |   |   | 691,460 |   |   |   | 2,442 |   |
| Marketable securities                    |   |                  | 1,979   |   |                    |   | -      |              |   |   | -                   |    |   |               | -      |   |              |   | -      |               |   |   | -                      |   |   |                 | -       |   |   |   | - |   |   |   | - |   |
| Accounts receivable and other            |   |                  | 2,147   |   |                    |   | -      |              |   |   | 7,418               |    |   |               | 38,775 |   |              |   | 3,471  |               |   |   | -                      |   |   |                 | 26,082  |   |   |   | 142,235 |   |   |   | 35,279 |   |
| Accounts payable and accrued liabilities |   |                  | (12,670 | )      |                    |   | -      |              |   |   | (33,744             | )       |   |               | -      |   |              |   | (1,474 | )                  |   |   | -                      |   |   |                 | (61,235 | ) |   |   | (687,162 | ) |   |   | (6,807 | ) |
| Debt                                     |   |                  | -       |   |                    |   | -      |              |   |   | -                   |    |   |               | -      |   |              |   | -      |               |   |   | -                      |   |   |                 | -       |   |   |   | (64,998 | ) |   |   | - |   |
| Net balance                              |   |                  | 247,590 |   |                    |   | 1,141  |              |   |   | (23,520             | )       |   |               | 38,775 |   |              |   | 5,871  |               |   |   | 305                    |   |   |                 | (31,545 | ) |   |   | 81,535 |   |   |   | 30,914 |   |
|                                     |   |                  |    |   |                    |   |   |              |   |   |                |    |   |               |   |   |              |   |   |               |   |   |                   |   |   |                 |    |   |   |   |   |   |   |   |   |   |
| Equivalent in U.S. dollars               |   | $                     | 248,857 |   |                    | $      | 1,187  |              |   | $      | (31,013             | )  |   | $                  | 5,967  |   |              | $      | 1,749  |               |   | $      | 495                    |   |   | $                    | (17,696 | ) |   | $ | 12,972 |   |   | $ | 15,132 |   |

|   | (ii) | Metal price risk and other price risk |
|--------|------|---------------------------------------|

|   | (iii) | Interest rate risk |
|--------|-------|--------------------|

|   | (b) | Credit risk |
|--------|-----|-------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 23. | Financial risk management (continued) |
|-----|---------------------------------------|

|   | (c) | Liquidity risk |
|--------|-----|----------------|

|   | ● | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e.,quoted prices for similar assets or liabilities). |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 23. | Financial risk management (continued) |
|-----|---------------------------------------|

|                                |   | Balance atDecember 31,2012$  |   | Quoted Pricesin ActiveMarkets forIdentical Assets$(Level 1) |   | SignificantOtherObservableInputs$(Level 2) |   | SignificantUnobservableinputs$(Level 3) |
|-------------------------------------|--------|-----------------------------------|--------|-------------------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------------------|
| Assets                              |   |                              |   |                                                        |   |                                       |   |                                    |
|                                |   |                              |   |                                                        |   |                                       |   |                                    |
| Available-for-sale financial assets |   |                              |   |                                                        |   |                                       |   |                                    |
|   Marketable securities   |   |                              | 1,988  |                                                        | 1,988  |                                       |   | -                                       |   | - |
|                                |   |                              |   |                                                        |   |                                       |   |                                    |   |   |
| Total assets                        |   |                              | 1,988  |                                                        | 1,988  |                                       |   | -                                       |   | - |

| 24. | Commitments |
|-----|-------------|

|                                      |   |   | 2013$   |   |   |   | 2014$  |   |   |   | 2015$  |   |   | 2016 and later$ |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------------|--------|
|                                      |   |   |    |   |   |   |   |   |   |   |   |   |   |            |   |
| Operating leases and capital expenditures |   |   | 6,644   |   |   |   | 7,095  |   |   |   | 4,399  |   |   |            | 9,919  |   |
| Purchase obligations                      |   |   | 171,621 |   |   |   | 21,767 |   |   |   | 16,079 |   |   |            | 29,036 |   |
| Totals                                    |   |   | 178,265 |   |   |   | 28,862 |   |   |   | 20,478 |   |   |            | 38,955 |   |

| 25. | Contingencies |
|-----|---------------|

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 26. | Related party transactions |
|-----|----------------------------|

|                                            |   | 2012   |   |   | 2011   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   | $      |   |   |   | $ |   |
| Salaries and other short-term employee benefits |   |   | 12,206 |   |   |   | 18,897 |   |
| Termination benefits                            |   |   | 0      |   |   |   | 732 |   |
| Defined benefit pension plan                    |   |   | 1,900  |   |   |   | 2,088 |   |
| Share based payments                            |   |   | 11,959 |   |   |   | 10,654 |   |
|                                            |   |   | 26,065 |   |   |   | 32,371 |   |

| 27. | Financial instruments by category |
|-----|-----------------------------------|

|                                                 |   | December 31, 2012 |    | December 31, 2011 |       |
|------------------------------------------------------|--------|-------------------|---------|-------------------|------------|
|                                                 |   | Carrying amount   |    |              | Fair value |   | Carrying amount |   |   | Fair value |   |
|                                                 |   | $                 |    |              |  $    |   | $ |   |   | $ |   |
| Financial Assets                                     |   |              |    |              |       |   |   |   |   |   |   |   |   |   |
| Held-for-trading                                     |   |              |    |              |       |   |   |   |   |   |   |   |   |   |
|   Restricted assets and other (SERP)       |   |              | -       |              |       |   | - |   |   | 14,456 |   |   |   | 14,456 |   |
|                                                 |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale                                   |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
|   Marketable securities                    |   |              | 1,988   |              |       |   | 1,988 |   |   | 2,640 |   |   |   | 2,640 |   |
|                                                 |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
| Loans and receivables                                |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
|   Cash and cash equivalents                |   |              | 816,843 |              |       |   | 816,843 |   |   | 393,763 |   |   |   | 393,763 |   |
|   Restricted cash                          |   |              | 241     |              |       |   | 241 |   |   | 55,390 |   |   |   | 55,390 |   |
|   Accounts receivable and other            |   |              | 105,600 |              |       |   | 105,600 |   |   | 34,630 |   |   |   | 34,630 |   |
|   Restricted assets and other              |   |              | 31,846  |              |       |   | 31,846 |   |   | 23,974 |   |   |   | 23,974 |   |
|                                                 |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities                                |   |              |    |              |       |   |   |   |   |   |   |   |   |   |   |
|   Accounts payable and accrued liabilities |   |              | 224,567 |              |       |   | 224,567 |   |   | 168,367 |   |   |   | 168,367 |   |
|   Debt                                     |   |              | 593,315 |              |       |   | 593,315 |   |   | 81,031 |   |   |   | 81,031 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 28. | Production costs |
|-----|------------------|

|                                             |   | 2012   |    |   | 2011   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                             |   |   | $       |   |   |   | $ |   |
| Production costs                                 |   |   |    |   |   |   |   |   |
|                                             |   |   |    |   |   |   |   |   |
| Labor                                            |   |   | 90,709  |   |   |   | 59,079 |   |
| Fuel                                             |   |   | 36,641  |   |   |   | 30,580 |   |
| Reagents                                         |   |   | 44,156  |   |   |   | 39,873 |   |
| Electricity                                      |   |   | 38,612  |   |   |   | 31,753 |   |
| Mining contractors                               |   |   | 58,628  |   |   |   | 31,677 |   |
| Operating and maintenance supplies and services  |   |   | 100,216 |   |   |   | 73,532 |   |
| Site general and administrative costs            |   |   | 26,082  |   |   |   | 19,210 |   |
| Inventory change                                 |   |   | (12,448 | )      |   |   | 13,185 |   |
| Royalties, production taxes and selling expenses |   |   | 45,350  |   |   |   | 47,595 |   |
| Total production costs                           |   |   | 427,946 |   |   |   | 346,484 |   |

|   | 29. | Interest and financing costs |
|--------|-----|------------------------------|

|                               |   | 2012   |   |   | 2011   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|
|                               |   |   | $      |   |   |   | $ |   |
|                               |   |   |   |   |   |   |   |   |
| Interest expense                   |   |   | 4,203  |   |   |   | 4,208 |   |
| Financing fees                     |   |   | 2,780  |   |   |   | 1,123 |   |
| Total interest and financing costs |   |   | 6,983  |   |   |   | 5,331 |   |

|   | 30. | Earnings per share |
|--------|-----|--------------------|

|                                                                                                   |                 | December 31, |                 |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------|----------------------|--------------|----------------------|--------|--------------|--------|
|                                                                                                   |                 | 2012         |                 |   | 2011         |   |
|                                                                                                   |  (in thousands) |         |  (in thousands) |   |
|                                                                                                   |                 |         |                 |   |         |   |
|                                                                                                   |                 |         |                 |   |         |   |
| Weighted average number of ordinary shares used in the calculation  of basic earnings per share   |                 |         | 689,007              |   |         |   | 549,791 |   |
| Diluted impact of stock options                                                                        |                 |         | 1,662                |   |         |   | 1,834 |   |
|                                                                                                   |                 |         |                 |   |         |   |   |   |
| Weighted average number of ordinary shares used in the calculation  of diluted earnings per share |                 |         | 690,669              |   |         |   | 551,625 |   |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 31. | Segment information |
|-----|---------------------|

|                                                       |   | 2012   |
|------------------------------------------------------------|--------|--------|
|                                                       |   | Turkey |   |   | China |   |   | Brazil |   |   | Greece |   |   | Romania |   |   | Other |   |   | Total |
|                                                       |   | $      |   |   | $ |   |   | $ |   |   | $ |   |   | $ |   |   | $ |   |   | $ |
| Information about profit and loss                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Metal sales to external customers                          |   |   | 550,781 |   |   |   | 502,494 |   |   |   | 45,565 |   |   |   | 48,701 |   |   |   | - |   |   |   | - |   |   |   | 1,147,541 |
| Production costs                                           |   |   | 132,390 |   |   |   | 220,476 |   |   |   | 36,443 |   |   |   | 38,637 |   |   |   | - |   |   |   | - |   |   |   | 427,946 |
| Depreciation                                               |   |   | 19,023 |   |   |   | 80,853 |   |   |   | 5,277 |   |   |   | 6,463 |   |   |   | - |   |   |   | 1,913 |   |   |   | 113,529 |
| Gross profit                                               |   |   | 399,368 |   |   |   | 201,165 |   |   |   | 3,845 |   |   |   | 3,601 |   |   |   | - |   |   |   | (1,913 | ) |   |   | 606,066 |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other material items of income and expense                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration expenses                                       |   |   | 8,504 |   |   |   | 12,635 |   |   |   | 10,379 |   |   |   | 1,574 |   |   |   | 150 |   |   |   | 6,279 |   |   |   | 39,521 |
| Income tax expense                                         |   |   | 74,052 |   |   |   | 52,794 |   |   |   | 1,110 |   |   |   | 847 |   |   |   | (540 | ) |   |   | 13 |   |   |   | 128,276 |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additions to property, plant and equipment during the year |   |   | 191,659 |   |   |   | 119,571 |   |   |   | 18,843 |   |   |   | 79,800 |   |   |   | 9,923 |   |   |   | 1,315 |   |   |   | 421,111 |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Information about assets and liabilities                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment (*)                          |   |   | 699,182 |   |   |   | 1,952,545 |   |   |   | 198,586 |   |   |   | 2,422,868 |   |   |   | 593,210 |   |   |   | 2,351 |   |   |   | 5,868,742 |
| Goodwill                                                   |   |   | - |   |   |   | 365,928 |   |   |   | - |   |   |   | 473,782 |   |   |   | - |   |   |   | - |   |   |   | 839,710 |
|                                                       |   |   | 699,182 |   |   |   | 2,318,473 |   |   |   | 198,586 |   |   |   | 2,896,650 |   |   |   | 593,210 |   |   |   | 2,351 |   |   |   | 6,708,452 |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                                                       |   |   | - |   |   |   | 10,341 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 582,974 |   |   |   | 593,315 |

----

| Notes to the Consolidated financial statements |
|------------------------------------------------|

| (Expressed in thousands of U.S. dollars, unless otherwise stated) |
|-------------------------------------------------------------------|

| 31. | Segment information (continued) |
|-----|---------------------------------|

|                                   2011 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                             |   | Turkey |   |   | China |   |   | Brazil |   |   | Greece |   |   | Other |   |   | Total |   |
|                                                                                                                                                                                                             |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |   |   | $ |   |
| Information about profit and loss                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Metal sales from external customers                                                                                                                                                                              |   |   | 458,985 |   |   |   | 587,889 |   |   |   | 56,863 |   |   |   | - |   |   |   | - |   |   |   | 1,103,737 |   |
| Production costs                                                                                                                                                                                                 |   |   | 117,189 |   |   |   | 198,995 |   |   |   | 30,300 |   |   |   | - |   |   |   | - |   |   |   | 346,484 |   |
| Depreciation                                                                                                                                                                                                     |   |   | 11,342 |   |   |   | 104,154 |   |   |   | 4,689 |   |   |   | - |   |   |   | 2,229 |   |   |   | 122,414 |   |
| Gross profit                                                                                                                                                                                                     |   |   | 330,454 |   |   |   | 284,740 |   |   |   | 21,874 |   |   |   | - |   |   |   | (2,229 | ) |   |   | 634,839 |   |
|                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other material items of income and expense                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration expenses                                                                                                                                                                                             |   |   | 10,515 |   |   |   | 8,741 |   |   |   | 5,639 |   |   |   | - |   |   |   | 5,878 |   |   |   | 30,773 |   |
| Income tax expense                                                                                                                                                                                               |   |   | 94,781 |   |   |   | 70,131 |   |   |   | 125 |   |   |   | 260 |   |   |   | 290 |   |   |   | 165,587 |   |
|                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additions to property, plant and equipment                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| during the year                                                                                                                                                                                                  |   |   | 166,601 |   |   |   | 82,249 |   |   |   | 17,532 |   |   |   | 2,902 |   |   |   | 2,062 |   |   |   | 271,346 |   |
|                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Information about assets and liabilities                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property, plant and equipment                                                                                                                                                                                    |   |   | 591,896 |   |   |   | 1,903,793 |   |   |   | 185,667 |   |   |   | 163,239 |   |   |   | 3,315 |   |   |   | 2,847,910 |   |
| Goodwill                                                                                                                                                                                                         |   |   | - |   |   |   | 365,928 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 365,928 |   |
|                                                                                                                                                                                                             |   |   | 591,896 |   |   |   | 2,269,721 |   |   |   | 185,667 |   |   |   | 163,239 |   |   |   | 3,315 |   |   |   | 3,213,838 |   |
|                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                                                                                                                                                                                                             |   |   | - |   |   |   | 81,031 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 81,031 |   |

|   | 31.2 | Economic dependence |
|--------|------|---------------------|

|   | 31.3 | Seasonality/cyclicality of operations |
|--------|------|---------------------------------------|

| 32. | Events occurring after the reporting date |
|-----|-------------------------------------------|

----